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Commodity	
  Sourcing	
  Strategy	
  Field	
  Project:	
  Copper	
  
By:	
  Chris	
  Messer,	
  Jenna	
  Palek,	
  Kevin	
  Patterson,	
  	
  
Clara	
  Penington,	
  and	
  Jake	
  Sims	
  
	
  
	
  
	
  
	
  
2	
  
	
  
	
  
Table of Contents
	
  
Executive Summary	
  ...............................................................................................................................................................	
  3	
  
Part I	
  .......................................................................................................................................................................................	
  5	
  
Company: Description of Optimiza, S.A.	
  ..............................................................................................................................	
  5	
  
Strategy	
  ..............................................................................................................................................................................	
  5	
  
Commodity: Copper	
  ...........................................................................................................................................................	
  6	
  
Part II	
  .....................................................................................................................................................................................	
  7	
  
Commodity Analysis	
  ..........................................................................................................................................................	
  7	
  
Part III	
  ....................................................................................................................................................................................	
  9	
  
Key Potential Suppliers	
  ......................................................................................................................................................	
  9	
  
AngloAmerican	
  ..............................................................................................................................................................	
  9	
  
Freeport McMoRan	
  ......................................................................................................................................................	
  11	
  
CODELCO	
  ...................................................................................................................................................................	
  12	
  
Part IV	
  ..................................................................................................................................................................................	
  14	
  
Recommendations	
  ............................................................................................................................................................	
  14	
  
Alternative 1: Expedite/Improve Addition of Consulting Branch	
  ................................................................................	
  14	
  
Alternative 2: Phase Out CODELCO, Phase in Anglo American and other non-Chilean Suppliers	
  ............................	
  14	
  
Alternative 3: Create Recycling Incentive to Reuse Old Metals	
  ..................................................................................	
  15	
  
Recommended Alternative	
  ...........................................................................................................................................	
  15	
  
Exhibits	
  ................................................................................................................................................................................	
  17	
  
Exhibit 1.1	
  ........................................................................................................................................................................	
  17	
  
Exhibit 1.2	
  ........................................................................................................................................................................	
  20	
  
Bibliography	
  ........................................................................................................................................................................	
  25	
  
3	
  
	
  
Executive Summary
In this report, our team will cover the comprehensive research we did into the copper commodity on
behalf of the company Optimiza. We have structured our report in such a way that it can be interpreted and
used by anyone regardless of his or her prior knowledge of the commodity of copper or Optimiza. We begin
with an introduction to the company, followed by an evaluation of our commodity, then we evaluate two of
Optimiza’s existing suppliers as well as a third potential supplier, and finally we provide recommendations
based on our findings. We began our research by reviewing what exactly Optimiza does as a company and what
they hope to accomplish. By first obtaining an understanding of the company’s foundations and goals, we were
better able to direct and constrain our research to sourcing alternatives that would be most feasible for
Optimiza’s existing corporate and operational structure. Next, we took a look at the current commodity market
for copper. We took into account where the largest deposits of copper are located, how copper is mined, and the
common ore standards for copper, and the level of market competition in the copper industry. In addition to
exposing us to a number of potential suppliers, this research helped us to obtain a more holistic understanding
of our commodity, its relative volatility, and how market behavior will affect the future sourcing opportunities
for Copper.
In addition to the research on Optimiza and the copper commodity market, we researched three different
suppliers of copper, CODELCO—their current primary supplier, Anglo- American—one of their smaller
suppliers, and Freeport McMoRan—whom they are not currently buying from. In particular, we focused on
what unique qualities each company could offer Optimiza and how we anticipated the supplier being able to
accommodate Optimiza’s future growth. We paid special attention to the growth capabilities of these suppliers
and how efficiently we anticipated them being able to serve the quality requirements that Optimiza values most.
Optimiza is currently experiencing tremendous growth as a company; rather than focusing on ways to increase
short-term growth, we focused our recommendations on ways to make this growth sustainable and provide for
the maintenance of this growth well into the future.
4	
  
	
  
Our team had the unique opportunity to conduct an interview with Optimiza CEO, Roxana Vásquez.
Although Vásquez spoke limited English, we were able to conduct the interview via telephone in Spanish. This
gave us some direct insights not only into the founding of the company, but also the direction the company
wants to take in the future. At the conclusion of the interview, Optimiza’s CEO even expressed interest in
reviewing the conclusions of our sourcing research. It is our hope that the recommendations we have made will
be considered by Optimiza as we truly believe they can provide for sustainable and continued success for the
company.
Based on the data we have collected about Optimiza, their goals and requirements, the copper
commodity market, and different suppliers of copper, we were able to make some recommendations to
Optimiza. Our suggestions were developed with the intent of increasing Optimiza’s supply chain flexibility,
developing diverse and strong supplier relations, and creating a sustainable supply base in an increasingly
difficult commodity market, without significantly increasing costs. Although we believe all three of our final
recommendations will benefit Optimiza, in the interest of pursuing cost-saving measures while simultaneously
improving future operations we able to select one recommendation above the others that we believe would be
the best choice for Optimiza to make.
5	
  
	
  
Part I
Company: Description of Optimiza, S.A.
Headquartered in the heart of the metropolitan center of Santiago, Chile, Optimiza is an engineering and
development company led by CEO, Roxana Vásquez, and CFO, Hernán Vásquez. Optimiza’s corporate
organizational structure divides its labor force is divided into special “task forces” that include Piping,
Mechanics, Structures, Civil Works, Electricity, Instrumentation and Control, Architecture, Industrial, Security,
Risk and Environment, Project Scheduling, Project Evaluation. At any given time, Optimiza employs between
70 and 80 workers and generates annual sales of $5 million. Additionally, the company has boasted an average
annual growth rate of 35% for the past three years. .
Optimiza was founded in 2000 by three metallurgical civil engineers from the University of Concepción,
with the aim of developing a company able to offer project planning for international Chilean engineering and
mineral processing plants. Optimiza has had a global scope from its conception and has always retained a focus
on its international suppliers. The company's major clients are found in Chile (CODELCO and Minera Los
Pelambres), the United States (AngloAmerican), Australia (bhpBilliton), and Denmark (FLSmidth).
Strategy
While Optimiza’s proximity to the copper market provides competitive pricing against its international
competitors, it still must remain competitive with other engineering and project management companies in
Chile. The company maintains its competitive pricing through careful monitoring of foreign and domestic
copper markets. Optimiza holds itself to a high standard of quality. Its strategic policy is based on the concept
of continuous improvement built upon a strong commitment to quality customer service. Optimiza seeks to
deliver technically feasible and economically viable solutions that adequately meet customer requirements and
contribute to improving their competitive position, achieving relations of trust, and creating long-term
customers.
Delivery time and quality vary greatly based on client location and performance is much better for
Chilean and American clients than for Australian or European clients. In order to assess these existing supply
chain problems, Optimiza is presently investigating the addition of a consulting arm that would be responsible
for business and process improvement. Optimiza faces similar issues in concept-to-customer cycle time as it
does with delivery—with lengthier cycle times for foreign customers. In terms of corporate social
responsibility, Optimiza is committed to preserving the environment by not allowing or performing work or
actions that involve contamination or alteration of air, water or soil. To ensure this, the company has created an
Environmental Management Plan underpinned by the following principles:
o Include environmental analysis in your projects, in order to minimize the impact, consume fewer
resources (water and energy) and generate less waste.
o Establish office practices that lead to reducing the environmental impact caused by the activities
of each worker.
o Promote a responsible attitude towards caring for the environment and natural resources.
6	
  
	
  
“We are considering developing a sales force. Because in 15 years of existence we have dedicated more
to production than seeking opportunities to develop new customers. We are also considering pioneering
an area of consulting, aimed at improving business productivity.”
-Roxana Vásquez
(see exhibit 1.1 for complete interview)
Commodity: Copper
Copper is a key component in nearly every project engineered by Optimiza. Optimiza’s location in the
capital of the largest net exporter of copper in the world serves as a significant competitive advantage. Its
proximity to Chilean copper mines is its distinguishing factor for its customers. The copper purchased by
Optimiza for its engineering ventures is used primarily for piping and electrical purposes. Presently, the
company purchases its copper supplies at a rate of $3.15 per pound. All the copper procured and processed by
Optimiza is compliant with ASTM international copper standards (see exhibit 1.2). Delivery requirements and
scheduling information for the commodity are orchestrated by Optimiza, but dictated by the needs to the client.
Optimiza maintains a diverse transportation network to accommodate its international partners. The
abundance and consequent favorable pricing of copper in South America (especially Chile) reduces the
feasibility of sourcing a copper alternative. Aluminum has emerged as a potential future substitute (but is a 65%
less effective conductor than copper wire). Because a feasible copper alternative does not seem to be a reality,
there are no existing plans to move away from copper a primary sourcing commodity. Optimiza standardizes its
operations by sourcing its copper from exclusively Chilean mines. Because Optimiza does not own any of these
mines, its pricing control is somewhat limited. Volume requirements are entirely dependent on the number and
scale of the projects Optimiza is engineering at any given time. Volume can vary greatly although consumption
averages around 9 million metric tons per year. There are no projected or anticipated supply chain design
changes at this time.
“Chile is a mining country, therefore its economy depends mainly on copper, thus any global crisis,
affecting the mining market, and therefore providers of mining, acts as a kind of internal recession in the
country.”
-Roxana Vásquez
7	
  
	
  
