Silvinit

Project: Strategy session “Cost reduction plan elaboration” for “Silvinit”

Silvinit is the major Russian mining company engaged in potash fertilizer mining and production and different types of salt (is among the world top 5 producers of potash fertilizer).

Each year the top management of the company holds a meeting to plan the future performance. Due to the economic situation the topic of the strategic session was the raise of the performance efficiency of the company. The consultants of ALT were attracted as the session experts and moderators.

What we have done

At the beginning of the strategy session ALT RC consultants provided participants with training materials to conduct scenario planning and to identify approach options for optimizing the core business of the company. These materials became the methodological basis for the work of "Silvinit" top managers on the plan of the companys crisis management.

Further "ALT" consultants helped the company top management in formulating the basic scenarios of market development and modeling of how, depending on changes in the external area, will change the economic performance of the company.

During the remaining days of the strategy session the managers of "Silvinit" were divided into working groups, which conducted the formulation of the main directions of cost optimization. The effectiveness of this block of tasks was significantly improved through the use of aggregated economic model developed by "ALT" consultants specifically for the strategy session for "Silvinit." Due to the calculations in this model, top managers of the company could immediately assess the potential impact of their proposed cost optimization plan and and were able to understand how sufficient was the list of considered specific events

Results

Thus, the main result of the strategy session for the company had become a coordinated program of anti-crisis actions, clearly tied to the elaborated scenarios of environment development, as well as the plan for implementing anti-crisis program of actions.

The greatest value was the systematization of options to change the situation on the market, including the following: dollar exchange rate, the cost of freight, railway tariffs as well as the prices for potash fertilizers and their application to economic model of business of the company, including optimization projects. This allowed to answer more objectively to the question of what can we expect from the crisis and what we can do