pulp and Paper

Paper Manufacturing
A $300 million division of a leading paper manufacturing company in the United States was struggling to improve profits. The management team believed they had exhausted all traditional avenues of productivity improvement. In fact, the CFO believed there was at most $500,000 to $1,000,000 in opportunity across the entire division.

Using True Opportunity software and Hagen implementation services, the management team identified a total of $67 million in opportunity across the division, of which $20 million had been completely hidden by their cost accounting system.  With the aid of the Hagen tools and improvement process, $8 million was added to the bottom line in the first 12 months, boosting profits by 67%.

At the end of the 12 months the CFO said, “Paper mills are usually valued at 15 times earnings. So a mill making $10 million per annum goes for $150 million. Using True Opportunity and the Hagen tools, we can acquire one of these mills and double its profits in 12 months, increasing its value from $150 million to $300 million. That’s a $150 million increase in shareholder value in 12 months with no capital expenditure. That is unheard of.”