Efficiently, Ecologically and Flexibly. Effective Strategy of KGHM
Friday, 18 December, 2020
A stable level of domestic production, significantly higher processing capacity of the Sierra Gorda plant, investments in environmentally friendly solutions as well as an increase in the effectiveness of external financing constitute a mere fraction of the key achievements in the implementation of the Strategy for years 2019-2023.
Marcin Chludzinński, President of the KGHM Polska Miedź S.A. Management Board emphasizes, that in such a demanding time for the global market, only a good strategy could prepare the Company for the necessary actions to be taken. - When updating KGHM's strategy for 2019-23, we thoroughly identified trends as well as possible economic turmoil, even though we could not predict the impact of the pandemic on the global economy. We achieve our goals because we boldly and consistently implement the assumptions contained int he document: day after day, month after month. We plan to maintain a high level of production and increase employee safety, while - at the same time - striving towards green energy. KGHM is a global giant, we are the leader in many areas, we are the first to implement new solutions and technologies - says Marcin Chludziński.
#Efficiency and #Flexibility
Within two years, KGHM carried out several key investments in the Company's development. What is worth mentioning: commissioning of the WTR furnace in Legnica Copper Smelter, expansion of the Żelazny Most Flotation Waste Tank, or the Deposit Accessibility Program. The copper Company maintains the assumed stable level of domestic production of 450 thousand tonnes of Cu in the ore (on average for years 2019-2023) and 540 thousand tonnes of electrolytic copper (on average for years 2019-2023).
The foreign assets of KGHM are primarily integration and financial efficiency. For the first time in history, the Sierra Gorda plant significantly increased its production capacity. They are close to the strategic goal set for only 3 years: achieving the minimum annual average daily ore processing in Sierra Gorda at the level of 130 thousand tonnes. Two years ago it was only 110,000 tonnes.
In addition, in the last two years, KGHM has issued characterised by the enormous interest bonds in the amount of PLN 2 billion and generated over PLN 2.5 billion in net profit (PLN 2,593 million for 2019 and 9 months of 2020).
#Ecology and #E-industry
KGHM Polska Miedź S.A. is one of the leaders in the global copper market and places particular emphasis on ecology. According to the assumptions, by 2030 the Company wants to cover half of its energy needs from its own sources, including the renewable energy ones, thus limiting CO2 emissions.
Currently, as part of the Energy Development Program, KGHM is implementing a project to build a photovoltaic power plant in Obora Sandpit and to build a complex of photovoltaic power plants at the Głogów Copper Smelter. Thanks to the use of plots intended for the investment and the use of high-power panels, it will be possible to increase the potential of the installed power from 9.5 to 14.5 MW.
Moreover, in December this year, KGHM launched the first photovoltaic power plant in the 4.0 Technology in Poland, which will provide energy to the KGHM ZANAM plant in Legnica.
The copper giant is successfully implementing the KGHM 4.0 Program - these are nearly 50 projects covering all strategic areas, including security and logistics. The goal is to consistently manage the production area with the use of data.
In the last two years, the budget of KGHM's investments in innovation and research and development has increased from approximately 35 million in 2017 to nearly 48 million projected for 2020. The copper giant has implemented a research and development management model and projects to develop the competences of current and future employees. The Company covered nearly 1,900 students from the Copper Basin with the "Kompetentni w Branży" program, which prepares young people to work in the copper industry.
Strategy During Pandemic Times
The strategy of the KGHM for 2019-2023 is implemented on the basis of the idea of sustainable development and security as well as strengthening social responsibility. The Coronavirus pandemic has not changed the operating philosophy of KGHM. The focus is still on employees - the Company's greatest asset. This is demonstrated by the safety indicators in KGHM branches. The data has improved significantly:
Poland: LTIFR accident rate in 2018 - 10.3; after the first half of 2020 - 6.4,
Foreign countries - the TRIR accident rate in 2018 - 1; after the first half of 2020 - 0.52. (LTIFR - the total number of accidents at work standardized to 1 million hours worked by employees of the technological sequence).
In the face of the threat of the COVID-19 pandemic, the Company introduced a number of procedures and activities in order to support employees and residents of the Copper Belt. Nitroerg Company, a member of the KGHM Group, launched the production of disinfectants, which were successively delivered to people in need all over Poland. The Company, through the foundation, provides support in the form of purchases of medical equipment and protection measures to both medical staff and students, teachers and seniors.
KGHM Produces and Gains
Thanks to consistency and flexibility, in the period of 9 months of 2020, the KGHM Group recorded a record level of operating profit EBITDA and maintained the full operating capacity of its assets.
- Our achievements prove that we work effectively and persistently achieve our goals. This applies to all employees of the Company. We are flexible, effective and ecological. Thanks to our strategy, we successfully build e-industry, maintain jobs and drive the Polish economy - concluded Marcin Chludzinski.
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