Final Proyect

Dispute Over the Import of Ammonium Sulfate

B E N E M E R I T A U N I V E R S I D A D A U T O N O M A D E P U E B L A

VS

By.

Aguilar Spezzia Synthia

Diyarza Lazaro Juan Jose

Perez Moranchel Luis Andres

Reynaud Alejandra Mireilli

Rivas Rebollar Hatzidi

BATNA Final Project

Dispute Over the Import of Ammonium Sulfate 25 de noviembre de 2013

Tabla de contenido

TABLA DE CONTENIDO 2

INTRODUCTION 3

SITUATION BETWEEN THE COMPANIES 4

AGROFERTILIZANTES DEL SURESTE S.A. DE C.V. 7

PRODUCT 8

BACKGROUND 11

DOF 11

COMPENSATORY QUOTA 12

ALTERNATIVES 17

CRITERIA 17

PRICES 21

EVALUATION OF ALTERNATIVES 22

PROBLEM SOLVING-‐ IMPLEMENT THE DECISION 25

CONCLUSION 28

ADJUNCT 29

Business Strategy 3


Introduction

The following document shows a problem about a compensatory quota

issue between two companies, Honeywell an American multinational company that

produces a variety of commercial and consumer products, engineering services

and aerospace systems for a wide variety. On the other hand we have Agrosure

Company considered 100% Mexican involved in petrochemical industry that

imports and exports different chemical products, especially ammonium sulfate.

Since 1997 they both have being facing a problem about a compensatory quota in

a basic product for Agrosure; ammonium sulfate, causing a difference between this

two. We will mention the problem, the situation now days and important facts

involve in this issue. Through the document we will explain the different types of

elements that exist in a negotiation and how can we infer them in this situation. It’s

very important to identify the problem and come up with a solution. There will be an

explanation of the criteria, the choices we must know filling the gaps of ambiguity

such as potential opportunities, the improvement of increasing a good position in

the market. So our method is to find a strategic based in a problem solving

process. It will be showed the different types of alternatives and how they could

benefit Agrosure (Agrofertilizantes del Sureste S.A de C.V) company. There is also

some statistics of the factors involved in this situation such as, prices, qualities,

characteristics, management and suppliers. So the main idea is to find an

appropriate solution according to the interest of the Mexican company. The

strategic consist on deciding which alternatives are the best option to work on, so

the company could increase their gains. Having better opportunity in the

international market, increasing their production and becoming a recognized

company with a high status.

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Situation between the Companies

Agrofertilizantes del sureste S.A. de C.V. is a Mexican company, founded in

2004, since that year this company has an agreement with Honeywell, a company

that invents and manufactures technologies to address some of the world’s

toughest challenges linked to global macro-trends such as energy efficiency, clean

energy generation, safety and security, globalization and customer productivity.

The main problem in this case with those enterprises is the controversy between

Honeywell international company and agrofertilizantes del sureste S.A. de C.V.

about the discrimination of imported product prices (ammonium sulfate).

Companies

Honeywell is a Fortune 100 company that invents and manufactures

technologies to address some of the world’s toughest challenges linked to global

macro trends such as energy efficiency, clean energy generation, safety and

security, globalization and customer productivity. With approximately 132,000

employees worldwide, including more than 22,000 engineers and scientists, we

have an unrelenting focus on performance, quality, delivery, value and technology

in everything we make and do.

Global Presence

A broad global presence is critical to Honeywell’s growth and enables us to

better understand and address the challenges that our customers face. Continuing

our globalization efforts has been a key pillar of Honeywell’s Growth Initiative for

the past decade, and, today, approximately 55% of our revenues are now

generated outside the U.S.

Business Strategy 5


Ø Americas

Honeywell is headquartered in Morris Township, New Jersey, and we

employ more than 69,000 employees in our research and development centers,

manufacturing facilities and administrative offices across the region. Throughout

the U.S., Mexico, Canada and Brazil we have vast talent resources that are

generating significant results every day and innovating on key projects.

