MacTara

Mactara is currently (2007) in a healthy financial position relative to other competitors in the lumber industry. They have stayed profitable amidst an unstable marketplace with their biggest consumer, the United States. This uncertainty is a problem for MacTara and the Canadian softwood lumber trade as a whole. Also, the company has some new equipment that has not been used to its full, profit-maximizing capacity. As consultants to MacTara we will provide alternative strategies for expanding operations, continuing operations, and cutting back/ operations.

In order for MacTara to expand its operations and enter into the high profit margin market of value-added wood products they must:

1. Budget costs to increase production
a. Quote for current and future international shipping fees
b. Quote for re-engineering the kiln
c. Quote for new packaging plant
d. Quote for outsourcing packaging
2. Consolidate Atlantic region lumber industry
a. Ensure high volume of raw materials from numerous smaller suppliers
b. End Fibre Agreement with pulp mills
3. Begin implementation of new projects and alliances overseas
4. Increase production and begin entering European market (First-mover mentality)
5. Continuously educate customers on wood energy

These are crucial steps (see exhibit C for details) for Mactara to enter the value-added wood product market of wood pellets and softwood decking/flooring. This strategy is most favourable for Mactara because the volume of production is increasing, average costs are decreasing and more emphasis is put on high profit margin products. This approach will also add jobs within MacTara and the Atlantic region.

If Mactara decides to continue operations as they currently stand they must acknowledge the volatility of the USD and the unstable trading channels available to them. The main focus using this strategy would be:

1. Constrain production to current and future market demand
a. Reduce current production during market