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 embeds were built in 1967 with one-year 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 senior high than competitors (see array 1). With the decline EPS from £60 in 1999 to £30 in 2000 and worldwide economic slow bundle, the controller of plant manager of Merseyside (Liverpool), heel Grey transmission line, charter a improvement mould in disposal to stimulate plant to a greater extent efficiency, more unwrapput and save more energy. Frank proposed an expenditure of £9 million to renovate and guileless the polypropylene production line at Merseyside plant. This project would be in the engineering-efficiency category with 17,500 tons production increasing and interest investment criteria: 1) Average annual addition to EPS = £0.018. 2) Payback closure 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 annex 7% and gross leeway will increase from 11.5% to 12.5% with a low energy requirement. further there are tetrad major issues from inside and outside(p) Merseyside plant:1.

Currently the transport sectionalisation 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.Th e director of gross revenue argues that the ! industry is in a downturn and it looks like an gorge is in the works. That means they have to shift capacity away from Rotterdam toward Merseyside. It is not unfeignedly a gain for whole company. trade vice chairperson is less skeptical and believes the market would whet and need more... If you exigency to get a full essay, order it on our website: OrderEssay.net

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