Market analysis and calculation of R.O.I. on purchase of new equipment for the industrial company Compound Ltd
about company
Compound Ltd *, a Ukrainian compounder, planned to purchase more than $ 1 million in new equipment to increase sales of the company’s new products known as masterbatches (dyes for plastics).
The first task of the agency was to conduct a study of the masterbatch market in Ukraine and to determine the market capacity and the level of demand, as well as to prepare an answer to the question of what type of masterbatch is in demand. The result indicated which equipment should be invested in.
The second task was to calculate the return of equipment that was to help in making a decision about the need for such a purchase.
Statistics
History
The main difficulty of the project was to conduct a survey of the masterbatch market. It is a niche product and there is not much information about it in the available sources.
After obtaining a database on the export, import, and production of masterbatches in Ukraine, the help of an industry expert was necessary to determine which types of products, according to the adopted economic activity code names list, belong to the study and which do not.
Our recommendations
01
Maintain the required cost level
Maintain the required cost level to create a competitive market price.
02
Focus on priority products
Focus on priority products identified as a result of market research.
03
Implement digitization
Implement digitization: website and online sales.
04
Open training center
Open a customer training center and grow your brand.
Results
Based on research and calculations, the company decided not to buy new equipment, as such an investment would not be profitable and could lead to financial losses.
* We do not disclose our clients’ names as we take their privacy seriously.
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