Victoria chemicals PLC (A): the Merseyside Project As a world wide major competitor in the chemical industry, Victoria Chemicals is a leading producer of polypropylene, a polymer that is used in a variety of products around the globe. Polypropylene is known for its strength and malleability and was priced as a commodity. The company operates two plants that produce polypropylene, one at Merseyside, England and the other at Rotterdam, Holland. Both plants were identical in scale, design, and age. However, Morris Greystock, the manager for the Merseyside plant saw a decline in the company’s stock, and decided to improve the position of the company. To do that, she came up with a project to increase production efficiency, rationalize the …show more content…
The project would result in a negative NPV since the EPC market is small. Tewitt claims this negative NPV would be offset by Greystock’s renovation plan. The committee rejected the plan based on economic reasons. In my opinion, Tewitt’s plan is a waste of money to spend in something that holds a small part of the market rather, the money should be spent on something that have a high impact on the market. Also, I have my suspicions about Tewitt’s plan, mainly because of his comment to Greystock and Morris after the committee rejection. In that comment “ in a hushed voice” he told Morris and Greystock that their anuual bonuses are begged to the size of this operation. This makes me think that Tewitt’s plan has a self-interest tied to it, which presents an obvious agency problem. Therefore, I strongly reject his proposal.
Concerns of the treasury staff: After scanning Greystock’s analysis, Andrew Gowman, the treausury staff pointed out a flaw in Grestock’s analysis. The flaw in the analysis was not considering inflation in calculating the discount rate, which would in return have in affect on the cash flows. Gowman suggests a long-term expected inflation of 3%. Adjusting the discount rate for inflation we get a a real discount rate of 7% instead of 10%.
Evaluating capital expenditure proposals at Victoria Chemicals:
Beyond the limitations of the actual plan, another shortcoming of pursuing this opportunity on Revere Street are the serious implications associated with Alexander’s “do-it-yourself” approach. By not outsourcing responsibilities to experts, he may be avoiding the explicit employment costs, but he is likely to pay more for doing the job himself later. For example, hiring a general contractor would ensure that the building is constructed to code, would be more efficient because the GC would know how to best handle subcontractors and manage the overall project, both of which would help expedite the process
Pibrex is one of the world’s largest developers of petrochemical polymers for the plastics market. The company has purchased a plant in Russia and after three years of serious operating losses it has appointed a new general manager of the plant. Then plant lacks a strong organisational culture; communications within and between departments are poor; there is inequity between in wages, working conditions and training and problems with
Proposals from Elisabeth Eustace consists of 90 full-page documents with the detailed scheme or chart, comments from engineers, strategic analysis, and financial plan. Based on the analysis of Discounted-Cash-Flow (DCF) and indicated that the plan has a NPV of £ 14
It seems that not only the analysts are in disagreement of how the fed should
Polysar Limited is Canada’s largest chemical company. Its Rubber Group accounts for 46% of Polysar’s sales. The primary products for this group are butyl and halobutyl and the principal customers for these products are tire manufacturers. The rubber Group has two divisions: NASA (North America & South America) and EROW (Europe & elsewhere). There is product transferring between NASA and EROW and the Vice President of NASA is required to present the performance results to the Board of Directors and explain why the bottom line is lower than expected.
4. Stadium Remodel is paramount that the CEC makes this investment failing that the poor state of the facilities would tarnish the image of the brand. The NPV is positive and EBIT.
Dow’s vice president of business development for Latin America, Oscar Vignart, and Luis Marcer, CFO of Dow Química Argentina are building the company’s cash flow projections for this particular project. In so doing, they have to assess the country’s risk; current political and economic conditions of Argentina, exchange rate stabilities, freedom of capital repatriation and the uncertainties of the project so they can justify it to the parent company. They had developed a three-stage operational strategy for their future polyethylene expansion in Argentina. The first stage is the acquisition of the PBB; the second stage is the acquisition of Polisur’s two polyethylene plants and the last stage is building a new ethylene cracker and a polyethylene plant. In order to help them decide, the cash flows from each stage of this big project have been valued using the discounted cash flow approach. They used a discount rate that was adjusted to incorporate the country
I think this plan does a realistic job at initiating but also facilitating and improving where possible. For example, things such as home garages with the proper voltage outlets for car charging or retrofitting residential buildings are great ideas to make part of new practices. Soon these modifications will become the new normal until something better is developed. New and existing businesses will be more
Shell NA LNG LLC (“SNALNG”) (NR), a subsidiary of Royal Dutch Shell Plc (“Shell”) (A/Aa2/SFS 2), has entered into a 20-year, take-or-pay Liquefaction Services Agreement (“LSA”) to take 100% of the liquefaction capacity from the Project.
eatingandsleeping.com Pty Ltd (EatingAndSleeping.com), is a business that provides honest unbiased reviews of exclusive, or high-end, hospitality experiences for customers via its online address (site) with the same name.
Helena Chemical Company is a national and global corporation that services farmer’s needs from start to finish of the growing season. We will look into Helena Chemical Company’s structure of the business, along with the management style throughout the business. Secondly we will look into the business opportunities and its business threats. Also we will go in depth to what I feel Helena Chemical Company is doing right, along with how I feel they are going about business the wrong way. Finally, I will give my recommendations on what Helena Chemical Company can do to gain a sustainable competitive advantage.
Another company that has recently conducted poor social responsibility is British Petroleum (BP plc). For those unfamiliar, BP, a multinational company headquartered in London, England, is one of the world’s seven major oil and gas companies operating in all areas of the oil and gas industry. These industries include the likes of exploration, production, distribution, marketing, and power generation, along with several other areas. With that much integration in one particular industry, a large corporation like that carries a large amount of social responsibility. The company’s origin dates all the way back to the founding of a small Iranian oil discovery company in 1908, but it has not been until recently that the company has been directly involved in several major environmental and safety incidents, one of which being the well-known 2010 Deepwater Horizon oil spill, the largest accidental release of oil into marine waters.
Bio-Plastics Inc had the competitive advantage in the market because it entered into the partnership with the Lanosian government to plant the materials for the firm’s production. All of the stakeholders are affected by this activity.“A firm’s stakeholders are all those diverse individuals and group who affected by a firm’s actions-including competitors, consumers, employees, investors, communities, regulators, suppliers, and governments, to name the most prominent” that was point out by Michael D. Pfarrer(2010, p.89, para.2). Then the most important stakeholders of the Bio-Plastics Inc are the Lanosian
During recent years, there has been an almighty game of chicken played out between bond investors and the Fed. The former group have embraced a secular stagnation thesis of slow economic growth and low inflation. Meanwhile, the FOMC has been forced to accept some of these conclusions by reducing their estimate of the neutral federal funds rate to 3%.
The role of risk-free rate in the financial analysis is of vital importance because it allows the cost of both equity and total capital to be assessed. For a particular security to be characterized as risk-free, the actual returns should always be equal to the expected one. The aforementioned fact presupposes the satisfaction of two criteria: The first indicates that the stock is free of default risk and the second declares that there can be no reinvestment risk (Damodaran 1998). However, no security is truly risk-free due to the exposure of its returns to inflation risk. Even, Treasury inflation-protected securities (TIPS) , which are indexed to inflation, are not risk-free (Shen1995).