Coogee chemicals

Student'Number:'167665'

Question)1)!

Scope'of'analysis:'before'the'joint'venture.'Year'1986.'

Summary!

Coogee'is'a'successful'company.'Coogee'financial'performance'is'very'strong'in'terms'of'ROE'

(Exhibit'Financials:'Coogee'+36.82%'compared'to'industry'at'+10.3%)'and'growth'(Exhibit'Growth:'

revenue'and'profit'grows'steadily'at'an'average'rate'of'45%'and'36%'respectively'in'the'past'10'

years,'in'comparison'with'industry'growth'at'S0.9%'S'Exhibit'3.3).'With'regards'to'

revenue/employee,'they'are'performing'very'strongly'as'well'(Exhibit'3.1:'Coogee'

Revenue/Employee'is'$300k'in'comparison'with'WA'$108.32k'and'Australia'$103.33k).'Coogee'

profitability'however'is'weak'in'comparison'with'the'whole'industry.'(Exhibit'3.1:'Coogee’s'

Profit/Employee'is'only'$9k'in'comparison'with'WA'$24.72k'and'Australia'$32.51k).'Coogee'has'a'

very'strong'market'share'(almost'near'monopoly'across'their'product'lines).'The'other'concerns'are'

their'dependability'with'CSBP'and'also'their'lack'of'cash'flow.'

ROE!

Coogee'ROE'without'gearing'is'19.43%'in'1986.'With'59%'gearing,'the'ROE'is'higher'at'36.82%.'This'

is'higher'than'industry'average'of'10.3%.'The'10'year'profit'growth'average'is'36%.''

Revenue!

In'1986,'Coogee’s'revenue'was'$15m.'In'comparison'with'medium'and'small'company’s'revenue,'

Coogee’s'revenue'is'smaller'than'the'average.'(Exhibit'3.2:'Average'medium'and'small'turnover'

$22.3m'vs.'Coogee'$15m).'However,'in'comparison'with'other'industrial'chemical'in'WA,'Coogee’s'

revenue'is'about'five'times'than'the'average.'(Exhibit'3.2:'other'industrial'chemical'turnover'$3.33m'

vs.'Coogee'$15m).'Coogee'revenue'grows'steadily'at'an'average'rate'of'45%'in'the'past'10'years.'

(Exhibit'Growth:'from'$920k'in'1976'to'$15m'in'1986).'This'is'higher'than'the'industry'growth'rate'

of'only'S0.9%.'(Exhibit'3.3:'average'industry'growth'from'1979'to'1984'is'S0.9%).'Revenue/employee'

is'very'strong'comparing'with'WA'and'Australia.'(Exhibit'3.1:'Coogee'Revenue/Employee'is'$300k'in'

comparison'with'WA'$108.32k'and'Australia'$103.33k).'

Market!Share!

Coogee'market'share'is'very'high'in'almost'all'of'their'product'lines,'in'fact'in'some'product'line'they'

have'near'monopoly.'(Exhibit'Market'Share:'Copper'Sulphate'+70%,'Ferrous'Sulphate'100%,'Sodium'

Silicate'100%'in'WA,'Aluminium'Sulphate'–'sole'distributor'to'WA'Water'Authority,'Molasses'

import/export'100%.)''

Other!financial!drivers!

Coogee'also'does'not'have'any'gearing'at'this'stage.'They'also'have'cash'difficulty'reflected'by'the'

seasonality'of'the'agriculture'industry.'They'have'to'dip'into'overdraft'account'between'October'

and'January.'This'can'be'a'problem'in'the'future'if'they'are'taking'debt'as'insufficient'cash'flow'can'


cause'a'default'on'their'debt.'With'59%'gearing,'they'will'have'an'interest'efficiency'of'0.7'and'

leverage'of'2.44.''