Part II
Commodity Analysis
Copper is a metal that has been known around the world since ancient times, and it has been mined since
8,700 BC. According to the New York Mercantile Exchange, copper is the third most widely used metal in the
world today. It is a very versatile material - copper can conduct electricity, destroy germs, and is used to make
many different products. Copper is currently used to make important parts of printed circuit boards, lead free
solder, microwave ovens, wave guides, integrated circuits, electromagnets, wiring, and piping.
In order to produce copper, copper ore is mined from an open pit or from underground mines. The mine
ore is then transported to a crushing plant, where it is crushed to a smaller size and transported to the
concentrator. The crushed mine ore is ground in rod and ball mills and then sent to flotation machines, where
the copper mineral rises to the top in a froth. The material then goes to the smelter, where non copper elements
are burned off or melted. The result is 99% pure molten copper, also known as blister, which is then poured into
anode molds. It goes through electrolytic refinery, further purifying it to 99.9999% pure copper. This pure
copper can then be sent out to external customers.
The current price of copper as of November 28, 2014 was 2.96 USD/lb. This price has decreased
significantly over the past year, as the high was 3.37 USD/lb in late December of last year. The main cost
structure of a copper mine are the operating costs, financing costs, administration cost, royalties to the country
of that mine, and depreciation and amortization. Though copper has decreased in price, it is still being
substituted by cheaper products including aluminum, plastics, and fiber optics. These substitutes decreased
demand from 400,000 to 500,000 metric tons in 2012.
The copper mining industry is highly competitive between companies around the world. Mines have
limited lives, so copper mining companies seek to acquire other reserves in order to expand their business. The
mining industry has experienced significant consolidation recently. The top five companies in the mining
industry are CODELCO (Chile), Freeport-McMoRan Copper & Gold Inc (Phoenix, AZ), BHP Billiton, Grupo
México, Xstrata, and Antofagasta. Copper is highly available because it is traded on exchanges. Chile holds 10
of the largest copper mines in the world, the largest being Escondida, which contains over 32 million tons of
copper. In June 2013, output was about 1.1 million tons, or 5% of the world’s global copper production. Peru,
Indonesia, and Mexico also are major players in the copper mining industry. Only about 6.8% of the world’s
copper supply comes from the United States, and more than half of this copper is mined in Arizona.
While South America might be the largest producer of copper, most of the world’s copper ends up in
buildings and electronics in North America, Europe, and China. Those three geographic locations are all
significant producers of copper, but they don’t produce nearly enough to meet their own needs.
8	
  
	
  
Copper will
continue to be available
because of geographical
availability and industry
innovation. Copper
reserves amount to 690
million tons, and copper
resources are estimated to
exceed 3,500 million
tonnes in the future. Since
1950 there has always
been about 40 years of
copper reserves and over
200 years of resources
left. Copper recycling also
plays a role in copper availability, as about 35% of todays copper came from recycled sources. See the below
chart for historical information about the ratios of copper reserves to copper production.
9	
  
	
  
	
  
Part III
	
  
Key Potential Suppliers
	
  
AngloAmerican
One of the world’s largest mining companies, Anglo American has approximately 158,900 employees
and contractors. They mine iron, coal, copper, nickel, platinum, diamonds and more. There are a total of seven
copper mines they have interests in in South America. They fully own two mines and have large shares in four
other mines all located in Chile. They are listed on the London Stock Exchange and their operating profit in
2013 was 6.6 billion. The company is managed by a board of twelve directors headed by Sir John Parker.
Their copper production is one of their largest commodities comprising 1.7 Billion in operating profit.
They receive 29% on capital employed in their copper business and attribute 28% of their total underlying
operating profit to copper. Recent news has stated that Anglo American will be selling off some of its copper
assets in Chile valued at $1 Billion USD. This appears to partially be speculation but it should be taken into
consideration. They anticipate to produce approximately 720,000 tons of copper in 2014. This accounts for
approximately 4% of total world copper production.
Anglo American Mining Locations
10	
  
	
  
The six mines they have interests in are located in various points around Chile. They have majority
interest in three mines located around Santiago. These are Chagres, close to sea level, Los Broncos, also close
to sea level, and El Soldado, tucked higher into the mountains. In the northern part of Chile of Tarapaca resides
Collahuasi, high in the mountains, of which Anglo American owns 44%. The mines they own fully are located
much closer to sea level and also reside in the northern part of Chile. These are Mantos Blancos and
Mantoverde.
In the third quarter of 2014 ended September 30th
, Anglo produced 207,300 tons of copper. This amount
is a 15% increase since the previous quarter and with Anglo’s continued ventures into obtaining new mines this
amount is expected to increase. With regards to shipping Anglo’s mines are located incredibly close to our
company, Optimiza. Because the country is Chile, all parties are located within a few hundred miles of the
ocean allowing for ease of transport if Optimiza desired to expand their operations into foreign countries.
The risk level associated with trying to establish long term business relations is comparatively low to the
average company. To demonstrate this, a few financial ratios will provide supporting evidence.
· Current Ratio 1.934
· Debt Equity Ratio 1.067
· Gross Profit Margin 20.97%
For a large company, these ratios show that Anglo American is relatively liquid, has an acceptable amount of
debt levied against their equity, and brings in a healthy gross profit.
11	
  
	
  
Freeport McMoRan
	
  
Freeport McMoRan was chosen as a potential supplier because it is headquartered in the USA, where
Optimiza already has a strong presence. In addition to its convenient location, Freeport McMoRan is part of the
S&P 500 Stock Index and is ranked number 142 in Fortune 500 companies. Finally, it is a company in close
proximity to other current clients of Optimiza.
Freeport McMoRan is already a very prominent multinational company in the metals and mining sector.
The company was founded in 1912 as Freeport Sulphur Company in Freeport, Texas. Through constant growth
and strategic acquisitions, Freeport McMoRan has devel	
  oped and entered many more markets than just sulphur.
Now headquarted out of Pheonix, Arizona, Freeport McMoRan had a 2013 sales volume of about 4.09 billion
pounds of copper, which continued a growing trend, up from 3.65 billion pounds in 2012. Freeport McMoRan
employs around 36,000 people and operates 15 copper mines around the world. Seven of these mines are in the
United States, where it is headquartered, along with one in Africa, three in Indonesia, and, most importantly,
four in South America. Another major reason we chose Freeport was because it currently operates three copper
mines in Chile (El Abra, Candelaria, and Ojos del Salado). This allows easier access to mines that could directly
supply our company.
Freeport has many major customers as a result of the size and influence of the company. As a result of
its involvement in many sectors, Freeport McMoRan works with any company working with raw materials of
copper, molybdenum, gold, oil, and other commodities. As of 2013, Freeport McMoRan held an 8.8% market
share in copper production and ranked second only to CODELCO. Freeport McMoRan is a publicly traded
company, with a listed stock price of around $25. It is currently under some scrutiny with its stockholders as a
result of its recent purchase of two companies last year, but is approaching a settlement soon. The stockholders
believed that Freeport overpaid when purchasing two companies last year, and therefore, the board has worked
to supply them with a fair settlement.
Freeport McMoRan has a board of directors- led by the company’s CEO, Richard C. Adkerson- that is
comprised of 16 members who come from various backgrounds such as work in metals, oil, business, public
affairs, and others. Currently Freeport’s board is working to maintain high profits as the price of certain
commodities, including copper, are dropping worldwide. However, with its holdings, it expects its mines to
increase production in the upcoming years, which will help offset the reduction in price per pound. Optimiza
and Freeport McMoRan have not worked in the past, but it is our belief that a strategic partnership could benefit
both parties.
12	
  
	
  
CODELCO
	
  
CODELCO is the main copper producer in the world and controls 10% of the world’s copper reserves.
CODELCO came to fruition in 1976 after the Chilean state purchased most of the country’s copper reserves in
1971. CODELCO would seem to be the obvious choice since it’s the largest producer. Since it’s the biggest
producer, they are able to offer competitive prices
and reliable service. CODELCO is an autonomous
organization but state owned by the Chilean
government. In 2013, it had total sales revenue of
14.96 billion USD and employed about 19019
people. There are five principle mines in
CODELCO’s operations. The biggest of these is the
operation titled CODELCO Norte. The main mine is
Chuquicamata. Mining began in the late 19th
century. Currently, there is 182,000 tons of daily
capacity in the mine. Radomiro Tomic is located
five km from Chuquicamata and produced 379,600
tons in 2013. Also, there is the Ministro Alejandro Hales, which are mined minimally, as there are high levels of
arsenic in the ore. The second major operation is the mine in El Salvador, although production there has been
slow since the mine is not as profitable as it once was. The Andina mine is near Santiago and is planning to
raise mill capacity to 200,000 tons a day. El Teniente largest underground copper mine in the world and
contains 73 million tons of copper. The final mine is El Abra, where CODELCO is working towards 168,000
tons of capacity. CODELCO also has a part in many joint ventures and partnerships in mines around the world,
and sources some of their copper from these other companies.
In 2011, CODELCO produced 1,796,169 metric tons of fine copper. However, the company has been
facing a decline in overall production. Earlier this year, CODELCO had to cancel shipments to China this year
due to lack of production in certain mines. CODELCO is also a provider to other major markets such as
America, Europe, Korea and Taiwan. CODELCO is responsible for 32% of Chile’s copper output. CODELCO
is owned by the Chilean government, but functions autonomously. The Board of Directors is the ruling body in
CODELCO. It consists of nine members, three of which are appointed by the Chilean government, four from a
list selected by the Council of Senior Public Management, one from the Federation of Copper Workers, and one
from either the Federation of Copper Supervisors and the National Association of Copper Supervisors.
CODELCO has the backing of the Chilean government, as well as billions of dollars in investments,
assets, and mines. The company consists of mainly Chilean workers and is known for being on the forefront of
new technologies to efficiently mine copper and refine the harmful chemicals. Although they have a varied base
of mines in Chile, they cannot always react to changes in demand and production. Since copper production is
effected by many outside factors such as weather, their supply chain is not very flexible. The main methods of
transportation for CODELCO’s metals are through trains, ships, and automobiles, which are also very sensitive
to outside variables. CODELCO prides themselves on high safety standards, with only 1.39 hours per million
worked lost due to injury.
13	
  
	
  
Currently, many of the mines are not being used to their full capacities due to lacking technology and
increased difficulties with mining and ore quality. CODELCO produced 162 million tons last year, 1.5% drop,
five year low due to lower ore grades and trickier mining operations. The company has said that they expect to
increase capacity but in order to do that they will have to develop technology to help them meet that demand.
Earlier this year they had to cancel 10,000 orders to China, which shows that they cannot currently meet
demand to the extent that they have to cancel orders. The cost of CODELCO’s copper depends largely on what
copper is being traded for on the commodities market, currently at a 5 year low. The market price for copper
peaked around 2010. Currently, Optimiza uses CODELCO as one of their main suppliers and has for many
years, which is convenient due to the location of both companies. However, it is unclear if CODELCO will be
able to meet the increasing demands of Optimiza going forward.
	
