Third Largest Producer of uncoated free sheet paper in North America.
In the decade prior to 1996, it had one of the worst financial records in the pulp and paper industry.
Case study : Taking change at domtar what it takes for a turnaround - Manu Melwin Joy
1. Case study :Taking change at Domtar;
What it takes for a turnaround.
Training and Development
2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
3. Case Study : Domtar
• Third Largest Producer of
uncoated free sheet
paper in North America.
• In the decade prior to
1996, it had one of the
worst financial records in
the pulp and paper
industry.
4. Case Study : Domtar
• Bureaucratic and hierarchical
organization with no clear
goals.
• Half of the business in trouble
areas.
• Did not have critical mass to
compete with bigger names in
the industry.
• Balance sheet was in bad
shape.
• Did not have investment grade
status in its long term debts.
5. Case Study : Domtar
• In 1996, Raymond Royer
was name president and
CEO.
• He decided to focus on
two goals.
– Return on investment.
– Customer service.
6. Case Study : Domtar
• Royer told Domtar
employees that in order to
survive, they need to
participate in the
consolidation of the
industry and increase its
critical mass.
• The goal was to become the
preferred supplier.
7. Case Study : Domtar
• He explained to the executive
team that there are three pillars
to the company.
– Customers.
– Shareholders.
– Ourselves.
• He noted that it is only
“ourselves” that are able to have
any impact on changing the
company.
8. Case Study : Domtar
• Royer implemented Kaizen in
Domtar, a process of getting
employees involved by using
their expertise in the
development of new and more
effective ways of doing things.
• He believed in tapping the
intelligence of experts, the
employees.
9. Case Study : Domtar
• The success of any change
process requires extensive
training and therefore, training
became a key part of Royer’s
strategy for Domtar.
• He believed that it is
employees competence that
make the difference. This was
later called the “Domtar
Difference”.
10. Case Study : Domtar
• Training a Domtar went
beyond the traditional job
training necessary to do
the job effectively and
include training in
customer service and
kaizen.
11. Case Study : Domtar
• Using the Kaizen Approach,
employees developed a new way of
cutting trees into planks.
• The result was fewer wood chips to
transport and more logs produced per
tree.
• Since 1997, it is estimated that Kaizen
has saved Domtar about $ 230 million
in production cost.
• Two of their mills are among the
lowest cost mills in North America.
12. Case Study : Domtar
• First quarter net earnings in
1998 were $ 17 million
compared with a net loss of $
12 million for the same period
in 1997, his first year in office.
• In 2002, third quarter earning
were $ 59 million, and totaled
$ 141 million for the year.
13. Case Study : Domtar
• Domtar became the only paper
and pulp company in north
America to be included in the
Dow Jones Sustainability list.
• In 2003, Paperloop, the pulp
and paper industry’s
international research and
information service, named
Royer Global CEO of the year.
14. Case Study : Domtar
• The committee said that
Royer was selected for the
award for his ability to
integrate acquired
businesses through a
management system that
engages employees.
• This happens only through
training.
15. Case Study : Domtar
• It was Royer’s sound management
policies and shrewd joint ventures
and acquisitions that helped
Domtar became more competitive.
• However, joint ventures and
acquisitions bring additional
challenges of integrating the new
companies into the “Domtar way”.
• This requires training.