'

Question)2)'

Across'the'product'lines,'Coogee'derived'most'of'the'profit'from'Copper'Sulphate'and'the'Tank'

terminal'&'Transport'operations.'(Exhibit'3.6:'Copper'Sulphate'+55%'and'Tank'terminal'and'

transport'operation'+30%).'Even'though'Copper'Sulphate'is'deriving'most'of'their'profit,'however,'

they'are'heavily'reliant'on'CSBP'for'their'supply'of'Sulphuric'Acid'(CSBP'is'the'only'producer'in'

Australia).'A'diversification'is'needed'for'Coogee'to'reduce'the'risk.'

'

'

'

Product $ Profit (1988)

Copper sulphate 246,575.34$ Ferrous sulphate -$

Monohydrate -$ Heptahydrate 18,493.15$

Sodium silicate 36,986.30$ Aluminium sulphate -$

12,328.77$ Chlor-alkali -$

Chlorine -$ Caustic soda 49,315.07$

Sodium cyanide 117,123.29$ Tank terminal and -$

transport operations 135,616.44$ 616,438.36$


'

'

Analysing'the'Profit'Margin/tonne,'the'copper'sulphate'derived'most'of'the'profit.'

'

'

Analysing'further'into'each'of'the'customer'for'Copper'Sulphate,'they'are'selling'highest'to'the'

mining'companies'in'the'eastern'state.'The'price'in'eastern'state'is'cheaper'could'be'because'of'the'

competition'with'Sydney'producer.'They'are'selling'lowest'to'CSBP.'It'could'be'that'they'have'an'

agreement'with'CSBP'as'they'are'also'the'provider'of'chemicals.''

Analysing'the'trend'of'the'demand'of'Copper'Sulphate,'the'trend'seemed'to'be'going'up.'(Exhibit'

3.8).'

'

Product $ Profit Margin (tonne)

Copper sulphate 30.82$ Ferrous sulphate

MonohydrateHeptahydrate 26.42$

Sodium silicate 10.57$ Aluminium sulphate

30.82$ Chlor-alkali

ChlorineCaustic soda 2.74$

Sodium cyanide 5.86$ Tank terminal and

transport operations

Buyers Volume (tonnes) Turnover ($000) Profit (%) Profit Unit Price (tonne)

CSBP 2,400 2,000 10% 348,972.60$ 833.33$ Mining companies 0% -$

WA 600 1,000 17% 587,243.15$ 1,666.67$ Eastern states 4,000 5,000 64% 2,248,287.67$ 1,250.00$

Timber treatment companies 500 500 4% 156,035.96$ 1,000.00$ Stockfeed companies 500 500 4% 156,035.96$ 1,000.00$


'

Question)3)'

Coogee’s'success'is'derived'from'the'following'value'propositions:'(See'the'cognitive'map'in'the'

exhibit'for'more'details'of'the'linkage)'

1. Lower!cost!and!price!

Coogee'exploits'the'advantages'and'disadvantages'of'the'industry.'They'are'strategically'

located'to'the'port'and'CSBP.'They'also'have'an'end'to'end'solution:'transport'and'storage'

of'chemicals'which'means'more'control'of'their'businesses'and'able'to'generate'lower'costs.'

In'addition,'they'only'produced'simple'chemicals.'That'means'that'they'can'use'second'hand'

equipment'to'lower'the'cost.'They'are'also'able'to'utilize'their'machineries'more'by'

rearranging'some'of'the'processes'to'achieve'the'same'effect.'

2. Proximity!of!location!

'S''''

'100''

'200''

'300''

'400''

'500''

'600''

'700''

'800''

1979' 1980' 1981' 1982' 1983' 1984' 1985'

FerBliser!tu

rnover!(P

er!1,000!to

nnes)!

Year!

Other!arBficial!ferBlisers!

WA'

Aust.'

Poly.'(WA)'

Poly.'(Aust.)'


'

The'green'line'square'is'CSBP'and'the'red'square'is'Coogee.'Image'source:'Google'Map.'

As'the'map'displayed,'Coogee'is'both'located'near'CSBP'and'also'the'port.'This'makes'the'

transportation'of'low'weight'to'ratio'chemicals'cheaper.'