  
	
  
	
  
14	
  
	
  
	
  
Part IV
  
Recommendations
Alternative 1: Expedite/Improve Addition of Consulting Branch
Currently the consulting branch of Optimiza is fresh and underutilized. Due to the relatively young age
of the company we find that adding resources into this branch of the company will likely lead to its continued
success and maintain its tremendous rate of growth. A current trend in global business—regardless of industry
or market—is the implementation of not only a strategic sourcing plan, but continued re-evaluation of strategic
sourcing. While we can provide recommendations as far as current sourcing plans go, we recommend most
strongly that infrastructure within the company be arranged so that Optimiza may continue to be a key player in
Chile as well as the rest of their global industry. Using strategic tools like supplier scorecards and comparative
financial ratios, Optimiza can work internally to continually improve its supply chain and work pursue cost
cutting measures.
The addition of an internal consulting branch will also play an important role from a sustainability
standpoint. Third-party consulting work not only places an enormous cost burden on the company, but it has
also been shown to be less effective than internal auditing processes. A team that is permanently dedicated to
improving Optimiza’s operations will be much more familiar with the company’s existing assets and corporate
structure than a third party consulting arm would be. Form our exclusive interview with CEO Roxana Vásquez,
we know that Optimiza has already been considering the idea of expansion to incorporate “an area of
consulting” aimed at “improving business productivity.” We would encourage this expansion and suggest that
this addition to the company be expedited and realized as soon as possible so that Optimiza can begin collecting
data from day-to-day activities and make meaningful, long-term improvements to its operations and supply
chain.
The only potential drawback to the addition of this consulting arm is the initial cost of creating the
department and hiring/training employees to perform these activities. However, with the cost-saving measures
the consulting branch would undoubtedly pay for themselves within a few years.
	
  
Alternative 2: Phase Out CODELCO, Phase in Anglo American and other non-Chilean
Suppliers
	
  
Currently, Optimiza sources much of its copper from its home country, Chile. However, Chilean mines
are beginning to become depleted and have been producing lower quality ore in recent years. Due to
CODELCO’s recent problems fulfilling orders, we would recommend phasing out sourcing with them.
However, the problems with Chilean copper production are not limited to to just CODELCO’s mines. Many
Chilean reserves are beginning to deplete or are consistently producing lower grade copper ores. Because of
15	
  
	
  
this, we would also recommend a slight decrease in sourcing from Anglo American, beginning to build sourcing
relationships with companies that have mines in many different countries, such as the supplier Freeport
McMoRan.
Headquartered in Phoenix, AZ, Freeport McMoRan has impressive facilities across the globe. Because
Freeport McMoRan is smaller in scope and size than CODELCO, Optimiza could exert more power over this
particular supplier, giving them the ability to negotiate better shipping terms and potentially even lower prices.
Freeport McMoRan could also strengthen Optimiza’s current corporate social responsibility practices. As
Freeport McMoRan is very outwardly and actively concerned with the health and safety of its employees,
minimizing adverse impacts on the environment, as well as forming long-term relationships with customer, we
feel that this supplier would be a very beneficial choice for Optimiza and would push them to become more
responsible to their employees, the environment, and their suppliers.
The biggest drawback we see to pursing a supplier relationship with Freeport McMoRan is increased
shipping costs and tariffs or taxes in order to get the commodity into Chile. But, with the large number of
copper mines that Freeport McMoRan has a stake in, we feel that Optimiza could weigh all of the potential
costs and benefits of their mining locations in order to chose one that is the most cost effective.
	
  
Alternative 3: Create Recycling Incentive to Reuse Old Metals
	
  
The global demand for copper is increasing each and every year with more companies developing and
requiring it. Developed countries also have shown no signs of stopping consumption of copper. For this reason,
we believe it is in Optimiza’s best interest to begin finding ways to recycle and/or reuse copper.
There are several initiatives and organizations designed around recycling on a large scale. A partnership
with the Institute of Scrap Recycling Industries based out of Washington DC would be advisable. This non-
profit organization is designed to equip companies with safety advice, networking opportunities, regulatory
information and standards, up to date market research and current publications for the purpose of enabling
companies such as Optimiza to figure out how they can best understand new techniques, trends and projects.
Some examples over copper recycling programs have been realized through projects like Toyota’s Wire
Harness Recycling Project. This project essentially takes copper out of the rubber wiring it is encased it. The
drawbacks to this project are the high costs associated with the methods used, however we believe that this is
still worth looking into because the price of copper will very soon exceed the cost of recycling it. Further
research and development is highly recommended into all manner of copper recycling programs.
Recommended Alternative
	
   	
  
Given our existing recommendations, the best course of action for Optimiza is to follow our second
alternative. This recommendation permits Optimiza to become a more global company, while also benefiting
the quality of its products. This recommendation begins with Optimiza reducing its reliance on CODELCO as
its primary supplier. We recommend this because the ore coming from CODELCO mines is now rated as an
16	
  
	
  
inferior product. Furthermore, there has been speculation with regards to the existing copper supplies in Chile
that have resulted in a drop in consumer confidence and increasing prices for copper sourced from these mines.
Therefore, we feel that Optimiza should look into building and improving relationships with other suppliers
such as AngloAmerican and/or Freeport McMoRan. These suppliers allow access to mines all over the world,
allowing Optimiza to obtain the best quality copper they can find, and with more competitive pricing than
sourcing the majority of their product from only Chilean mines. Yet, these suppliers also still have Chilean
mines, which allow for quick access to copper if Optimiza needs it. This means Optimiza can continue to
provide quick and efficient project service to its existing Chilean and South American customers while also
taking advantage of competitive pricing abroad and improving its service and delivery times with its foreign
clients. Finally, by working with these new suppliers, which are true multinational corporations, Optimiza’s
influence will be enhanced throughout the globe.
Our existing research with AngloAmerican suggests that sourcing a larger percentage of Optimiza’s
copper from it should not pose significant risk to the company. AngloAmerican has a stable amount of equity
levied against its debt and its existing growth rates seem sustainable for the foreseeable future. Freeport
McMoRan offers proximity to Optimiza’s existing clients as well as access to substantial North American
copper reserves. The company is ranked second only to CODELCO, whose share of the market is projected to
fall in the coming decade. Increasing sourcing form both of these suppliers should not pose any significant
threat to Optimiza from a supplier risk standpoint.
If Optimiza complies with this recommendation, it will not only ensure that the company is not affected
by potentially dwindling supplies of copper in Chile, but it will help Optimiza to diversify its suppliers, lower
procurement costs, and provide superior performance to its increasing number of foreign clients. If the company
wishes to continue its tremendous growth and not be stagnated by the copper market or rising commodity
prices, improving relations with more geographically diverse suppliers like AngloAmerican and contracting
new suppliers like Freeport McMoRan is the best course of action for the immediate and long-term benefit of
the enterprise.
17	
  
	
  
	
  
Exhibits
  
Exhibit 1.1
Entrevista con Roxana Vásquez
	
  
¿Podría	
  darnos	
  una	
  breve	
  descripción	
  de	
  cuál	
  es	
  el	
  propósito	
  de	
  su	
  empresa	
  y	
  cuál	
  es	
  el	
  producto	
  o	
  servicio	
  
que	
  esta	
  ofrece?	
  
R:El	
   propósito	
   es	
   ser	
   la	
   mejor	
   empresa	
   de	
   ingeniería	
   Chilena	
   para	
   la	
   minería.	
   El	
   producto	
   es	
   desarrollar	
  
proyectos	
  de	
  Ingeniería	
  multidisiciplinarios	
  para	
  Plantas	
  de	
  Procesamientos	
  de	
  Minerales	
  
¿Qué	
   le	
   hizo	
   decidir	
   empezar	
   una	
   nueva	
   empresa,	
   su	
   propio	
   emprendimiento?	
   ¿Cuáles	
   fueron	
   sus	
  
principales	
  razones?	
  
R:La	
  principal	
  razón	
  fue	
  haber	
  quedado	
  sin	
  trabajo	
  a	
  inicios	
  del	
  año	
  1999	
  debido	
  a	
  la	
  crisis	
  asiática,	
  con	
  casi	
  10	
  
años	
  de	
  permanencia	
  en	
  una	
  empresa	
  de	
  ingeniería.	
  
