VICTORIA CHEMICALS Revisi 1 
VICTORIA CHEMICALS plc (A)
The Merseyside Project
Presented by Group 2 :
Aldy Rifianto, Dedy Mardianto
Floriana Nataly, Hiralalitya
Lextro Kristiano Concorda
Natallia Winata, Wita Puspadilla
Yosua Bangun
THE MERSEYSIDE PROJECT
SUMMARY
PROBLEM IDENTIFICATION
ALTERNATIVE SOLUTION
RECOMENDATION
SUMMARY
• Victoria Chemicals, a major competitor in the
Worldwide chemicals industry, was a leading producer of polypropylene, a polymer used in an extremely wide variety of products
SUMMARY
Victoria Chemicals was under pressure from investors to improve its financial performance because of the accumulation of the firm’s common shares by a well known corporate raider. The Earnings was fallen to 180 pence per share at the end of 2007 from around 250 pence per share at the end of 2006.
SUMMARY
Lucy Morris was plant Manager of
Victoria Chemicals Merseyside Works in Liverpool, England. Her Controller
Frank Greystock was discussing a capital project that Morris wanted to propose to senior management. The
Project Consisted of a (British
Pounds) GBP 12 Million expenditure to renovate and rationalize the polypropylene production line at the
Merseyside plant in order to make up for deferred maintenance and to exploit opportunities to achieve increased production efficiency.
SUMMARY
• Beside The Polypropylene plant at Merseyside also has Etylene Propylene Copolymer rubber (EPC).
• EPC remainded a relatively small product in the
European chemical Industry.
• Victoria, the Largest supplier of EPC, Produced the entire volume at Merseyside.
• EPC had been only marginally profitable to Victoria because of the entry by compatitors and the development of competing synthetic-rubber compounds over the past five years
SUMMARY
•
•
•
•
The Merseyside project would be in the engineeringefficiency category :
Impact on earning per share
= had to be positive.
Payback = maximum six years. Discounted cash flow = had to be positive.
Internal rate of return had to be greater than 10%.
The Merseyside Project
Presented by Group 2 :
Aldy Rifianto, Dedy Mardianto
Floriana Nataly, Hiralalitya
Lextro Kristiano Concorda
Natallia Winata, Wita Puspadilla
Yosua Bangun
THE MERSEYSIDE PROJECT
SUMMARY
PROBLEM IDENTIFICATION
ALTERNATIVE SOLUTION
RECOMENDATION
SUMMARY
• Victoria Chemicals, a major competitor in the
Worldwide chemicals industry, was a leading producer of polypropylene, a polymer used in an extremely wide variety of products
SUMMARY
Victoria Chemicals was under pressure from investors to improve its financial performance because of the accumulation of the firm’s common shares by a well known corporate raider. The Earnings was fallen to 180 pence per share at the end of 2007 from around 250 pence per share at the end of 2006.
SUMMARY
Lucy Morris was plant Manager of
Victoria Chemicals Merseyside Works in Liverpool, England. Her Controller
Frank Greystock was discussing a capital project that Morris wanted to propose to senior management. The
Project Consisted of a (British
Pounds) GBP 12 Million expenditure to renovate and rationalize the polypropylene production line at the
Merseyside plant in order to make up for deferred maintenance and to exploit opportunities to achieve increased production efficiency.
SUMMARY
• Beside The Polypropylene plant at Merseyside also has Etylene Propylene Copolymer rubber (EPC).
• EPC remainded a relatively small product in the
European chemical Industry.
• Victoria, the Largest supplier of EPC, Produced the entire volume at Merseyside.
• EPC had been only marginally profitable to Victoria because of the entry by compatitors and the development of competing synthetic-rubber compounds over the past five years
SUMMARY
•
•
•
•
The Merseyside project would be in the engineeringefficiency category :
Impact on earning per share
= had to be positive.
Payback = maximum six years. Discounted cash flow = had to be positive.
Internal rate of return had to be greater than 10%.