Dutch Chemical

2016 WordsApr 9, 20139 Pages
R | AXEON N.V. | | Case Analysis | R | AXEON N.V. | | Case Analysis | Table of Contents Axeon N.V Overview 2 SITUATION ANALYSIS 2 ENVIRONMENTAL ANALYSIS 3 EXTERNAL SIZE UP 3 INTERNAL SIZE UP 3 ISSUE DESCRIPTION 3 SWOT ANALYSIS FOR NEW FACTORY 5 FINANCIAL ANALYSIS 6 Manufacture product in UK 6 Manufacture product in Netherlands 7 ALTERNATIVE 1: 8 Build the manufacturing plant in U.K. 8 ALTERNATIVE 2: 9 Manufacture more product in Netherland and sale it to cost to Hollandsworth 9 RECOMMENDATION 10 QUESTIONS 11 QUESTION #1 11 QUESTION #1b 11 QUESTION #1c 11 QUESTION #2 12 EXHIBITS 13 AXEON N.V. Case Analysis Axeon N.V Overview Axeon N.V. is a producer of industrial chemicals with 24 manufactory sites around Europe, and headquarters in…show more content…
| FINANCIAL ANALYSIS In order to analyze the proposal we compared the financial benefits for Axeon to support product manufacturing in the UK versus the Netherlands. See exhibits 1 and 2 for cash flow comparisons including financial summary. As seen in the cash flow analysis, economically makes sense to manufacture the product in Netherlands and ship it to U.K., that option has an NVP of £1,044,146 versus £915,976 NVP if the product is manufactured in U.K. ALTERNATIVE 1: Build the manufacturing plant in U.K. As proposed by Ian Wallingford, the building of a new manufacturing facility to produce AR-42 in U.K. is financially viable and sustainable for at least 7 years. Advantages: The manufacturing process would be located in U.K. therefore it is easier to facilitate speed to market by local distribution and management. Higher sense of accountability for Hollandsworth as they would not only sale it but manufacture it as well. Disadvantages: Lack of experience in developing and manufacturing a specialized product. This would be difficult in assessing variable costs. If the market analysis is not correct and the expected market share or sales volume are not reached, Hollandsworth will end up with not acceptable levels of IRR. i.e., if there is a decrease in expected market share of 27%, then
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