We designed a strategy for business development and an OPEX optimization program for a manufacturing company
After completion of the deal for new asset acquisition the shareholder needed to design long- and short-term scenario options for paper mill further development.
The company with a significant market share in the paper, cardboard and packaging segment was showing negative net profit and required immediate actions for business recovery. The project objectives included (1) development of immediate actions which are required and sufficient to the enterprise to break even, (2) recommendations on the long-term development of the paper mill (including analysis of feasibility of the current production facility dismantling to establish an industrial park or a logistics center in its territory).
At the first stage of the project MCG team assessed the external factors of the packaging market in Russia (demand, product requirements, price offers, production capacities and competitors’ production costs) and identified the main reasons for the company running at a loss.
Then, based on the expert interviews and using the financial modeling tools, MCG prepared a list of the activities with the highest potential which can be arranged in the paper mill territory.
At the second stage MCG team focused on assessment of the company’s internal resources (equipment condition and opportunities of its modernization, personnel headcount and skills, working capital availability) and preparation of a detailed implementation roadmap aimed at reaching the breakeven point by the company.
Project results: action plan developed and minimum required investments estimated to provide for the company reaching the breakeven point within 6 months after the start of transformation, plan for development of the paper mill’s territory recommended to contribute to the long-term strategy of the company.