They'also'established'many'tanks'at'the'customer’s'site.'It'is'unknown'whether'they'are'the'

first'mover'in'the'customer’s'site,'however,'this'might'deflect'potential'entrants.'

Both'the'overseas'and'interstate'competitors'have'to'pay'the'large'transport'cost.'Also'

overseas'competitors'need'to'pay'tariffs.''

'

3. End!to!end!solution!

Besides'the'chemical'factory,'they'also'have'other'facilities'such'as'storage'and'

transportation.'They'also'built'tanks'to'store'chemicals'at'their'customers’'site.'This'lowers'

the'cost'of'the'chemicals.'This'means'they'have'an'economic'of'scope'in'

production/delivery/storage'of'chemicals'which'lowers'the'cost'and'price'further.'Their'

expertise'with'handling/storing/transport'of'chemical'is'reflected'in'their'profit'(Exhibit'3.6'

In'1986'tank'terminal'and'transport'operation'contributes'30%'of'the'profit).'

4. Strong!brand!as!a!reputable!supplier!of!chemicals!They'also'established'strong'brand'as'a'reputable'supplier.'This'is'critically'important'as'the'

mining'sector'requires'a'reliable'supply'of'chemicals.'They'also'developed'an'expertise'in'

handling'chemicals.'Because'of'this'expertise,'they'are'also'trusted'for'the'joint'venture'

projects'which'allow'them'to'increase'in'size'and'achieving'an'economic'of'scale'in'

producing'chemical.''


'

5. Producing!niche!product!They'also'have'a'strategy'on'selling'niche'product.'This'is'a'very'good'move'as'what'Tsun'Zu'

says:'only'attack'the'opponent'when'you'are'ten'times'its'size.'As'they'are'much'smaller,'

they'are'only'selling'niche'product'and'other'products'that'are'just'a'minor'feedstock'for'the'

large'manufacturer.'In'this'case,'they'have'little'and'sometimes'no'competition.'They'also'

enriched'the'relationship'with'other'companies'and'it'developed'the'experience'curve'in'

producing'and'handling'chemicals.'

'

'

Are!Coogee’s!competitive!advantages!hard!to!copy?!

1. Lower!cost!and!price.! !This'is'easy'to'copy.''

2. Proximity!of!location.! !This'is'easy'to'copy.'Other'companies'can'just'buy'land'close'to'the'supplier.'There'are'

plenty'of'lands'besides'the'chemical'companies/mining'companies'as'they'are'located'in'

suburban'location.'As'a'matter'of'fact,'process'chemical:'(Another'small'company'that'

Coogee'competed'against'for'the'WA'Water'Authority'tender)'used'Coogee'strategy.'Their'

location'is'very'near'with'Alcoa:'

'


'

'

Yellow'is'Alcoa.'Purple'is'Process'Chemical.'Green'is'CSBP.'Red'is'Coogee'

'

3. End!to!end!solution !


a. Learning!curve!in!handling!chemical.! !This'is'difficult'to'copy'as'there'is'experience'curve'and'licenses'for'handling'

chemical.'

b. Location!of!the!storage!facility.! !This'is'difficult'to'copy'as'Coogee'already'have'the'storage'facility'and'pipe'

connection'to'the'only'allSpurpose'terminal'able'to'store'flammable'and'hazardous'

bulk'liquid'in'WA.'

4. Strong!brand!as!a!reputable!supplier!of!chemicals.! !a. This'is'moderate'level'to'copy.'It'will'take'time'to'establish'reputation'and'credibility'

with'suppliers'and'buyers.'It'will'also'take'effort'to'do'experiments'with'suppliers'to'

find'out'which'one'is'reliable.'

5. Producing!niche!product.! !a. This'is'easy'to'copy.'It'just'need'a'market'research'on'determining'which'product''

!

In'summary:'except'for'their'branding'and'providing'an'end'to'end'solution,'their'competitive'

advantages'are'easy'to'copy.'

How!does!the!environment!influence!their!ability!to!capture!value?!

