123 School Work

Diamond Chemicals A B

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  Executive Summary
  
  
  1. Both the Merseyside and Rotterdam projects have a positive NPV, but the Rotterdam project doesn't satify to the criteria of 6 years maximum pay pack period;
  2. The Merseyside project is more attractive despite come complications that can be elicited.
  3.
  
  Introduction
  
       Diamond Chemicals, a major competitor in the worldwide chemicals industry, was leading producer of polypropylene, a polymer used in an extremely wide variety of products (ranging from medical products to packaging film, carpet fibers, and automobile components). Diamond Chemicals produced polypropylene at its Merseyside and Rotterdam plants. The Mersyside plant was constructed in 1967, and its production process was old, semi continuous at best, and, therefore, higher in labor content than competitors' newer plants.
  
  Statements of the problems
       The Merseyside plant's manager, Lucy Morris is charged with the development and submission of a proposal to renovate and rationalize the polypropylene production line at Merseyside Works. The project entitled the enhancement of existing facilities and production process, and expand the polypropylene output by 7 percent. Although it met the Diamond Chemicals' criteria for capital investment in an engineering project, a preliminary analysis has raised a number of internal issues that threaten the viability and attractiveness of the project and ultimately its acceptance by the company's CEO and board of directors...