Charlotte Facility Is Having Difficulty

¶ … charlotte facility is having difficulty obtaining recycled material, the president contends Eastvaco should open a similar manufacturing facility and expand to the Asian market. The Asian region can provide to be very beneficial for Eastvaco for a number of reasons. The Asian rim forest offers more resources. Firstly, the paper pulp raw material is available in greater quantities there. Hemp is widely known to be one of the cheapest and best sources of very high quality cellulose for paper making. Hemp varieties have been cultivated with low Tetrahydrocannabinol (THC) content and high fiber yields for thousands of years in China (http://www.tree.org/c1.htm). THC is a drug on which one can become mentally dependent as a result of habit or an emotional connection therewith (http://en.wikipedia.org/wiki/Tetrahydrocannabinol).

Secondly, there is a continued increase in demand for wood raw material from plants and pulp mills in the Asian market causing the domestic log prices to be higher. However, this provides more opportunity for Eastvaco to import logs and wood chips to raise the domestic fiber sources resulting in increased revenue for Eastvaco's business. As Zhao & Guafon (2002) mentioned the total chip imports for 2010 are likely to be close to five times as much as in 2008. Vietnam is by far the largest supplier of chips followed by Indonesia and Thailand. The three countries together currently supply about 90% of all imported chips (Zhao & Guafon, 2002).

Thirdly, Eastvaco has the opportunity of hiring more labor with lower payroll. This can result in an increased productivity in less time. Furthermore, the cleanup and replenishment cost is much lower in the Asian regions.

12b.

Eastvaco's strengths and weaknesses can play a major role in determining whether it should expand its business in the Asian market. To increase the raw material, Eastvaco has its own indigenous forest management program which can be implemented in the Asian market. Furthermore, Eastvaco's forest reserves in the United States and Brazil is greatly being depleted thereby facing a downward supply pressure. Excess production from the Asian rim may relieve this pressure and ease any rising demand in the United States.

Eastvaco maintains 30 sales offices in the foreign countries, therefore, having marketing experience on an international level. Its marketing experience and strategies can cause it to be one of the leading papermaking organizations in the Asian market. Eastvaco must comply to the federal and state environmental laws and regulations which results in the distraction of capital and an increment in its operating costs unlike the Asian rim.

However, the currency exchange rates may greatly affect Eastvaco's business in the Asian market. The supply cost may outsource the net sales of the company. Another reason worth mentioning is the skilled labor suppliers in Asia. Eastvaco operates major research facilities in the United States which provide process and product support for its manufacturing operations. These research facilities will not be present in the Asian region. The company also has separate staff for each product-related project responsible for the individual units which is not available in the Asian rim. Furthermore, Eastvaco owns a many foreign and domestic patents which are of great material importance.