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MYTILINEOS GROUP
SUSTAINABILITY REPORT 2011
28
Management Approach
MYTILINEOS Group is today one of the largest
industrial groups at the global level, with activities
in the sectors of Metallurgy, Energy and EPC
Projects. Driven by its desire for continuous
development and progress and seeking always be
at the forefront of developments, as it has always
done in the course of its long history, the Group is
consistently pursuing its vision to become a strong
and competitive European “heavy industry” group.
In an ever-changing economic environment,
maintaining high liquidity and mitigating financial
risk are key to ensuring the smooth continuation
of investments in all of the Group’s activity sectors.
Drawing on its highly qualified human resources,
significant assets and financial robustness, the
Group aims to achieve a steady organic growth in
the wider region of SE Europe, N. Africa and the
Middle East, and focuses on revealing the significant
synergies available between its core activity
sectors, seeking their balanced development.
In parallel with its investment plan, the Group
develops methods to curtail costs and exploits the
capabilities of sophisticated risk-hedging tools and
techniques to optimise its financial performance in
the coming years. The Group’s core development
goal is “
TO EXPLOIT THE OPPORTUNITIES
OPENING UP THROUGH THE DEREGULATION
OF THE ENERGY MARKET”
in Greece. The Group
is currently holding a dominant position in the Greek
market, as it is the country’s largest electricity
producer after the PPC. With persistence and a
clear focus on concrete targets, we succeeded in
carrying out an energy investment plan in excess
of €1 billion during the last few years, managing to
overcome both business and regulatory difficulties
in the process. Today, our efforts are rewarded,
as in 2011 the Group's Energy sector posted for
the first time a turnover figure in excess of €130
million.
In addition, the goals of
“SEEKING NEW VERTICAL
INTEGRATION PROJECTS OR PROJECTS FOR
EXPANDING METALLURGY OEPRATIONS”
and
of “
INCREASING COMPETITIVNESS THROUGH
STRATEGIC INVESTMENTS AND RISK-HEDGING
METHODS”
show the Group’s orientation in
the Metallurgy sector, while the focus on the
“UTILISATION OF THE SIGIFICANT INDUSTRIAL
KNOW-HOW AND INFRASTRUCTURE”
and
on
“MAINTAINING THE GROUP’S LEADING
ROLE IN ENERGY PROJECTS IN GREECE AND
EXPANDING ITS OPERATIONS ABROAD”
are
indicative of the Group’s strategic focus in the
sector of EPC Projects.
Climate change, relevant laws and
greenhouse effects
Energy is a key raw material for the Group’s
activities and is also expected to become a key
source of income in the near future. The Group is
also active in the broader energy sector through
the construction of turnkey energy projects (EPC
Projects sector).
According to a view that is rapidly gaining ground,
the consumption of energy produced by mineral
fuels is one of the key factors that contribute
to global warming. An increasing number of
Governments or governmental bodies have
already introduced or are about to introduce
legislative and regulatory changes as a response
to the potential risks that this phenomenon poses.
The Group’s operational margins might be affected
by changes which may be made to production
facilities of the Group with high greenhouse gas
emission levels, as well as to Group facilities with
increased requirements in energy, as a result of
new regulatorymeasures primarily in the EU, where
the Group is active. The estimates concerning the
potential impact of the future legislation and of
the regulatory framework on climate change, and
of the European and international conventions
and agreements, cannot be established with any
certainty, given the wide-ranging purpose of these
potential changes.
The Group may be forced to carry out significant
investments in the future, as a result of the need
to comply with the revised legislation and the new
provisions. Finally, as a result of a surplus or deficit
in its management of CO
2
emission rights, the Group
may have to recognise significant expenditures or
revenues, respectively, in the future. On the other
hand, the Group may identify opportunities in the
EPC Projects sector, made possible by any one of
the aforementioned changes in the legislation which
relate to climate change.
Management of local suppliers
Developing andmaintaining good relationshipswith
the supply chain actors is a commitment in which
the Group has invested and is continuing to invest
through permanent associations at the national
as well as at the local level. The Group’s policy in
this area has made possible the manufacture in
Greece of a broad range of specialised materials
and of simple and tailor-made products that serve
the needs of its companies.
Although varying slightly between its various
activities, the term “local supplier” for MYTILINEOS
Group generally refers to suppliers of materials,
products or services, both industrial and otherwise,
who are located within the geographical region
where the Group’s companies are based and within
their sphere of influence, which frequently extends
to the entire Greek territory.
Because of this particularity, the total share
of the Group’s budget for purchases which is
implemented at major locations of the Group’s
operations and corresponds to outlays to local
suppliers cannot be estimated accurately.
However, the Report's individual Company
sections that follow describe these particular
characteristics and provide specific figures for
the shares that these outlays represent.
In selecting their suppliers, the Group Companies
follows simple procedures characterised by
meritocracy and transparency. The key parameters
affecting supplier selection, in addition to
geographical location, are the following:
- The quality of the products and services offered.
- Pricing policy.
- Solvency.
- Punctuality in the delivery of products and
services.
- Compliance with the key environmental and
safety principles.
- Availability of suitable production equipment
according to the specific needs of the Group
Companies, as applicable each time, and
- Experience.
