Acclimate

Consumers, commodity prices and technology are everchanging, requiring businesses to constantly evaluate their relationships with their value chain and competition. Companies may acclimate through vertical integration, expanding into new consumer market segments or strategic partnerships. Companies can manage linear risk by incorporating flexibility and diversity into their strategic planning.

Novelis

The world leader in rolled aluminum products, Novelis collaborates with customers to provide infinitely recyclable products for the transportation, packaging, electronics and architectural sectors.

Novelis incorporated an average of 53% recycled content across their portfolio in 2016 (up from 30% in 2009). Their journey towards massively increasing the recycled content in their products took a big step in 2014 with the opening of their €200M aluminum recycling center in Germany, the largest and most advanced in the world. The facility has a capacity to recycle up to 400,000 metric tons of aluminum scrap annually, potentially saving 3.7 million metric tons in CO2 emissions.

Because of the high-energy intensity of aluminum production, Novelis views this vertical integration as a strategy to decouple their economic productivity and energy consumption. In addition to securing future feedstocks, this new value chain relationship also saves money and greenhouse gas emissions.

In addition to contributing to their recycled content goal, a key driver for opening a recycling plant was to give them the ability to produce their own aluminum and hedge supply chain risks like commodity price volatility. Novelis even considers their customers to be suppliers because they can give back scraps.

Copersucar S.A.

Copersucar S.A., Brazil’s largest trader and exporter of sugar and ethanol, bringing together field and industry with integrated logistics throughout its entire business chain, operating excellence and sustainable value creation. Copersucar’s partner mills reuse 100% of their by-products and generate enough electricity for self-sufficiency during the harvest season.

The sugarcane industry is highly effective in reusing by-products - with over 150 alternative uses available by some estimates.  A few reuse examples include using cane tops in animal feed, filter muds and vinasse for amending fertilizers and molasses for ethanol production.

In line with the strategic plan, to strengthen its integrated logistics structure, Eco-Energy promoted investments of around USD $50M in the period 2015/2016, more than double of the previous year.

Recognizing the societal challenge of reducing greenhouse gas emissions from fossil fuels and the economic opportunity that their by-products presented, Copersucar invested 100% equity stake in Eco-Energy Global Biofuels LLC. Through the acquisition of Eco-Energy, Copersucar became the largest global platform for biofuels. Together, the two companies marketed 13.5 billion liters of ethanol in the 2015-2016 Crop-Year, equivalent to 11.5% of the entire global supply. Copersucar traded over 5 billion liters and exported 0.6 billion of that. Over that same period Eco-Energy handled 8.5 billion liters and held 16% of US market share.

This evolution in Copersucar’s strategy and its partner mills used its by-products to create financial returns through the exploration of new, higher value markets.