Margin improvement

Margins in the industry remained under pressure, even prior to the economic downturn For the industry as a whole, returns on capital have continued below the cost of capital. Before the falls in the second half of 2008, the rise in input costs ( raw materials, energy, chemicals) and other operating costs had been inexorable and the inability of the industry to recover these costs through sales price increases reflects disaggregated decision-making within the industry, continuing industry over capacity and end user resistance to price increases.

Accordingly, the industry must continue to focus upon reducing costs, in particular the “cost to serve” customers, together with capacity management.

The industry which has traditionally focused on volume and capacity utilisation, must also focus more on margin, and in turn this requires more innovation, in process, in an attempt to drive margin improvements.

How PwC can help

We combine extensive knowledge of business trends, industry expertise and a creative approach to problem solving to develop solutions that can enhance our clients’ ability to build stakeholder value, manage risk and improve performance. Our Performance Improvement practice leverages our knowledge of forest, paper and packaging industry business processes, HR, finance, technologies and project management to provide solutions to our clients’ performance problems.

Our services range from strategy to support in operations improvement and include industry benchmarking, finance function effectiveness, supply chain efficiency, organisational effectiveness and HR transformation.