The'industry’s'ROE'is'lower'than'the'average'ASX'listed'company.'In'1986,'the'ROE'of'ASX'listed'

company'is'12%'(Dow,'2003)'compared'with'the'industry’s'ROE'of'10.3%.'

The'segments'are'classified'as'the'following:'

Chemical'companies' ' Price'sensitive.'Their'location'also'plays'a'factor.'The'buyers'can'also'backward'integrate.'''

Mining'companies.' ' Reliability'is'a'huge'factor'as'idle'time'is'expensive.'The'mining'companies'are'unlikely'to'get'from'overseas'if'the'supply'is'irregular.''Therefore'low'bargaining'power'for'the'mining'company.'

Agriculture'companies.' ' Price'sensitive'buyer.''''

Exports' ' The'export'are'affected'by'the'following'factors:'

S Tariffs.' '

S Exchange'rate.' '

S Freight'costs.' '

S Product'dumping. ''Freight'costs'can'be'large'depending'on'where'is'the'destination.'There'is'also'tariff'in'the'destination'country.'The'exchange'rate'of'Australian'dollar'is'low'at'the'moment.'''


There'are'a'lot'of'potential'buyers'overseas,'but'with'the'weak'Australian'dollar,'this'is'a'good'market.''

Water'Authority' ' Price'sensitive'buyer.''

Overall'if'Coogee'focused'on'selling'to'the'mining'companies'and'exports,'they'are'in'better'

segments.'This'is'proven'by'the'fact'that'the'fact'that'Coogee'derived'most'of'the'profit'in'selling'

Copper'Sulphate'in'Eastern'state.'(Exhibit'3.10:'Profit'from'mining'companies'in'Eastern'State'

derived'64%'of'Copper'Sulphate'revenue).'

On'certain'product'(Example:'Aluminium'Sulphate)'Firm’s'action'to'drop'price'can'results'in'very'

thin'margin.'However,'in'general,'there'are'long'contract'to'protect'the'dominance'of'the'market.'

There'are'also'very'few'players.'Also'a'firm'can'retaliate'by'choosing'another'niche'product.'

'

'

Question)4)'

Positive!aspects!of!joint!venture! Negative!aspects!of!joint!venture!1. Diversification'of'their'product'line'and'

less'reliant'on'the'copper'sulphate'product.'

2. Able'to'scale'without'borrowing'too'much'money'from'the'bank.'

3. Long'term'contract'protection.'4. The'risk'of'financials'is'shared'between'a'

few'parties.'5. Lands'are'shared'between'the'customer'

and'the'joint'venture.'6. There'could'be'a'clause'in'the'joint'

venture'for'nonScompete'agreement,'this'can'be'helpful'as'there'will'be'lesser'price'war.'

7. It’s'also'building'stronger'relationship'with'the'other'chemical'industries.'

8. They'can'also'deepened'their'learning'curve'in'chemical'producing/transport/storage.'

1. There'is'a'risk'of'inability'to'pay'up'the'debt'in'the'loan.'

2. The'joint'venture'business'model'is'different'from'existing'model.'They'are'taking'on'debt'and'having'larger'cost'structure'and'newer'machineries.'

3. There'could'be'restricting'elements'in'their'joint'venture'such'as'nonScompetitive'agreement'and'limitation'on'selling'equity.'

4. The'long'term'contract'with'the'joint'venture'also'served'as'a'double'edged'sword.'It'could'lock'them'up'in'a'number'of'years.'

5. They'may'not'have'a'voice'in'the'joint'venture'as'they'have'very'little'controlling'interest'with'20%'share.'

6. They'might'be'given'a'lower'number'of'profit'figure'compared'to'other'bigger'players'as'they'are'a'small'players'and'lacking'negotiation'powers.'

'

Do!they!build!on!Coogee’s!past!bases!of!success?!

The'joint'venture'partially'builds'on'past'bases'of'success.''


