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“Tronox Limited”
Bogdan Golchenko
MNGT 5000 Tuesday 5:30PM – 9:30PM
Professor: Albert Schroeder
December 10, 2017
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Contents
Executive overview……………………………………………………………3
Origins of the company……………………………………………………….5
Five’s Porter Forces…………………………………………………………..7
Current competitors……………………………………………..7
Threat of new entrants………………………………………….8
Power of Suppliers..…………………………………………….9
Power of Buyers………………………………………………..10
Threat of substitute products………………………………….11
SWOT Analysis………………………………………………………………12
Strengths……………………………………………………………….12
Weaknesses……………………………………………………………13
Opportunities…………………………………………………………..13
Threats…………………………………………………………………14
Strategic Recommendations………………………………………………..17
Conclusion…………………………………………………………………....19
References……………………………………………………………………20
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Executive overview
“Tronox Limited” is a vertically integrated inorganic and mining business. The
company mines and processes zircon, titanium ore and other minerals, and
produces titanium dioxide pigments that is extremely widespread and is used to add
brightness and durability to paints, plastics, paper and other consumer products. The
company operates and owns mines and mineral processing plants in Australia and
South Africa, as well as pigment manufacturing plants in the United States, Australia
and Netherlands. They have nearly 20 locations around the world, with corporate
offices in Stamford, Connecticut (USA), Kwinana, Western Australia (Australia), and
Sandton, Gauteng (South Africa). Their research and development center is located
in Oklahoma City, Oklahoma (USA). In total, company operates in 5 different regions
globally, including Europe and Asia. In 2016, the company had globally 10.0% of
market share in the titanium dioxide industry and was ranked as the third largest
titanium feedstock producer. Besides this particular product, Tronox also has an
electrolytic and specialty chemicals business that provide the innovative products to
the energy storage, automotive, pharmaceutical and paper industries.
Since the time of origins, the company almost didn’t change it’s mission
statement that sounds as: “We have six core company values that are each
supportive of strong sustainability practices. They guide our policies and actions and
impel us to create long-term stakeholder value, protect the environment and prioritize
social responsibility in our communities and around the world. Values include health
& safety; responsibility; people; teamwork; customers and results. Each of our values
is intertwined with sustainability”. To their workforce of 3,500 employees around the
world: “People are our most important resource and therefore we create
opportunities for development and act intentionally to create a diverse and
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supportive work environment. Each of us is committed to personal growth and
development, embraces change, and learns from our successes and mistakes in
order to create a high-performance culture”.
By this mission statement, company provides its concern not only about
increase of the titanium dioxide production, but also to create a safe circumstances
for the society. Another their core mission is related to company’s employees –
Tronox says that there are opportunities for each worker to get a carrier growth and
self-development, company provides to its workforce that their job is important and to
have mistakes is a common practise to create a high-performance atmosphere
inside and outside of the firm.
Company at the same time is aimed to become the world’s largest producer
and supplier of titanium dioxide, therefore it re-invests money in the business by
increasing the amount of ore mined and by producing it into the product that has a
very high demand in the market. The usage of TiO2 is extremely widespread, with
more than 170 countries each spending more than US$10,000 per annum on TiO2
pigment. This pigment is largely used in paint, which in 2016 accounted for 56% of
consumption, and plastics, which accounted for 25.6%.
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Origins of the company
Tronox Limited is an American worldwide chemical company involved in the
titanium products industry. Company is the largest fully integrated seller and
marketer of titanium dioxide pigment, which provides brightness to applications such
as coatings, plastics and paper. Tronox also sells titanium ore – the main feedstock
of titanium dioxide – and zircon directly to customers.
The company was a daughter firm of its parent one, the Kerr-McGee, and
became public and independent after a loud lawsuit. Kerr-McGee was sued for the
dumping of toxic wastes in around 22 states. According to some reports, the “Kerr–
McGee” prefered to shift its liabilities into Tronox instead of paying for the mess that
they created, meanwhile keeping its own oil and gas assets. Tronox kept it as a
secret, and didn’t show this shift to its investor, but nothing is infinite and later, with
some time, this secret was revealed and the company’s stocks dropped to a penny
price in 2009. As a response, shareholders sued the new parent company of Tronox,
which is called “Anadarko Petroleum Corporation” for keeping such secret unspoken.
Also, the US Federal Government sued Anadarko to fully pay for the cleanup, and
later it was known as a largest environmental contamination settlement in American
history in April 2014 with a price of over $5 billion. The environmental pollution
included polluting Lake Mead in Nevada with rocket fuel, leaving behind radioactive
waste piles throughout the territory of the Navajo Nation and dumping carcinogenic
creosote in communities throughout the East, Midwest and South at its wood-treating
facilities.
In 2009, the Huntsman Corporation announced that it would buy some assets of
Tronox, such as factories, but however, in late 2009, Tronox declined this deal.
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On June 15, 2012, Tronox announced that it had completed the acquisition of
Exxaro Mineral Sands and combined both entities under Tronox Limited, an
Australian holding company. Providing the more detailed explanation about the
benefits of the combination, Tronox Limited CEO Tom Casey said, “We now have
the ability to sell into a lucrative titanium feedstock market while assuring our
titanium dioxide customers that we have the supply to deliver quality products at
reasonable prices”.
Porter’s Five Forces
1. Current competitors
If the rivalry among the existing players in an industry is intense, like in almost
any other, then it will drive down prices for the products and can decrease the overall
profitability of all the companies in a given industry. Tronox Limited operates in a
very competitive Chemical Diversified business industry. This competition does take
toll on the overall long term profitability of this organization.
The Dye and Pigment, particularly TiO2 pigment, manufacturing industry is
highly competitive, with industry operators competing on the basis of price, customer
service, brand recognition and quality. In addition, price-based competition is
particularly integral for dye and pigment manufacturers to compete with imports from
