s2096914,Engineers like Forge & MND derive their competitive...

s2096914,

Engineers like Forge & MND derive their competitive advantage from a strong reputation (on-time delivery, exceeding performance expectations etc). I suspect that Arccon has a good reputation - by virtue of the contracts they have won, their financial performance, and the history of their management with Minproc. Through researching some of the projects that Arccon have been involved in, particularly feasability studies, the indication is that Arccon is doing a good job in maximising design efficiencies & throughput whilst minimising costs.

The unique value proposition for Arccon is definately their alliance with NFC. The most important component is the access to Chinese capital markets, and the streamlining of offtake arrangements with Chinese companies. To a company like BHP, Vale, or Rio Tinto - these abilities may not provide a significant advantage - they would be able to source their own capital/offtake arrangements.

However, to a mid-tier exploration company seeking to transition into a mid-tier producer - I can see the advantage of a company offering financing, offtake arrangements AND engineering. That is quite a complete offering. Arccon's ability to develop an alliance with a company like NFC demonstrates the incredible networks that Arccon's management have - no doubt from their days in Minproc.

Financially, if they achieve their forecasts - their ROE/ROA/net profit margin will be exceptional.