The'following'are'the'things'that'are'built'on'Coogee'past'success:'

1. Niche!strategy!The'joint'venture'is'producing'only'the'things'that'have'a'lot'of'demands'and'very'little'

supply'locally.''

2. Proximity!to!the!customer!The'location'of'the'ChlorSAlkali'plant'is'located'at'SCM'site.'

3. Strong!Brand!They'have'established'a'strong'brand'as'a'reliable'supplier'of'chemical'to'the'mining'

companies'which'is'important'as'idle'time'for'the'mining'companies'are'expensive.'

4. Complimentary!Services!They'also'offered'other'services'besides'producing'chemical.'This'includes'the'storage'

facility'and'transport.'

5. Experience!curve!in!handling!toxic!chemical!The'basis'of'their'winning'the'ChlorSAlkali'tender'is'because'of'their'expertise'with'handling'

the'toxic'chemical.'

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'

'

The'following'are'the'things'that'are'not'built'on'Coogee'past'success:'

1. Cost!factor!In'the'existing'strategy,'Coogee'can'lower'the'cost'of'production'using'second'hand'

machineries'and'old'process'technologies.'The'joint'venture'is'using'new'machineries.'They'

also'are'using'newer'processes'in'the'production'of'chemicals.'

2. Large!quantity!Previously'they'are'only'producing'small'amount'of'quantity'that'the'big'players'in'the'

industry'ignored.'Currently'they'are'producing'large'quantity'of'chemicals'and'they'are'

directly'competing'with'the'large'players.'Although'the'joint'venture'is'with'the'other'big'

players'in'Australia'and'there'could'be'a'nonScompete'agreement'signed;'however,'Coogee'

is'now'exposed'with'other'large'overseas'chemical'producers'that'have'the'economics'of'

scale'in'producing'chemicals'cheaper.'

3. Debt!structure!In'the'existing'strategy,'the'company'has'no'debt.'In'this'Joint'Venture,'they'are'taking'on'

debt.'The'debt'that'they'are'taking'will'be'a'risk'to'the'company.'It'is'mentioned'that'they'

have'cash'problem'during'October'to'January'months'because'of'the'seasonality'of'the'

industry.'It'is'possible'if'there'is'a'drop'in'demand'of'their'product,'then'they'might'default'

in'their'loan.'

Should!they!proceed!with!the!Joint!Venture?!Why?!

In'summary'they'should'proceed'with'the'joint'venture.''Even'though'the'financials'are'not'good,'

however,'the'default'risk'is'low'as'they'are'much'protected'in'the'industry.'The'biggest'risks'are'the'

decline'in'gold'price'and'increased'in'Australian'dollar.'Sensitivity'analysis'is'done'and'it'is'not'

causing'problem.'Besides,'they'can'take'steps'to'lower'the'risks.'Below'are'my'analyses'for'the'joint'

venture.'


'

Coogee'financials'after'the'joint'venture'

There'is'a'significant'increased'ROE'from'19.43%'before'the'joint'venture'to'94.63%.'The'ROA'

however'is'only'9.57%'and'the'asset'turnover'is'only'2.31'compared'to'12.7'before'the'joint'

venture.'Interest'efficiency'is'0.28'and'their'leverage'is'very'high'at'9.89.'In'conclusion,'the'financials'

are'not'good,'they'are'too'heavily'geared.'

'


'

1986 1988Value of Equity 1,181,000.00$ 1,181,000.00$ Value of Debt -$ 10,500,000.00$

Industry ROE 10.3%Average Gearing 59%

1986Tax Rate 49%Interest Rate 15%

Gearing 0%

Income Statement InformationRevenue 15,000,000.00$ 27,000,000.00$ COGS -$ -$ Interest expense -$ 1,575,000.00$ Income taxes 220,500.00$ 302,054.79$ Income before taxes 450,000.00$ 616,438.36$ Net income 229,500.00$ 314,383.56$

Liability InformationTotal Liabilities -$ 10,500,000.00$

Equity InformationTotal shareholder equity 1,181,000.00$ 1,181,000.00$

Asset InformationTotal assets 1,181,000.00$ 11,681,000.00$

Financial AnalysisNOPAT 229,500.00$ 1,117,633.56$ ROE 19.43% 94.63%

DuPont DecompositionROA 19.43% 9.57%Asset Turnover 12.70 2.31Interest efficiency 1 0.28Leverage 1 9.89


Assumption'is'that'the'interest'expense'is'already'paid.'

