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The investment needed to reduce the level of risk at each
plant is estimated with the goal of achieving an “Excellent
HPR” classification for all the Group’s facilities. As at 31
December 2013, all of the plants inspected were classified as
“Excellent HPR”, “Good HPR” or “Good not HPR”; no plant was
classified as medium or high risk.
In addition, specific disaster recovery plans have been
developed that, by predetermining loss scenarios, allow all
the appropriate countermeasures to be activated as soon as
possible in order to minimise the impact of a catastrophic
event.
Lastly, the Risk Management function periodically reviews the
level of insurance coverage, premiums paid, losses incurred
and the damages recovered by the Group and prepares,
for each Group company, a plan for preventing such risks,
indicating the priority areas of mitigation and control.
Business interruption/Catastrophic events - Risks associated
with the supply and availability of raw materials
Copper is the principal raw material used by the Prysmian
Group for its manufacturing processes. The other raw
materials used are aluminium, lead and steel, as well as
various petroleum derivatives, such as PVC and polyethylene.
The Group has always been able to obtain sufficient supplies
of metals and other raw materials to meet its production
needs and does not consider itself dependent on any one
supplier. As far as possible, the Group seeks to diversify its
sources of supply. The Group procures most of its resins and
plastic materials from the major world suppliers, signing
supply contracts normally for a year with monthly deliveries,
and satisfies the remainder of its needs by producing such
materials directly at some of its plants. In addition to
the policies of diversifying the sources of supply for more
critical materials, the availability of such materials is also
based on building long-term partnership relationships and
arrangements with leading suppliers in the respective sectors.
With particular reference to optical fibre, the Group believes
it has sufficient production capacity to meet its needs for
the production of optical fibre cables and for sales of such
material to third parties. Nonetheless, for commercial
and strategic reasons, the Group has decided to adopt a
policy of sourcing part of its optical fibre from third-party
manufacturers.
Environmental risks
In the various countries in which it operates, the Prysmian
Group is also subject, among others, to specific laws and
regulations on the environment and workplace safety.
Complete or partial failure to comply with these regulations
or the occurrence of accidents due, for example, to sabotage,
negligence or acts of nature, could expose the Group and
the persons involved to significant risks, with consequent
potentially negative effects on the Group’s business, results of
operations, financial condition and reputation.
To mitigate these risks, the Group not only organises
specific training programmes, it also adopts management
systems designed to ensure strict compliance with the rules
in accordance with best practices and which are subject
to internal and external monitoring. The number of the
Group’s sites certified under ISO 14001 (for environmental
management systems) and OHSAS 18001 (for safety
management) has reached 86% and 49% of the total
respectively.
Although the Group constantly endeavours to reduce its
exposure to environmental and safety risks (including, but not
limited to, risks relating to emissions of polluting substances
into the air, water, soil and subsoil, treatment and disposal
of hazardous substances and non-compliance with rules,
procedures and regulations) and even though it has taken out
insurance against potential liabilities arising from third-party
environmental damage, it is nonetheless possible that not
all risks have been adequately identified and that not all the
insurance coverage is fully effective.
Risks associated with information systems
To support integration of the Draka business, the Prysmian
Group has initiated a major project to upgrade and consolidate
its various information systems into standard platforms using
a common model based on the latest technology.
The Prysmian Group is aware of the risks associated with such
projects, primarily in connection with possible inaccuracies
in data transfer. However, the Group believes that it has
taken every step necessary to limit such risks through
testing, training, and preliminary planning, as well as through
appropriate contracts with the suppliers of the replacement
technology.
