United Grain Grower Case

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Dosen : Erni Ekawati Kusuma, Ph.D
Dosen : Erni Ekawati Kusuma, Ph.D

Kelompok 6 : Dhika Yogatama Lintang Widayanto Sandra Dwi Putri Kelompok 6 : Dhika Yogatama Lintang Widayanto Sandra Dwi Putri

United Grain Grower Case
Risk Management
United Grain Grower Case
Risk Management

PREFACE
United Green Growers (UGG) is a company who provides commercial services to farmers in Canada and markets agricultural products worldwide. UGG tried to distinguish itself from competitors by creating products with brand names an d by providing on-going services to customers. During the latter part of the 1990s, some UGG’s managers started to question the desirability of managing pure risk and financial risk separately. UGG started by forming a risk management committee, consisting of the CEO, CFO, risk manager, treasurer, compliance manager (for commodity trading), and manager of corporate audit services. This committee, along with a number of UGG employees, then met with a representative from Willis (risk management consultant) for a brainstorming session to identify the firm’s major risks. This process identified 47 exposure areas, from which six were chosen for further investigation and quantification. The six risks were: 1. Environmental liability

2. The effect of weather on grain volume
3. Counterparty risk (suppliers or customers not fulfilling contracts) 4. Credit risk
5. Commodity risk and basis risk...
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