O PAPEL vol. 82, num. 3, pp. 93 – 97 – MAR 2021
PROJECT PORTFOLIO MANAGEMENT BASED
ON RISK ASSESSMENT: A VERACEL PULP
MILL CASE STUDY
Authors: Hugo Gomes 1,2, Vinicius Bravim 1, Lucas Pacheco 2, Wilian Aioffi 1,2
1 Time Now Engenharia, Brazil
2 Veracel Celulose SA, Brazil
ABSTRACT
Traditional methodologies for prioritizing projects are based
on financial returns, such as IRR, ROI or present value that
define measurable evaluation criteria. However, the majority
of industrial project demands in the pulp and paper market
aim to ensure operational stability of the plant and production
budget, and the above-mentioned indices may not be the best
way of representing them. These project demands come from
different areas and comply with different strategic goals, such
as safety, environmental, legal requirements and operational
sustainability, causing subjectiveness during project selection
and decision-making process in steering committees, and
making project prioritization one of the greatest challenges in
portfolio management. In order to reduce this subjectiveness,
the article proposes a methodology that integrates all different
indices, from diverse project categories, selecting and
prioritizing projects on an integrated-assessment basis, based on
what each candidate project contributes to the plant, called “the
risk of not doing”, according to the company’s risk tolerance. As
a result, the article will show the gains of having an integrated
method for Capex evaluation, reducing subjectiveness, ensuring
better use of financial resources, allowing for more-accurate
long-term planning of the project portfolio, complying with the
company’s strategic plan.
Keywords: Project Portfolio Management, Portfolio,
Methods, Risk, Pulp Mill