S How'is'the'value'created?'

o Niche!product!selection!!The'products'that'they'select'(Sodium'Cyanide'and'Caustic'Soda)'are'niche'products.'

There'are'not'a'lot'made'in'Australia.'

Sodium'Cyanide'

! Market'demand:'40,000'tonnes.'

! Joint'venture'supply:'20,000'tonnes.'

Caustic'Soda'

! Market'demand:'500,000'tonnes.'

! Current'supply:'5,000'tonnes.'

! Joint'venture'supply:'18,000'tonnes.'

o Economic!of!scale!in!production!They'have'a'newer'machineries'and'better'processes.'They'also'create'the'chemicals'

in'large'quantities.'

o Better!relationship!with!other!chemical!companies!They'have'built'the'storage'facility'at'the'customer'location.'They'also'will'have'a'

better'relationship'with'other'chemical'companies.'

o Deepened!the!experience!curve!in!creating/handling/storage!of!chemicals!The'joint'venture'will'allow'them'to'handle'more'complex'projects'and'deepened'

their'experience'curve'in'creating,'handling'and'storage'of'chemicals.'

S Is'it'hard'to'copy?'

o Niche!product!selection!!! This'is'not'hard'to'copy.'They'just'have'to'do'a'market'research.!

o Economic!of!scale!in!production!! This'is'hard'to'copy'as'it'requires'huge'amount'of'money'and'existing'big'

players'are'already'there.'

o Better!relationship!with!other!chemical!companies!! This'is'not'hard'to'copy'as'existing'chemical'companies'are'already'interS

connected.'

o Deepened!the!experience!curve!in!creating/handling/storage!of!chemicals!! This'is'hard'to'copy'as'the'experience'curve'needed'to'handle'and'store'the'

chemicals'complicated.'

'

S How'does'the'environment'influence'their'ability'to'capture'value?'

o Since'most'of'these'chemical'companies'are'interconnected'and'there'could'be'a'

nonScompetitive'agreement,'the'risk'of'the'price'war'is'unlikely.'

o The'biggest'risk'with'the'joint'venture'is'inability'to'pay'up'debt'if'there'is'a'decline'

of'revenue'from'the'mining'cause'by'the'decline'of'the'price'of'gold'and/or'an'

increased'in'Australian'currency.'However,'at'this'stage,'the'trend'of'the'Australian’s'

currency'is'already'low'and'even'if'the'gold'price'goes'down,'at'most'it'will'go'back'

to'$271:'Which'is'a'50%'decreased'from'$538.'However'the'market'supply'


production'for'sodium'cyanide'is'only'50%'of'current'peak'demand'and'similarly,'

the'total'supply'for'Caustic'Soda'is'only'46%'of'demand.'

'

How'to'lower'the'risk'for'the'joint'venture?'

S Have'a'clause'in'the'joint'venture'to'be'able'to'sell'the'joint'venture'in'case'if'they'cannot'

pay'up'the'debt.'

S Have'a'clause'in'the'joint'venture'for'availability'of'other'parties'to'help'out'their'debt'in'

case'of'low'demand'of'their'product'in'exchange'of'equity.'

S Have'another'person'to'finance'it'using'equity'instead'of'debt.'Currently'the'equity'is'hold'

90%'by'Gordon'Martin.'He'still'can'distribute'some'of'the'equity'to'other'person'to'lower'

the'risk.'

'

Other'alternative'besides'the'joint'venture:'

1. Expanding'their'tank'and'transport'product'line.'There'is'a'huge'margin'to'sell'Urea'from'

WA'to'SA.'Margin'is'$39.95/tonne.'See'exhibit'3.9.''

