Paper Company

Division: Phoenix Management Services


Client

Our client was a $60 million company with interests in Paper Converting, Paper and Plastic Packaging, and Paper Products Manufacturing with operations in several states.

Problem

Acquisitions into new business lines, transitional issues from the majority shareholder to his son, higher raw material costs, supply shortages, dwindling stock, a drop-off in travel following 9/11 that resulted in reduced demand for tissue in the “away-from-home” market, the bankruptcy and subsequent reorganization of a major industry competitor, and industry consolidation resulted in three consecutive years of operating losses at this manufacturer.

Solution

Phoenix Management Services was engaged to identify ways to return this client to profitability. Phoenix quickly identified the profitability and cash flow of each entity and operation, and developed and helped implement a turnaround plan that encompassed the following elements and ultimately returned the Company to profitability: alleviated capacity constraints, consolidated fiber purchases—the Company’s largest raw material cost; renegotiated contracts with major customers; identified new distribution channels, solidified a succession plan; refined the methodology for capital spending decisions and calculating after-shrink yields; and spearheaded the closure of two money-losing divisions.