Euroland Foods S.A.

Euroland Foods S.A.

Weihan Zhang

Marshall University

Euroland Foods S.A.

Introduction:

This case discusses Euroland Foods' the eleven projects that was financial reporting. This case indicates that Euroland Foods draft the company's capital budgeting in the New Year, but the eleven projects spend EUR316million far beyond EUR120 million spending limit prescribed by the board. It will be a challenge for senior managements to allocate funds for these projects .This case will analysis the project which is more beneficial to the company. It will include new product introduction, acquisitions, market expansion, improve efficiency, preventive maintenance, safety and pollution control.

Company’s Background:

The Euroland Foods was established in 1924 by the Belgian farmer Theo Verdin. This was a multinational company in the production of high quality food, such as ice cream, yogurt, fruit juices and bottled water. Ice cream, the most popular product, had a loyal customer base that was causing ice cream accounted for about 60% of company's revenue. Yogurt, was introduced by Verdin in 1982, contributed about 20% of revenue, the rest of the bottled water and fruit juice were equally divided about 10%. These products have been sold to some Europe countries, such as Britain, Belgium, Luxembourg, the Netherlands, Scandinavia, northern France and western Germany.

Because Verdin focused on product development and shrewd marketing, the company grow steadily over the years. The company continued to grow and went public in 1979. By 1993, the Euroland Foods was listed for trading on Frankfurt, London and Brussels exchanges. As the company continues to grow, it faced some financial considerations that need management focus.

Company’s current situation:

The board of directors of Euroland Foods has 12 members that included three Verdin family's members, the four management and five outside directors. Each member has different tradable shares, such...