Rev. Mar 9, 2011
VICTOR CHEMI
RIA
ICALS PLC (A): THE MERSEYS
C
E
SIDE PROJ
JECT
Late one afte
L
ernoon in Jan nuary 2008, Frank Grey ystock told L
Lucy Morris “No one s s, seems satisfied with the an nalysis so far, but the suggested c f changes cou kill the project. If solid uld projects like this can’t swim past the corpora piranhas, the compan will never modernize.” l t ate ny r Morris was plant manager of Vict
M
toria Chemi icals’ Merse eyside Work in Liver ks rpool,
England. Her control ller, Frank Greystock, was discussin a capital p
G
w ng project that M
Morris want to ted m
.
ct d ) million propose to senior management. The projec consisted of a (British pounds) GBP12 m ure onalize the polypropylen production line at the Merseyside plant ne n expenditu to renovate and ratio in order to make up for deferred maintenan and to ex d nce xploit oppor rtunities to a achieve incre eased productio efficiency on y.
Victoria Che
V
emicals wa under pr as ressure from investors to impro m s ove its fina ancial performa ance because of the ac ccumulation of the firm commo shares b a well-kn n m’s on by nown corporate raider, Sir David Benj e jamin. Earni ings had fall to 180 p len pence per sh hare at the en of nd 2007 from around 25 pence per share at the end of 2006 Morris th believed that the time was m 50 r e
6.
hus e ripe to obtain fund ding from corporate he c eadquarters for a mod dernization p program for the ide —at e ved til k everal Merseysi Works— least she had believ this unti Greystock presented her with se questions that had on recently surfaced. s nly s Victoria Chemicals and Polypr ropylene Victoria Che
V
emicals, a major compe m etitor in the worldwide chemicals industry, w a e e was leading producer of polypropyle p ene, a polym used in an extreme wide var mer n ely riety of pro oducts (ranging from medic