¿Qué	
  características	
  de	
  su	
  empresa	
  considera	
  únicas?	
  ¿Existe	
  algún	
  valor	
  agregado	
  que	
  usted	
  considere	
  que	
  
pertenece	
  sólo	
  a	
  su	
  compañía?	
  
R:El	
  clima	
  laboral	
  que	
  hemos	
  forjado	
  en	
  base	
  a	
  una	
  filosofía	
  de	
  trabajo	
  feliz.	
  La	
  calidez	
  y	
  empatía	
  con	
  que	
  se	
  
trata	
  a	
  todos	
  los	
  clientes.	
  
¿Cuáles	
  fueron	
  las	
  percepciones	
  de	
  mercado	
  iniciales	
  que	
  le	
  hicieron	
  querer	
  ingresar	
  a	
  la	
  industria	
  en	
  que	
  
actualmente	
   desarrolla	
   su	
   negocio?	
   ¿Fueron	
   estas	
   percepciones	
   completamente	
   determinantes	
   en	
   su	
  
decisión?	
  
R:No	
   hubo	
   percepciones,	
   es	
   lo	
   que	
   yo	
   sabía	
   hacer.	
   No	
   hubo	
   análisis	
   de	
   ningún	
   tipo,	
   solo	
   la	
   convicción	
   de	
  
hacerlo.	
  
¿Qué	
  pasos	
  debió	
  tomar	
  correctamente	
  para	
  desarrollar	
  su	
  negocio	
  de	
  manera	
  exitosa?	
  
R:Los	
  pasos	
  fundamentales	
  fueron:	
  realizar	
  el	
  trabajo	
  con	
  estándares	
  de	
  clase	
  mundial	
  desde	
  el	
  primer	
  día,	
  
dedicación	
   al	
   100%,	
   sin	
   horario,	
   ni	
   fines	
   de	
   semana,	
   ni	
   vacaciones	
   durante	
   los	
   primeros	
   años,	
   identificar	
  
profesionales	
  con	
  alto	
  conocimiento	
  técnico.	
  Amor	
  por	
  el	
  trabajo	
  y	
  no	
  tener	
  permitido	
  el	
  fracaso.	
  	
  	
  
¿A	
   qué	
   tipo	
   de	
   sociedad	
   pertenece	
   su	
   empresa?	
   ¿Quiénes	
   son	
   los	
   socios	
   fundadores,	
   miembros	
   o	
  
empleados	
  claves	
  de	
  su	
  negocio?	
  
R:	
  Sociedad	
  Anónima	
  cerrada.	
  Yo	
  soy	
  la	
  socia	
  fundadora,	
  y	
  mi	
  marido	
  que	
  además	
  es	
  mi	
  socio,	
  ha	
  sido	
  un	
  
elemento	
  clave	
  en	
  la	
  gestión	
  financiera	
  del	
  negocio.	
  
18	
  
	
  
Al	
   inicio	
   de	
   sus	
   actividades,	
   ¿requirió	
   usted	
   de	
   alguna	
   ayuda	
   financiera	
   externa?	
   ¿De	
   ser	
   así	
   las	
   podría	
  
describir?	
  Si	
  no,	
  ¿cómo	
  se	
  autofinanció?	
  
R:	
   Si	
   se	
   requirió,	
   y	
   conseguimos	
   un	
   crédito	
   del	
   Banco	
   de	
   Chile,	
   por	
   5	
   millones	
   de	
   pesos,	
   como	
   capital	
   de	
  
trabajo,	
  donde	
  en	
  realidad	
  recibimos	
  4	
  millones,	
  ya	
  que	
  el	
  millón	
  restante	
  quedaba	
  como	
  seguro	
  del	
  crédito.	
  	
  	
  
¿Por	
  qué	
  cree	
  usted	
  que	
  sus	
  usuarios	
  o	
  clientes	
  consideran	
  sus	
  productos	
  o	
  servicios?	
  
R:	
  Calidad,	
  compromiso	
  y	
  capacidad	
  de	
  respuesta	
  es	
  nuestro	
  sello,	
  y	
  nos	
  esforzamos	
  por	
  hacer	
  de	
  este	
  sello	
  
una	
  realidad,	
  creo	
  que	
  por	
  eso	
  los	
  clientes	
  nos	
  consideran.	
  	
  
¿Qué	
  características	
  está	
  considerando	
  agregar	
  a	
  su	
  negocio	
  en	
  el	
  futuro	
  próximo	
  o	
  lejano?	
  De	
  ser	
  posible,	
  
nombre	
  2	
  o	
  3.	
  
R:	
  Estamos	
  considerando	
  desarrollar:	
  
-­‐ Una	
  fuerza	
  de	
  venta,	
  ya	
  que	
  en	
  15	
  años	
  de	
  existencia	
  nos	
  hemos	
  dedicado	
  más	
  a	
  producir	
  que	
  a	
  la	
  
búsqueda	
  de	
  oportunidades	
  o	
  desarrollo	
  de	
  clientes	
  nuevos.	
  
-­‐ Un	
  área	
  de	
  consultoría,	
  orientada	
  a	
  mejorar	
  la	
  productividad	
  de	
  las	
  empresas	
  	
  	
  
¿Cuál	
   ha	
   sido	
   el	
   momento	
   más	
   difícil	
   por	
   el	
   cual	
   su	
   empresa	
   ha	
   tenido	
   que	
   atravesar?	
   ¿Cómo	
   logró	
  
sobrellevar	
  esa	
  situación?	
  
R:	
  Hemos	
  tenido	
  varios	
  momentos	
  difíciles,	
  durante	
  el	
  3er	
  año	
  para	
  lograr	
  financiamiento	
  vendimos	
  nuestra	
  
casa,	
   el	
   7°	
   año	
   fue	
   muy	
   difícil	
   también,	
   pero	
   ya	
   teníamos	
   una	
   historia	
   por	
   lo	
   que	
   el	
   banco	
   nos	
   prestó	
  
financiamiento,	
  y	
  este	
  año	
  que	
  también	
  ha	
  sido	
  complicado,	
  la	
  baja	
  demanda	
  ha	
  hecho	
  caer	
  los	
  precios	
  de	
  
ventas,	
  y	
  los	
  clientes	
  han	
  aumentado	
  los	
  periodos	
  de	
  pagos	
  casi	
  al	
  doble,	
  lo	
  que	
  sin	
  duda	
  altera	
  los	
  flujos	
  de	
  
caja.	
  	
  	
  
Según	
  su	
  percepción,	
  ¿Cuáles	
  son	
  los	
  mayores	
  riesgos	
  de	
  su	
  negocio?	
  
R:	
  Chile	
  es	
  un	
  país	
  minero,	
  por	
  ende	
  su	
  economía	
  depende	
  fundamentalmente	
  del	
  cobre,	
  por	
  ende	
  cualquier	
  
crisis	
  mundial,	
  afecta	
  el	
  mercado	
  minero,	
  y	
  por	
  ende	
  a	
  los	
  proveedores	
  de	
  la	
  minería,	
  de	
  igual	
  manera	
  si	
  hay	
  
algún	
  tipo	
  de	
  recesión	
  interna	
  en	
  el	
  país.	
  
¿Cuáles	
  son	
  los	
  factores	
  que	
  limitan	
  la	
  velocidad	
  de	
  crecimiento	
  del	
  negocio?	
  ¿Cuáles	
  son	
  sus	
  planes	
  de	
  
crecimiento	
  para	
  el	
  futuro	
  en	
  el	
  corto,	
  mediano	
  y	
  largo	
  plazo?	
  
R:	
  La	
  velocidad	
  de	
  crecimiento	
  se	
  ve	
  limitada	
  por	
  la	
  incertidumbre	
  del	
  mercado.	
  	
  
Los	
  planes	
  de	
  crecimiento,	
  obedecen	
  a	
  las	
  oportunidades	
  de	
  proyectos	
  que	
  puedan	
  venir,	
  hoy	
  día	
  en	
  Chile	
  se	
  
ve	
  un	
  notorio	
  estancamiento,	
  por	
  lo	
  que	
  muchas	
  empresas	
  han	
  debido	
  disminuir	
  su	
  dotación,	
  en	
  nuestro	
  caso,	
  
estamos	
  empeñados	
  en	
  mantenernos.	
  Una	
  vez	
  que	
  se	
  normalice	
  podremos	
  analizar	
  si	
  podremos	
  continuar	
  
con	
  el	
  ritmo	
  de	
  crecimiento	
  promedio	
  anual	
  de	
  35%,	
  como	
  ha	
  sido	
  nuestra	
  historia.	
  	
  	
  
¿Cuáles	
  son	
  las	
  proyecciones	
  de	
  la	
  empresa	
  en	
  los	
  próximos	
  3	
  años	
  y	
  cuáles	
  son	
  los	
  supuestos	
  claves	
  detrás	
  
de	
  estas	
  predicciones?	
  
19	
  
	
  
R:	
   El	
   supuesto	
   clave	
   es	
   que	
   el	
   segundo	
   semestre	
   del	
   2016	
   se	
   recupera	
   la	
   economía	
   en	
   Chile,	
   y	
   por	
   ende	
  
comienza	
  un	
  nuevo	
  ciclo	
  en	
  la	
  minería	
  chilena.	
  