2. Doing'exports.'

)' )


Exhibit)Financials)

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'

1986Value of Equity 1,181,000.00$ Value of Debt -$

Industry ROE 10.3%Average Gearing 59%

1986Tax Rate 49%Interest Rate 15%


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Gearing 0% 59%

Income Statement InformationRevenue 15,000,000.00$ 15,000,000.00$ COGS -$ -$ Interest expense -$ 104,518.50$ Income taxes 220,500.00$ 220,500.00$ Income before taxes 450,000.00$ 450,000.00$ Net income 229,500.00$ 124,981.50$

Liability InformationTotal Liabilities -$ 696,790.00$

Equity InformationTotal shareholder equity 1,181,000.00$ 484,210.00$

Asset InformationTotal assets 1,181,000.00$ 1,181,000.00$

Financial AnalysisNOPAT 229,500.00$ 178,285.94$ ROE 19.43% 36.82%

DuPont DecompositionROA 19.43% 15.10%Asset Turnover 12.70 12.70Interest efficiency 1 0.70Leverage 1 2.44


Exhibit)Growth)

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1971 1976 1977Revenue

9 bags of chemicals -$ Sodium Silicate 920,769.23$ 920,769.23$ Copper Sulphate 2,700,000.00$ Failed AerosolFerrous SulphatesAluminium SulphateChlor-AlkaliSodium CyanideTank and TransportTotal Revenue -$ 920,769.23$ 3,620,769.23$ Revenue Growth 293%Average Revenue Growth (1976-1986) Before JV 45%Average Revenue Growth (1976-1988) After JV 44%

Profit9 bags of chemicals -$ Sodium Silicate 36,986.30$ 36,986.30$ Copper Sulphate 73,972.60$ Failed AerosolFerrous SulphatesAluminium SulphateChlor-AlkaliSodium CyanideTank and TransportTotal Profit -$ 36,986.30$ 110,958.90$ Proft Growth 200%Average Profit Growth (1976-1986) Before JV 36%Average Profit Growth (1976-1988) After JV 33%


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1978 1979 1980Revenue

9 bags of chemicalsSodium Silicate 920,769.23$ 920,769.23$ 920,769.23$ Copper Sulphate 3,400,000.00$ 4,100,000.00$ 4,800,000.00$ Failed Aerosol 4,000.00$ Ferrous SulphatesAluminium SulphateChlor-AlkaliSodium CyanideTank and Transport 527,451.28$ 1,054,902.56$ 1,582,353.85$ Total Revenue 4,852,220.51$ 6,075,671.79$ 7,303,123.08$ Revenue Growth 34% 25% 20%Average Revenue Growth (1976-1986) Before JVAverage Revenue Growth (1976-1988) After JV

Profit9 bags of chemicalsSodium Silicate 36,986.30$ 36,986.30$ 36,986.30$ Copper Sulphate 93,150.68$ 112,328.77$ 131,506.85$ Failed Aerosol 36,000.00-$ Ferrous SulphatesAluminium SulphateChlor-AlkaliSodium CyanideTank and Transport 15,068.49$ 30,136.99$ 45,205.48$ Total Profit 109,205.48$ 179,452.05$ 213,698.63$ Proft Growth -2% 64% 19%


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1981 1982 1983Revenue

9 bags of chemicalsSodium Silicate 920,769.23$ 920,769.23$ 920,769.23$ Copper Sulphate 5,500,000.00$ 6,200,000.00$ 6,900,000.00$ Failed AerosolFerrous Sulphates 302,884.62$ 302,884.62$ Aluminium Sulphate 29,284.62$ 29,284.62$ Chlor-AlkaliSodium CyanideTank and Transport 2,109,805.13$ 2,637,256.41$ 3,164,707.69$ Total Revenue 8,530,574.36$ 10,090,194.87$ 11,317,646.15$ Revenue Growth 17% 18% 12%Average Revenue Growth (1976-1986) Before JVAverage Revenue Growth (1976-1988) After JV

