Alkaline Ash Production Expansion

ChemCo, a U.S. chemical manufacturer, seeks advice on expanding alkaline ash production capacity from 1 to 2 million metric tons by 2020, with a $20M investment. Analysis of market demand and supply reveals opportunities in Asia, where demand exceeds capacity. Cost comparisons show U.S. producers have a significant advantage over Chinese competitors, particularly in raw materials and energy costs. Projected selling price of $196/metric ton allows for $19.5/ton profit. First-year profit after expansion is estimated at $14.5M, with increasing profits expected in subsequent years. The investment is recommended, with risks including potential Chinese access to cheaper raw materials and economic downturns affecting construction and electronics industries. Next steps involve researching Asian market demand and initiating production facility expansion.