Case Study:
Fibertex Personal Care is a global textile company based in Aalborg, Denmark, with large non-woven production facilities in Malaysia and print factories in Germany, Malaysia, and the USA. The company produces non-wovens – which is textile made from fibers that are bound together in a proprietary process. The unique material is used in the production of diapers and other hygiene products.
CUSTOMER:
INDUSTRY:
LOCATION:
FIBERTEX
MANUFACTURING
DENMARK
Electricity Price Risk Management
Customer Overview
Fibertex processes large volumes of material
resulting in high electricity consumption and significant
energy costs. With little purchasing expertise in energy, the company had used a procurement model focused on successive purchases over a 2 to 3-year horizon, but the model made it difficult to take advantage of market price changes. The challenge was to find a more efficient and cost-effective way to purchase electricity.
Challenge
World Kinect’s trading team became an extension of Fibertex energy management operations, by designing the price risk management strategy, monitoring daily electricity markets, providing energy procurement and the concurrent sale of financial contracts for hedging.
World Kinect Solution
Through a structured risk assessment process, World Kinect identified Fibertex’ electricity price risk and hedging preferences, which formed the basis of a flexible (rather than fixed-priced) portfolio management strategy.
World Kinect provides direct market access to Fibretex, by purchasing electricity from 3rd -party local reputable suppliers for the Fibertex facilities, coupled with a flexible price risk portfolio, making available to the customer a dynamic energy management program, without the need for locked-in multi-year hedging contracts as before.
With a combination of continuously updated reporting via World Kinect Online customer portal and regular status meetings, Fibertex now has the information they need to control costs –- without requiring in-house energy specialists.
Fibertex received a purchasing model that could keep pace with the market, protect against escalating prices, and at the same time be flexible enough to take advantage of favorable market rates to stay ahead of their competition.
World Kinect’s approach provided savings of 15% in electricity energy costs when compared to the previous year, or €0.4 million YoY savings.
Business Impact
FLEXIBLE PROCUREMENT THAT LOWERS COSTS & EXPLOITS MARKET OPPORTUNITIES
15% OR €0.4M LOWER YOY
ELECTRICITY COSTS
Through collaboration with World Kinect, we’ve achieved professional management of our electricity purchases with significant savings as a result.
PETER REIS, SUPPLY CHAIN MANAGER,
FIBERTEX PERSONAL CARE, DENMARK
Source energy
and fuel
REDUCED NEED FOR
IN-HOUSE PROCUREMENT EXPERTS
Minimize price
and operational
risk
FLEXIBLE PROCUREMENT THAT LOWERS COSTS & EXPLOITS MARKET OPPORTUNITIES
15% OR €0.4M LOWER YOY
ELECTRICITY COSTS
REDUCED NEED FOR
IN-HOUSE PROCUREMENT EXPERTS