D R A F T
Guidelines for Wiggins Texpe : July 1987
General O
I. The overall objective forms ins Toaps should be to b%&Ld-au--&zL,&zin&
-0-- arbonless, Fine Papers, Distribution and the
manufacture pcus Pulp that v:L3.1 provide profitable sustained
growth cus Pu
2. Wiggins Teape should aim to position its businesses in leadership
positious in growth markets and ensure that each business is operating
efficiently and achieving returns sufficient to give a cash flow that
will either fund real sales growth of at least 6 per cent a year or
produce an equivalent cash surplus for investment in other activities.
Where it is not feasible to achieve the required position or
performance, action plans should be developed for the divestment of
the businesses concerned.
Financial Guidelines
3. The Wiggins Teaps Group as a whole should aim to achieve a RONA of at
least 22 per cant an an historic cost basis of accounting and there
should be a ai-41-r target for each of the individual businesses.
4. @follow@ing dividends are expected from Wiggins Teape
1987 1988 1989 1990 1991 1992
La 24 31 35 39 44 49
S. Wiggins Taapa should aim to maintain a dobnequity ratio of 50 per
cent or below.
Specific Priorities
G. For Carbouless, the main emphasis should continue to be on
developing and maintaining a strong market position In the
higher-quality, prazium-priced sector in the UK and Europe. However,
the f irst priority should be to review the potential for improving on
the projected profit perf ormanca. In particular, action should be
taken to improve productivity and efficiency La order to achieve the
position of lowest-cost producer and, as far as is possible, selling
prices should be incraased in line with increases iu pulp prices.
7. Plans should be developed and agreed with the CPC concerning the cost
appropriate option for meeting the expected incremental base and CY
requirements.
8. Wiggins Teape should continue to evaluate opportunities to strengthen
the Group's position in France, Spain and Italy, including the
monitoring of possible acquisition candidates.
9. The strategy of concentrating an high-value products In Flue
Papers should be continued, with consideration being given to the
out appropriate ways in which this activity can be developed and
extended, particularly in Europe.
10. However, Wiggins Tcape should also seek to improve performance in the r1J
Flat Papers division, both through implementing price increases
whenever possible and by improving productivity.
co
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11. Wiggins Teape should continue to participate as a manufacturer of
copier and other business papers and plans should be developed to set
up an integrated plant for producing copier paper.
12. The priority function of the Wiggins T*ape Distribution business
should be to support the growth of the Group's manufacturing
operations, though each mrchant should be efficient and financially
sound in its awn right.
13. Special emphasis should be given to the need to Improve performance in
the Distribution businesses. In particular, the performance of the
individual European marchanting businesses should be Improved before
consideration is given to expansion through acquisition.
14. Action plans should be established for the proposed divestments of the
overseas merchants in Japan, Singapore and Malaysia.
15. Suitable distribution arrangements should be developed in Spain to
support the Soparcal and CEASA investments.
16. Wiggins Texpe should continua to develop, and =nItor the efficiency
of, the Soporcal and CZASA operations In order to ensure
continued access to low-cost Eucalyptus pulp over the sodium term. In
addition, the forestry developmanc programmes being undertaken by
Sop,orcal and CZASA should be zonitored and supported by Wiggins
Taspe.
17. Wiggins Teape should develop plans for reducing the Group's coossituent
to am-core businesses.
18. 7laus should be established for developing a central organisation
appropriate to the proposed longer-term shape of the Wiggins Teape
Group. In addition, further consideration should be to dG.'A"
de-0-41-694;AMog services currently provided by obe Orel
WB/DJA
21st July 1967
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BAT industries document for Province of British Columbia 23 April 1999