Effectively Allocate Capital and Plan Cash Flows
Model changes in the industry before they occur to understand their impact.
Fastmarkets RISI’s Cost benchmarking service helps you monitor mill projects that will impact your market. You can also model potential projects at your mills to understand how they could impact your cost standing among competitors.
Allocate capital for the highest returns
- Model real-time mill and market changes to understand their impact on your production and grade-mix decisions; as well as your costs, profits and long-term competitiveness.
- Find the investments that will have the greatest impact on your machine, mill or company by analyzing the investment histories of similar mills and machines.
Model the impact of capital investment on machine competitiveness
- Measure changes in machine productivity, capital cost, depreciation, salvage value, technical age and incremental capacity.
- Review the impact of those changes in Weighted Average Cost of Capital (WACC), capacity and net sales.
- Understand how the value of an investment will change over time.
Example: Track planned BSKP capacity expansions, new capacity and restarts in Latin America using projects data. Then model the potential impact on existing Latin American BSKP-producing mills. In this example, new, low-cost BSKP capacity would push the average cost down. This would increase cost and profit margin pressures on high cost mills, especially those producing at almost twice the cost of the new capacity. In the cash cost curve below, each bar represents a mill’s operational costs in relation to their capacity. You can easily see how new, low-cost capacity would influence other competitive mills.