Examples of major projects include a complete overhaul and modernization

of the Los Angeles, CA city wastewater treatment system using integrated

Honeywell controls to simplify operations and reduce environmental risks.

Honeywell is also working closely with Petrobras in Brazil as it expands its diesel

production capacity and commissions new offshore vessels to process natural gas

off the coast of Brazil.

Ø China

Since 1935, China has been critical to Honeywell's growth and innovation

strategies. Today, we have around 12,000 employees located in 20 cities, including

five major technology centers in Shanghai, Beijing, Tianjin, Nanjing and Chongqing

with more than 1,400 scientists and engineers focused on research and

development, engineering and design.

Our successes in China are many. Honeywell is playing a major role in the

growth of China’s aviation industry, providing fly-by-wire flight controls, wheel and

brake systems, auxiliary power units and the inertial reference and air data

systems for the new C919 platform from Commercial Aircraft Corporation of China

Ltd. (COMAC), and Green Jet Fuel made from Honeywell technology powered the

first biofuel flight in the region in 2011. Honeywell has also been selected to

develop and implement China's first smart grid pilot project and feasibility study for

managing energy use in commercial buildings.

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Ø India

Honeywell's presence in India dates back to the 1930s, when refining

technology from Honeywell’s UOP was commissioned in India’s very first refinery

in the state of Assam. Today, the region is an integral part of Honeywell’s global

growth strategy. With more than 12,000 employees, it operates state-of-the-art

engineering and manufacturing facilities in Pune, Guragon, Chennai and Dehradun

for automation control solutions, turbochargers, and refining. Honeywell also has

global centers of excellence for technology and product development across the

region. Honeywell recently developed the world’s first turbo technology for a 2-

cylinder micro-diesel engine, which is helping to drive a new chapter of ultra fuel-

efficient micro vehicles for the growing region.

Ø Asia Pacific

Honeywell continues to build its manufacturing, engineering, and sales

capabilities across the Asia Pacific region. Each of our businesses – Aerospace,

Automation and Control Solutions, Performance Materials and Technologies, and

Transportation Systems – is growing and expanding its operations in this region.

Today, we have around 6,000 employees.

Our footprint in this region includes turbo operations in Korea and Japan

where we are working with major car and truck manufacturers to provide tailored

turbocharging solutions for local markets and global customers, as well as

semiconductor manufacturing operations for our Electronic Materials business in

Thailand, Korea and Japan. The Honeywell Process Solutions and Building

Solutions businesses employ more than 100 engineers and technicians designing

automation and control software in our research and development center in

Sydney, Australia, and Honeywell’s UOP has established a design and operations

center in Kuala Lumpur, Malaysia to serve oil and gas customers across Southeast

Asia.

Ø Europe, the Middle East & Africa (EMEA)

Today there are more than 32,000 employees representing Honeywell’s four

businesses across Europe, the Middle East and Africa, and our footprint continues

Business Strategy 7


to expand. Honeywell has 23 research and development centers in the region that

are innovating for key EMEA trends, including smart grid solutions that can cut

peak energy use in commercial and industrial facilities and advanced turbos that

will help customer to reach new emissions and fuel efficiency standards without

compromising on power and performance. As concerns grow over the projected

increase in air travel across Europe and the globe, we are utilizing the expertise

from our Aerospace and Automation Control Systems businesses to develop a

modernized infrastructure that would allow people and aircraft to be moved into,

around and out of airports faster, safer and in a more efficient manner – saving

time and fuel, and delivering a better experience for travelers.

Agrofertilizantes del sureste S.A. de C.V.

Agrosure is a 100% Mexican company, founded in 2004. It is located in

Cosoleacaque , Veracruz (1km from Minatitlan Airport, approximately 650 km of

Mexico City and closest to the most important complexes PEMEX Petrochemicals)

Ø Mission

Through constant efforts, we work together to achieve total customer

satisfaction, always acting with honesty and transparency in the negotiations as

well as in our day to day labor. That will be the basis for sustained growth of our

company, promoting the development of society in general and always ensuring

environmental care.