Profit9 bags of chemicalsSodium Silicate 36,986.30$ 36,986.30$ 36,986.30$ Copper Sulphate 150,684.93$ 169,863.01$ 189,041.10$ Failed AerosolFerrous Sulphates 18,493.15$ 18,493.15$ Aluminium Sulphate 12,328.77$ 12,328.77$ Chlor-AlkaliSodium CyanideTank and Transport 60,273.97$ 75,342.47$ 90,410.96$ Total Profit 247,945.21$ 313,013.70$ 347,260.27$ Proft Growth 16% 26% 11%


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1984 1985 1986Revenue

9 bags of chemicalsSodium Silicate 920,769.23$ 920,769.23$ 920,769.23$ Copper Sulphate 7,600,000.00$ 8,300,000.00$ 9,000,000.00$ Failed AerosolFerrous Sulphates 302,884.62$ 302,884.62$ 302,884.62$ Aluminium Sulphate 29,284.62$ 29,284.62$ 29,284.62$ Chlor-AlkaliSodium CyanideTank and Transport 3,692,158.97$ 4,219,610.26$ 4,747,061.54$ Total Revenue 12,545,097.44$ 13,772,548.72$ 15,000,000.00$ Revenue Growth 11% 10% 9%Average Revenue Growth (1976-1986) Before JVAverage Revenue Growth (1976-1988) After JV

Profit9 bags of chemicalsSodium Silicate 36,986.30$ 36,986.30$ 36,986.30$ Copper Sulphate 208,219.18$ 227,397.26$ 246,575.34$ Failed AerosolFerrous Sulphates 18,493.15$ 18,493.15$ 18,493.15$ Aluminium Sulphate 12,328.77$ 12,328.77$ 12,328.77$ Chlor-AlkaliSodium CyanideTank and Transport 105,479.45$ 120,547.95$ 135,616.44$ Total Profit 381,506.85$ 415,753.42$ 450,000.00$ Proft Growth 10% 9% 8%


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1977 1988Revenue

9 bags of chemicalsSodium Silicate 920,769.23$ 920,769.23$ Copper Sulphate 9,000,000.00$ 9,000,000.00$ Failed AerosolFerrous Sulphates 302,884.62$ 302,884.62$ Aluminium Sulphate 29,284.62$ 29,284.62$ Chlor-Alkali 3,000,000.00$ Sodium Cyanide 9,000,000.00$ Tank and Transport 4,747,061.54$ 4,747,061.54$ Total Revenue 15,000,000.00$ 27,000,000.00$ Revenue Growth 0% 80%Average Revenue Growth (1976-1986) Before JVAverage Revenue Growth (1976-1988) After JV

Profit9 bags of chemicalsSodium Silicate 36,986.30$ 36,986.30$ Copper Sulphate 246,575.34$ 246,575.34$ Failed AerosolFerrous Sulphates 18,493.15$ 18,493.15$ Aluminium Sulphate 12,328.77$ 12,328.77$ Chlor-Alkali 49,315.07$ Sodium Cyanide 117,123.29$ Tank and Transport 135,616.44$ 135,616.44$ Total Profit 450,000.00$ 616,438.36$ Proft Growth 0% 37%

1988,''$616,438.36''

'$(100,000.00)'

'$S''''

'$100,000.00''

'$200,000.00''

'$300,000.00''

'$400,000.00''

'$500,000.00''

'$600,000.00''

'$700,000.00''

1970' 1975' 1980' 1985' 1990'

Profi

t!

Year!

Profit!

Series1'

Linear'(Series1)'


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'$(5,000,000.00)'

'$S''''

'$5,000,000.00''

'$10,000,000.00''

'$15,000,000.00''

'$20,000,000.00''

'$25,000,000.00''

'$30,000,000.00''

1970' 1975' 1980' 1985' 1990'

Revenu

e!

Year!

Revenue!

Series1'

Linear'(Series1)'

Business

Coogee chemicals