Arauco Case Analysis
Arauco should build the Nueva Aldea project for the following reasons:
Growing markets in developing nations: Export sales represent the majority (around 85%) of Araucos sales from 2001 to 2003. Adding to that, developing nations in Asia, Eastern Europe, and Latin America were expanding their utilization of paper products. In this manner, fabricating more factories to expand profitability to meet the expanding requests in the developing nations is inevitable.
Influence more economies of scale: By expanding the size of its plants, it will prompt to lower costs and higher effectiveness for Arauco to profit more from the economies of scale.
The organization Arauco ought to manufacture the project Nueva Aldea, for different reasons related to
production, proficiency, access to lower expenses and its development universally. Among the reasons
that bolster the development of the new plant, we consider that Arauco will be situated in a particular
locale (VIII) near the ports of Lirquén, Coronel and San Vicente where we can locate the biggest
profitable plantations and where this strategic position would support the assembly of prepared
materials, key purpose of investigation to advance the extension and interconnection of an organization
of this magnitude. Likewise have a perfect access to the central power grid, which would fundamentally
diminish the cost of power transmission. In addition to the strategic location also exist benefits with
respect to transdisciplinary work between various plants. Benefits that outcome in a predictable process
integration, cross data, encouraging learning, innovative exchange, and diminished administrations, all
components which add to the improvement of production processes and efficiency.
In connection to economies of scope, this new project would accomplish differentiate exercises pulping,
exploiting new innovations in processing focused on growing different enterprises. Lastly, this new
plant, will permit to Arauco, get a horizontal growth that would position him as one of the biggest
makers