Ø Vision

Reference be a Company Worldwide Petrochemical Industry, offering our

clients an added value in each of our products and services, at the same time

contribute to the personal and professional development of all our employees.

Focused and committed to each of our activities with the overall quality,

environmental care and social development.

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Ø Values

Encourage the development of the petrochemical industry in the country,

encourage the investment and employment development, we focused our efforts

on the overall quality of our products and services. We also contribute to the

welfare and social development together with our customers. Here is a information

card.

Agrosure (Agrofertilizantes S.A de C.V) Web site

Product

Characteristics of Ammonium Sulfate

Ammonium sulfate is a chemical fertilizer for agricultural use with a content

of 21% nitrogen and 23.4% sulfur, which serves for making physical and ease of

application to the soil mixtures. t is double action because it provides two plant

macronutrients and their sulfur content favors the physical and chemical conditions

of agricultural land.

Physical and Chemical Properties

Business Strategy 9


Color: White.

Physical Condition Fine solid crystals

Apparent density (g / L) 825-1080

Nitrates (wt% as NO3) 1.5 maximum

Nitrogen (wt%) 21.0 minimum

Acidity (wt%) 0:03 maximum

Water (wt%) 0.5 max

Sulfur content (wt%) 23.4 minimum

Ammonium sulfate prices in Mexico

Supplier Date Unit Price (MXN) Status

Min 01-05-2013 KG $19.97

$19,970 (Ton)

Reference

Max 01-05-2013 KG $20.21

$20,210 (Ton)

Reference

Average 01-05-2013 KG $20.09

$20,060 (Ton)

Reference

Market pricehttp://www.costonet.com.mx/empresas.asp?clave=MERCADEO

01-05-2013 KG $19.97 $19,970

(Ton)

Market price

Market pricehttp://www.costonet.com.mx/empres

09-03-2012 KG $20.21 $20,

210 (Ton)

Market price

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In 2013 according to the INEGI database estimated selling price in the

domestic market were as follows:

AMMONIUM SULFATE

Code: JARQUI00220 Unit: KG

Description: Ammonium sulfate

Historical Prices

Year Month Price (kg) (Ton) INPC

2013 May 19.96 19,960 98.438

2013 April 19.99 19,990 98.587

2013 March 20.03 20,030 98.779

2013 February 20.04 20,040 98.848

2013 January 20.06 20,060 98.924

2012 December 20.07 20,070 98.968

2012 November 20.07 20,070 98.966

2012 October 20.05 20,050 98.876

2012 September 20.06 20,060 98.948

2012 August 20.14 20,140 99.350

as.asp?clave=MERCADEO

Business Strategy 11


2012 July 20.22 20,220 99.720

2012 June 20.27 20,270 100.000

Information de INPC de INEGI

Background

Agrofertilizantes del sureste S.A de C.V. invader’s demand:

The Juridical Office of the Agrosure company will going to prepare a legal

demand for a suspicious invasion in one of the office in the central company,

people who made this activity cause a material disaster who provoke leakage from

the ammonium sulfate damaging the pipe valve that has 22 ton., of the product.

The invasive group that was around 80 people came around with trucks,

guns, and professional equipment. Then they appeared in the parking of the

company, and with their materials made a disaster with 2 rooms, the cops catch

them, and informed that the suspects were the responsible from those disasters of

the ammonium sulfate in the company.

At the end, the company rapport a loss of 8.5 million of USD, because they

had to stop their operations from 3 turns of work all of this, in the ammonium

sulfate plant apart from the material damage. Now the company is working

normally.

DOF The conclusion about the validity of the compensatory quota for the

importation of the ammonium sulfate from the United States it’s independent from

the precedence of the country. The ammonium sulfate has the tariff classification:

3102.21.01 from the tariff regulation called LIGIE.

