The forest products industry is characterized by capital-intensive production processes, cyclical product markets, and recent consolidation among firms. In this very competitive environment, cost-effective projects are essential for survival. IPA's work spans many companies and industries. One key trait of leading companies is an ability to quickly learn and implement an effective practice more efficiently than the competition. In addition, Best Practices for developing and executing capital projects are frequently found outside of the forest products industry. Therefore, forest products companies have a tremendous opportunity to learn from others.
The forest products industry, on average, loses almost 2 percent return on investment versus other capital-intensive industries. On average, the contribution to financial results caused by capital project system performance is 2 percent greater in the chemical process industry than the pulp and paper industry. In other words, firms in the forest products industry may benefit from better understanding the practices used in the chemical process industry. IPA research also shows that the gap in financial performance caused by the capital project system is widening over time. Hence, improvement efforts should be accelerated in the forest products industry just to maintain relative position.
The forest product company that is able to learn and implement the proven practices of others will have a clear advantage over their industry competitors.
IPA's Forest Products Database includes hundreds of capital projects executed by Weyerhaeuser, International Paper, SAPPI, Inlnd, Potlatch, and Mead, among others, including their contractors (BE&K, Jacobs, etc.). These projects represent more than $2 billion in capital investment. Projects in the database include pulp mill projects, paper machines, wood products, mill improvements, converting operations, environmental compliance, and specialty paper projects. All of this information is carefully protected to ensure proprietary information is safeguarded.