Utility Procurement Managers debate China Sourcing, Financial Risk Management and Climate Change

December 01, 2008 – APUG members and invited guests met in Hong Kong on 26th-27th November for the latest regional APUG meeting hosted by CLP Power. With 40 delegates representing 13 power utilities from Australia, Hong Kong, India, Macau, Mainland China, New Zealand, and Thailand, this was the largest regional APUG meeting to date.

In his opening address Mr. S.M. Ho, Chief Procurement Officer of CLP Power and host for the meeting, welcomed the participants and outlined some of the priority issues that would be discussed between the members and invited guests over the two days. High on the agenda for all companies was managing the current financial crisis and the impact on their supply chains, sourcing and the assessment of suppliers from low cost countries and addressing climate change.

To support these discussions delegates were able to draw on presentations from an international panel of guest speakers;

Mr. Gaylord Haas, Director of Compliance, Control & Risk Management, for Phelps Dodge International Corporation, from Florida, USA, presented on ‘Managing Commodity Price Risk with Your Suppliers’ including hedging techniques to limit exposure to commodity price fluctuations.
Mr. Xiaoming Ou, Director for State Grid Technology and Equipment Co. Ltd. in China, outlined State Grid’s Procurement Strategy and best practice recommendations, including how State Grid has achieved an estimated saving of 7% on a budgeted spend of US$18Billion in 2007 through collaboration on procurement activities across State Grid.

Mr. Colin Maund, CEO of Achilles Group in the UK, outlined recent developments in Supply Chain Management as observed from Achilles’ work with over 200 utilities worldwide. Mr. Maund updated the members on initiatives already underway in the utility industry to assess corporate social responsibility and carbon foot printing in the supply chain as well as the changing drivers, impacts and measures that procurement managers need to take to address the current financial downturn and third party data security.
The second day offered the members and APUG Working Groups an opportunity to discuss their approach to these subjects in more detail. In addition to the subjects above the members also debated climate change and low cost country sourcing supported by presentations from Dr. Jeanne Ng on CLP’s Climate Vision programme for 2050, and C.P. Cheng on their experience of sourcing from China.
Following the success of the site visits offered by Meridian Energy and Transpower at the meeting held earlier in the year, members also had the chance to visit CLP’s Castle Peak Power station and their emissions control project as well as the Centenary Building Substation.

Copies of the presentations and documents from the meeting are available to members in the APUG on-line document library. For further information please contact enquiries@apug.com or call Achilles on +(852) 2815 7100.

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