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Inove Ingles

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Vale´s Suppliers Development Program

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Inove Ingles

  1. 1. Inove Program April 28 th , 2009
  2. 2. Agenda Context Inove at a glance Results Oman approach Next steps
  3. 3. Context The implantation of VALE’s Pellet and Port Complexes in Oman will have to surpass some challenges, such as the development of a local supply chain of goods and services and the generation of jobs…. <ul><li>Investment of US$ 1,4 billion - process around 40 MTPA of Brazilian ore and produce up to 10 MTPA of Pellets (initial production expected to 2011) </li></ul><ul><li>The local industrialization is low, not so diversified and the exports are concentrated in oil, natural gas, fishing, textile products and metals. </li></ul><ul><li>There are 3,3 millions of inhabitants in Oman, with average age of 19 years, unemployment rate of 15%. </li></ul><ul><li>VALE faces the challenge of developing a competitive and reliable local supply chain of goods and services, in order to allocate the Oman’s manpower in the market and increase the participation of 65% of direct residents employees in the Startup of the Pellet Complex, to 80% of the total manpower involved in VALE’s plants production, after 4 years of operation. </li></ul>
  4. 4. Less developed regions (27% of GDP) Greater need to leverage local suppliers Opportunity to reduce imbalances and improve community perceptions More developed regions (73% of GDP) Context In Brazil while south and southeast regions hold 73% of the Brazilian GDP, Vale´s operations are concentrated in other areas of the country, generating a similar challenge than Oman in terms of local suppliers development Vale's operations South and southeast regions
  5. 5. New Program VALE Institutional Relations H&S and Environment Operating Areas Procurement HR & Finance Communications Foundation Macro Plano de Ação Revisão de Processos Análise Demandas vs . Integration Action Plan Financeiras Normas e Divulgação Financials Training Policies & Processes Disclosure Government/ Trade Unions Governance Model Local Suppliers Others Context Based on the 2008 diagnosis of local industry, Vale decided to implement Inove , a new development program to leverage local suppliers…. Objectives Scope Local Content Growth Support investment plan Labor training Increase competitiveness of local industry Assure service and material supplies Financeiras Capacitação Normas e Processos Divulgação
  6. 6. Inove at a glance …that aims to reinforce the relationship with these suppliers through training programs, financial tools for credit access and new business opportunities generation… Education Inove Program Pillars <ul><li>Labor </li></ul><ul><li>Management </li></ul><ul><li>Certification </li></ul><ul><li>CDF </li></ul><ul><li>FFF </li></ul><ul><li>FIDC </li></ul><ul><li>BNDES </li></ul><ul><li>Joint-Ventures and Partnerships </li></ul><ul><li>Industry Diagnostics </li></ul><ul><li>National forum </li></ul>Sensibiliza ç ão Crit é rios IDF Planejamento Demanda Forma ç ão de Pre ç os Fornecedor Classe Mundial Elabora ç ão de Proposta Planejamento Estrat é gico Price formation World class supplier l Proposal formulation Strategic planning Business Development Financial
  7. 7. Results …and after five months of Inove implementation we have already achieved some background and important results 22 Roadshows and 700 Participants First national forum to discuss local suppliers development Business development R$ 11,7 Million (dec/08 to mar/09) Target: R$ 120 MM Financial Online courses pilot training: 10 companies and 60 employees Launching of the online courses: June/2009 Target: 100 companies and 1.000 trained employees in online courses Education
  8. 8. Oman Approach Based in this background, we recommend the development of a supply x demand diagnosis in Oman to indicate main gaps in local supply capacity, enabling the evaluation of supply alternatives in neighbor countries + providing guidelines for structuring an action plan… <ul><li>Identify VALE’s demands in Oman; </li></ul><ul><li>Identify critical resources (goods and services); </li></ul><ul><li>Elaborate critical resources demand data base and histograms </li></ul><ul><li>Development of tools to leverage Oman suppliers </li></ul><ul><li>Structure action plan to implementation of Oman local supplier development program </li></ul>Gap Analysis, Supply Alternatives and Action Plan Definition Demand Diagnosis Supply and Gaps Identification in Oman Step 1 Step 2 Step 3 Action Plan Elaboration <ul><li>Assess critical resources supply; </li></ul><ul><li>Consolidate supply and demand data; </li></ul><ul><li>Identify gaps; </li></ul><ul><li>Elaborate matrix to prioritize critical resources gaps. </li></ul>Interaction with Project Board to set drives and validations.
