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Indalex Ltd
Group 7:
Harshvardhan Samvatsar (1311162)
Pradheep P (1311390)
Saurabh Kumar (1311196)
Shakti Mahapatra (1311401)
Shekhar Sharan Mishra (1311403)

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Agenda
Background
Firm Objectives
Company Culture
Problem Definition
Evaluation Criteria
Options
Evaluation
Recommendations
Q&A

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Background Timeline
1961 Established Indalex in UK by Pillar Holding Company
1962 Broke even in a year and profitable then on
1964 Competitive Strategy Extrusion, Anodising
1969 Capacity Expansion
1970 Acquired by RTZ
1973 Forward Integration Fabrication as Profit Center
1977 Operating at 95% utilization
1979 ???
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Firm Objectives
Focussed Differentiators Aluminium Business
Move up the value chain by Forward Integration
Sustain Competitive Advantages of Quality and Flexibility
Real Growth Rate of 10% YOY
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Company Culture
Customer Service as High Priority
Independence to Operating Units (Responsible for P&L)
Tight Control over Operations and Cost
Employee Policy
High percentage of Hourly Wage Workers (Approx. 75%)
Promotion from within, hiring from referrals


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Problem Definition
Prioritize the capacity expansion plan as per the market
demands while addressing short term uncertainty in economic
prospects
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Evaluation Criteria
Positive NPV on the investment and profitability
Capacity Utilization and Cost Efficiency
Resilient to downturn in Economic prospects
Long Term Strategic Implications
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Options Available
Option 1: Expand Extrusion Plant
Option 2: Expand Anodizing Capacity
Option 3: Create Re-Cycling Plant to avoid
Tolling
Option 4: Staggered Expansion of Extrusion and
Anodising
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Options
Option and Year
Operational
Capital
Requirement
(In Pounds)
Impact
Expand Extrusion
Plant only(1979)
1,000,000 Addition of 3000 tonnes in
Extrusion Capacity
Expand Anodizing
Plant only (1979)
800,000 Addition of 2000 tonnes in
Anodizing Capacity
Build a New Re-
cycling Plant (1979)
857,000 Savings on Tolling Cost and a
capacity of 10,500 that can
serve other plants
Staggered
expansion of
Extrusion (1979)
and Anodizing
(1982)
1,857,000 Addition of Capacity in
staggered approach
Extrusion 3000
Anodizing 2000
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Evaluation
Option NPV
(30%)
Resilient to
Economic
Slump (20%)
Capacity
and Cost
(20%)
Long Term
Strategic
Implication (30%)
Option 1
175,117
Option 2
(50,000)
Option 3
687,063
Option 4
139,528
Verdict: Option 3 -Build a New Re-cycling Plant (1979)

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Re-Cycling Plant - Salient Features
Highest NPV
Resilient to short term Economic Slumps
Provides time to analyse market trends and strategize
expansion
Additional Revenue Stream by using additional capacity
as tolling for other plants
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Other Recommendations
Increase Labor Work Force
Reduce Overtime Wages
Will help process innovations
Diversify Customer Base and Acquire New Business
Construction business may take a hit
Process Improvement Initiatives
Increase Capacity by scrap reduction (Currently 30%)
Reward Innovation in Process Cultural Changes
Change hiring policy to have new ideas
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Open to Questions!