KCM Packaging Ltd

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KCM Packaging Ltd is a business organization in UK which was founded in 1984. Its major operation as a leading manufacturing company in the UK is packaging wholesale supplies and also in the manufacture of corrugated cartons. The other activity in which the company is indulged in is the manufacture of containers which are generally heavy duty. The packaging is ISO 9001:2000 certified and therefore the handling of the retailers and clients goods is well taken care of. Apart from the products offered to the clients, the services offered by the Company are varied including consultancy, designing, printing, and sourcing. The latest services offered by the company is the peripheral packaging to the products delivered by the clients. This goes a long way in ensuring that the goods provided by the company meet the varied uses like chemicals, pharmaceuticals, electronics or food. As such due to the varied products and services offered by the company, the inherent of risk occurrence in the process is highly culminated. Therefore in order to mitigate such risks various techniques have to be deployed when undertaking the firm`s operations.
Types of risks faced by KCM Packaging Ltd
The company faces diverse risks when undertaking its operations. Managers have taken an initiative to mitigate such risks in order to ensure that the cost incurred when the risks materializes is reduced and curtailed effectively. The risks faced are grouped into five major categories by the risk manager of the company. This includes; volatility risks, market risks, credit risks, operational risks and legal risks.
Market risk
The risks in this case are demonstrated by the change in value for the investment undertaken by the organization which is in turn affected by the market factors. As such where the value of the investment decreases, the company will make a loss and therefore will not be able to meet the investor`s requirements. The major standard factors that enhance market risks include;
Equity risk: the stock market prices may change adversely due to the changes in the economic condition of the investors. For instance, the company`s investment in the stock market was highly affected during the period of economic degradation in the early 2008. As such the company`s stock prices were highly affected and the company was not able to meet the investor`s demands. Following such adverse implications, the company decided to incorporate various strategies of managing the risks.
Interest rate risk: the market risk incurred by the company under this factor is the rapid change in the interest rates in the economy. For instance, the investment in the government bonds in which the company had invested in order to acquire further finances was affected adversely by the decrease in the interest rates. As such the speculated high interest rate in which the company would have acquired was curtailed by the economic condition and therefore incurred a financial loss.
Currency risk: the company faces substantial risk in the changes that face the foreign exchange markets. In the contemporary world, the economy faces tremendous changes and instability in the foreign exchange rates. This will be implicated by the political, economic and socio-cultural implications of the domestic country. Where the economic condition in the UK economy is not stable the foreign exchange rate will be unstable and as such increase the riskiness of the company`s operations.
Commodity risk: KCM Packaging Ltd is focused in the manufacture of heavy duty containers and also the cartons to be supplied to its clients. Recently, the prices of the commodities supplied were adversely affected due to the negative changes experienced in the UK economy. The commodity risk is frequent but not hazardous as it takes only a short duration of time before it returns to norm. It can also be mitigated by imposing proportional cost of production and therefore no major financial loss to be incurred.
Operational risks
This risk is well fostered by the inadequacy and the imminent failure of the internal processes in the organization, systems or the staff in operation. It can also be facilitated by the inadequacy of external events. The company`s operational risks in which it...