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Upscale Strategy · Decision Room

Decision summary

Put to the board 18 September 2026. Printed 2 October 2026

The company. Eksempel Emballage A/S · CVR 99999999 · Manufacture of plastic packaging

The decision put to the board

Should we invest DKK 42 million in a new production line for recyclable packaging in 2027, or should we first test the market with a subcontractor for a year?

Your leaning before the board
I lean towards investing now. Customers are asking, and we risk losing them to a competitor that can already deliver.
Success criteria
At least DKK 25 million in new revenue by 2029, a margin above 30 percent on the new line, and no loss of our five largest customers.
Can it be undone
Partly

The situation

Two of our five largest customers want a quote on recyclable packaging before the end of the first quarter. Raw material prices are up 18 percent in a year, and margins are under pressure. The leadership team is split on whether to invest in a new line now or wait a year.

From your charter, as it stands today.

The chair's recommendation

Revised after your follow-up

Go ahead with stage one of the investment, DKK 18 million, against a two-year agreement with the customer. Decide stage two when the second customer has committed, by the November budget meeting at the latest.

The first recommendation
Go ahead with a staged investment, but only against an advance agreement with at least one of the two large customers. Use the next six weeks on the agreement and a financing plan for the board.
Evidence
Moderate. Demand is documented in two specific enquiries, but neither is binding yet.
Consequence
If one customer drops out, the margin on the line falls to about 18 percent, and payback goes from five to eight years.
The weakest point
Two years do not cover the payback on stage one. The agreement needs an option to extend.
Dissenting view, Karen Bruhn
Even in stages it is too early. Without signed agreements, no capital should be committed in 2027.

The paths on the table

  • Invest now

    Gains A lead position with the two largest customers and full control of quality.

    Costs DKK 42 million committed before customers sign, and pressure on liquidity in 2027.

  • Subcontractor test for a year

    Gains Learning about the material and customers without tying up capital.

    Costs A lower margin in the test year, and customers may get used to another supplier.

  • Staged investment with advance agreementYour choice

    Gains The investment follows the customers' commitments, and the risk is shared.

    Costs A slower start-up and a negotiation that may drag on.

The advisers' points

The first sentences of each adviser's opening, verbatim.

  • Helena Lindqvist, Chief Strategy Officer

    The question is not whether recyclable packaging is coming, but whether you want to be the ones who set the standard.

  • Karen Bruhn, Chief Financial Officer

    DKK 42 million is two years of free cash flow, and the payback rests on two customers who have not yet signed. I want to see the downside if one of them chooses another supplier.

  • Rafael Moreno, Chief Commercial Officer

    Customers are not asking for fun; their own customers demand it, and they buy from whoever delivers first. If we wait a year with a subcontractor, we teach them they can buy it elsewhere.

  • Mads Kjeldsen, Chief Operating Officer

    A new line takes 14 months from order to stable operation, and we do not have the people to run it. The subcontractor route gives us time to learn the material before we commit to the machines. Quality is what could bring this down.

  • Elias Hartmann, Chief Human Resources Officer

    The leadership team is divided, and it is the team that has to carry the decision. If you make it alone now, you get an investment and a leadership team waiting for it to fail.

  • Birgitte Falk, Owner Representative

    The owners have been promised a dividend at this year's level. An investment of this size has to go to the board with a financing plan, and the timing has to fit the budget meeting in November.

Your decision

Staged investment with advance agreement

Rationale
The staged route tells the customers that we mean it, without the full amount resting on agreements we do not have yet.
Your position after the board
I see it differently now. Karen's figures on the downside and Elias's point about the leadership team.

Assumptions to watch

  • At least one of the two large customers will commit to volume for three years.May have changed
  • Raw material prices will not rise more than 10 percent in 2027.Holds
  • We can recruit six operators for the new line before start-up.Holds

Next steps and follow-up

First step
Negotiate a two-year framework agreement with an option to extend with the first customer.
Owner
The sales director
By
31 October 2026
Assumptions reviewed by
1 December 2026
Signals that trigger a review
The customer moves the tender deadline, or raw material prices rise more than 10 percent.

Prepared with Decision Room, upscalestrategy.com

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