Growing a mineral processing business in Asia through acquisition
Background: Tractus was engaged by Amcol International, a billion-dollar global producer of high quality industrial minerals to develop its Asia Pacific growth strategy with a goal of growing the business’ Asia Pacific revenue from US$10 million to US$100 million within seven years.
Project: Tractus worked with the client’s management to review and assess the performance of their mineral processing operations in China and Thailand and provided detailed budgets, schedules and strategic plans to first expand their existing plants in Thailand and then subsequently two plants in Northeast China.
Tractus worked with Amcol’s corporate headquarters to secure approval for a multimillion dollar Asia Pacific strategic plan expansion, which was phased over a seven-year period in Thailand and China. Tractus Strategy and Implementation team managed the concept design, outsourced detailed engineering and construction contracts for plant expansions in both countries as well as the procurement packages for all of the process equipment.
While Tractus was initially retained for project management, the client ultimately engaged Tractus on regional supplier search engagements to identify and evaluate suppliers of raw materials for its regional production activities. As the expansions were taking place, Tractus’ Strategy and Implementation teams conducted a detailed market analysis of the Vietnamese, Myanmar, and Indonesian markets to identify more cost effective suppliers of clay minerals and anthracites and a loaded purchase price and logistics cost basis.
As the client’s operations grew and new market opportunities materialized, Amcol turned to Tractus’ Business Incubator service to establish a low-cost and low-risk presence in both Indonesia and Vietnam. The Tractus Business Incubator team managed the clients’ back office operations for both countries. This included serving as the Amcol’s own human resources department in hiring individuals to serve as the client’s representatives to source Bentonite and Anthracite and develop a market for the client’ products. Utilizing Tractus’ business incubator service had given the client an opportunity to rapidly enter new markets and tap into new streams of revenue.
Solution: The client’s Asia Pacific operations surpassed the US$100 million revenue goal, achieving a compounded annual growth rate (CAGR) during the project period on average of 22%, dramatically outpacing the GDP growth rate of the region.
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