Exhibit 2

VICTORIA CHEMICALS (A)

Frank Greystock's DCF Analysis of Merseyside Project
(Financial values in millions of British Pounds)
Assumptions
Annual Output (metric tons)
Output Gain/Original Output
Price/ton (pounds sterling)
Inflation Rate (prices and costs)
Gross Margin (ex. Deprec.)
Old Gross Margin
Energy Savings/Sales
Yr. 1-5
Yr. 6-10
Yr. 11-15

Year
Now
1. Estimate of Incremental Gross Profit
New Output (tons)
Lost Output--Construction
New Sales (Millions)
New Gross Margin
New Gross Profit
Old Output
Old Sales
Old Gross Profit
Incremental Gross Profit
2. Estimate of Incremental WIP inventory
New WIP inventory
Old WIP inventory
Incremental WIP inventory
3. Estimate of Incremental Depreciation
New Depreciation
4. Overhead
5. Prelim. Engineering Costs
Pretax Incremental Profit
6. Cash Flow Adjustments
Less Capital Expenditur
-12.00
Add back Depreciation
Less Added WIP inventory
7. Free Cash Flow
-12.00
NPV =
IRR =

10.57
24.3%

250,000
7.0%
675
0.0%
12.50%
11.5%
1.25%
0.75%
0.0%

Discount rate
Tax Rate
Investment Outlay (mill.)
Depreciable Life (years)
Salvage Value
WIP Inventory/Cost of Goods
Months Downtime, Construction
Preliminary Engineering Costs
Overhead/Investment

10.0%
30%
12.0
15
0
3.0%
1.5
0.5
3.5%

1
2008

2
2009

3
2010

4
2011

5
2012

6
2013

7
2014

8
2015

9
2016

10
2017

11
2018

12
2019

13
2020

267,500
(33,438)
157.99
13.8%
21.72

267,500

267,500

267,500

267,500

267,500

267,500

267,500

267,500

267,500

267,500

267,500

267,500

180.56
13.8%
24.83

180.56
13.8%
24.83

180.56
13.8%
24.83

180.56
13.8%
24.83

180.56
13.3%
23.92

180.56
13.3%
23.92

180.56
13.3%
23.92

180.56
13.3%
23.92

180.56
12.5%
22.57

180.56
12.5%
22.57

180.56
12.5%
22.57

250,000
168.75
19.41
2.32

250,000
168.75
19.41
5.42

250,000
168.75
19.41
5.42

250,000
168.75
19.41
5.42

250,000
168.75
19.41
5.42

250,000
168.75
19.41
4.52

250,000
168.75
19.41
4.52

250,000
168.75
19.41
4.52

250,000
168.75
19.41
4.52

250,000
168.75
19.41
4.52

250,000
168.75
19.41
3.16

250,000
168.75
19.41
3.16

250,000
168.75
19.41
3.16

250,000
168.75
19.41
3.16

250,000
168.75
19.41
3.16

4.09
4.48
-0.39

4.67
4.48
0.19

4.67
4.48
0.19

4.67
4.48
0.19

4.67
4.48
0.19

4.70
4.48
0.22

4.70
4.48
0.22

4.70
4.48
0.22

4.70
4.48
0.22

4.70
4.48
0.22

4.74
4.48
0.26

4.74
4.48
0.26

4.74
4.48
0.26

4.74
4.48
0.26

4.74
4.48
0.26

1.60
0.42
0.50
-0.20

1.39
0.42

1.20
0.42

1.04
0.42

0.90
0.42

0.78
0.42

0.68
0.42

0.59
0.42

0.55
0.42

0.55
0.42

0.55
0.42

0.55
0.42

0.55
0.42

0.55
0.42

0.55
0.42

3.61

3.80

3.96

4.10

3.32

3.42

3.51

3.55

3.55

2.19

2.19

2.19

2.19

2.19

1.60
0.39
1.85

1.39
-0.58
3.33

1.20
0.00
3.86

1.04
0.00
3.81

0.90
0.00
3.77

0.78
-0.03
3.08

0.68
0.00
3.07

0.59
0.00
3.05

0.55
0.00
3.03

0.55
0.00
3.03

0.55
-0.04
2.05

0.55
0.00
2.09

0.55
0.00
2.09

0.55
0.00
2.09

0.55
0.26
2.35

180.56
13.3%
23.92

14
2021
267,500
180.56
12.5%
22.57

15
2022
267,500
180.56
12.5%
22.57