case solution for australian paper manufacturing

1. OS Group - 1
Akanksha Rajput (005)
Konda Pavan (021)
Abhinav Peddinti (061)
Chaithanya Madhav (093)
Mukund Khatod (140)
Anuraag Sharma (147)

2. 2
 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. 3
 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. 4
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.
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6. 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
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