Case Abstract
It is early 2001 in Brazil and Grupo Orsa has purchased Jari Celulose. By doing so, the group has assumed US$ 415 million in debt that has to be repaid over 11 years, following a preestablish agreement with creditors bank. Jari faces major problems in terms of unstable pulp production, high energy costs, decreasing international pulp prices, and a series of financial losses throughout its 20 years of existence. Jari also faces serious environmental and social issues that stem from its very existence.
Readers are left to consider the strategic direction that Sr. Sardinha, the new CEO of Jari Celulose, might take to turn the venture around. The successful implementation of such strategic plan is crucial not only for the company’s survival, but because it is foundation to develop a sustainable growth model in the region. The case presents a summary of the pulping process, the global pulp market, as well as the background and history of both Jari and Grupo Orsa.
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