Raw Material Supply: DERA Makes Recommendations for Action

12. May 2022 | Market

A commissioned study conducted by Pricewaterhouse Coopers (PwC) provides insight into the strategies of international corporations to secure supplies of critical raw materials.

What strategies do international companies have in place to secure their own raw material supplies and what lessons can be learned? The auditing firm PwC has investigated this on behalf of the German Mineral Resources Agency (DERA) The study is being presented today as part of an online event. The focus was on the automotive, machinery and equipment and telecommunications industries.

According to the study, the topic of reliable raw material procurement has become increasingly relevant for these market participants. They intend to increase the use of corresponding strategies. The diversification of the supplier base and the use of long-term supply contracts play the most important role. In addition, a trend towards sustainability is emerging, for example projects on substitution, recycling and reduction of materials. The increased use of IT applications, e.g. Big Data or artificial intelligence, is also planned. Involvement in mining projects or other forms of vertical integration, on the other hand, plays only a minor role for cost reasons.

The authors of the study expect the complexity of the commodity markets to increase in the future as a result of growing interconnection and, at the same time, increased protectionist tendencies. Companies will therefore have to become “more flexible and agile” and develop a “resilient portfolio of instruments.

Photo: iStock/ipopba

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