Global Packaging Company
Scope
Upon request from the CEO, a team with extensive expertise in CapEx strategy performed a strategic investment project in collaboration with the client’s project team. The project covered over 20 pulp and/or paper mills plus several dozen converting plants, with a combined replacement value exceeding $20 billion.
Business Needs
✔ Understanding Pitfalls: The CEO and his management team, after reading “the Tail that wags the dog,” recognized pitfalls in the capital allocation process historically repeated in the industry.
✔ New Capex Strategy: Gather the “top 30” decision makers to establish a new Capex strategy with detailed site plans.
✔ Common Commitment: Ensure the team’s common commitment to the strategy to guarantee its implementation.
✔ Avoiding Pitfalls: Achieve an understanding of the pitfalls and how to avoid them.
Our Approach
✔ Expert-Led Capex Strategy: Our team guided key decision-makers through a structured Capex Strategy process tailored to their operational needs.
✔ Comprehensive Financial Modeling: Developed a detailed model integrating Capex needs, cost structures, and key operational variables for data-driven decisions.
✔ Investment Prioritization: Established a strategic framework to optimize capital efficiency and ensure long-term financial performance.
✔ Continuous Optimization: Integrated dynamic decision-making tools to keep investment strategies flexible and responsive.
✔ Embedding Strategic Thinking: Ensured insights and best practices became a core part of the company’s long-term Capex planning.
Client’s Results
✔ Endorsed Strategy: A long-term Recommendation for Action (RfA) was universally endorsed.
✔ Increased Value: The RfA predicted a +40% increase in future discounted cash flow.
✔ Swift Implementation: Strategy implementation began only months after project closure.
✔ Positive Market Reaction: The stock reacted positively to major decisions communicated to the market.
✔ Mindset Shift: Fundamental change in the company’s mindset regarding Capex prioritization.