“Measuring Return on Investments and Project interactions,
side costs and side benefits – FENI Industries – Ferronickel
Dr Katsaliaki, Korina
School of Economics, Business Administration and Legal Studies, Executive MBA
At the time of its acquisition by CUNICO back in 2005, FENI Industries was
operating only one of its two production lines with annual nickel production that was
around 5,000 tonnes. After technical additions, innovations and capital investment by the
group, the smelter is now fully operational, with both lines operating simultaneously. As a
result, FENI Industries is continuously increasing ferronickel production to 16,000 tonnes
per year and ongoing refurbishments will give an opportunity to increase even further,
allowing production of 22,000 tonnes per year.
In today’s world, when demand in Base Metals Industry is very low, oversupply of
the market is more than evident, metals price volatility and uncertainty is making more
difficult for the companies in this sector to survive. Survival means Development in every
level and every aspect, and Development means Investments. Selection and acceptance of
the most profitable investments among of many, has extremely importance for the
companies in today’s tough world.
From the analysis done in this paper work it can be realized that FENI Industries is
a very successful company in the volatile and uncertain ferronickel market and is
characterized by high financial performance. Furthermore, this analysis is pointing out that
methodology used for valuation, acceptance and rejection of the investment project’s, in
general is following investment decision rules proposed by Corporate Finance theory and
used by vast majority of the companies in this sector.