  9. 9. Next Steps … and in order to support Oman demands and generate new business opportunities to local Brazilian suppliers, we have defined some next steps <ul><li>Analyze association of local Brazilian suppliers to attend Oman needs </li></ul><ul><li>Share of technology and knowhow </li></ul><ul><li>Brazilian suppliers commercial missions to Oman </li></ul>Vale´s international presence
  10. 10. Back up
  11. 11. Inove´s Calendar Roadshows Inove Forum Identify together with stakeholders initiatives to develop local suppliers North Technical Seminars Governance meetings start-up South Technical Seminars Pará Diagnosis Inove implementation Dec 4 th – Inove Kick Off 2008 2009 Regional Awards Suppliers Day (North & South) Online Courses launching Inove National Award May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
  12. 12. <ul><li>Line for funding with financial institutions and destined to suppliers participating in local supplier development programs (PDFs) </li></ul>FFF – Financial Funding for Suppliers CDF – Credit for suppliers <ul><li>Working capital solution for Vale´s suppliers to anticipate of their invoices with covenant banks </li></ul>Financial Products Financial tools to facilitate access to credit and provide resources to Vale´s suppliers
  13. 13. Diagnosis Procurement Policy Review Joint-Venture and Partnerships <ul><li>Diagnosis of gaps in supply and demand for the states of PA, ES, MG and MA by comparing the local industry capacity and Vale’s local demands for the next 5 years </li></ul><ul><li>Review of Vale’s procurement policies to incentive increase in local content </li></ul><ul><li>Development of incentives with local supplier development programs (PDFs) for the creation of joint-ventures and partnerships between local suppliers </li></ul>International Missions <ul><li>Create incentives for Vale’s local suppliers in Brazil to export to countries where Vale has investments, in order to attend the local demand as well as establish partnerships to develop local suppliers </li></ul>Business Development Products Promotion of local businesses, such as revision of internal standards and procedures, formation of alliances between suppliers and trade missions abroad
  14. 14. Inove Forum Labor Development Program Management Training “Track” <ul><li>Annual event with main internal and external stakeholders to discuss strategic topics related to the pillars of Inove Program </li></ul><ul><li>Partnership with local supplier development programs (PDFs) to organize and complement training offered to labor, aligned to IDF criteria and other specific requirements from the mining industry </li></ul><ul><li>Online and on-site training to develop suppliers management - also in partnership with PDFs </li></ul>Education Award <ul><li>Launching of education products and incentives to promote adhesion to Inove education programs </li></ul>Supplier Day <ul><li>Event with suppliers to discuss strategic themes from IDF </li></ul>Technical Seminars <ul><li>Event with suppliers including lectures and round tables about the proposed themes during the Inove Forum </li></ul>Education Products Managers and labor training programs, events and seminars for discussion of topics aligned to the Program
  15. 15. Inove Site Inove Folders Roadshows <ul><li>Internet Site information highlighted in Vale´s homepage </li></ul><ul><li>Promotion material for communication detailing all initiatives from Inove program </li></ul><ul><li>Local events to promote the initiatives and products for internal and external stakeholders </li></ul>Executive Panel <ul><li>Panel that shows detailed information to support managers decision (local acquisitions, investment map, training achievements, suppliers performance, credit access) </li></ul>Communication and Promotion Products Communication strategy based on spontaneous media and promotion materials for dissemination of Inove´s results

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