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Since 1997 has been written in the DOF the final resolution from an

investigation antidumping about the importation of ammonium sulfate from de U.S

which it’s independent from the precedence of the country.

By this resolution it was determined that the importations of the ammonium

sulfate by the U.S, was determined that the princes who has been below from the

normal value average of 97.18 USD ton/metrica, will have to pay the compensatory

quota that results the difference between the exportation price and the normal

value average from the difference of the goods. Its also was considered the

exportation price and the fabric price. The total amount for the compensatory quota

will not exceed the discrimination line of prices that is 57.91%.

On November, 2011 it was published on DOF the notice about the validity of

the compensatory quotas. By this way, the national producers were informed all

the products that would be eliminating the compensatory quota included the

ammonium sulfate. On September, 2013 it was notice by Agrogen,

Agrofertilizantes, Fertirey, Nitrosur y Univex that the ammonium sulfate would not

maintain a compensatory quota by the importations of this product that would be

originary from U.S, so they proceed from their validity

Compensatory Quota

DOF: 17/10/2013

A. Final Resolution

1. The May 26, 1997 was published in the Official Journal of the Federation ( DOF)

the final determination of the antidumping investigation on imports of ammonium

sulfate, originating in the United States of America ( the "United States " ),

regardless of country of origin ( the "Final " ) .

Two . By Final Resolution was determined that imports of ammonium sulfate from

the United States, whose prices are less than the average normal value of 97.18

U.S. dollars ( "dollars" ) per metric ton , would be subject to the payment of the fee

duty that would result from the difference between the export price and the normal



value of the average reference goods. For these purposes , it was considered the

export price at ex-factory price of the goods. The amount of the countervailing duty

that is determined according to the above, would not exceed the dumping margin

of 57.91 % prices .

B. Previous term exams

3. - The December 12, 2003 was published in the DOF the end of the first sunset

review of the countervailing duty . Was determined to keep for five years beginning

on May 27, 2002 .

4.-The August 28, 2008 was published in the DOF the end of the second sunset

review of the countervailing duty. Was determined to continue the validity of it for

five years beginning on May 27, 2007, and change the reference price to $ 138 per

metric ton. The amount of the countervailing duty would not exceed the dumping

margin of 53.17 % prices. However, it was determined not to apply the

countervailing duty for the reasons set out in paragraphs 147 to 154 of the same

resolution.

C. Notice the effect of antidumping duties

May. On November 4, 2011 was published in the Official Gazette Notice -dumping

effect. It is hereby informed domestic producers and anyone who has an interest,

that the countervailing duties imposed on products listed in such notice, be

removed from the expiration date stated therein for each unless a domestic

producer concerned has indicated in writing their interest to initiate a review

procedure of the countervailing force. The list included ammonium sulfate subject

of this proceeding.

D. Expression of interest

June. The 13, 18 and April 19, 2012 Unisex , SA , Agrogen , SA de CV , Fertirey ,

SA de CV , Agrofertilizantes Southeast , Inc. de CV and Nitrosur , S.A. de CV ( "

Univex " , " Agrogen " , " Fertirey " , " Agrofertilizantes " and " Nitrosur "

respectively ) , expressed their interest for the Secretariat to initiate a review of the

antidumping duty force .

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F. Call and notifications

August. With the publication of the Initiation, the Secretariat convened domestic

producers, importers, exporters and anyone to consider a legal interest in the

outcome of this test of validity, for them to appear to present arguments and

evidence deemed pertinent.

9. The Secretariat also reported the beginning of this process to interested parties

that had knowledge and government of the United States.

