Riordan Manufacturing Expansion

Introduction

Proposed Expansion of Manufacturing and Distribution (sales) of the Plastic BSF+™

It is proposed that Riordan Manufacturing, Inc expand its focus to incorporate a charitable outreach which will work in conjunction with various recognized charitable institutions such as the United Nations/ World Health Organization and United States Agency for International Development (USAID) in the development and production of plastic molds that are used for filtering water in water purification projects where clean, potable water is not accessible to the residents.

This proposal recognizes the urgency of the situation and the fact that Riordan Manufacturing, Inc has the tools available to help implement sustainable change through their commitment to excellence, leading edge research and development, and dedication to meeting the customer's challenges.

The Plastic BSF+™ is a plastic prototype of the existing heavier concrete version of the BioSand Filter which has been used effectively in developing (water poor) nations.

This paper will assess the financial implications by reviewing the macroeconomic indicators and financial market analysis of two key trading blocs. These two trading blocs are

1. UNECA (The United Nations Economic Commission for Africa). (With special focus to South Africa, Kenya and Egypt)

2. CARICOM- (The Caribbean Community and Common Market). (With special focus on Haiti, Trinidad and Tobago, and Guyana)

Macroeconomic Indicators

1. Compare and contrast the balance of trade and balance of payment for three nations in the UNECA- (The United Nations Economic Commission for Africa).

The three member nations selected are South Africa, Kenya and Egypt. Listed are the balance of trade and balance of payment for each of these three nations:

South Africa:

The financial account of the balance of payments registered a larger surplus in 2005 than in 2004. A large foreign direct investment transaction in the banking sector contributed significantly towards this outcome and also helped to stimulate interest in investment in South Africa generally. Portfolio investment into South Africa also continued in 2005 and mainly involved investment in shares. The continued surplus on the financial account in respect of the final quarter of 2005 reflected, among other things, further direct investment activity as well as flows related to the domestic private-banking sector. During each of the quarters of 2005 the overall balance of payments registered a surplus. (http://www.reservebank.co.za)

USA always had a negative balance of trade with South Africa in the last few years, i.e., it imports more as compared to Exports from South Africa.

Egypt:

According to a recent statement of the Central Bank of Egypt (CBE), Egypt's balance of payments realized, during Fiscal Year (FY) 2005/06, an overall surplus of US$ 3.3 billion (against an overall surplus of US$ 4.5 billion during FY 2004/05). This resulted in an equivalent rise in the foreign reserve assets with the CBE. The overall BOP surplus was an outcome of the US$ 1.8 billion surplus on the current account and the rise in the net inflows of the capital and financial account to US$ 3.5 billion during FY 2005/06. The current account surplus was ascribed to the services surplus and the increase in unrequited transfers (net) on the one hand, and the higher trade deficit on the other. The trade deficit reached US$ 12.0 billion (against US$ 10.4 billion during FY 2004/05) as a result of the increase in merchandize imports to US$ 30.4 billion (of which imports of investment and intermediate goods represented 53.6% ; a matter that will have a positive impact on investment and growth in the future). (http://www.ahkmena.com)

The United States has a positive trade balance with Egypt in the last few years.

Kenya:

The overall balance of payments improved to a surplus of US$ 770 million during the year to September 2006. This improvement resulted from increased net foreign private financial inflows which more than offset widening current account deficit. (http://www.centralbank.go.ke)

The United States has a positive trade balance with Kenya in the last three years.

2. Describe the comparative advantage(s) of these selected regional trading blocs.

South Africa:

South Africa is the economic powerhouse of Africa, with a gross domestic product (GDP) four times that of its southern African neighbors and comprising around 25% of the entire continent's GDP.

The country leads the continent in industrial output (40% of total output) and mineral production (45%) and generates most of Africa's electricity (over 50%).

Its major strengths include its physical and economic infrastructure, natural mineral and metal resources, a growing manufacturing sector, and strong growth potential in the tourism, higher value-added manufacturing and service industries. (http://www.southafrica.info)

South Africa is one of the most sophisticated and promising emerging markets in the world, offering a unique combination of highly developed first world economic infrastructure with a vibrant emerging market economy. It is also one of the most advanced and productive economies in Africa.

According to South Africa Business Information web pages here are just some of the reasons for doing business in South Africa:

* Sound economic policies

* Favorable legal and business environment

* World-class infrastructure

* Access to markets

* Gateway to Africa

* Trade reform, free trade agreements

* Cost of doing business in South Africa

* Ease of doing business in South Africa

* Industrial capability, cutting-edge technology

* Competitiveness (http://www.southafrica.info)

Egypt:

Since the beginning of 2005, Egypt's economy has improved considerably due mainly to

a reformist government