Otro	
  supuesto	
  clave,	
  es	
  que	
  los	
  2	
  contratos	
  de	
  servicios	
  que	
  Optimiza	
  tiene	
  por	
  2	
  años,	
  van	
  a	
  demandar	
  el	
  
trabajo	
  declarado	
  por	
  el	
  cliente.	
  
Dada	
  las	
  condiciones	
  actuales	
  en	
  Chile,	
  las	
  proyecciones	
  crecer	
  un	
  20%	
  en	
  el	
  2015,	
  aumentando	
  a	
  un	
  30%	
  en	
  
el	
  2016	
  y	
  ojala	
  recuperar	
  el	
  histórico	
  35%	
  en	
  el	
  2017.	
  	
  	
  
Después	
   de	
   convertirse	
   en	
   emprendedor,	
   ¿cómo	
   logra	
   balancear	
   las	
   responsabilidades	
   profesionales,	
  
familiares	
  y	
  de	
  desarrollo	
  personal?	
  
R:	
  Durante	
  15	
  años	
  me	
  he	
  dedicado	
  al	
  desarrollo	
  de	
  Optimiza	
  y	
  de	
  mis	
  hijos,	
  recién	
  ahora	
  estoy	
  pudiendo	
  
ocuparme	
  un	
  poco	
  de	
  mi	
  misma	
  y	
  de	
  mi	
  marido.	
  Es	
  difícil	
  y	
  desgastador,	
  pero	
  con	
  la	
  ayuda	
  y	
  entendimiento	
  de	
  
mi	
  familia	
  los	
  logros	
  han	
  sido	
  más	
  que	
  satisfactorios,	
  pero	
  ha	
  implicado	
  un	
  gran	
  esfuerzo	
  y	
  mucho	
  trabajo,	
  
pero	
  me	
  gusta	
  hacer	
  lo	
  que	
  hago,	
  creo	
  que	
  eso	
  es	
  lo	
  más	
  importante,	
  y	
  no	
  lo	
  podría	
  haber	
  logrado	
  sin	
  la	
  ayuda	
  
de	
  muchas	
  personas	
  que	
  creyeron	
  en	
  mí.	
  
¿Podría	
   otorgarles	
   algunas	
   recomendaciones	
   a	
   quienes	
   estén	
   por	
   iniciar	
   su	
   propio	
   emprendimiento	
   o	
   a	
  
quienes	
  no	
  les	
  resultó	
  exitoso?	
  
R:	
  No	
  creo	
  que	
  haya	
  una	
  receta,	
  ya	
  que	
  cada	
  caso	
  en	
  único.	
  Pero	
  creo	
  que	
  lo	
  fundamental	
  es	
  que	
  ames	
  lo	
  que	
  
haces,	
   trabajar	
   sin	
   límites,	
   ser	
   ordenado	
   en	
   todos	
   los	
   ámbitos,	
   ocuparse	
   de	
   la	
   calidad	
   y	
   de	
   la	
   imagen	
   del	
  
producto,	
  saber	
  que	
  siempre	
  puede	
  ser	
  mejor.	
  Ser	
  autoexigente,	
  y	
  exigente	
  con	
  los	
  que	
  trabajan	
  contigo,	
  pero	
  
a	
  su	
  vez	
  respetuoso	
  y	
  afable,	
  es	
  decir	
  se	
  debe	
  “Liderar	
  y	
  Trabajar	
  con	
  Amor”.	
  	
  	
  
	
  
20	
  
	
  
Exhibit 1.2
	
  
Pipe and Tube
Designation Title
B42 - 10 Standard Specification for Seamless Copper Pipe, Standard Sizes
B43 - 14 Standard Specification for Seamless Red Brass Pipe, Standard Sizes
B68 / B68M - 11 Standard Specification for Seamless Copper Tube, Bright Annealed
B75 / B75M - 11 Standard Specification for Seamless Copper Tube
B88M - 13 Standard Specification for Seamless Copper Water Tube [Metric]
B88 - 14 Standard Specification for Seamless Copper Water Tube
B111 / B111M -
11
Standard Specification for Copper and Copper-Alloy Seamless Condenser Tubes and Ferrule Stock
B135 - 10 Standard Specification for Seamless Brass Tube
B135M - 10 Standard Specification for Seamless Brass Tube [Metric]
B188 - 10 Standard Specification for Seamless Copper Bus Pipe and Tube
B251 - 10 Standard Specification for General Requirements for Wrought Seamless Copper and Copper-Alloy Tube
B251M - 10 Standard Specification for General Requirements for Wrought Seamless Copper and Copper-Alloy Tube
[Metric]
B280 - 13 Standard Specification for Seamless Copper Tube for Air Conditioning and Refrigeration Field Service
B302 - 12 Standard Specification for Threadless Copper Pipe, Standard Sizes
B306 - 13 Standard Specification for Copper Drainage Tube (DWV)
B315 - 12 Standard Specification for Seamless Copper Alloy Pipe and Tube
B359 / B359M -
12e1
Standard Specification for Copper and Copper-Alloy Seamless Condenser and Heat Exchanger Tubes With
Integral Fins
B360 - 09 Standard Specification for Hard-Drawn Copper Capillary Tube for Restrictor Applications
B372 - 12a Standard Specification for Seamless Copper and Copper-Alloy Rectangular Waveguide Tube
B395 / B395M -
13
Standard Specification for U-Bend Seamless Copper and Copper Alloy Heat Exchanger and Condenser Tubes
B447 - 12a Standard Specification for Welded Copper Tube
B466 / B466M -
14
Standard Specification for Seamless Copper-Nickel Pipe and Tube
B467 - 14 Standard Specification for Welded Copper-Nickel Pipe
B543 / B543M -
12
Standard Specification for Welded Copper and Copper-Alloy Heat Exchanger Tube
B552 - 12 Standard Specification for Seamless and Welded Copper–Nickel Tubes for Water Desalting Plants
B587 - 12 Standard Specification for Welded Brass Tube
B608 - 11 Standard Specification for Welded Copper-Alloy Pipe
B640 - 12a Standard Specification for Welded Copper Tube for Air Conditioning and Refrigeration Service
B643 - 12 Standard Specification for Copper-Beryllium Alloy Seamless Tube
21	
  
	
  
B687 - 99(2011) Standard Specification for Brass, Copper, and Chromium-Plated Pipe Nipples
B698 - 10 Standard Classification for Seamless Copper and Copper Alloy Plumbing Pipe and Tube
B706 - 00(2011) Standard Specification for Seamless Copper Alloy (UNS No. C69100) Pipe and Tube
B743 - 12 Standard Specification for Seamless Copper Tube in Coils
B813 - 10 Standard Specification for Liquid and Paste Fluxes for Soldering of Copper and Copper Alloy Tube
B819 - 00(2011) Standard Specification for Seamless Copper Tube for Medical Gas Systems
B828 - 02(2010) Standard Practice for Making Capillary Joints by Soldering of Copper and Copper Alloy Tube and Fittings
B837 - 10 Standard Specification for Seamless Copper Tube for Natural Gas and Liquefied Petroleum (LP) Gas Fuel
Distribution Systems
B903 - 10 Standard Specification for Seamless Copper Heat Exchanger Tubes With Internal Enhancement
B919 - 12 Standard Specification for Welded Copper Heat Exchanger Tubes With Internal Enhancement
B937 - 04(2010) Standard Specification for Copper-Beryllium Seamless Tube (UNS Nos. C17500 and C17510)
B944 - 11 Standard Specification for Copper-Beryllium Welded Heat Exchanger and Condenser Tube (UNS No. C17510)
B956 / B956M -
10e1
Standard Specification for Welded Copper and Copper-Alloy Condenser and Heat Exchanger Tubes with
Integral Fins
Plate, Sheet, and Strip
Designation Title
B19 - 10 Standard Specification for Cartridge Brass Sheet, Strip, Plate, Bar, and Disks
B36 / B36M -
13
Standard Specification for Brass Plate, Sheet, Strip, And Rolled Bar
B96 / B96M -
11
Standard Specification for Copper-Silicon Alloy Plate, Sheet, Strip, and Rolled Bar for General Purposes and
Pressure Vessels
B100 - 13 Standard Specification for Wrought Copper-Alloy Bearing and Expansion Plates and Sheets for Bridge and Other
Structural Use
B101 - 12 Standard Specification for Lead-Coated Copper Sheet and Strip for Building Construction
B103 /
B103M - 10
Standard Specification for Phosphor Bronze Plate, Sheet, Strip, and Rolled Bar
B121 /
B121M - 11
Standard Specification for Leaded Brass Plate, Sheet, Strip, and Rolled Bar
B122 /
B122M - 11
Standard Specification for Copper-Nickel-Tin Alloy, Copper-Nickel-Zinc Alloy (Nickel Silver), and Copper-Nickel
Alloy Plate, Sheet, Strip, and Rolled Bar
B129 - 12 Standard Specification for Cartridge Brass Cartridge Case Cups
B130 - 13 Standard Specification for Commercial Bronze Strip for Bullet Jackets
B131 - 12 Standard Specification for Copper Alloy Bullet Jacket Cups
B152 /
B152M - 13
Standard Specification for Copper Sheet, Strip, Plate, and Rolled Bar
B169 /
B169M - 10
Standard Specification for Aluminum Bronze Sheet, Strip, and Rolled Bar
B171 /
B171M - 12
Standard Specification for Copper-Alloy Plate and Sheet for Pressure Vessels, Condensers, and Heat Exchangers
B194 - 08 Standard Specification for Copper-Beryllium Alloy Plate, Sheet, Strip, and Rolled Bar
22	
  
	
  
