Thinking outside the box

Most manufacturers have it tough during recessions, as inventories become a burden, sales fall and pricing pressure intensifies.

But the tough conditions can sometimes favour bigger players, particularly if they react quickly. Take Lee and Man Paper Manufacturing, one of the largest containerboard producers in China. Its balance sheet is healthy thanks to a combination of pricing power, a green marketing message and prudent financial management.

“We came out of the financial crisis in good shape,” said Clement Chan, group vice president of Lee and Man. “Our top priority was to reduce our debt because our gearing ratio was slightly too high. In fiscal year 2010 we...