July 15, 2022
Escalation & Country Risk


There are two budgeting tools that may not be familiar to you. These are escalation and country risk.

In times of inflation, the escalation line is a valuable addition to your budgeting process. It is simply an estimate of the inflation you expect from the time the budget is prepared until the project is up and running.

What this does for you is separates the inflation from the properly prepared budget. Inserting inflation into each budget line item can get messy and confusing, placing this estimate in its own line provides clarity for the budgeting process. We haven't used this line since the 1970's, but it is time to pull it out again.

Another valuable line item, especially if you are financing a project in one country and building it in another is a line called "country risk." Country risk is assigned to reflect currency differences, change in government policies and so forth. It lacks the clarity of the escalation line, but it does give a focus to non-project issues that may be encountered.

What is your opinion? Drop me a line at jim.thompson@ipulpmedia.com. I would like to hear from you.


 
Young Engineering Manager of the Year, call for nominations

We are looking for an individual who has done an extraordinary project, one that almost defies belief. Its extraordinary features can be schedule, technology, cost or all three. There is an age limit on the manager eligible for this award: they must be under 35 years old when they completed the project.
 
We have often gotten nominees that go something like this, "I nominate Joe because he has done a great job of running our engineering department for the last fifteen years." Quite frankly, we are not interested in such nominees.
 
However, if you know someone who has led a very exceptional project in the recent past (the last two or three years) and meets our age requirement, we want to know about it. We want to honor them and hold them up as an example for Engineering Managers in every pulp and paper mill around the world.
 
Just send your nomination, with as much details as you can provide, to jim.thompson@ipulpmedia.com. We will seriously consider it.
Current Patent Activity is available here.


‌
‌
‌
Please write when we tickle your brain cells! Email jthompson@taii.com