B248 - 12 Standard Specification for General Requirements for Wrought Copper and Copper-Alloy Plate, Sheet, Strip, and
Rolled Bar
B248M - 12 Standard Specification for General Requirements for Wrought Copper and Copper-Alloy Plate, Sheet, Strip, and
Rolled Bar (Metric)
B370 - 12 Standard Specification for Copper Sheet and Strip for Building Construction
B422 /
B422M -
10e1
Standard Specification for Copper-Aluminum-Silicon-Cobalt Alloy, Copper-Nickel-Silicon-Magnesium Alloy, Copper-
Nickel-Silicon Alloy, Copper-Nickel-Aluminum-Magnesium Alloy, and Copper-Nickel-Tin Alloy Sheet and Strip
B432 - 14 Standard Specification for Copper and Copper Alloy Clad Steel Plate
B465 - 11 Standard Specification for Copper-Iron Alloy Plate, Sheet, Strip, and Rolled Bar
B506 - 09 Specification for Copper-Clad Stainless Steel Sheet and Strip for Building Construction
B508 - 08 Standard Specification for Copper Alloy Strip for Flexible Metal Hose
B534 - 14 Standard Specification for Copper-Cobalt-Beryllium Alloy and Copper-Nickel-Beryllium Alloy Plate, Sheet, Strip, and
Rolled Bar
B569 - 14 Standard Specification for Brass Strip in Narrow Widths and Light Gage for Heat-Exchanger Tubing
B591 - 09 Standard Specification for Copper-Zinc-Tin and Copper-Zinc-Tin-Iron-Nickel Alloys Plate, Sheet, Strip, and Rolled
Bar
B592 - 11 Standard Specification for Copper-Zinc-Aluminum-Cobalt Alloy, Copper-Zinc-Tin-Iron Alloy Plate, Sheet, Strip, and
Rolled Bar
B694 - 13 Standard Specification for Copper, Copper-Alloy, Copper-Clad Bronze (CCB), Copper-Clad Stainless Steel (CCS),
and Copper-Clad Alloy Steel (CAS) Sheet and Strip for Electrical Cable Shielding
B740 - 09 Standard Specification for Copper-Nickel-Tin Spinodal Alloy Strip
B747 - 11 Standard Specification for Copper-Zirconium Alloy Sheet and Strip
B768 - 11 Standard Specification for Copper-Cobalt-Beryllium Alloy and Copper-Nickel-Beryllium Alloy Strip and Sheet
B882 - 10 Specification for Pre-Patinated Copper for Architectural Applications
B888 /
B888M - 13
Standard Specification for Copper Alloy Strip for Use in Manufacture of Electrical Connectors or Spring Contacts
B936 - 13 Standard Specification for Copper-Chromium-Iron-Titanium Alloy Plate, Sheet, Strip and Rolled Bar
Rod, Bar, Wire, Shapes and Forgings
Designation Title
B16 / B16M -
10
Standard Specification for Free-Cutting Brass Rod, Bar and Shapes for Use in Screw Machines
B21 / B21M -
14
Standard Specification for Naval Brass Rod, Bar, and Shapes
B98 / B98M -
13
Standard Specification for Copper-Silicon Alloy Rod, Bar and Shapes
B99 / B99M -
11
Standard Specification for Copper-Silicon Alloy Wire for General Applications
B124 / B124M -
14a
Standard Specification for Copper and Copper Alloy Forging Rod, Bar, and Shapes
B134 / B134M -
08
Standard Specification for Brass Wire
23	
  
	
  
B138 / B138M -
11
Standard Specification for Manganese Bronze Rod, Bar, and Shapes
B139 / B139M -
12
Standard Specification for Phosphor Bronze Rod, Bar, and Shapes
B140 / B140M -
12
Standard Specification for Copper-Zinc-Lead (Red Brass or Hardware Bronze) Rod, Bar, and Shapes
B150 / B150M -
12
Standard Specification for Aluminum Bronze Rod, Bar, and Shapes
B151 / B151M -
13
Standard Specification for Copper-Nickel-Zinc Alloy (Nickel Silver) and Copper-Nickel Rod and Bar
B159 / B159M -
11
Standard Specification for Phosphor Bronze Wire
B187 / B187M -
11
Standard Specification for Copper, Bus Bar, Rod, and Shapes and General Purpose Rod, Bar, and Shapes
B196 / B196M -
07(2013)
Standard Specification for Copper-Beryllium Alloy Rod and Bar
B197 / B197M -
07(2013)
Standard Specification for Copper-Beryllium Alloy Wire
B206 / B206M -
12
Standard Specification for Copper-Nickel-Zinc (Nickel Silver) Wire and Copper-Nickel Alloy Wire
B249 / B249M -
14
Standard Specification for General Requirements for Wrought Copper and Copper-Alloy Rod, Bar, Shapes and
Forgings
B250 / B250M -
13
Standard Specification for General Requirements for Wrought Copper Alloy Wire
B272 - 12 Standard Specification for Copper Flat Products with Finished (Rolled or Drawn) Edges (Flat Wire and Strip)
B283 / B283M -
14a
Standard Specification for Copper and Copper-Alloy Die Forgings (Hot-Pressed)
B301 / B301M -
13
Standard Specification for Free-Cutting Copper Rod, Bar, Wire, and Shapes
B371 / B371M -
08(2013)
Standard Specification for Copper-Zinc-Silicon Alloy Rod
B411 / B411M -
14
Standard Specification for Copper-Nickel-Silicon Alloy Rod and Bar
B441 -
04(2010)
Standard Specification for Copper-Cobalt-Beryllium, Copper-Nickel-Beryllium, and Copper-Nickel-Lead-Beryllium
Rod and Bar (UNS Nos. C17500, C17510, and C17465)
B453 / B453M -
11e1
Standard Specification for Copper-Zinc-Lead Alloy (Leaded-Brass) Rod, Bar, and Shapes
B455 - 10 Standard Specification for Copper-Zinc-Lead Alloy (Leaded-Brass) Extruded Shapes
B570 -
06(2010)
Standard Specification for Copper-Beryllium Alloy (UNS Nos. C17000 and C17200) Forgings and Extrusions
B870 -
08(2014)
Standard Specification for Copper-Beryllium Alloy Forgings and Extrusions Alloys (UNS Nos. C17500 and
C17510)
B927 / B927M -
13
Standard Specification for Brass Rod, Bar, and Shapes
B929 -
05(2011)e1
Standard Specification for Copper-Nickel-Tin Spinodal Alloy Rod and Bar
24	
  
	
  
B967 / B967M -
12a
Standard Specification for Copper-Zinc-Tin-Bismuth Alloy Rod, Bar and Wire
B974 / B974M -
12a
Standard Specification for Free-Cutting Bismuth Brass Rod, Bar and Wire
B981 / B981M -
12
Standard Specification for Low Leaded Brass Rod, Bar and Shapes
F68 - 10 Standard Specification for Oxygen-Free Copper in Wrought Forms for Electron Devices
25	
  
	
  
	
  
Bibliography
"Annual Report 2013." (n.d.): n. pag. Angloamerican.com. Anglo American Plc, Spring 2014. Web. 6 Dec.
2014.
ASTM. (n.d.). Copper Standards. Retrieved December 2, 2014, from http://www.astm.org/Standards/copper-
standards.html Web. 06 Dec. 2014.
Basov, Vladamir. "Top 10 Copper Companies in 2012." Mining.com. N.p., n.d. Web. 06 Dec. 2014.
"CODELCO - Corporación Nacional Del Cobre , Chile - Inicio." CODELCO - Corporación Nacional Del
Cobre , Chile - Inicio. CODELCO, n.d. Web. 06 Dec. 2014.
"Copper." – Anglo American. N.p., Dec. 2014. Web. 06 Dec. 2014.
<http://www.angloamerican.com/products/copper.aspx>.
"Copper Supply & Consumption — 1993–2013." EpscoHost. Copper Development Association, Inc., 1 Jan.
2014. Web. 06 Dec. 2014.
“Comodity Information” Optimiza, S.A. Ltd., n.d. Web. 06 Dec. 2014.
Crane, Tom. "Member Services & Benefits." Member Services. N.p., n.d. Web. 06 Dec. 2014.
<http://www.isri.org/about-isri/membership/member-services-benefits#.VIPczjHF-So>.
DraKoln, Noble. "Commodities: Copper." Investopedia. Investopedia, LLC., n.d. Web. 06 Dec, 2014.
"FCX_Freeport-McMoRan Inc. - Our Company, Who We Are." FCX_Freeport-McMoRan Inc.Web. 1 Dec.
2014. <http://www.fcx.com/company/who.htm>.
"History." – Anglo American. N.p., Dec. 2014. Web. 06 Dec. 2014. http://www.angloamerican.com/about-
us/history
Hoffman, Liz. "Freeport-McMoRan Nears Settlement Over McMoRan, Plains Deals." The Wall Street Journal.
Dow Jones & Company, 1 Jan. 2014. Web. 1 Dec. 2014. <http://online.wsj.com/articles/freeport-
mcmoran-nears-settlement-over-mcmoran-plains-deals-1417379391>.
"How Do They Do That? How Copper Is Made." Copper Development Association, Inc. BHP Copper, n.d.
Web. 06 Dec. 2014.
"Long-Term Availability of Copper." Copper Alliance. International Copper Association, Ltd., n.d. Web. 06
Dec. 2014.
"Market Share of Major Copper Producing Companies 2013." Statista. 1 Jan. 2014. Web. 1 Dec. 2014.
<http://www.statista.com/statistics/274260/market-share-of-major-copper-producing-companies/>.
26	
  
	
  
"Revenue and Profit of Copper Manufacturer CODELCO 2013 | Statistic." Statista. N.p., n.d. Web. 06 Dec.
2014.
"Reviving CODELCO." The Economist. The Economist Newspaper, 23 Oct. 2010. Web. 06 Dec. 2014.
Sprovieri, John. "Wire Harness Recycling." Assemblymag.com. Assembly, 1 July 2014. Web. 6 Dec. 2014.
<http%3A%2F%2Fwww.assemblymag.com%2Farticles%2F92263-wire-harness-recycling>.
Troszkiewicz, Agnieszka. "Copper Substitution Seen by KME Accelerating on Slow Growth." Bloomberg.com.
Bloomberg, 5 Mar. 2013. Web. 06 Dec. 2014.
Vásquez, Roxana. "About Optimiza." Telephone interview. 6 Nov. 2014.

