In such a highly capital-intensive industry like pulp and paper, any new investment must be very well thought out. On top of the capital needed for a new project, a large one needs 12- 24 months for implementation from the time someone realizes there is an opportunity through construction itself. So, a good look into the future is required for the success of such projects.
We all in the business pay attention to the news, we talk to suppliers, we listen to our people in the field to make sure our new investment won’t collide with others and therefore produce an oversupply of what looked to be a good idea. Once we make a decision, we might announce our intentions in hopes that others will think longer about matching our investment in the same grade. Well, at least we hope for that.
But what if someone magically could add new volume to the market before we can? Perhaps not “magically,” but what if a mill restarts an old line or a company restarts an old mill? Our planning also needs to take this possibility into account. But, is it even possible to foresee these variables?
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