Grupo Lindo Ecuador: air gas production project for Acería Ecuatoriana

Learning outcomes: This case teaches participants to: identify evaluation feasibility criteria for project alternatives according to their typology (market, techniques, finances, environmental and social), starting from the analysis of the information available about them. Prepare a comparative project alternative evaluation table, applying good business analysis practices promoted by PMI® and other authors for selecting the most viable project option that will add the most value to the organization. Case overview/synopsis: At the start of 2013, Acería Ecuatoriana, because of a million-dollar investment that had been started by its general manager, Pérez, increased its melting and steel production capacity from 100,000 tons per year to 220,000 tons per year. This implied a greater demand for industrial gases and require its main additional supplier to deliver. Demand increase caused Grupo Lindo Ecuador´s plant saturation, unit separation air 1. For this reason, Grupo Lindo Ecuador had to import considerable oxygen amounts and this increased its cost of production. This caused Cadena to seek the establishment of a strategic alliance with Acería Ecuatoriana, for the purpose of developing a project for gas production (oxygen, nitrogen and argon). In September of the same year, Nelson became interested but required to know the Grupo Lindo Ecuador project proposal before signing the strategic alliance. Complexity academic level: The case is addressed to an audience made up of graduate students (graduation and Master’s Degree) who have managerial experience and would like to improve their project management empirical practices. Supplementary materials: Teaching Notes are available for educators only. Subject code: CSS 9: Operations and logistics.