METALCLAD IN MEXICO (A
Case number:
A03-01-0018
Abstract
This case details the experience of Metalclad, a small California company, with an investment in a hazardous waste treatment and disposal facility in Mexico. Led by its new president and CEO, Grant Kesler, Metalclad shifts away from its core business and attempts to become a major player in the emerging market for hazardous waste disposal in Mexico. Despite support for the project at the highest levels of Mexican government, the project fails because of local opposition. The case ends with Metalclad charging illegal expropriation and filing the first ever suit by a private company against a NAFTA government.
Teaching
This case is especially useful for exploring issues relating to direct investment in a foreign country. Metalclad’s entry strategy runs into difficulty and the case allows students to analyze what went wrong and why. In addition to host-investor relations, the case examines the impact of regional trade agreements on market opportunities and on the host country’s political system. The case also facilitates a discussion on changing perceptions of the environment as a public policy issue and as a business opportunity in developing countries.
Case number:
A03-01-0018
Subject:
Business
Government
International Policy
Year:
Setting:
Mexico
Length:
17 pages
Source:
Library/Field