Vale Client Credential

Overview
As one of the largest private-sector companies in Latin America, Vale is also the second-largest diversified metals and mining company in the world, with mineral exploration efforts in 19 countries. Through an aggressive program of mergers and acquisitions, Vale altered its revenue composition, multiplying its total debt five-fold within only three years. To safeguard its assets from risk, the company turned to Accenture to implement enterprise risk management (ERM) to transform its enterprise risk profile. Vales ERM initiative (which is still on-going and in the stages of implementation) focused on three broad areas: market risk management, credit risk management and operational risk management. Need more information? Please Contact Us. fluctuations on the metals pricing and essential supplies that influence earnings and cash flow. The strategy to mitigate these risks included improving strategic planning and decision-making processes with scenario generation and cash flow project analysis. Vales finance organization also needed to improve its capability to manage the volatility of cash flow and its exposure to fluctuations in local currencies. The challenges in credit risk revolved around the increase in Vales portfolio of clients, both domestic and international, and the importance of being able to guarantee them that the commercial exposure and credit risk assumed would remain within the limits established by the company. To do this reliably, Vale unified the processes and methodologies for defining clients and banks credit limits and for exposure control and measurement, giving it more control over company cash flow, and centralized credit limit definition and decentralized control and measurement. Vales credit risk model enables itself to reduce the credit risk inherent in Day Sales Outstanding (the average number of days a company takes to collect revenue after a sale has been made), the terms of sale and other risk factors.

Business Challenge
With market risk management, the challenge was to reduce the uncertainties associated with market risk factors specific to Vales new acquisitions and minimize the effect of market

How We Helped
To mitigate operational risk, Vale needed to increase the sharing of assets and resources across the enterprise, improve its system for allocating resources, and enhance its ability to monitor the risk exposures that might translate into financial operational losses. Accenture determined that the solution was to align business strategy with operations, provide for a centralized allocation of capital to cover expected losses, define a corporate insurance policy and control and monitor performance through an iterative and continuously improving system.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with approximately 236,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.

High Performance Delivered

Vales transformation through Accenture's ERM initiative focuses on four main ways to increase shareholder value: Better capital allocation Improved operating performance Stronger compliance and prevention (averted losses) Enhanced corporate reputation In these ways Vale is building a strong ERM capability, giving it one of the business worlds most value-centric cultures as it journeys towards high performance. Need more information? Please Contact Us.

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