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Risk management

Risk Management at COFCO International is a key department involved in all aspects of our businesses

The ability to react in advance and in a sophisticated manner to risks that may arise in the daily activity of COFCO International provides us a competitive advantage and gives management the tools to conduct business in a secure manner.

Risk management in COFCO International covers four pillars; market risk, credit risk, operational risk and insurance.

Market risk

The global market risk team focuses on the risks associated with fluctuating price change and liquidity. COFCO international uses, amongst other metrics, VAR and stress testing scenarios to monitor and help predict potential price moves. The global portfolio is analysed daily, considering the correlated risks and thereby allowing the company to navigate potential risks.

Credit risk

The global credit risk team focuses on the risks associated with potential counterparty default. The team analyses both macro-economic factors, sector-specific factors and counterparty-specific factors to compute internal credit appetite. This daily analysis using the latest information from sources such as S&P and Moody’s allows COFCO International to protect its balance sheet from economic risks such as default.

Operational risk

The global operational risk team focuses on two broad pillars. The TLC team, covering the risks associated with processes within our Trade Lifecycle, monitors such items as process reviews, trade entry and KPIs. The SCLC team covers risks associated with our stocks and potential losses that may arise from our day to day activities in relation to physical goods.

Insurance

The Global Insurance team focuses on risk transfer. The global team looks at all elements of the company identifying areas where risk can be mitigated by transferring the risk to the global insurance markets. This team works globally within all elements of the business from commercial activity, buildings liability, finance liabilities to health.

The global risk team is headquartered in Geneva with teams sitting globally in all major business locations.