Case ID 12-1026
Published 2012
Industry SUGAR PROCESSING
Industry Code 095
Subject Accounting & control


Abstract The Ahome Suger Mill in North Mexico faced bankruptcy in 2009. A new group of investors lead by the son of a prominent local business recued the company and brought in an experienced CEO. The new manager realized that the current facility could not be profitable and requested a new facility. The ownership approved building a new factory with a budget of 200 million US dollars, including the sale of the current factory's land, which was located in the city's central quarter and a high real state value. The case describes the decisions needed for the new factory's configuration including considering the budget restrictions and with the goal to turn the mill into a profitable company. The decisions included the new location, the use of sugar cane sub-products, the generation of electricity, and the sale of the current land while keeping good relationships with the local government. The case uses accounting and financial knowledge into the strategic management process in order to take the best decision, considering that the factory is the largest employer of the region and the current operation could not be sustained in the near future.
Pages 25
Teaching Note Yes