BrAINWARS’23

Case study competition – Round 1

BrAINWARS: (Round 1)​

You are a team of BCN analysts that joined the firm and have been
assigned to case manager, Chavi Ahuja. In the preliminary meeting
with case manger, she tells you how they are making a proposal
for new client FluorCo and shares across a couple of mails from
client containing context and data received. She assigns you with
the task of producing maximum 3 slides identifying the potential
reason for profit decline in client business to be used in the
upcoming client discussions to focusing on
/ Potential reasons for underperformance of HF business
/ Conclusions from our competitor strategy and client’s situation

Upon connecting it with one of the alumni from your college, they
informed that Chavi doesn’t take slides at face value, and it would
be good to create backup slides/excels highlighting approach,
assumptions and calculations.
HF Case Study: Mail from Client (1/2)

Hi Chavi,
Its nice to e-meet you and I am looking forward to working with you!
To give you a brief context, FluorCo., is a prominent manufacturer of Hydrofluoric Acid (HF) and other fluorine-based chemicals. Despite being in the industry for almost
five decades and having achieved a ~40% CAGR in the past three years, their HF business contributes only a third of their total sales.
The key material in this industry, Fluorspar, is facing supply disruption globally resulting in 100% of Indian demand for fluorspar being met by imports with importers
moving away from China and Thailand to South Africa, Vietnam and Canada inform standard cases that produces ~120 MT of HF acid
Interestingly, HF market is a ~2M MT market globally; India comprises of 4-5% of the total market, growing faster than the market average
We would really appreciate your help on identifying potential growth drivers and potential reasons for the underperformance of HF business. An ideal output will be 2-3
slides covering some key insights for the first meeting.
My colleague @Hendricks will reach out to you separately to share some company performance information from our internal reports.
Let me know in case of any queries. I will be online for next ~2 hours before I log off for the day.
Best,
Anna
HF Case Study: Mail from Client (2/2)

Thanks Anna!
Hi Chavi,
Hope you are doing well!
Please find below some of the company metrics based on our internal reports:
– FluorCo. produced 12,800 MT in FY22 out of which 4,480MT was consumed internally, translating to revenue of $3.8M with raw material cost as $2.7M
– Captive consumption ratio remained constant throughout the years while competitors don’t have any captive consumption
– Selling price of HF in industry has remained constant throughout the decade by competitors and we don’t expect any changes in next five years
– FluorCo. has had an installed capacity of 20K MT with utilization of 37%, 22%, 64% between FY20-FY22 and is expected to drop to ~45% in FY23
– We have only one production plant which can produce 11.25 MT per hour with production time of 8 hours per day and 200 days as operational time in a year
– We imports our raw material from Vietnam and Canada (~50% and ~40% respectively) with some minor imports from Morroco and Thailand
– Based on market intelligence study, EtchItOn imports ~96% of raw material from South Africa at $25K per case, Glassify imports ~80% of raw material from South
Africa at $28K per case while ElectEtch imports ~82% of raw material from South Africa at $30K per case
I am also attaching table from an earlier Project Trojan Horse, describing the HF landscape. Please note that base for analysis is FY22 and volume sold by competition is
multiple of FlourCo. volume. Hopefully, you have all the information that is needed for your analysis
Do let me know if I can be of any further help.
Best,
Hendricks
%Sales by Region Competitor Sales Additional metrics
North India South India West India East India Dollar Sales Volume Sold % New customers Production Days
FluorCo 20% 60% 15% 5% $3.8 1x 10% 200 days

EtchItOn 35% 30% 25% 15% $29 M 10x NA 200 days

Glassify 25% 35% 30% 10% $18 M 6x 50% 220 days

ElectEtch 30% 25% 35% 10% $10 M 3x 80% 200 days