Risk Management
agropec / how we operate / risk management
how we operate
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Agropec continuously identifies and monitors the risks that it is exposed to, and which can directly affect the business sustainability, in order to observe in its management and strategic planning, initiatives and operational guidelines that aim to mitigate their possible impacts. The main risks identified are presented below, and also the initiatives to mitigate them:
RISKS
I. Inability to implement programmed strategies a. Lack of necessary government documentation or difficulties in obtaining regulatory and environmental permissions;
b. Difficulties in selecting and retaining qualified service providers in technical and administrative areas;
c. Increased operating costs affecting profit margins; Risks in the economic, political and social conjunctures, specifically in the geographical areas where investments are made;
d. Default of buyers on due dates or at any time;
e. Global weather conditions, such as global warming, which can contribute to the frequency of unpredictable weather phenomena, and also unpredictable and unusual patterns of rain, among others. These climate variations have a direct impact on production levels and sales volume during the year.
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II. Inability to improve agricultural technologies and techniques and to implement investment plans in the properties that it operates.
These aspects are directly linked to increased productivity and expansion of productive areas, and therefore, if Agropec is unable to implement the investment plan proposed to its partners or promote innovation, its operations may be adversely affected.
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III. Fires, diseases and other accidents
Agropec operations are subject to various risks that affect rural properties and agricultural facilities, including destruction of farms and crops by fire, occurrence and effect of crop diseases, such as Asian rust and Helicoverpa zea corn larva, theft, natural disasters or other unexpected losses.
MEASURES
I. The Company invests in the education of its managers and professionals to allow the efficient evaluation, new projects and partnerships, seeking to anticipate and adopt the appropriate measures to face the factors that may affect the results of its own business and those that it operates. On the weather conditions, it seeks to monitor and anticipate severe weather conditions and, as far as possible, adopt protective measures to reduce the impact of such conditions on properties. Also in this sense, Agropec believes that the cultivation of different products also offers an additional protection, in addition to the use of deep soil preparation techniques, no-tillage planting and crop-livestock integration.
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II. The Company seeks to add value to the rural properties that it operates through the use of modern agricultural techniques and technologies, with the periodic updating of its technical staff, and with the monitoring of technological advances. Regarding the investment plans, the Company always proposes in advance to its partners and seeks to develop infrastructure and transformations with a focus on production efficiency. In addition, it seeks to make joint investment decisions with its partners, based on the expectation that each property will be able to acquire and pay, in addition to having a work team qualified in the sector and an efficient operational management.
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III. The Company monitors its operations, based on the local presence in each of the properties it operates and from communication and accident prevention mechanisms, and its business plans always include the implementation of fire brigades and fire prevention mechanisms. In addition, to prevent and identify pests and diseases, it uses modern agricultural techniques, constantly invests in pest control, and relies on the diversification of crops, which allows a greater protection.