Worldwide Paper

Worldwide Paper Case

Group member: Dan Liu, Yue Shen, Nan Wang

Instructor: Maurry Tamarkin

Background of the company

Papers Worldwide was incorporated in 2001 with the definitive objective of becoming the ‘Preferred Paper Supplier' in the regions of Middle East, Levant, Africa and Asia. Today Papers Worldwide has grown into a global paper company with a green conscience and a strong portfolio of high quality commodity, Technical and Fine Paper products. Headquartered in the UAE Papers Worldwide works through its branches, distributors and agents across these areas. Worldwide Paper’s mission is to achieve business excellence through fair and best practices. They are focused on providing satisfaction and value to clients and stakeholders by placing strong emphasis on eco products, environmental sustainability, corporate social responsibility, integrity and innovation. They aim to provide our clients with the finest paper products from around the world at the best prices.

Brief Summary of the case

In December 2006, the controller for the Blue Ridge Mill, Bob Prescott, prepared to eliminate the need to purchase shortwood from an outside supplier by establishing a new wood yard producing shortwood and create the opportunity to sell shortwood on the open market as a new market for Worldwide Paper Company(WPC), and this will cost WPC $18 million capital outlay plus the incremental investment in working capital over the six-year life of the investment, the problem here is whether the benefits will outweigh the costs in the near future and bring a positive outcome.

The costs of the wood yard will be $16 million in 2007 and the remaining $2 million in 2008. As for the capital outlay of $18, only 10% will be recoverable in 2013. And, when the new wood yard began operating in 2008, it would significantly reduce the operating costs of the mill. For 2008, he expected to show revenues of approximately $4 million, as the facility came on-line and began to...