G. Interested parties appearing

10. This procedure appeared to the following parties:

1. National production

• Agrofertilizantes Southeast, Inc. de CV

• Agrogen, S.A. de CV

• Fertirey, S.A. de CV

• Nitrosur, S.A. de CV

• Univex, S.A. de CV

Importers

• Agroindustrial Center , Inc. de CV

• Isaosa, S.A. de CV

• Plantagro, S.A. de CV

• National Agricultural Promotora Mexicana, SA de C Martin Mendalde 1755,

ground floor Col. Del Valle C. P. 03100, México, DF

• Three Export

• Honeywell Resins & Chemical , LLC Promenade des Tamarins 150, ground

floor Col. Bosques de las Lomas

C. P. 05120 , Mexico , DF



H. Request for termination of term exam 11. On September 5, 2013 Agrogen , Agrofertilizantes , Fertirey , Univex Nitrosur

and stated that it is no longer of interest to maintain the antidumping duty imposed

on imports of ammonium sulfate, originating in the United States, and requested

that the proceeding examination of validity.

I. Completion of the force

16. Articles 11.1 of the ADA and 67 of the LCE provide a countervailing duty shall

remain in force only as long as and to the extent necessary to counteract dumping

which is causing injury to the domestic industry .

17. For their part , Articles 11.3 and 70 fraction II and 70 B of the LCE provide that

countervailing duties be eliminated within five years , unless the Secretary has

started, before the end of that period, among others, a sunset review of the

countervailing duty , derived from the expression of interest from one or more

producers.

18. In this case , Univex , Agrogen , Fertirey , Agrofertilizantes and Nitrosur , as

domestic producers of the subject merchandise , on time and expressed interest in

the initiation of the sunset review of the countervailing duty .

19. However, given that the same domestic producers who attended the

proceedings and requested that it be initiated , said it is no longer of interest to

maintain the antidumping duty imposed on imports of ammonium sulfate,

originating in the United States, conclude from the Secretariat considers the

examination procedure and eliminate antidumping .

20 . For the foregoing reasons , based on Articles 11.1, 11.3 and 11.4 of the AD

Agreement , 67, 70 and 89 F Section IV , paragraph b , of the LCE and 109 of the

RCFT , it issues the following

Resolution

21. The proceeding is declared effective review of the countervailing duty imposed

on imports of ammonium sulfate, originating in the United States , regardless of

country of origin , entrants tariff 3102.21.01 of the Tariff Act General Taxes of

Import and Export , or any other , regardless of country of origin .

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22. It removes the countervailing duty imposed on imports of ammonium sulfate,

originating in the United States, referred to in paragraph 4 of this Order .

23. Contact this resolution to the Tax Administration Service for appropriate legal

purposes .

24. Report the present resolution to the parties that there is knowledge .

25 . This Resolution shall take effect the day following its publication in the Official

Gazette .

26. Case file it as fully and finally completed.

Archetype

Dance of concessions:

Agrofertilizantes del sureste S.A. de C.V. would be beneficiated by the

compensatory quota, because of the negotiation with Honeywell, so the enterprise

would have to pay more for the importation of the ammonium sulfate. What’s more,

for the implementation of the strategy the company Agrofertilizantes will negotiate

again with Honeywell for maintain a better relation with more benefits for each

other, making this situation as “favors and ledgers”.

Third-party Roles

During the alliance between the companies the third party plays an

important role in negotiation and has the function to manage the conflicts, for

implementing a better decision. First, there is not mediator in this negotiation, but

there are some companies that try helping Agrofertilizantes del sureste for create a

standard that satisfy the necessities between the companies.

In the other hand, there is “Secretaria de Economia” who plays as arbitrator

because of their legal framework and through this regulates the management of

commerce.



Alternatives

During the process of identifying the desire benefits for Agrofertilizandes SA

de CV we get to the basic step which is identify the alternatives, in this part we

have to mention which are the alternatives that could benefit the company

according to the situation that the company is facing. Here are the three

alternatives that we came up after analyzing the problem.

1. Find a National Supplier

We believe that finding a national supplier could be a good option because it can

be easily for the company to obtain the raw material, (ammonium sulfate). Also the

company can find a better price and reduce time.

