What Is Ecolab's Rapid Growth?

The Northern part of Africa has been experiencing a constant growth rate in GDP, and therefore an increase in disposable income. As this area further develops, there is an increase in home sales as well. Both of these factors were key economic drivers mentioned previously that help to promote the pest elimination industry. For these reasons, Ecolab would benefit greatly from entering one of the countries shown in exhibit (MAP). These countries consist of Algeria, Egypt, and Nigeria. After careful analysis it is believed that Ecolab will substantially benefit from an entry into Egypt, which has experienced a 4.2% rise in GDP, the highest of the available countries according to The World Bank. Currently Ecolab already holds an office in Egypt
Additionally, Bug Busters places customer service on top of their priorities, something that Ecolab values greatly. This joint venture options creates multiple benefits for Ecolab. Pursuing this option will help marginalize their seasonal revenues, a problem in which Ecolab has struggles to combat in recent years. Since the weather patterns in Egypt are more consistent, the pest populations do not vary according to the time of year as dramatically as in other areas. Additionally, the joint venture option allows Ecolab to enter the area with assistance in the areas of culture, trust, and the types of pests needed to be eliminated. After completing a thorough financial evaluation, it was found that the opportunity cost of capital is approximately 9.17%, assuming an initial investment of $10,000,000, Ecolab’s breakeven point would be a revenue of at least $917,000 a year. This allows for a payback period of roughly 10.97 years. Overall, taking all of the above into consideration, it is believed that this option would greatly benefit Ecolab, and align with their core principles