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Supplier and Sourcing Strategy - Optimiza

  • 1. 1                   Commodity  Sourcing  Strategy  Field  Project:  Copper   By:  Chris  Messer,  Jenna  Palek,  Kevin  Patterson,     Clara  Penington,  and  Jake  Sims          
  • 2. 2       Table of Contents   Executive Summary  ...............................................................................................................................................................  3   Part I  .......................................................................................................................................................................................  5   Company: Description of Optimiza, S.A.  ..............................................................................................................................  5   Strategy  ..............................................................................................................................................................................  5   Commodity: Copper  ...........................................................................................................................................................  6   Part II  .....................................................................................................................................................................................  7   Commodity Analysis  ..........................................................................................................................................................  7   Part III  ....................................................................................................................................................................................  9   Key Potential Suppliers  ......................................................................................................................................................  9   AngloAmerican  ..............................................................................................................................................................  9   Freeport McMoRan  ......................................................................................................................................................  11   CODELCO  ...................................................................................................................................................................  12   Part IV  ..................................................................................................................................................................................  14   Recommendations  ............................................................................................................................................................  14   Alternative 1: Expedite/Improve Addition of Consulting Branch  ................................................................................  14   Alternative 2: Phase Out CODELCO, Phase in Anglo American and other non-Chilean Suppliers  ............................  14   Alternative 3: Create Recycling Incentive to Reuse Old Metals  ..................................................................................  15   Recommended Alternative  ...........................................................................................................................................  15   Exhibits  ................................................................................................................................................................................  17   Exhibit 1.1  ........................................................................................................................................................................  17   Exhibit 1.2  ........................................................................................................................................................................  20   Bibliography  ........................................................................................................................................................................  25  
  • 3. 3     Executive Summary In this report, our team will cover the comprehensive research we did into the copper commodity on behalf of the company Optimiza. We have structured our report in such a way that it can be interpreted and used by anyone regardless of his or her prior knowledge of the commodity of copper or Optimiza. We begin with an introduction to the company, followed by an evaluation of our commodity, then we evaluate two of Optimiza’s existing suppliers as well as a third potential supplier, and finally we provide recommendations based on our findings. We began our research by reviewing what exactly Optimiza does as a company and what they hope to accomplish. By first obtaining an understanding of the company’s foundations and goals, we were better able to direct and constrain our research to sourcing alternatives that would be most feasible for Optimiza’s existing corporate and operational structure. Next, we took a look at the current commodity market for copper. We took into account where the largest deposits of copper are located, how copper is mined, and the common ore standards for copper, and the level of market competition in the copper industry. In addition to exposing us to a number of potential suppliers, this research helped us to obtain a more holistic understanding of our commodity, its relative volatility, and how market behavior will affect the future sourcing opportunities for Copper. In addition to the research on Optimiza and the copper commodity market, we researched three different suppliers of copper, CODELCO—their current primary supplier, Anglo- American—one of their smaller suppliers, and Freeport McMoRan—whom they are not currently buying from. In particular, we focused on what unique qualities each company could offer Optimiza and how we anticipated the supplier being able to accommodate Optimiza’s future growth. We paid special attention to the growth capabilities of these suppliers and how efficiently we anticipated them being able to serve the quality requirements that Optimiza values most. Optimiza is currently experiencing tremendous growth as a company; rather than focusing on ways to increase short-term growth, we focused our recommendations on ways to make this growth sustainable and provide for the maintenance of this growth well into the future.
  • 4. 4     Our team had the unique opportunity to conduct an interview with Optimiza CEO, Roxana Vásquez. Although Vásquez spoke limited English, we were able to conduct the interview via telephone in Spanish. This gave us some direct insights not only into the founding of the company, but also the direction the company wants to take in the future. At the conclusion of the interview, Optimiza’s CEO even expressed interest in reviewing the conclusions of our sourcing research. It is our hope that the recommendations we have made will be considered by Optimiza as we truly believe they can provide for sustainable and continued success for the company. Based on the data we have collected about Optimiza, their goals and requirements, the copper commodity market, and different suppliers of copper, we were able to make some recommendations to Optimiza. Our suggestions were developed with the intent of increasing Optimiza’s supply chain flexibility, developing diverse and strong supplier relations, and creating a sustainable supply base in an increasingly difficult commodity market, without significantly increasing costs. Although we believe all three of our final recommendations will benefit Optimiza, in the interest of pursuing cost-saving measures while simultaneously improving future operations we able to select one recommendation above the others that we believe would be the best choice for Optimiza to make.
  • 5. 5     Part I Company: Description of Optimiza, S.A. Headquartered in the heart of the metropolitan center of Santiago, Chile, Optimiza is an engineering and development company led by CEO, Roxana Vásquez, and CFO, Hernán Vásquez. Optimiza’s corporate organizational structure divides its labor force is divided into special “task forces” that include Piping, Mechanics, Structures, Civil Works, Electricity, Instrumentation and Control, Architecture, Industrial, Security, Risk and Environment, Project Scheduling, Project Evaluation. At any given time, Optimiza employs between 70 and 80 workers and generates annual sales of $5 million. Additionally, the company has boasted an average annual growth rate of 35% for the past three years. . Optimiza was founded in 2000 by three metallurgical civil engineers from the University of Concepción, with the aim of developing a company able to offer project planning for international Chilean engineering and mineral processing plants. Optimiza has had a global scope from its conception and has always retained a focus on its international suppliers. The company's major clients are found in Chile (CODELCO and Minera Los Pelambres), the United States (AngloAmerican), Australia (bhpBilliton), and Denmark (FLSmidth). Strategy While Optimiza’s proximity to the copper market provides competitive pricing against its international competitors, it still must remain competitive with other engineering and project management companies in Chile. The company maintains its competitive pricing through careful monitoring of foreign and domestic copper markets. Optimiza holds itself to a high standard of quality. Its strategic policy is based on the concept of continuous improvement built upon a strong commitment to quality customer service. Optimiza seeks to deliver technically feasible and economically viable solutions that adequately meet customer requirements and contribute to improving their competitive position, achieving relations of trust, and creating long-term customers. Delivery time and quality vary greatly based on client location and performance is much better for Chilean and American clients than for Australian or European clients. In order to assess these existing supply chain problems, Optimiza is presently investigating the addition of a consulting arm that would be responsible for business and process improvement. Optimiza faces similar issues in concept-to-customer cycle time as it does with delivery—with lengthier cycle times for foreign customers. In terms of corporate social responsibility, Optimiza is committed to preserving the environment by not allowing or performing work or actions that involve contamination or alteration of air, water or soil. To ensure this, the company has created an Environmental Management Plan underpinned by the following principles: o Include environmental analysis in your projects, in order to minimize the impact, consume fewer resources (water and energy) and generate less waste. o Establish office practices that lead to reducing the environmental impact caused by the activities of each worker. o Promote a responsible attitude towards caring for the environment and natural resources.
  • 6. 6     “We are considering developing a sales force. Because in 15 years of existence we have dedicated more to production than seeking opportunities to develop new customers. We are also considering pioneering an area of consulting, aimed at improving business productivity.” -Roxana Vásquez (see exhibit 1.1 for complete interview) Commodity: Copper Copper is a key component in nearly every project engineered by Optimiza. Optimiza’s location in the capital of the largest net exporter of copper in the world serves as a significant competitive advantage. Its proximity to Chilean copper mines is its distinguishing factor for its customers. The copper purchased by Optimiza for its engineering ventures is used primarily for piping and electrical purposes. Presently, the company purchases its copper supplies at a rate of $3.15 per pound. All the copper procured and processed by Optimiza is compliant with ASTM international copper standards (see exhibit 1.2). Delivery requirements and scheduling information for the commodity are orchestrated by Optimiza, but dictated by the needs to the client. Optimiza maintains a diverse transportation network to accommodate its international partners. The abundance and consequent favorable pricing of copper in South America (especially Chile) reduces the feasibility of sourcing a copper alternative. Aluminum has emerged as a potential future substitute (but is a 65% less effective conductor than copper wire). Because a feasible copper alternative does not seem to be a reality, there are no existing plans to move away from copper a primary sourcing commodity. Optimiza standardizes its operations by sourcing its copper from exclusively Chilean mines. Because Optimiza does not own any of these mines, its pricing control is somewhat limited. Volume requirements are entirely dependent on the number and scale of the projects Optimiza is engineering at any given time. Volume can vary greatly although consumption averages around 9 million metric tons per year. There are no projected or anticipated supply chain design changes at this time. “Chile is a mining country, therefore its economy depends mainly on copper, thus any global crisis, affecting the mining market, and therefore providers of mining, acts as a kind of internal recession in the country.” -Roxana Vásquez