2. Find a foreign supplier

Finding another foreign supplier could be good option because it could offer a

better negotiation, providing more raw materials or satisfying Agrofertilizantes

benefits in a better way.

3. Maintain the relationship with Honeywell company

Having a good relationship with the same company is also a good option because

they have being working together for about 10 years that is a long time, and means

that they perfectly know their interest and benefits so they could easily come up

with a good agreement.

Criteria

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In the next step we must determine the criteria; in this section we are going

to explain the characteristic and physical conditions of the ammonium sulfate. We

also mention some options of the national and foreign suppliers. It’s important to

identify the national prices so we can evaluate and compare the differences

between having a national and external supplier.

National Suppliers

The following list shows the name of some companies engaged in the production

and sale of ammonium sulfate in the country

• Proquinat

• Ecoquímicos

• CHEMICAL CORPORATION JK

• QM comercializadora

• FERNET

• D´ Grosa Industrial

• FARBE MR

• Químicos y Distribuidora SIRSA

• 2mas Desarrollo

• High Purity, Técnica Química

• AMERIPOL CHEMICAL SA DE CV

Foreign suppliers

1.



Highlights

• One of the largest producers of specialty chemicals, fertilizers, plastics and

packaging in Latin America.

• Major producer of styrene and polystyrene.

• Latin America’s sole producer of acrylonitrile (AN), methyl methacrylate

(MMA), acrylic and polycarbonate resins, polycarbonate films and cyanides.

• Largest producer of cast acrylic sheets in the Americas.

• Latin American’s largest ammonium sulfate producer

2.

About the company CellMark Chemicals is a global supplier of chemical products. The Division

has 16 offices around the world and a rich, 100-year tradition of serving and

improving the communities in which we operate. The global organization forges

strong local ties and creates mutually beneficial relationships with partners.

Countries in which it operates:

• Asia: China, India, Japan, Singapore, South Korea, Taiwan, Vietnam

• Europe: France, Germany, Greece, Italy, Poland, Spain, UK

• Americas: Brazil, USA

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Providing Solutions and Adding Value Custom manufacturing chemical products to meet the specific needs of our

customers is an important part of who we are and what we do. Custom

manufacturing began as a small part of our business, but today it represents more

than 25 percent of our sales, and continues to grow. We also help customers and

suppliers by delivering:

• Local Sales / Marketing / Sourcing Support

• Technical Support including R&D

• Custom Packaging

• Regulatory Support

• Market Research Intelligence Reports

• Customer Service and Local Warehousing / Logistics

• Financial Capabilities

Markets Served CellMark Chemicals focuses on the Industrial & Specialty Chemicals, and Health & Personal Care markets.

Industrial & Specialty Chemicals

• Oil & Gas (H2S / CO2 Removal, Environment / Process Catalysts)

• Electronic (Semi-Conductor)

• Water Treatment

• Technical Minerals (Specialty Aluminas)

• Agriculture (Fertilizer, Herbicides, Insecticides)

• Chemical Manufacturing (Intermediates)

• Building & Construction (Paints & Coatings, Glass, Ceramics)



Health & Personal Care

• Pharmaceuticals (Intermediates, APIs, OTC, Excipients)

• Cosmetic (Haircare, Skincare, Beauty)

• Food & Nutrition (Vitamins & Supplements)

• Beverage (Diet Cola, Table-top, Tonics, Sports Drinks)

• Oral Care (Mouthwash & Toothpaste)

3.

Company

Established in 1984, Allan Chemical Corporation is dedicated to providing

customers with personal attention and value. Quality and service have been, and

continue to be, our driving forces. We are importers and exporters with multiple

warehouses; who work with well-respected domestic and international partners to

provide prompt shipment and timely deliveries of high-quality chemical raw

materials.

Prices

Estimated in the international market by metric ton price varies depending

on country of origin, the prices are in dollars of United States and made based on a

FOB incoterm.

The minimum order is 5 tons.

