Solid agricultural company is a family owned company that has been in existence since 1960. It operates piggery farms in Antipolo, Rizal and Meycauayan, Bulacan. It has grown conservatively due to limited family resources. The company was previously primarily managed by Mr. Henry Koh. But in the recent years, his son Mr. Manuel Koh helped in the management of the company. Mr. Manuel Koh saw an opportunity for expansion. The expansion is projected to increase revenue and decrease the cost of sales. This however requires substantial amount of capital that can not be provided by the company alone. Additional resources are necessary. Mr. Bince and Mr. Antonio are interested in giving financial investment to the company to finance expansion in exchange for a management position.
II. Statement of the problem
The company is considering expansion. However, they are not making enough profit to finance expansion. What are the company's options?
The objective of this analysis is to able to identify the best possible option for the company to be able to find resources to finance expansion.
IV. Critical factors / Areas of consideration
Solid agricultural company is family owned and operated company. Although it gains marginal profit, there was no mention of any significant financial burden. Mr. Manual Koh, the operations manager and son of the proprietor saw an opportunity for expansion. Since the company is not finically able to pursue the expansion, he looked for other options.
Mr. Bince and Mr. Antonio are interested investors. They can be able to invest the necessary amount to pursue with the expansion. They can also provide expertise in agribusiness management since they are also involved in poultry projects and grains marketing. Taking in new investors would mean significant adjustment in Solid Agricultural Company because the new investors will take active part in the management of the...