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Dispute Over the Import of Ammonium Sulfate

By. Aguilar Spezzia Synthia Diyarza Lazaro Juan Jose Perez Moranchel Luis Andres Reynaud Alejandra Mireilli Rivas Rebollar Hatzidi

BENEMERITA UNIVERSIDAD AUTONOMA DE PUEBLA

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Tabla de contenido
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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. Its 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 worlds 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 worlds 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 Honeywells 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 Honeywells Growth Initiative for the past decade, and, today, approximately 55% of our revenues are now generated outside the U.S.

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! 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. ! 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 Chinas 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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! India Honeywell's presence in India dates back to the 1930s, when refining technology from Honeywells UOP was commissioned in Indias very first refinery in the state of Assam. Today, the region is an integral part of Honeywells 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 worlds first turbo technology for a 2cylinder micro-diesel engine, which is helping to drive a new chapter of ultra fuelefficient micro vehicles for the growing region. ! 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 Honeywells UOP has established a design and operations center in Kuala Lumpur, Malaysia to serve oil and gas customers across Southeast Asia. ! Europe, the Middle East & Africa (EMEA) Today there are more than 32,000 employees representing Honeywells four businesses across Europe, the Middle East and Africa, and our footprint continues
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!"#$%&##'()*+)&,-'0 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) ! 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. ! 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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! 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


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!"#$%&##'()*+)&,-'1 Color: Physical Condition Apparent density (g / L) Nitrates (wt% as NO3) Nitrogen (wt%) Acidity (wt%) Water (wt%) Sulfur content (wt%) White. Fine solid crystals 825-1080 1.5 maximum 21.0 minimum 0:03 maximum 0.5 max 23.4 minimum

Ammonium sulfate prices in Mexico

Supplier Min

Date 01-05-2013

Unit KG

Price (MXN) $19.97 $19,970 (Ton)

Status 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://ww w.costonet.co m.mx/empres as.asp?clave =MERCADEO Market pricehttp://ww w.costonet.co m.mx/empres

01-05-2013

KG

$19.97 $19,970 Market price (Ton)

09-03-2012

KG

$20.21 210 (Ton)

$20, Market price

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as.asp?clave =MERCADEO

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 2013 2013 2013 2013 2013 2012 2012 2012 2012 2012

Month May April March February January December November October September August

Price (kg) 19.96 19.99 20.03 20.04 20.06 20.07 20.07 20.05 20.06 20.14

(Ton) 19,960 19,990 20,030 20,040 20,060 20,070 20,070 20,050 20,060 20,140

INPC 98.438 98.587 98.779 98.848 98.924 98.968 98.966 98.876 98.948 99.350

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2012 2012

July June

20.22 20.27

20,220 20,270

99.720 100.000

Information de INPC de INEGI

Background
Agrofertilizantes del sureste S.A de C.V. invaders 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 its 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 its 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
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!"#$%&##'()*+)&,-'2. 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, Mxico, DF Three Export Honeywell Resins & Chemical , LLC Promenade des Tamarins 150, ground floor Col. Bosques de las Lomas C. P. 05120 , Mexico , DF
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!"#$%&##'()*+)&,-'2/ 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. Whats 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.

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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. Its 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 Ecoqumicos CHEMICAL CORPORATION JK QM comercializadora FERNET D Grosa Industrial FARBE MR Qumicos y Distribuidora SIRSA 2mas Desarrollo High Purity, Tcnica Qumica AMERIPOL CHEMICAL SA DE CV

Foreign suppliers

1.

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!"#$%&##'()*+)&,-'21 Highlights

One of the largest producers of specialty chemicals, fertilizers, plastics and packaging in Latin America. Major producer of styrene and polystyrene. Latin Americas 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 Americans 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)

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!"#$%&##'()*+)&,-'32 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 Max

110 USD 1,500 USD

1,320 MXN 18,000 MXN

Evaluation of Alternatives
Alternatives Advantages Disadvantages

-Find supplier

national -There is a long list of Mexican - The prices according on the suppliers to choose. These will list of suppliers used to be help to find the right one with more best prices for our profits. - Choose a national supplier will encourage to our national - As a new chain supplier producers and will help the with new providers, this may economy of the country. - The chain supplier would be easier just inside the national - We cant guarantee that the territory. With low prices with national another country. Therefore is just a national logistic. - The historical of prices during the last quarters didnt have changed too much. So that means the stability of product in
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expensive

in

benefits we looking for, and the comparison with a foreign supplier still being a national supplier.

cause that the cost would elevate the national logistic.

provider

could

the benefit of not to cross to supply in long period of time.

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-Find for a foreign supplier -The tariffs benefit sulfate customs on that has ammonium not

There

are

not

enough

the options of suppliers. makes We were looking for

cheaper its importation.

American suppliers trying to find better benefits between

- As a foreign supplier, it can both nations, but there are promise the supply of a quality just good. a few number of providers could supply to Agrofertilizantes S.A. de C.V. - Also with an international in big amounts. The rest of contract secure. the benefits of a providers has a limit of supply in long period is more quantity respect their

exportations.

- The prices of a foreign -A new chain supplier could suppliers compared with the make more expensive the national ones are cheaper. importations logistic. -Maintain relationship the with The chain supplier - Honeywell could increase is their prices for the problem already known, so with this with compensatory quotes. advantage make the costs So, they need to recover the dont elevate. In addition that lost time and lost money that the elimination of the tariff to they left in all the process. ammonium sulfate makes an (Maybe just temporally) easier way to the product
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with

new

Honeywell Company

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gets in the country.

- They can search for another buyer that offer them a better

- The benefits to keep with or at the same time keeps Honeywell will promise a provide to Agrofertiliantes supply for a long period of S.A. de C.V. too and to time for being a recognized another national competitor company. - The prices will get stable for the relations between both companies relationship, and their old promising company.

benefits for both parties.

BATNA Decision Making: Maintain relationship with Honeywell Company. The reasons are twofold: First, the most feasible and final decision its 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.

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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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BATNA Final Project

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, thats 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 Honeywells 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.

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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

Problem Solving

Decision Making

Implement decision:
Considered the different aspects and certainly with good planning

Evaluate the results: Make sure both interest are satisfied


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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 ones 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 doesnt 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.

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Adjunct
Arbitration

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

Secretary of Economy

Favors and Ledgers (both are benefit)

Hard Positional Bargaining

HONEYWELL

Makes mexican company stronger

Compensatory cuota The cuota was annulled

Mexican companies could import ammonium sulfate from the U.S. at a lower price !"#$%&'()*'+(&,'(-.$/+&(/0(1../2"%.(3%405&'( 67(8'(2/*"'.9+'(8'(6:;<(

BATNA Final Project

R EFERENCES

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

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