Diamond Chemicals PLC (A)

Introduction:Diamond Chemicals is a large ecumenical chemicals producer with two factories in Liverpool England and Rotterdam Holland. Both of their kit and caboodles were built in 1967 with annual getup of 250,000 metric tons polypropylene. Compare with low- appeal producer, the exertion cost per ton is 1.09 which is a little bit in high spirits than competitors (see array 1). With the decline EPS from £60 in 1999 to £30 in 2000 and worldwide economic slow stack, the controller of plant manager of Merseyside (Liverpool), click Grey descent, charter a improvement hurl in trend to stimulate plant to a greater extent efficiency, more unwrapput and save more energy. Frank proposed an expenditure of £9 million to renovate and immaculate the polypropylene production line at Merseyside plant. This project would be in the engineering-efficiency category with 17,500 tons production increasing and future(a) investment criteria: 1) Average annual addition to EPS = £0.01 8. 2) Payback layover speech sound =3.6 years. 3) NPV=£9 million. 4) IRR=25.9%. Problem Statement:This project will conduct 45 days to shut down Merseyside plant and their customers make believe to buy from competitors since Rotterdam?s plant was operating near capacity. later improvement, the output will affix 7% and gross leeway will increase from 11.5% to 12.5% with a low energy requirement. further there are quaternion major issues from inside and outside(p) Merseyside plant:1.

Currently the transport piece could make this allocation out of excess capacity, but doing so would accelerate from 2005 to 2003 the need to leveraging new rolling stock to support the growth. 2.The di rector of gross revenue argues that the indu! stry is in a downturn and it looks like an gorge is in the works. That room they have to shift capacity away from Rotterdam toward Merseyside. It is not real a gain for whole company. trade vice chair is less skeptical and believes the market would whet and need more... If you necessity to get a full essay, order it on our website: OrderEssay.net

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