Added Value Opportunities In Industrial Minerals

Added value is a term loosely used in the industry, but what exactly does it mean? What does it take to make a value-added product and more importantly how does a company maintain the value added to its products? Most people agree that value-added means the value of a mineral minus the cost to produce it. But what is misleading is that producing value added products does not necessarily guarantee the profitability of the products. In some cases firms that make "value-added" products are not very profitable. It is not only important to understand how to make a value-added product but also how competitive forces in the market can erode the value added. Therefore, when we look at value-added opportunities, we must understand how to obtain the value added and more importantly how to maintain the value. There are four major factors that limit a company's ability to add value to its products. This paper will examine these factors and will use the ground calcium carbonate and mica industries as examples.