The resulting strategic direction identified the potential to increase future discounted cash flow by more than 40% compared with the base alternative.
Looking beyond individual investment projects
The initiative started with the CEO.
Leadership recognised that traditional capital allocation processes could lead to a series of individually reasonable investments without answering the bigger question:
What combination of investments and asset decisions creates the most value for the company as a whole?
With a large global asset base, answering that question required looking beyond individual business cases and annual budget cycles.
The company brought together around 30 key decision-makers to develop a common long-term Capex and asset strategy across the organisation.
Starting with what happens if nothing changes
Working alongside the company's project team, Weissr built a detailed financial model covering the asset base and its major economic drivers, including investment requirements, volumes, pricing, fixed and variable costs and energy.
A base alternative established what the future would look like if the company continued on its existing path.
From there, the team developed more than 30 major strategic initiatives.
Those initiatives were combined in different ways to create and evaluate more than 100 full-scale strategic alternatives.
Instead of comparing isolated projects, leadership could see how different combinations of mill investments, asset changes and strategic initiatives affected the future cash flow of the entire business.
One strategy built around the whole asset portfolio
The analysis ultimately resulted in a long-term Recommendation for Action that was endorsed across the leadership team.
Compared with the base alternative, the selected direction was projected to generate more than 40% higher future discounted cash flow.
Implementation began within months of completing the strategy work.
But the change went beyond the individual investment decisions that followed. The process changed how the organisation thought about Capex prioritisation itself: from evaluating projects individually to considering how capital, assets and strategic choices work together across the entire portfolio.
The result
The company established a common long-term direction for one of its most important resources: capital.
The work helped the organisation:
- Create one Capex Strategy across more than 20 mills and dozens of converting plants
- Evaluate the future of an asset base with a replacement value above $20 billion
- Compare more than 100 strategic alternatives
- Align around a common long-term direction
- Identify a strategy projected to increase future discounted cash flow by more than 40%
- Move rapidly from strategic decision to implementation
- Shift Capex discussions from individual projects to whole-portfolio value creation
The result was greater Strategic Clarity around where capital should go, and a stronger foundation for making individual investment decisions against the long-term direction of the business.