The Value Proposition of 'Teck Coke Limited' Should Teck Enter the Coke Trade?

This paper will review the business case for Teck to enter the metallurgical cokemarket for the steel industry. The trend impacting investment is the growing demand forsteel. There are two coke battery technologies to choose from; environmental concernsmake the heat recovery oven the preferred technology. Four countries were considered inwhich to build the coke plant; Teck’s relationship with Chile and Chile’s desire forforeign investment makes it the best choice. Market size was estimated using theDemand Estimation Model. The forces that determine the ‘total market’ are a netpositive on demand. ‘Marketing plan’ forces do not have an impact on the size of themarket. Profitability is dependent upon the premium paid for coke over its input hardcoking coal. With steel demand expected to increase and little additional coke supplycoming online, Teck should invest in a coke oven alone or in a JV.