Page 134 - Sigmaroc Annual-Report 2023

SIGMAROC ANNUAL REPORT 2023 STRATEGIC REPORT
Chief Technical Officer’s risk report
Risk
Description
Mitigation
Competition and Margins
Increase in costs or prices; reliance on key suppliers and key customers, including national merchants, could impact supply and profitability.
A number of existing competitors compete on range, price, quality and service. Potential new low-cost competitors may be attracted into the market through increased demand.
Operate a strategic purchasing plan to minimise key supplier risks, notably in cement and bitumen.
Seek to offset rising commodity prices through our product pricing strategy and hedging programmes.
Maintain a diverse customer and project base which focuses on quality, service, reliability and continuing focus on new product development.
Operate a decentralised model matching focus of independents and new entrants.
Economic and Political
The Group is dependent on the level of activity in its end markets. Accordingly, it is susceptible to economic downturn, the impact of Government policy, interest rates and any political and economic uncertainty, such as COVID-19 events.
Difficult economic conditions could also increase our exposure to credit risk from our customers.
The Group has a strong focus on operational gearing, allowing it to be flexible during economically disruptive events.
The Group has a diverse product portfolio across multiple end markets and jurisdictions.
The Group’s relationship with suppliers and customers allows for management of risk including credit risk and where necessary credit risk insurance is sourced.
Energy and Power
Though captured under Raw Materials sourcing and internal resources, given the current climate, this has been separated out.
The Group is susceptible to significant increases in the price of energy and power, utilities, fuel oil, associated haulage costs and decreases in availability.
Risks exist around our ability to pass on increased costs through price increases to our customers.
Energy and Power plans developed at all sites to ensure optimal energy and power use.
The Group focuses on its multiple supplier and customer relationships, contracts and the use of hedging instruments.
Ensure businesses have ability to manage stock and inventory to minimise disruption from energy and power.
Environment and Climate Change
Operational impact on the environment or the effects of climate change could expose the Group to regulatory breaches, significant disruption, reputational risk, or a reduction in demand for our products.
Committed to reducing level of carbon emissions, reuse and recycling schemes and implementation of sustainability initiatives.
Under SECR the Group has committed to monitoring all its operations, not just in the UK, through an independent external organisation.
Management, training and control systems are in place to prevent environmental incidents.
Promotion of EMS and ISO14001 accreditation and approximately 76% of our businesses are accredited1.
1 Based on Group Revenue, not number of businesses