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Min 110 USD 1,320 MXN

Max 1,500 USD 18,000 MXN

Evaluation of Alternatives Alternatives Advantages Disadvantages

-Find a national

supplier

-There is a long list of Mexican

suppliers to choose. These will

help to find the right one with

benefits we looking for, and the

best prices for our profits.

- Choose a national supplier

will encourage to our national

producers and will help the

economy of the country.

- The chain supplier would be

easier just inside the national

territory. With low prices with

the benefit of not to cross to

another country. Therefore is

just a national logistic.

- The historical of prices during

the last quarters didn’t have

changed too much. So that

means the stability of product in

- The prices according on the list of suppliers used to be more expensive in comparison with a foreign supplier still being a national supplier. - As a new chain supplier with new providers, this may cause that the cost would elevate the national logistic. - We can’t guarantee that the national provider could supply in long period of time.



México is constant.

-Find for a foreign

supplier

-The benefit that the

ammonium sulfate has not

tariffs on customs makes

cheaper its importation.

- As a foreign supplier, it can

promise the supply of a quality

good.

- Also with an international

contract the benefits of a

supply in long period is more

secure.

- The prices of a foreign

suppliers compared with the

national ones are cheaper.

- There are not enough options of suppliers. - We were looking for American suppliers trying to find better benefits between both nations, but there are just a few number of providers could supply to Agrofertilizantes S.A. de C.V. in big amounts. The rest of providers has a limit of quantity respect their exportations. -A new chain supplier could make more expensive the importations with a new logistic.

-Maintain the

relationship with

Honeywell Company

- The chain supplier is already known, so with this advantage make the costs don’t elevate. In addition that the elimination of the tariff to ammonium sulfate makes an easier way to the product

- Honeywell could increase their prices for the problem with compensatory quotes. So, they need to recover the lost time and lost money that they left in all the process. (Maybe just temporally)

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gets in the country. - The benefits to keep with Honeywell will promise a supply for a long period of time for being a recognized company. - The prices will get stable for the relations between both companies and their old relationship, promising benefits for both parties.

- They can search for another buyer that offer them a better or at the same time keeps provide to Agrofertiliantes S.A. de C.V. too and to another national competitor company.

BATNA

Decision Making:

“Maintain relationship with Honeywell Company”.

The reasons are twofold:

First, the most feasible and final decision it’s keeping the relationship with

Honeywell Company, since a long period of time those companies maintain a

strength alliance. Therefore, for Honeywell is important to keep the negotiation with

Agrofertilizantes del sureste S.A. de C.V., so the strategy would be create a new

planning that could be attractive for reach the objectives for both companies.

Second, because all the invests, cost, qualities for the other alternatives would be

impossible to change the decision so, the posture would be the same as we had,

but just different structure and reporting just the new essential information for the

negotiation.



Problem Solving- Implement the Decision

After a long analysis and have studied each and every one of the

alternatives in a particular way and having taken into account all the information we

have. We have finally completed our more convenient alternative is to continue

with the company Honeywell Resins & Chemical, LLC, but establishing a strategy

with the company as we considered the different aspects and certainly with good

planning will help us to make the Agro - southeast fertilizer more competitive in

your area and a better functioning internal and external company.

Steps were mentioned to consider and should be implemented for optimum

results and benefits for the company

Objective

The objective consists in making more competitive, as well as improves the

activity and development of the company through the implementation of a strategic

alliance to be established between the company Honeywell Resins & Chemical,

LLC and Southeast Agro - fertilizers.

1. Establish alliance between the two companies.

a. In the first instance take care that such a link is established with a solid

structure trying to prevent more errors and having conducted a preliminary

study we consider the information that we have to generate strategies,

objectives and the most appropriate way how work.

b. Using the information from the two companies, ie, advantages,

disadvantages, interest in using them and knowing each other we can get

great benefits that help both companies to grow economically.

c. When you reach an agreement that the two companies know in detail the

process that will take place the policies for the use, benefit mainly obtained

by forming the alliance. Pact has finally concluded with the agreement and

legally translates it for a more prompt implementation.

