Risk management |GRI 1.2|
Klabin adopts tools and processes to mitigate the principal risks involving the business, so as to maintain expected results in operations and their longevity. The management of risk is also intended to evaluate future aspects, capable of provoking negative impacts both on the activities and the reputation of the company and its relationship with its strategic stakeholders.
The principal risks identified in the business are:
Financial risks – In 2012, the company started to map the principal corporate financial risks which could have an impact on operational results or on cash generation. The purpose of this work, split into three phases and expected to terminate in 2013, is to detail the main variables of the business and enable the structuring of a formal hedge policy. These risks are administered today by control systems, by determining the limits of positions and by contracting credit protection tools. There are no speculative operations in this respect and contracting derivative instruments is limited and can only be approved by the company’s board.
The company debt is indexed to the fluctuation of the Long Term Interest Rates, owing to the financing contracts signed with the BNDES, and to the LIBOR, linked to export financing contracts. All cash-based exchange rate exposure is covered by the revenue from exports. The company has an Investment Policy which preserves liquidity and the quality of financial assets by closely following the established standards of limits and ratings for operations with each financial institution or counterpart.
Market risks – The investments to modernize the industrial plants and increase production capacity ensure that Klabin has a competitive differential, thus generating greater efficiency in its operations and permitting the development of products with more quality and higher aggregated value. By accompanying the trends of national and international paper and packaging markets, it is possible to monitor these risks in order to back decisions on eventual changes of course in production and sales. The verticalized and integrated operation, support for quality and product diversification, protect the company against swings in demand and also macroeconomic fluctuations of the economies where it is active. Consequently, Klabin has a considerably diluted exposure to the market in its products and its activities in numerous segments, and does not depend on one particular industry or on specific customers.
Credit risk – In 2012, the company completed mapping of the credit risks and a review of administration and policy criteria, adopting the probability of portfolio non-payment. To reduce the credit risks in accounts receivable, Klabin has based its strategy on specific registration norms, customer acceptance, credit analysis and setting exposure limits per customer, as well as immediate monitoring of overdue bills and guarantees given. For operations in the export market, the company contracts credit insurance policies.
Environmental risks – To act in a sustainable way, Klabin obeys strict guidelines laid out by its Environmental Management System, certified by ISO 14001, in its manufacturing operations and by FSC® in the forestry operations. Measures of Assessment of Aspects and Impacts, concerning the conservation of environment and maintenance of human health, ensure that the Principle of Precaution is applied, established by ECO92. |GRI 4.11|