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Inove Program
April 28th , 2009
Agenda
ContextContext
Inove at a glanceInove at a glance
ResultsResults
Oman approachOman approach
Next stepsNext steps
ContextContext
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….
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)
The local industrialization is low, not so diversified and the exports are concentrated in oil, natural gas, fishing, textile products and metals.
There are 3,3 millions of inhabitants in Oman, with average age of 19 years, unemployment rate of 15%.
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.
Vale's operations
South and
southeast regions
Less developed regions Less developed regions
(27% of GDP)(27% of GDP)
Less developed regions Less developed regions
(27% of GDP)(27% of GDP)
Greater need to leverage local Greater need to leverage local supplierssuppliers
Greater need to leverage local Greater need to leverage local supplierssuppliers
Opportunity to reduce Opportunity to reduce imbalances and improve imbalances and improve community perceptionscommunity perceptions
Opportunity to reduce Opportunity to reduce imbalances and improve imbalances and improve community perceptionscommunity perceptions
More developed regions More developed regions
(73% of GDP)(73% of GDP)
More developed regions More developed regions
(73% of GDP)(73% of GDP)
ContextContext
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
New Program
VALE
Inst
ituti
onal
Rela
tions
H&
S a
nd
Envir
onm
ent
Op
era
ting
Are
as
Pro
cure
ment
HR
& F
inance
Com
munic
ati
ons
Found
ati
on
Macro Plano de AçãoFinanceiras
Capacitação
Normas e Processos
Divulgação
Revisão de Processos
Análise Demandas vs.
Integration
Action PlanFinanceiras Normas e
Divulgação
Financials
Training
Policies & Processes
Disclosure
Government/ Trade Unions
Governance Model
LocalSuppliers
Oth
ers
ContextContext
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
Inove at a glanceInove 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…
Business Development
Education Financial
Inove Program Pillars
• Labor
• Management
• Certification
• CDF
• FFF
• FIDC
• BNDES
•Joint-Ventures and Partnerships
• Industry Diagnostics
•National forum
Sensibilizaç ão
Crité rios IDF
Planejamento Demanda
Formaç ão de Preç os
Fornecedor Classe Mundial
Elaboraç ão de Proposta
Planejamento Estraté gico
Price formation
World class supplier l
Proposal formulation
Strategic planning
22 Roadshows and 700 ParticipantsFirst 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 employeesLaunching of the online courses: June/2009
Target: 100 companies and 1.000 trained employeesin online courses
Education
ResultsResults
…and after five months of Inove implementation we have already achieved some background and important results
Oman ApproachOman 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…
Identify VALE’s demands in Oman;
Identify critical resources (goods and services);
Elaborate critical resources demand data base and histograms
Development of tools to leverage Oman suppliers
Structure action plan to implementation of Oman local supplier development program
Gap Analysis, Supply Alternatives and Action Plan Definition
Demand DiagnosisDemand Diagnosis Supply and Gaps Identification in Oman
Supply and Gaps Identification in Oman
Step 1 Step 2 Step 3
Action Plan ElaborationAction Plan Elaboration
Assess critical resources supply;
Consolidate supply and demand data;
Identify gaps;
Elaborate matrix to prioritize critical resources gaps.
Interaction with Project Board to set drives and validations.
Analyze association of local Brazilian suppliers to attend Oman needs
Share of technology and knowhow
Brazilian suppliers commercial missions to Oman
Vale´s international presence
Next StepsNext Steps
…and in order to support Oman demands and generate new business opportunities to local Brazilian suppliers, we have defined some next steps
Back up
Inove´s CalendarInove´s Calendar
Roadshows
Inove Forum
Identify together with stakeholders initiatives to develop local suppliers
North Technical Seminars
Governance meetings start-up
South Technical Seminars
MayMay JunJun JulJul AugAug SepSep OctOct NovNov DecDec JanJan FebFeb MarMar AprApr MayMay JunJun JulJul AugAug SepSep OctOct NovNov DecDec
Pará Diagnosis
Inove implementation
Dec 4th – Inove Kick Off
2008 2009
Regional Awards
Suppliers Day (North & South)
Online Courses launching
Inove National Award
• Line for funding with financial institutions and destined to suppliers participating in local supplier development programs (PDFs)
FFF – Financial Funding for Suppliers
CDF – Credit for suppliers
• Working capital solution for Vale´s suppliers to anticipate of their invoices with covenant banks
Financial ProductsFinancial ProductsFinancial tools to facilitate access to credit and provide resources to Vale´s suppliers
Diagnosis
Procurement Policy Review
Joint-Venture and Partnerships
• 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
• Review of Vale’s procurement policies to incentive increase in local content
• Development of incentives with local supplier development programs (PDFs) for the creation of joint-ventures and partnerships between local suppliers
International Missions
• 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
Business Development ProductsBusiness Development ProductsPromotion of local businesses, such as revision of internal standards and procedures, formation of alliances between suppliers and trade missions abroad
Inove Forum
Labor Development Program
Management Training “Track”
• Annual event with main internal and external stakeholders to discuss strategic topics related to the pillars of Inove Program
• 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
• Online and on-site training to develop suppliers management - also in partnership with PDFs
Education Award• Launching of education products and incentives to promote
adhesion to Inove education programs
Supplier Day • Event with suppliers to discuss strategic themes from IDF
Technical Seminars• Event with suppliers including lectures and round tables
about the proposed themes during the Inove Forum
Education ProductsEducation ProductsManagers and labor training programs, events and seminars for discussion of topics aligned to the Program
Inove Site
Inove Folders
Roadshows
• Internet Site information highlighted in Vale´s homepage
• Promotion material for communication detailing all initiatives from Inove program
• Local events to promote the initiatives and products for internal and external stakeholders
Executive Panel • Panel that shows detailed information to support managers
decision (local acquisitions, investment map, training achievements, suppliers performance, credit access)
Communication and Promotion ProductsCommunication and Promotion ProductsCommunication strategy based on spontaneous media and promotion materials for dissemination of Inove´s results