Australian Paper Manufacturers
The case deals with the Australian Paper industry in 1990, the major players operating in it and how the environment is throwing up challenges to its major players and shaping the future growth of the industry. The paper industry in Australia can be separated into three categories - Newsprint, Paperboards and Fine paper. The industry is dominated by two big players namely the PCA and Australian Paper Manufacturer (APM) and the rest catered to by imports. PCA operates in the fine paper market enjoying a 75% market share, while APM is a leading player in the paperboards segment. Both the companies are part of a huge diversified parent organization. Environment regulations from the government, green peace activists have been recently posing threats to PCA on organochloride emissions. APM is proactively seeking to strive ahead of the environmental issues facing the industry. Ken McRae, the GM of APM has to decide on three alternatives to choose upon for utilizing the A$ 50 million allocated by the parent company Amcor, keeping in view the Financial, Strategic, Ethical and Environmental issues.
Before 1987, the Australian paper industry was divided into three companies. Australian Newsprint Mills supplied newsprint, Australian Paper Manufacturers produced paperboard, and Paper Company of Australia produced coated and uncoated fine-papers. All three of those companies were subsidiaries of major Australian corporations. Maitland sales, which owned Paper Company of Australia (PCA), recorded $495 million in net sales. Amcor Limited, which owned Australian Paper Manufacturers (APM), grossed $2.4 billion in net sales. APM decided to enter another aspect of the paper industry and dive into uncoated fine papers. They figured that they could draw on their strength in paperboard manufacturing. The making of fine paper or paper in general requires close...