Case study Example | Topics and Well Written Essays - 1000 words - 34

Case Study Example Plants in Egypt and Trinidad (Atlas and Titan) are worked as joint endeavors with Methanex holding basic interest of 60% and 63.1%, individually. The paper seeks to carry out a comprehensive analysis of the company’s SWOT analysis before the year 2013. In addition, the paper will discuss the key recommendations on how to solve the issues both qualitatively and quantitatively (Methanex, n.d.). Some of the major issues affecting the company include holding a large amount of Assets (PPE) sitting unused due to political instability in Chile and Egypt leading to wastages. Notably, these wastes constitute to close to $1.87 B in initial investment costs that could be put to constructive use. In addition, the company lacks diversification and is completely dependent on the sale of Methanol making it not competitively effective. Besides, the company has not fully taken advantage of economies of scope since almost all of its competitors produce other materials (Methanex, n.d.). Methanol in its pure form cannot be directly used since companies buy from Methanex to produce other materials. The replacement cost of assets are more than the market value of the company (2/3 cost). This implies that if the company goes under, they could not sell assets to cover all the cost. Another major challenge that the company faces is high operational cost (Zacks.com, 2014). In fact, 80% of cash co sts go to purchase of natural gas and energy use costs hence increasing the operational cost (Arslan & Er, 2008). Its greatest contender (MHTL), could conceivably make them bankrupt in Trinidad (where the vast majority of Methanexs yield is produced) The biggest utilization for methanol, formaldehyde, has had terrible attention in the U.S. in view of conceivable negative wellbeing impacts identified with presentation (Leukemia, numerous myeloma, Hodgkins). High purchaser power- methanol expenses represent a little divide of what