BACNOTAN CONSOLIDATED

INDUSTRIES INCORPORATED
 SWOT ANALYSIS
FACTS S W O T
Mr. Santos realized that the company
was proud of its long tradition of
consistent dividend payment to its
shareholders.


The initial year of BCI saw extensive

improvements to increase the plant 
production and operating efficiency.
Employee’s salaries, wages and
benefits were raised and working 
conditions improved to establish a
proper labor-management relationship.
BCI became a major supplier of cement in the
Northern Luzon region  

In 1963, the company acquired a galvanized

iron sheet plant in Poro, San Fernando, La
union. Further, in 1966, BCI established a 
second cement plant and another GI sheet
plant in Davao City, both of which became
operational in 1968.

The government adopted a program for a 

modernization and rationalization of the
cement industry.

Although BCI had established a pattern of

growth in both its assets and earnings in its 
corporate life, its net income performance was
affected by the economic downturn
experience.
In FY 1981, BCI reported
income from operations of
about 18 million which was 9
million lower than FY 1980’s
income of 7 million, or a 33%

decline.

In FY 1982, earnings went down to

16.7 million or a light 7% decline
relative to the previous year. 
TIME FRAME
May 1984
 VIEWPOINT
Mr. Rufino R. Santos, Vice-
President and treasurer of
Bacnotan Consolidated
Industries, Inc (BCI).
 STATEMENT OF THE
PROBLEM
What will Bacnotan
Consolidated Industries (BCI)
do in order to give both the
needs of the shareholders and
the need of the company for
the current expansion?
 STATEMENT OF THE
OBJECTIVES
To meet the policy of the
company

 To sustain BCI’s
improvement and expansion
project
 AREAS OF CONSIDERATION
• The company was proud of its long tradition of
consistent dividend payment to its shareholders
• BCI had a diverse shareholder group which generally
preferred more dividends but had been so far amenable
to lower dividends if properly justified by the
management.
• The composition of the company’s stockholders group’s
influence on deliberations and their representatives of
the Board of Directors may have had some influence on
the deliberations regarding dividends.
• BCI and Filipinas Cement appeared to be the front-
runners, with the World Bank extending its credit line
to both firms in their respective expansion and
modernization programs.
 ALTERNATIVE COURSES OF
ACTION
Reduce the dividend payment and
the additional incentives for the
stockholders

Apply a loan for the improvement

and expansion project of BCI.
 EVALUATION OF ALTERNATIVE
COURSES OF ACTION
 Reduce the dividend payment and the
additional incentives for the stockholders

ADVANTAGES DISADVANTAGES

a.) Meet the policy of the a.) Dissatisfaction of

management shareholders
b.) Additional fund for the
expansion
Apply a loan for the improvement and
expansion project of BCI.

ADVANTAGES DISADVANTAGES

a.) Tax Benefit a.) liabilities

b.) it won’t affect the b.) strict requirements

dividend payment
c.) high- interest
 RECOMMENDATION
I highly recommend that Mr. Santos should
reduce the dividend payments and additional
incentives that the BCI’s regularly give to its
shareholders. With the half dividend and stocks
that BCI would save, BCI will use it as additional
capital for the improvement and expansion
project. Since the shareholders are part of the BCI,
they’ll benefit from it. They won’t feel the effect
right now, but soon, as the expansion and
improvement of the company is done.
 PLAN OF ACTION
PEOPLE TIME BUDGET
SPECIFIC ACTION RESPONSIBLE FRAME

Set a meeting with Mr. Santos A day 1,000

the shareholders
Discuss about the Mr. Santos After they 10,000
decision set the
meeting
Negotiating a Shareholders After the
contract and Mr. Santos discussion 5,000
s
Signing of contracts Shareholders 1 day 2,000
and Mr. Santos
THANK YOU !