Nine Dragons Paper 2009
Case number:
A10-10-0004
Abstract
Nine Dragons Paper (NDP) is the largest paperboard manufacturer in China, and one of the largest in the world. Led by Mrs. Cheung, CEO, Chairman, and founder, it has successfully grown to the top of the industry through a “grow at all costs” strategy. But in the spring of 2009, the company’s rising debt levels had combined with declining margins to send the company’s share price tumbling. The market was increasingly worried that Mrs. Cheung’s strategy was putting the company at risk.
Teaching
This case has been used in both MBA and Corporate Learning programs to examine the linkages between corporate strategy and finance. The case allows a detailed analysis of how a rapid growth strategy requires the firm to raise massive quantities of capital, in this case both debt and equity, and what drains on the organization’s cash flows that capital poses.
Case number:
A10-10-0004
Subject:
Finance and International Trade
Year:
Setting:
China
Length:
12 pages
Source:
Library