Phase Separation Solutions Final

Topics: Pollution, License, Environmentalism Pages: 5 (922 words) Published: June 29, 2015
Phase Separation Solutions (PS2): The China Question
Group: Thant Sin Naing, Myat Thu Khine, Yu Thwe Phyo, Kaung Myat Win, Aye Mon Khaing, Ywet Nu Wai Hlaing Situation Analysis: Being a specialist in the clean up of two waste streams: the remediation of soil contaminated with persistent organic pollutants (POPs) and recovering usable oil from industrial sludge using Thermal Phase Separation (TPS) technology in North America, PS2 attracted State Environmental Protection Agency of China in early 2008. Strengths

Internationally proven world class TPS technology
Management is familiar with international markets
Extract up to 90 % of oil from industrial sludge
No harmful air emissions
Mobile, onsite remedial technology
Modular design, easily deployed, avoid transportation cost
Reusable, resalable contaminants
Own fuel source generation to fire the system
Fewer greenhouse gas emissions
Weaknesses
Still in immaturity stage
Insufficient employees
No Guarantee that JV will work
Low capacity (20,000 tons)
Not in a good locations compared to its competitor
Limited paten lifetime (will expire in 2019)

Opportunities
High entry barrier
New regulations for soil treatment market in Canada
Deadlines for ending the use and long-term storage PCBs
result in strong demand for PS2’s TPS technology
Exclusive rights to use TPS in Canada & US in 2002 & in China in 2009 Environmental pollution became big issue in China
Exclusive rights to use the technology in China
Importation of waste containing POPs from province to province was banned in China If JV works, can explore consulting services and other technologies to other parts of China. Threats
PCB market declining in North America
Renewing contracts could be affected by the economic climate of the day Increased in potential competitors adopting the TPS technology after 2019 when TPS will expire US banned transporting of PCB contaminated soil from US to Canada Competitive intensity in China Industry

Harder for PS2 to gain permissions to other areas in China

Key Issue
Among several economic problems such as regulatory problems and potential limited markets in Canada and North America, should PS2 internationalize into China? Alternatives
Pros
Cons
1. Related Limited diversification strategy emphasizing on industrial sludge market in Canada (Current Strategy) Comparative cost advantages over other conventional disposal methods Other methods create environmental liabilities

Land Disposal Restrictions (LDR) in which treated wastes are required to meet specific treatment standards creates demand for PS2’s TPS in Ontario
Paint sludge market is at emerging stage
Distance between Ontario and PS2’s facility in Saskatchewan limited the potential for PS2 2. Related Linked extensive diversification strategy
pursuing NIES
3 times higher PCB market compared to Canada
First mover advantage
Early entrant into the emerging environmental market
Reduce risk since NIES is a government agency
NIES has extensive expertise & experience
Free advertising campaign for PS2’s technology
Cost of JV is expensive (Investment of $ 3.0 million)
JV needs to redesign, engineer, manufacture and market the TPS in China

3. Related Linked extensive diversification strategy pursing NAHAI Solid trust between two entrepreneurs
Market Leader in Housman
Excellent infrastructure
Oil storage facility(2,500,000 tons capacity)
Good location
In the center of the world’s largest four fisheries
Biggest commercial petroleum transit base in China
Expandable processing from 10,000 tons of oily sludge to 100,000 tons per year Solid assets, a wide range of permits
Huge generation of oily sludge waste per year (up to 180, 000 tons which is 3 % of total amount of oil sludge in China in 2009) Permission to other areas may be an issue
Cost of JV is expensive (Investment of $ 3.0 million)

4. Licensing with NIES
Investment saving
Higher and faster return on investment...
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