Approach: Rigorous Commercial Due Diligence and Financial Modelling
To answer this question, we conducted a comprehensive commercial due diligence process, including:
- Primary Research: Interviews with market experts and collaboration with technical engineering partners to understand production feasibility and market appetite.
- Market and Profitability Analysis: Detailed examination of historic profitability, input price trends, and the key drivers behind recent market peaks.
- Future Market Trends: Assessment of demand forecasts, evolving customer requirements, and competitive dynamics within the paper packaging sector.
- Investment Modelling: In-depth financial modelling, including calculation of Return on Capital Employed (ROCE) for each shortlisted investment option, and comparison of internal and external investment opportunities.
Outcome: Evidence-Based Recommendations for Strategic Investment Decisions
Our analysis revealed that, due to higher capital expenditure requirements, investing in the alternative paper grade did not offer a significant long-term advantage over existing grades. We recommended against expanding production capacity for the alternative grade and advised the client to focus on sourcing alternative papers from the market to optimise commercial returns.
This enabled the client to make informed, evidence-based decisions on future investments, ensuring optimal shareholder value and strategic alignment with market trends.
Why Choose Us for Commercial Due Diligence in Paper & Packaging?
Our expertise in the paper and packaging sector, combined with robust commercial diligence and financial modelling capabilities, ensures clients receive actionable insights for high-stakes investment decisions. Read White Space’s experience on capital allocation optimisation here.
