Strategic Evaluation of Fiber Utilization Scenarios, 2000 Pulping / Process & Product Quality Conference Proceedings

J. D. Kramer, L. Samuelsson--A few companies in the forest products industry have used new methods for optimizing the performance of their integrated operations. They have come to realize that a systematic, quantitative analysis and planning process will maximize current and future earnings. More specifically, they have been formalizing their evaluation of strategic development scenarios for the improved economic performance of selected units within their integrated operations. This results in a powerful structure for their future investments and adds to gaining a competitive edge.

A proven and cost-effective technique for such evaluations is AIM (Asset Investment Management). Using this technique in the fiber raw material area, several applications have been evaluated. One example is discussed in this paper. The benefits of the optimization became evident. Strategic planning is more in-depth and more objective. Vital financial benchmarks, such as maximum operating margin, cash flow, NPV, and incremental IRR are predicted and subjected to analyses that facilitate strategic decision- making.

An optimization using our technique results in a powerful strategical basis for future investments and adds significantly to gaining a competitive edge. It can thus make a contribution to a company’s efforts towards a more profitable and less cyclical performance in the future.