AUSTRALIAN PAPER MANUFACTURERS (A)

OS Group - 1

Akanksha Rajput (005)Konda Pavan (021)Abhinav Peddinti (061)Chaithanya Madhav (093)Mukund Khatod (140)Anuraag Sharma (147)

2

WHAT OPPORTUNITIES AND RISKS DID KEN MCRAE FACE AS HE CONTEMPLATED TAKING APM INTO THE FINE PAPERS MARKET? BE SPECIFIC WITH RESPECT TO TECHNOLOGICAL, OPERATIONS, AND CAPITAL INVESTMENT (AS WELL AS OTHER) CONSIDERATIONS? 

To provide alternatives to people had stopped using check-out bags preferring plastic - APM seized this opportunity to enter into fine-paper market

To acquire new capabilities in the demanding market - they learned how to make fine paper better than others through experiments in an ever growing market

To compete head-on with the largest domestic supplier of uncoated fine paper by upgrading of Maryvale’s machine 3

To allure distributors of 2nd and 3rd largest paper merchants of country are with PCA, distributing 40% of the Australia’s fine paper.

Sustaining in the business with replacing the merchants and dealing directly with the customer.

Deforestation rate in Australia this led to the greater forest scrutiny, and deforestation was put under the radar.

OPPORTUNITIES RISKS

3

WHAT OPPORTUNITIES AND RISKS DID KEN MCRAE FACE AS HE CONTEMPLATED TAKING APM INTO THE FINE PAPERS MARKET? BE SPECIFIC WITH RESPECT TO TECHNOLOGICAL, OPERATIONS, AND CAPITAL INVESTMENT (AS WELL AS OTHER) CONSIDERATIONS? 

To eliminate the middle man i.e. merchants, they equipped themselves with better software acquiring orders from consumer directly

To cater to different segments – through products like CopyRight (White Collars), PrintRight (Blue collars), and DataRight (for technology-oriented consumers)

To better Market reputation and increase market confidence compared to competitor, by creating a better record of maintaining environmental thresholds

Adverse effects of dioxins included reproductive disorders in animals, suppressing immune systems and hence effect humans.

To ensure environmental safety and regulations. Environment is most susceptible to adverse outcomes of the competition between APM and PCA.

OPPORTUNITIES RISKS

4

HOW HAS THE ENVIRONMENT FARED IN THIS BATTLE? 

It took 4 tonnes of wood to produce 1 tonne of paper. Using discarded

waste paper was considered a better

option as it consumed half the energy compared to virgin pulp, lesser air and water pollution and

lesser deforestation

 Bleached pulp produced an organo-chlorine,

namely dioxin that had adverse effects-

reproductive disorders in animals, suppressing

immune systems

DEFORESTATION ORGANO-CHLORINES

5

Option 1

Uncoated fine paper market is set to grow at a CAGR of 6.5% The demand accounts to 200000*1.065 = 212000 (1990) APM can expand its capacity to 100k from the existing capacity of 70k It would further close the gap with PCA in fine paper market. APM should make use of its superior technology (most technologically

advanced fine-paper machine) to gain more market share in fine paper segment

It would also help the company to more closer towards the target of 150k to achieve economies of scale.

AS KEN MCRAE, WHAT TECHNOLOGY AND OPERATIONS STRATEGY OPTIONS ARE AVAILABLE? WHICH DO YOU THINK HE OUGHT TO PURSUE? WHY?

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AS KEN MCRAE, WHAT TECHNOLOGY AND OPERATIONS STRATEGY OPTIONS ARE AVAILABLE? WHICH DO YOU THINK HE OUGHT TO PURSUE? WHY?

Option 3A Use of chlorine has put paper manufacturers in a bad position against the

environmental activists. APM must make efforts to reduce the chlorine released during bleaching by investing in oxygen pre-bleaching

This will reduce chlorine use by 50%. But marginal reduction of 5% only. 50 million = Option 1 (35 million) + Option 3a (15 million) So, APM should use the grant of A$50 million to implement options 1 and 3A Additionally, APM should also focus on efficient collection of post-consumer waste.

They should come up with a method to increase the yield of recycled paper from one tonne of waste pulp (currently it was 0.75)

APM should make efforts in treating water before it is released into water bodies APM should reduce the dependence upon one variety of tree and cultivate multiple

robust varieties

THANK YOU