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299They include Methanol Holdings Trinidad Limited MHTL Sabic Mitsubishi Gas Chemical MGC MSK Mitsubishi Corporation and Petronas These companies particularly in the Middle East were state owned and had different objectives cost structures and access to financial resources However Methanex can still take up about 17 of the market share in this industry The main strategy of Methanex was to become the cost leader in the production and distribution in the methanol industry One of the its objectives was to achieve the lowest delivered cost Unlike the others Methanex owned storage and terminal facilities in key distribution hubs in Canada Korea China the Netherlands and the United States The company supported its production with purchases of methanol from producers when prices were favourable and kept one month's worth of methanol supply Despite the high costs associated with storage Methanex used this product supplementation to diverse market risks and ensure its ability to provide its products to clients Due to its ability to deliver to all major methanol markets through its logistics network Methanex was the preferred supplier for the world s major chemical customers including Univar Momentive Lyondell Evonik Samsung Taminco Dow Chemical and LG Economic logic It had signed long term contracts based on monthly volumes with numerous multinational manufacturers none of which occupied more than 10 of its revenues In addition some of these long run contracts with low cost suppliers of natural gas partially mitigated Methanex s risk from fluctuations in supply and prices In 2010 Methanex has 267 million in earnings before interest taxes depreciation and amortization and net income of 102 million on 1 97 billion in annual revenues
The natural gas should also be accessible transportable and available at secured low costs for 25 to 30 years The company was also involved in research into future uses of methanol and alternative sources of methane for the production of methanol Vehicles In 2010 Methanex had the opportunity to participate in a dimethyl ether DME project in China Methanex would be a 20 shareholder and the only supplier of methanol at a 200 000 tonne plant near Shanghai Methanex and China s XinAo Group would enter into a long term arrangement under which Methanex would supply an initial quantity of approximately 300 000 tonnes of methanol to XinAo every year Methanex could raise its investment in this venture and leverage it into opportunities in China DME was viewed as an alternative residential fuel source and was gaining traction not only in China but also in other countries such as Indonesia Japan Sweden Iran and India Pursuing this option would require an important modification to Methanex s focused and singular corporate strategy Moreover technological advances allowed for the conversion of methanol into olefins Olefins ethylene and propylene could be processed through a polymerization unit to create polypropylene the world s most widely used plastic substances Methanol to olefin MTO processes were being piloted as subunits of existing plants primarily however if demand for methanol increased a lot producers would need to purchase additional merchant methanol for supply This opportunity could also divert the company from its focused strategy