The Importance Of Monitoring Capital Investments in Your Industry? – Case 1

Last week, the notion of tracking capital investments in your industry was introduced.  An abundance of details can be collected about the sector, competitors and various investment projects.  To demonstrate this, consider the following case scenario.

As one of several competitors in the energy sector, you are interested in knowing the level of foreign direct investment flowing into Canada from specific countries in 2008 and 2009.

Using information from E&B DATA‘s Information Observatory, the following details are available:

Within the past 22 months, foreign direct investment in the energy sector in Canada originated from the following top five countries.

  • France
  • Germany
  • Spain
  • United Kingdom
  • United States

Figure 1 presents that the majority of the investments in the sector came from the United Kingdom with 46%.

Figure 1: Source of FDI in Canada for energy sector in 2008-2009 by percentage

Drilling down further into the data reveals that some of the investments from the United Kingdom were made by TCI Renewables Ltd. and REG Ltd. (Renewable Energy Generation) via their Canadian subsidiaries – Air Energy TCI, Venterre and AIM PowerGen Corporation. Below is a sample of the announcements made by these investors.

These companies were contacted to validate the amount of the investment that was made and the number of jobs that were created.

Next week’s caseAs a major competitor to Xstrata, you would like to investigate the number and the type of investments (ie, new facility, expansion, modernization) that the company has made during the past three years.