Green Case

CASE SUMMARIES FOR STRATEGIC MANAGEMENT CLASS Lecture 2: corporeal Strategy:- Expansion, Integration, Diversification A) Arauco Ltd Forward integration or Horizontal involution? In early 2004, Mr. Perez, the president of the Chilean forestry company: Arauco ltd. was nearly to present his recommendations to the board of directors on a $ 1b investment in a modern frame plant. The plant will adjoin the firms capacity by 800,000 tons to 3.2 MT, hence making it the largest frame producer in Latin America. ii years back the board approved about US $ 150m investment in the current plant, increasing the firms capacity to current 2.4 MT. The current plant has a heart of about 30 years. The major sales pitch for Perez was the downwards trend in pulp prices for last three years, which worked in advantage for Arauco, as cheaper pulp prices meant that integrated moderaters now whitethorn start outsourcing. In addition Arauco was a major timberland products manufacturer, such as ply timberland and fiber wood panels, for which pulp was a raw material. So far the % Capacity enjoyment factor (CUF) for Arauco was 100%. Roughly 50% of the firms revenue came from pulp sales to paper making firms, the other(a) 50% went into two products: plywood, fiber boards.

90% of global pulp production as at 2004 came from wood, the other 10% from pick raw materials like straw bamboo, bagasse, flax, hemp and cotton. However of former(a) concerns of global warming resulted in stiff opposition from environmentalists on cutting down forests for pulp making and alternative greener sources were in stages becoming popular, although they were not that cost effective like wood based pulp. However in future, better technologies may make pulp making from alternate sources more viable and that day was not very far away. Given European wedlocks commitment to generating 20% of its energy requirements from green sources by 2020 and replacing the current internal combustion engine with render cell/battery powered... If you want to get a abundant essay, order it on our website: Orderessay

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