The paper industry is a highly energy intensive process. In many cases a CHP transforms gas into power and steam. The excess of power is sold on electricity markets. Paper companies often have plants in multiple countries meaning that they are exposed to multiple natural gas and electricity markets. It is clear that energy risk management is a top priority for the paper industry.
KYOS commodity portfolio & risk management allows effective management of your global energy contracts. Reporting of costs can be broken down per country, business unit, legal entity and even per plant.
Multiple category buyers profit from automated commodity market price analytical functions. Each user is able to define a category specific portfolio of commodities. No more use of spreadsheets as all category buyers use the same integrated commodity & risk management system. The Chief Procurement Officer has an up-to-date helicopter overview and compliance and consistency is secured for all categories. You save valuable time by sharing your analysis across the organisation as multiple colleagues can view the results.
Cost savings – KYOS portfolio & risk management system
Your bottom line can be affected heavily by rising costs of energy. In the KYOS portfolio & risk management system you are able to compare several natural gas or complicated steam contracts in a split second. Calcutating the best applicable natural gas index or specific steam formula takes less time then Excel based analysis. Resulting in significant lower costs with less time spend.
Active managing energy risks is inevitable for the paper industry, accurate and up-to-date information is crucial to stay ahead of competitors. Managing this crucial information in Excel has proven to be a pitfall for many companies in terms of costs, mistakes, hidden risks and potential fraud. ERP systems like SAP look backwards in stead off to the future and cannot perform the required risk management calculations. The KYOS portfolio & risk management system captures years of experience in managing risks of energy contracts and market price volatility leading to effective hedging strategies.
Managing cashflow variance – KYOS portfolio & risk management system
The higher and more frequent market prices move up or down the higher its volatility. Volatility is often expressed in a percentage and can be calculated for e.g. interest rates, currencies (FX) and commodities. A highly volatile market price is not per definition a bad situation but you probably feel more comfortable with less volatile costs. Calculating the volatility of gas indexes like TTF, Henry Hub or NCG should be an integrated part of your energy risk management strategy.
You can store in the portfolio & risk management system energy budgets,forecasts, actual consumption and contracts. The automated market price analytics are combined with your contracted positions. It will provide you with clear insight in the current cashflow and potential cashflow variance versus budget expectations.
By automating this process you will have a strongly improved insight in the associated risks. This is a clear added value for procurement, sales, finance and treasury.
Fixed or floating prices – Energy risk management
Procurement needs to find a balance between security of supply and the risks of rapidly changing market prices The KYOS portfolio & risk management system will help you to find your “risk and reward” optimum by simulating multiple cashflow variances. Your energy risk management policy will be built on sophisticated calculations combined with your existing market experience.
Better managing your cashflow variances will lower your required working capital.
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