Waste paper sales and trading is a global business, where sales pricing as well as raw material pricing changes are ongoing. Sales (price, volume and timing) are committed based on current and projected raw material pricing, but by the time of procurement, the pricing changes would have a significant impact on the margin and thus the viability of the business.
The other challenge for the business was cash flow the business is cash intensive as the time between payments for raw material to receiving payment for sales can significantly impact cash flow. Funds generally cost between 1% to 1.5% per month, so delays when margins are tight have an impact.
WHAT WE DID
Defined a strong structure and processes – for all aspects of the business from procurement, sales, processing and overhead. Enabled management and finance to understand what the key business drivers were, developed weekly/monthly KPI to manage the business.
Today the business has passed breakeven, and projections of increased profitability.
A Middle East based waste paper recycling business, engaged in processing mix paper waste, packaging, and shipping the processed material to international clients. Raw material is sourced through various forms, including local pick up, local bulk purchases and some regional purchases.