This study attempts to determine the potential of extracting sand in Greenland for the purpose of exporting it to foreign countries in the North Atlantic region. Export of sand could have the potential of benefiting the economy of Greenland and cover potential global supply shortages in the future. The study addresses the issue from a business perspective as it is assumed by the authors that these operations must be profitable from a business point of view before exports of sand can benefit the economy of Greenland. An analytical framework is developed for the specific purpose of examining the potential of success for any company that considers to become involved in this project. The framework addresses five factors to assess potential of success: profitability, strengths, weaknesses, opportunities and threats. The five factors are examined individually after which they are combined into a holistic assessment. The study aims to provide a short-term assessment and a long-term assessment of the potential of success.
The research revealed that several issues need further investigation before it can be definitively concluded whether a company can successfully extract and export Greenlandic sand to foreign countries. The most important of these are: (1) A specification of the sand quality available for extraction; (2) An outline of sand products that can be produced from the sand available; (3) Requirements for setup of sustainable equipment and port infrastructure specific to the extraction location; (4) Narrowing down potentially attractive export markets by applying the analytical framework until a thorough understanding of specific regions, competitors and competitor products is obtained.
Despite the fact that a significant amount of issues are yet to be uncovered, the findings of the study indicate that a company might become profitable in one to two decades from now under the conditions that: (1) Sand prices continue to increase with a rate of five to ten percent per year; (2) Costs for a sand operator in Greenland do not significantly change over time; (3) Financial support for setup of port infrastructure is provided; (4) Attractive markets in specific regions can be identified and joined.
Additional key take aways were that size in terms of production capacity and financial capital are essential success parameters for a sand operator. The location of Greenland brings certain advantages. The use of waterborne transport reduces costs per unit significantly compared to in-land competitors. The largest location disadvantage comes with the distances to export locations which are far exceeding those of competitors. Lastly, the study identified a key success factor to be tightened extraction regulations in other countries, weakening the positions of competitors. The government of Greenland must avoid similar regulations. Instead, it must implement policies that supports a sand business in Greenland in order to make it competitive.
|Educations||MSc in International Business, (Graduate Programme) Final Thesis|
|Number of pages||130|