This paper will provide valuable information on the opportunities of opening a detergent plant in Pakistan and Mongolia which should be considered by Spring Clean Products.
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It is important that both these countries have rich deposits of the raw materials which are required for the manufacturing processes within the detergent plant, including sodium chloride, phosphate and chlorine. Kogel et al (2006) noted that “In Pakistan, several hundred small lakes contain sodium carbonate, chloride and sulfite” (p. 863). Regarding Mongolia, this country is known for its Quaternary Quagan Nur deposit which contains salt deposits as well (Kogel et al, 2006, p. 863).
Taking into account the Pakistani semi-industrialized economy and the recent shift towards the growth of the manufacturing sector, it can be stated that currently there are a lot of skillful factory workers and managers. Regarding Mongolia, the industry accounts approximately for the same rate as the agricultural sector does. It means that skillful factory workers can be found in Mongolia as well.
The potential size of the market in Pakistan with the population of nearly 170 million is impressive. Taking into account Afghanistan, Iran, India and China on which the country borders and to which the market can be potentially extended, it can be stated that the hypothetical size of the market is favorable for opening a detergent plant in the area.
Regarding Mongolia with the population of about 2 million, the potential sizes of the market are smaller, but can be compensated by extending the market to Russia, People’s Republic of China and Kazakhstan bordering on the country.
Regarding the political stability in Pakistan and Mongolia, it should be noted that the situation in both countries is rather stable. It is significant that Pakistan does not support the Taliban regime. Mongolia which is a parliamentary republic maintains positive relations with other countries and supports diplomatic missions.
As to the trade and investment policies in Pakistani economy, it can be stated that with the recent shift towards industrialization of the country, the foreign investments have already been made into several sectors. Regarding the Mongolian policies concerning the same issues, it can be stated that the country’s government implements strategies for encouraging the foreign trade and investments.
Keegan and Green (2008) noted that “foreign exchange is an aspect of global marketing that involves certain financial risks, decisions, and activities that are completely different than those facing a domestic marketer” (p. 147). The local currency in Pakistan, the Pakistani rupee has been relatively stabilized by the central bank through decreasing the interest rates and buying dollars.
The Mongolian local currency tugrik is recognized as one of the best-performing currencies in the world. The relative stability and high performance of the local currencies in these countries create favorable conditions for opening a detergent plant on their territories.
Taking into account the availability of the raw materials on the Pakistani territory, it can be stated that the costs of transporting the materials and the finished goods would be minimal. Taking into account the correlation between the area and the population rate in Mongolia, it can be concluded that transportation can be more costly. Still, the developed railroad net of Mongolia would allow transporting the finished products to not only different regions of the country but also the neighboring states.
The governments of both these countries encourage the foreign investments. As to the competition of the local and international companies, it can be concluded that it would be stronger in Pakistan because the chemical industry is one of important sectors of Pakistani economy.
Analyzing the above-mentioned information on the availability of the raw materials, socio-economical situation and the government policies concerning the foreign investments in Pakistan and Mongolia, it can be stated that the conditions of both countries are favorable for opening a detergent plant.
Keegan, W.J. and Green, M.C. (2008). Global marketing. (5th ed.). Upper Saddle River, NJ: Prentice Hall
Kogel, J., Trivedi, N., Barker, J., and Krukowski, S. (2006). Industrial minerals and rocks: Commodities, markets and uses. Littleton, CO: Society for Mining, Metallurgy and Exploration.