Processing Analysis & Market Analysis on Company X Bentonite

Abstract

Bentonite is a clay that is used in many industrial applications. Company X required an investigation on the bentonite that is mined by Company Y. Currently Company X produces cat litter only from her bentonite, but other applications might be of economical interest to the company. After scoping down to 4 applications other than cat litter (drilling mud, foundry sand, soil improvement and bleaching earth), the possibility of processing bentonite to gain the physical properties required by these 4 applications was investigated. The information needed for this investigation is mostly gathered from scientific reports based on the processing of Country A bentonites. From the results from earlier researches on Country A bentonites it is concluded that Country A bentonites can be made suitable for all 4 applications through several processing steps. The second part of the report focuses on the market possibilities of the 5 applications (the cat litter application included). It is found that the bleaching earth and the drilling mud market are most likely to be fit for a market entry. It is also concluded that the bleaching earth application is of most economical interest when looked at the net present value of the investment after 15 years. The drilling mud application is of most economical interest when looked at the internal rate of investment. The soil improvement application requires almost no change in processing steps when compared to the production of cat litter and might therefore be of economical interest to Company X. There is a risk of turning up with a negative net present value (after 15 years) when Company X would choose to invest in the drilling mud, foundry sand and bleaching earth application. Therefore the final conclusion is that Company X should do a deeper investigation in the soil improvement application, since it is found that the economic potential is very high for this application. When this seems to be an unrealistic or economical uninteresting investment, Company X should investigate a further expansion of cat litter export.