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d. Working together the two companies found that by sharing information and

implementing certain strategies at first instance may notice the work that

companies are implementing.

e. Finally we will see the results of teamwork that each addition will be

developed over time more and better strategies as well as ways of

executions for better benefits

2. The alliance that we are going to implement is Supply Chain because is based

on a firm contract between two parties that include interest and benefits of each

other.

Nowadays Honeywell plays an important role as a supplier from Agrosure,

that’s why if we choose another supplier the consequence would be the higher

logistic costs.

Steps for the proposal:

a) Honeywell Company has a higher costs production, so for Agrosure it would

be beneficial the exportation of the product to Mexico.

b) Agrosure would transform the product in Mexico for its lower cost.

c) Agrosure would export the final product again, using Honeywell’s chain.

This alliance is going to benefit both companies in different ways, because

the interests are mutual and satisfied by both parties. In fact, Honeywell would

have better presence in the national market, so they would increase the demand.

On the other hand, the benefit for Agrosure its supply the raw materials, one part

for transformation and exportation and the other part for national sale so it would

be beneficial, increasing their competitiveness in the market. So, once the

company has enough logistic knowledge in the market, then Agrosure could

separate its chain transportation relationship with Honeywell, so they can make

their own supply chain, for penetrating in a foreign market.



Adjunct

Problem:

Agrosure (Agrofertilizantes del sureste S.A. de C.V.) is looking for a supplier which satisfy its necessities.

Alternatives:

• Find a national supplier

• Find for a foreign supplier

• Maintain the relationship with Honeywell Company

Criteria:

• Find national and foreign suppliers

Between alternatives:

• Compare costs • Compare objectives • Compare quality Choose alternative:

Maintain the relationship with

Honeywell Company

Implement decision:

Considered the different aspects and certainly with good planning

Evaluate the results:

Make sure both interest are satisfied

Decision Making

Problem Solving

! "#$%&'(!)*+!',-.#%-/0#+!!

BATNA Final Project


Conclusion

Honeywell and Agrosure are recognized firm companies that work together

in a different ways, but there are some missing aspects that affect both

counterparts for reaching their objectives. Evaluating the results, Agrosure stopped

their production and for consequence the alliance between both companies fall out

creating no feasible results. In addition, it is important to obtain gains of one’s

company, so the solution of the procedure is create a new strategy implementation

that strengthens the firm.

Ministry of Economy works out with Agrosure that was an advantage

because of the compensatory quota, some aspects or alternatives were considered

for resolving the problem. For instance, the national suppliers and the foreign

suppliers but it doesn’t result because of the total costs, so the final solution was to

maintain the relationship with Honeywell.

Supply Chain alliance is the most feasible proposal strategy for obtaining the

expected benefits. Therefore, in the negotiation process we concluded that the

archetypes for the implementation (dance of concessions and ledgers) help the

company to grow up with a beneficial activity.



Adjunct

Arbitration

Agrosure (Agrofertilizantes del Sureste S.A de C.V)

Secretary of Economy

Favors and Ledgers

(both are benefit)

The cuota was annulled

Compensatory cuota

Makes mexican company stronger

Hard Positional Bargaining

HONEYWELL

Mexican companies could import ammonium sulfate from the U.S. at a lower

price

BATNA Final Project


REFERENCES

http://www.elcamporadio.com/source/src/prods/sulfatodeamonio.htm

http://www.costonet.com.mx/precio.asp?clave=JARQUI00220

http://www.quiminet.com/productos/sulfato-de-amonio-51616128/proveedores.htm

http://www.unigel.com.br/

http://www.unigel.com.mx/

http://chemicals.cellmark.com/

http://www.allanchem.com/default.aspx

http://spanish.alibaba.com/products/ammonium-sulphate-price.html

Documents

Final Proyect