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  Chemair Technologies Ltd
Profit Optimisation
Many organisations have recognised that the volatility of financial parameters such as currencies and interest rates can adversely affect cash flow. Those who are exposed to volatile commodity and or energy prices have also begun to manage the risk they present to cash flow where suitable instruments exist. However the biggest danger to cash flow as measured by “cash flow at risk” frequently comes not from visible financial or commodity risks but from the options embedded in purchase and sales contracts.
Increasingly customer demands are motivated by a desire to offload their risks. Examples of common contractual embedded options are volume bands, and pricing formulae for raw materials and finished products. Purchasing and sales organisations in attempting to meet increasing stakeholder demands often give away options which sub optimise and undermine corporate profitability. Organisations rarely recognise the aggregate effect of these embedded options which frequently combine together to increase “cash flow at risk.”
Chemair can assist companies to optimise their profitability by helping them quantify the impacts of embedded options and determining appropriate profit optimisation and hedging strategies to maximise business line and corporate NPV at minimal cash flow at risk. Additional benefits of reducing earnings instability include lowering the cost of capital, avoidance of stop go capital spending cycles, and improved customer relationships.
Business Management
Systems for the assessment of strategies including measurement of risk and reward inherent in alternatives.
Commodity price risk management systems and consulting.
Procurement/Supply chain
Contract review including advice on negotiating options.
Commodity price risk management.
Strategic Planning
Strategy formulation and assessment risk/reward analysis of alternatives and options.
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© Chemair Limited 2004