Phase Separation Solution: The China Question

Second, Bees facility was located in Quebec. The majority Of PC contaminated soil was located in Ontario and Quebec. BEE had an advantage in Quebec, and in most of Ontario. Ass’s facility was located in Saskatchewan, where was far from Ontario. Third, BEE was the major player with a capacity of 80,000 tons, four times the capacity of Ass’s 20,000 tons. At the same time, BEE had been seeking opportunities for geographical diversification and product diversification, which reduce volatility in revenues and improve efficiency through continuous operations.

Although ASS might try diversification s well, given the huge difference in competitiveness between BEE and ASS, ASS would not be sustainable in the Canadian PC market in the long run. The second reason is the Canada PC market which was only approximately 200,000 tons. Even though many believed that several additional sites potentially contained unknown amounts of PC-contaminated soil, the future prospects for the industry were not good. The third reason is that under the new regulations in industrial sludge market, land disposal of untreated hazardous wastes was prohibited.

Such regulatory changes created demand tort technologies that could et the environmental regulation, such as Ass’s TIPS technology. However, the prohibition against dumping sludge into landfills might simply create more opportunities for Other conventional disposal methods, such as incineration. Therefore, ASS would largely depend on their comparative cost advantages over Other conventional disposal methods. The potential Of this market for ASS was also limited due to distance between Ontario and Ass’s facility in Saskatchewan.

Get quality help now

WriterBelle

Verified

Proficient in: Economics

4.7 (657)

“ Really polite, and a great writer! Task done as described and better, responded to all my questions promptly too! ”

+84 relevant experts are online

Hire writer

The fourth reason is the vision Of ASS Which was to become a fully integrated environmental service company. Consistent with its vision, West Mountain Capital (WANT), the parent firm of ASS, also had plans for geographical diversification The fifth reason is that China avgas going to be a huge market for ASS. First, the China PC market was approximately 550,000 tons, which avgas three times the Canadian PC market size. Assuming a treatment cost of the Chinese PC market avgas *1. 65 billion or approximately $ 225 million. Second, I million tons Of soil was contaminated With Other pops in China.

It means that the China pops market was approximately 1 million tons. Assuming a similar retirement cost to that Of BPCS, Of,COO, the Chinese POP market was estimated billion, equivalent to approximately S 470 million. Even this number may have been conservative and would probably rise as the Chinese government improved its environmental protection measures. Furthermore, the ongoing rapid industrialization and arbitration in the country would probably continue to generate POP wastes. In conclusion, ASS was not only facing a very strong competitor in Canada but also facing a declining market of PC treatment.

In addition, the industrial sludge market was still at an emerging stage, The China, n the other hand, was going to be a huge market which couldn’t be compared with Canada market, I consider China as a land of opportunities for ASS. Q. Is ASS ready to enter the China market now? ASS is ready to enter the China market now, We could find many reasons converging to support this. First of all, ASS had raised capital and revenue funding, and the funding of West Mountain Capital (WANT), the parent firm of ASS in December 2007, based on the strength of ASS in a reverse takeover.

In so doing, ASS went public on the TTS and, by April 2010, had grown to a market capitalization of $ 12. 7 million. First, if ASS vans to cooperate with Nah for oil sludge market in china, ASS needs an investment of approximately S 3. 0 million. Second, ASS wants to cooperate with Nanjing Institute of Environmental Sciences(NINES) for pops market in china, ASS also needs an investment Of approximately $3. 0 million.

Hence, Ass’s a market capitalization is sufficient enough to undertake foreign direct investment(FAD) both for the soil remediation and oil sludge recon. Ere markets in China. Secondly, the TIPS technology had originally been developed as a mobile, onsite remedial technology. This attribute old prove to be attractive to the Chinese market, which had numerous small contaminated sites. Ass’s TIPS technology was likely to be embraced in a market such as China, where hundreds of thousands of contaminated sites were widely dispersed across the country. Thirdly, Ass’s had been seriously considering China, as was demonstrated by its involvement with the Chinese market in the past one-and-a-halt years of relationship building and market research.

The Ass’s management team also was no stranger to international markets. The TIPS technology had been successfully employed in 14 countries in the past 15 years. For example, the technology had been used to treat hundreds of thousands of tons of contaminated material worldwide at many high-profile projects, such as the Sydney, Australia’s 2000 Olympic Games Site Restoration Project, Fourth, RSI did not need to find potential cooperative opportunities in China as ASS already secured two separate Chinese organizations.

One of the organizations was NINES, which was a government agency, thus significantly reducing the risk of the project. Another one is Nah, whose owner was an accomplished entrepreneur, similar to Paul Antler The two entrepreneurs had identified with each other from he beginning. Throughout their interactions, a solid trust had been developed These potential cooperative opportunities made ASS being ready to enter the China market now _ In conclusion, ASS had ideal conditions for entering the China market now.

