Morton Salt Global Business Presentation

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Morton Salt Global Business Presentation

  1. 1. Global Business Report Chemical Process Design Jackie Alcantar James Pike Jennifer Pratt Ross Turbiville
  2. 2. Introduction <ul><li>Started in Chicago-1888 </li></ul><ul><li>U.S. leading producer of salt </li></ul><ul><li>Occupies 47% world market share </li></ul><ul><li>Bought by Rohm and Haas in 1998 </li></ul><ul><li>3 types of salt-solar, evaporation, rock </li></ul>
  3. 3. Introduction <ul><li>Plants in Glendale, AZ and Inagua, Bahamas </li></ul><ul><li>Glendale-Rock salt </li></ul><ul><li>Inagua-Solar salt </li></ul><ul><li>Inagua plant is the largest salt production facility in the world </li></ul><ul><li>-Capacity (1 million short tons/year) </li></ul>
  4. 4. Cost of Labor-Bahamas <ul><li>Bahamas has high cost of labor </li></ul><ul><li>Located on remote island </li></ul><ul><li>Bahamians resistant to foreign investment </li></ul><ul><li>Lack of experienced managers </li></ul><ul><li>Emigrants cannot fill vacancies </li></ul><ul><li>No minimum wage but higher wages than other Caribbean islands </li></ul>
  5. 5. Cost of Labor- Glendale, AZ <ul><li>Second best state for cost of labor ( Business Facilities: The Location Advisor , 2005 ) </li></ul><ul><li>Takes into account </li></ul><ul><li>-unionization percentage </li></ul><ul><li>-average unemployment </li></ul><ul><li>-comparative workers compensation rate </li></ul><ul><li>-average hourly earnings </li></ul>
  6. 6. Accessibility to Utilities- Bahamas <ul><li>Sunlight energy mainly used in Inagua </li></ul><ul><ul><li>Supplemented with diesel fuel for pumps and electricity </li></ul></ul><ul><ul><li>Diesel fuel is expensive and purchased biweekly </li></ul></ul>
  7. 7. Accessibility to Utilities- Glendale, AZ <ul><li>Purchases 218,160 kilowatt-hr/month all year round </li></ul><ul><li>Solar panels recently installed to reduce cost </li></ul><ul><li>5 wells-530,301,000 gal/year water used </li></ul><ul><li>Natural gas purchased to run the kiln- 26,000 therms average </li></ul>
  8. 8. Cost of Land <ul><li>Land is cheaper in Bahamas than Arizona </li></ul><ul><li>Arizona is $10/ft 2 </li></ul><ul><li>Bahamas is </li></ul><ul><li>$1.10-$2.75/ft 2 </li></ul>
  9. 9. Tax Structure/ Tax Rate <ul><li>Tax rate in Bahamas is much less than AZ </li></ul><ul><li>The commodity is transferred at max transfer price </li></ul><ul><li>This decreases taxable income in the US. </li></ul>
  10. 10. Safety Regulations <ul><li>Similar standards in both plants </li></ul><ul><li>Monthly plant safety inspections </li></ul><ul><li>Weekly safety meetings </li></ul><ul><li>Workers complete hazard/GMP training </li></ul><ul><li>Safety incentive program </li></ul><ul><li>Safety accomplishments publicized </li></ul><ul><li>Heat is a problem that is handled on a daily basis </li></ul>
  11. 11. Environmental Regulations- Glendale, AZ <ul><li>Air and groundwater quality control </li></ul><ul><li>Groundwater is limited by Arizona Department of Water Resources </li></ul><ul><li>Water withdrawal mineral extraction permit </li></ul><ul><li>Non-Title V Air-Quality permit required </li></ul><ul><li>-emissions, monitoring, operational requirements, recordkeeping/reporting </li></ul>
  12. 12. Environmental Regulations- Bahamas <ul><li>Few regulations </li></ul><ul><li>Animals suffer from salt pilings </li></ul><ul><li>New reservoir system to promote algal mat growth </li></ul><ul><li>Algal mat prevents seawater seepage </li></ul><ul><li>Environmental issues addressed voluntarily on the island </li></ul>
  13. 13. Import Issues <ul><li>Goods flow freely between US and Bahamas </li></ul><ul><li>Duty free is 35% of value to product added in Bahamas </li></ul><ul><li>Goods are easily imported for manufacture as long as they are exported after </li></ul>
  14. 14. Patent Laws <ul><li>Trade secrets are used instead of patents </li></ul><ul><li>Employees can not reveal secrets </li></ul><ul><li>This helps maintain competitive advantage </li></ul>
  15. 15. Natural Resources/ Raw Materials <ul><li>Bahamas have limitless resources </li></ul><ul><li>Glendale salt is mined from underground </li></ul><ul><li>Salt deposits mined from 800 to 9000 feet </li></ul><ul><li>Glendale’s cost is greater than Bahamas </li></ul><ul><li>Glendale, AZ salt formed in Playa Lake Bed </li></ul>
  16. 16. Climate-Bahamas <ul><li>Bahamian climate is sunny and temperatures 75-90  F year round </li></ul><ul><li>September is heavy in hurricanes and is the worst month for production </li></ul><ul><li>Rain slows production average 30 inches/year </li></ul>
  17. 17. Climate- Arizona <ul><li>Heat increases costs </li></ul><ul><li>Worker safety is ensured by cool environment </li></ul><ul><li>Issue only prominent in summer </li></ul><ul><li>Winter temperatures average in 50s </li></ul>
  18. 18. Conclusion <ul><li>Plant in Bahamas is extremely profitable </li></ul><ul><li>- exports 1.27 million short tons/year </li></ul><ul><li>The Glendale plant appears less profitable </li></ul><ul><ul><li>only produces 113,839 short tons/year </li></ul></ul><ul><ul><li>Land more expensive </li></ul></ul><ul><ul><li>Accurate profitably cannot be predicted without exact numbers </li></ul></ul>
  19. 19. Questions?

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