polypropylene production line at Merseyside plant. This is done in order to make up for deferred maintenance and exploit opportunities to achieve increased efficiency. This report will look at the following four main areas of concern in order to calculate the feasibility of this Merseyside Project: * The cost of GBP2 million for the purchase of new rolling stock being allocated to the Transport Division or to the Merseyside project. * The cannibalization affect on Rotterdam sales looking at both
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polypropylene‚ a polymer used in various everyday items. * Victoria Chemicals at the end of 2007 was in a financial slump and was under pressure to improve their financial performance. * Due to this financial slump‚ Lucy Morris‚ the Plant Manager at Merseyside Works‚ proposed a GBP12 million project to help modernize the production line of polypropylene by: * Remodeling and relocating tank-car unloading areas to streamline the process * Refurbishing polymerization tanks to achieve higher
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associated with the case – Victoria Chemicals PLC (A): The Merseyside Project‚ written by Robert. F. Bruner. Introduction In the case‚ Victoria Chemicals‚ a fictional company‚ were under the pressure of its investors to improve its performance as the earnings per shares (EPS) has decreased from 250 pence in 2006 to 180 pence in 2007. Victoria Chemicals is a producer of polypropylene that has two factories in Merseyside Works and Rotterdam‚ Holland. In addition‚ there are seven major competitors
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cost of the rolling stock. These would become an essential asset of the Merseyside Works. The investment to occur in 2010 and then depreciated over the following 10 years. These would become an asset of the Merseyside works. • Ignore the requests of the Director of Sales. The assumption is that Victoria Chemicals uses consolidated financial accounting in that they will consolidate the books of both Rotterdam and Merseyside. The impact of cannibalisation will be picked up in these consolidated accounts
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Chemicals: Case 21-22 TO: Lucy Morris FROM: DATE: September 30‚ 2009 SUBJECT: Merseyside Project In this memo I will be making a recommendation for or against the Merseyside Project. With the help of a few questions that guide my memo‚ I will be able to determine whether or not to continue funding for the Merseyside Project. This memo will include an exhibit that will show an analysis of the Merseyside Project including the NPV and the IRR. In the DCF analysis that was provided in the
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Diamond Chemicals PLC (A): The Merseyside Project Late one afternoon in January 2001‚ Frank Greystock told Lucy Morris‚ “No one seems satisfied with the analysis so far‚ but the suggested changes could kill the project. If solid projects like this can’t swim past the corporate piranhas‚ the company will never modernize.” Morris was plant manager of Diamond Chemicals’ Merseyside Works in Liverpool‚ England. Her controller‚ Frank Greystock‚ was discussing a capital project that she wanted to propose
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UV2493 Version 1.5 DIAMOND CHEMICALS PLC (A): THE MERSEYSIDE PROJECT Late one afternoon in January 2001‚ Frank Greystock told Lucy Morris‚ “No one seems satisfied with the analysis so far‚ but the suggested changes could kill the project. If solid projects like this can’t swim past the corporate piranhas‚ the company will never modernize.” Morris was plant manager of Diamond Chemicals’ Merseyside Works in Liverpool‚ England. Her controller‚ Frank Greystock‚ was discussing a capital project that
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from the Treasury Staff? 2. How attractive is the Merseyside project? By what criteria? 3. Should Morris continue to promote the project for funding? Case B: 1. Why are the Merseyside and Rotterdam projects mutually exclusive? 2. How do the two projects compare on the basis of Victoria Chemicals’ investment criteria? 3. Is it possible to quantify the value of managerial flexibility associated with the Merseyside project? How‚ if at all‚ does this flexibility in style
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they built two plants‚ one in Merseyside‚ England and one in Rotterdam‚ Holland. Both plants were identical to each other and produced an equal amount of goods. Morris Greystock‚ the controller of the Merseyside plant had notice a decline in stock price in from 250 pence per share in 2006 to 180 pence per share in 2007 and knew he had to do something. Facing pressure from the investors and wanting to increase production efficiency‚ he decided to renovate the Merseyside plant so Victoria Chemicals
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Diamond Chemicals PLC Case 1 The Merseyside Project | Analyze the real world scenario to figure if Merseyside Project is a promising project | Date: 4th Sep‚ 2013 | Background & Problem Statement Diamond chemicals is a leading propylene producer and a major player in the chemicals industry worldwide. However the share of the company had fallen from £60 at the end of 1999 to £30 in 2000 on account of worldwide economic slowdown and poor financial performance. Given the prevalent
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