Through reverse acquisition of WANT, ASS had grown to a market capitalization Of S 12. 67 million. Ass’s TIPS technology had an advantage in comparison with the other one in China. Ass’s also had been seriously considering China, as was demonstrated by its involvement With the Chinese market in the past one-and-a-half years of relationship building and market search. Lastly, ASS already secured two separate Chinese organizations as its business partner for their operation in China. Q.

Is export a viable mode of foreign entry visit-;-visit foreign direct investment(Fad) for the soil remediation and oil sludge recovery markets in China? Consider that export is not a viable mode of foreign entry visit–visit foreign direct investment (FAD) for the soil remediation and oil sludge recovery markets in China. ASS would undertake in the soil remediation and oil sludge recovery markets in China. An export also is a way for foreign entry but it is not the best. Through the experience in international markets, ASS already knew that they did not get a huge profit to export its technology.

Therefore, as more export, the overall profit structure of corporations was not expected to get better Assuming ASS just exports its technology, we can expect the following situations of ASS: First of all, ASS would not be significantly affected by the risks EDI in the China market. Moreover, acknowledging that ASS aims to become an integrated company, ASS can concentrate on the geographicdiversification within Canada. For example, ASS could establish a second facility in Ontario the largest market in Canada) if and when demand exceeds the current plant capacity of 20,000 tons.

However, Ass’s operation was limited in Canada. There was also a highly comparatively called BEE in Canada. ASS particularly had to keep BEVY’S operation in mind and plan to do their operation. ASS could not expect a huge profit because the overall profit structure of ASS was from the Canadian PC market. Furthermore, the future prospects for PC industry in Canada also were not good. In contrast, industrial sludge market was still at an emerging stage,hence AS? Could consider industrial sludge market for improving heir return in Canada.

In fact, the potential size of this market appears to be of a decent size for small firms such as RSI because the total industrial sludge in Canada was estimated to be at 375,000 tons in 2009. Nevertheless, there were competitors who compete on conventional disposal methods, such as incineration in this market Therefore, ASS had to find the good alternative to compete against disposal method such as incineration, in terms of disposal’s cost and distance of operation.

Acknowledging the reasons above, ASS could contemplatives EDI in China. The international geographic diversification old transform ASS from a domestic player to an international player, and in so doing, would significantly improve its growth potential There resealed reasons converging to support this. The first reason is about the political environment. When a company enters the China market, it will experience difficulties in adjusting to local policy. However, this case of ASS is different from such situation.

The Chinese government now regarded environmental protection as a “basic state policy” after the 2008 Beijing Olympics. In 2009, the environmental expenditure by the Chinese State Environmental Protection Agency was at 162. 5 billion, up from S 75 billion in 2005. The government had also sped up its implementation Of the Stockholm Convention on Persistent Organic Pollutants (Pops), an international environmental treaty that aimed to eliminate or restrict the production and the use of pops.

The second reason is about the economic environment. First of all, China had the big market about POPS, oil sludge and pharmaceutical waste. First, the China PC market was approximately 550,000 tons, which was three times the Canadian PC market size, Assuming a treatment cost of E, 000, the Chinese PC market was *1. 5 billion or approximately S 225 million. Second, 1 million tons of soil was contaminated with other pops in China. It means that the China pops market was approximately I million tons.

Assuming a similar treatment cost to that of BPCS, of the Chinese POP market was estimated E billion, equivalent to approximately $470 million, Even this number may have been conservative and would probably rise as the Chinese government improved its environmental protection measures. Furthermore, the ongoing rapid industrialization and arbitration in the country would probably continue to generate POP wastes. Third, China would need to treat 6. 1 million or more tons of oil sludge as a result of its annual oil imports.

Much of the huge amount of oil sludge would need to be treated at facilities, thus oil sludge treatment is an emerging industry. Fourth, in 2006, China produced 570,000 tons of pharmaceutical waste. ASS could still consider it as a market to diversify into in the future, especially When considering the absolute size Of the pharmaceutical waste market and Ass’s past experience in pharmaceutical waste management in Canada. The third reason is about a license Of the T AS technology. In 2009, MI Drilling Fluids granted ASS the exclusive rights to use the technology in China.

However, all the patents associated with the TIPS technology were set to expire in 2019, after which the company would not need to renew its license. This patent deadline implied that competition would increase after 201 9, when potential competitors would be able to more easily adopt the TIPS technology. Despite the importance of the reasons elaborated above, I think the company’s stability is a relatively more important area. AS? Had two potential opportunities. One is about remediation of pop-contaminated soil and another en is about oil recovery from oil sludge.