  • 7. 7     Part II Commodity Analysis Copper is a metal that has been known around the world since ancient times, and it has been mined since 8,700 BC. According to the New York Mercantile Exchange, copper is the third most widely used metal in the world today. It is a very versatile material - copper can conduct electricity, destroy germs, and is used to make many different products. Copper is currently used to make important parts of printed circuit boards, lead free solder, microwave ovens, wave guides, integrated circuits, electromagnets, wiring, and piping. In order to produce copper, copper ore is mined from an open pit or from underground mines. The mine ore is then transported to a crushing plant, where it is crushed to a smaller size and transported to the concentrator. The crushed mine ore is ground in rod and ball mills and then sent to flotation machines, where the copper mineral rises to the top in a froth. The material then goes to the smelter, where non copper elements are burned off or melted. The result is 99% pure molten copper, also known as blister, which is then poured into anode molds. It goes through electrolytic refinery, further purifying it to 99.9999% pure copper. This pure copper can then be sent out to external customers. The current price of copper as of November 28, 2014 was 2.96 USD/lb. This price has decreased significantly over the past year, as the high was 3.37 USD/lb in late December of last year. The main cost structure of a copper mine are the operating costs, financing costs, administration cost, royalties to the country of that mine, and depreciation and amortization. Though copper has decreased in price, it is still being substituted by cheaper products including aluminum, plastics, and fiber optics. These substitutes decreased demand from 400,000 to 500,000 metric tons in 2012. The copper mining industry is highly competitive between companies around the world. Mines have limited lives, so copper mining companies seek to acquire other reserves in order to expand their business. The mining industry has experienced significant consolidation recently. The top five companies in the mining industry are CODELCO (Chile), Freeport-McMoRan Copper & Gold Inc (Phoenix, AZ), BHP Billiton, Grupo México, Xstrata, and Antofagasta. Copper is highly available because it is traded on exchanges. Chile holds 10 of the largest copper mines in the world, the largest being Escondida, which contains over 32 million tons of copper. In June 2013, output was about 1.1 million tons, or 5% of the world’s global copper production. Peru, Indonesia, and Mexico also are major players in the copper mining industry. Only about 6.8% of the world’s copper supply comes from the United States, and more than half of this copper is mined in Arizona. While South America might be the largest producer of copper, most of the world’s copper ends up in buildings and electronics in North America, Europe, and China. Those three geographic locations are all significant producers of copper, but they don’t produce nearly enough to meet their own needs.
  • 8. 8     Copper will continue to be available because of geographical availability and industry innovation. Copper reserves amount to 690 million tons, and copper resources are estimated to exceed 3,500 million tonnes in the future. Since 1950 there has always been about 40 years of copper reserves and over 200 years of resources left. Copper recycling also plays a role in copper availability, as about 35% of todays copper came from recycled sources. See the below chart for historical information about the ratios of copper reserves to copper production.
  • 9. 9       Part III   Key Potential Suppliers   AngloAmerican One of the world’s largest mining companies, Anglo American has approximately 158,900 employees and contractors. They mine iron, coal, copper, nickel, platinum, diamonds and more. There are a total of seven copper mines they have interests in in South America. They fully own two mines and have large shares in four other mines all located in Chile. They are listed on the London Stock Exchange and their operating profit in 2013 was 6.6 billion. The company is managed by a board of twelve directors headed by Sir John Parker. Their copper production is one of their largest commodities comprising 1.7 Billion in operating profit. They receive 29% on capital employed in their copper business and attribute 28% of their total underlying operating profit to copper. Recent news has stated that Anglo American will be selling off some of its copper assets in Chile valued at $1 Billion USD. This appears to partially be speculation but it should be taken into consideration. They anticipate to produce approximately 720,000 tons of copper in 2014. This accounts for approximately 4% of total world copper production. Anglo American Mining Locations
  • 10. 10     The six mines they have interests in are located in various points around Chile. They have majority interest in three mines located around Santiago. These are Chagres, close to sea level, Los Broncos, also close to sea level, and El Soldado, tucked higher into the mountains. In the northern part of Chile of Tarapaca resides Collahuasi, high in the mountains, of which Anglo American owns 44%. The mines they own fully are located much closer to sea level and also reside in the northern part of Chile. These are Mantos Blancos and Mantoverde. In the third quarter of 2014 ended September 30th , Anglo produced 207,300 tons of copper. This amount is a 15% increase since the previous quarter and with Anglo’s continued ventures into obtaining new mines this amount is expected to increase. With regards to shipping Anglo’s mines are located incredibly close to our company, Optimiza. Because the country is Chile, all parties are located within a few hundred miles of the ocean allowing for ease of transport if Optimiza desired to expand their operations into foreign countries. The risk level associated with trying to establish long term business relations is comparatively low to the average company. To demonstrate this, a few financial ratios will provide supporting evidence. · Current Ratio 1.934 · Debt Equity Ratio 1.067 · Gross Profit Margin 20.97% For a large company, these ratios show that Anglo American is relatively liquid, has an acceptable amount of debt levied against their equity, and brings in a healthy gross profit.
  • 11. 11     Freeport McMoRan   Freeport McMoRan was chosen as a potential supplier because it is headquartered in the USA, where Optimiza already has a strong presence. In addition to its convenient location, Freeport McMoRan is part of the S&P 500 Stock Index and is ranked number 142 in Fortune 500 companies. Finally, it is a company in close proximity to other current clients of Optimiza. Freeport McMoRan is already a very prominent multinational company in the metals and mining sector. The company was founded in 1912 as Freeport Sulphur Company in Freeport, Texas. Through constant growth and strategic acquisitions, Freeport McMoRan has devel  oped and entered many more markets than just sulphur. Now headquarted out of Pheonix, Arizona, Freeport McMoRan had a 2013 sales volume of about 4.09 billion pounds of copper, which continued a growing trend, up from 3.65 billion pounds in 2012. Freeport McMoRan employs around 36,000 people and operates 15 copper mines around the world. Seven of these mines are in the United States, where it is headquartered, along with one in Africa, three in Indonesia, and, most importantly, four in South America. Another major reason we chose Freeport was because it currently operates three copper mines in Chile (El Abra, Candelaria, and Ojos del Salado). This allows easier access to mines that could directly supply our company. Freeport has many major customers as a result of the size and influence of the company. As a result of its involvement in many sectors, Freeport McMoRan works with any company working with raw materials of copper, molybdenum, gold, oil, and other commodities. As of 2013, Freeport McMoRan held an 8.8% market share in copper production and ranked second only to CODELCO. Freeport McMoRan is a publicly traded company, with a listed stock price of around $25. It is currently under some scrutiny with its stockholders as a result of its recent purchase of two companies last year, but is approaching a settlement soon. The stockholders believed that Freeport overpaid when purchasing two companies last year, and therefore, the board has worked to supply them with a fair settlement. Freeport McMoRan has a board of directors- led by the company’s CEO, Richard C. Adkerson- that is comprised of 16 members who come from various backgrounds such as work in metals, oil, business, public affairs, and others. Currently Freeport’s board is working to maintain high profits as the price of certain commodities, including copper, are dropping worldwide. However, with its holdings, it expects its mines to increase production in the upcoming years, which will help offset the reduction in price per pound. Optimiza and Freeport McMoRan have not worked in the past, but it is our belief that a strategic partnership could benefit both parties.
  • 12. 12     CODELCO   CODELCO is the main copper producer in the world and controls 10% of the world’s copper reserves. CODELCO came to fruition in 1976 after the Chilean state purchased most of the country’s copper reserves in 1971. CODELCO would seem to be the obvious choice since it’s the largest producer. Since it’s the biggest producer, they are able to offer competitive prices and reliable service. CODELCO is an autonomous organization but state owned by the Chilean government. In 2013, it had total sales revenue of 14.96 billion USD and employed about 19019 people. There are five principle mines in CODELCO’s operations. The biggest of these is the operation titled CODELCO Norte. The main mine is Chuquicamata. Mining began in the late 19th century. Currently, there is 182,000 tons of daily capacity in the mine. Radomiro Tomic is located five km from Chuquicamata and produced 379,600 tons in 2013. Also, there is the Ministro Alejandro Hales, which are mined minimally, as there are high levels of arsenic in the ore. The second major operation is the mine in El Salvador, although production there has been slow since the mine is not as profitable as it once was. The Andina mine is near Santiago and is planning to raise mill capacity to 200,000 tons a day. El Teniente largest underground copper mine in the world and contains 73 million tons of copper. The final mine is El Abra, where CODELCO is working towards 168,000 tons of capacity. CODELCO also has a part in many joint ventures and partnerships in mines around the world, and sources some of their copper from these other companies. In 2011, CODELCO produced 1,796,169 metric tons of fine copper. However, the company has been facing a decline in overall production. Earlier this year, CODELCO had to cancel shipments to China this year due to lack of production in certain mines. CODELCO is also a provider to other major markets such as America, Europe, Korea and Taiwan. CODELCO is responsible for 32% of Chile’s copper output. CODELCO is owned by the Chilean government, but functions autonomously. The Board of Directors is the ruling body in CODELCO. It consists of nine members, three of which are appointed by the Chilean government, four from a list selected by the Council of Senior Public Management, one from the Federation of Copper Workers, and one from either the Federation of Copper Supervisors and the National Association of Copper Supervisors. CODELCO has the backing of the Chilean government, as well as billions of dollars in investments, assets, and mines. The company consists of mainly Chilean workers and is known for being on the forefront of new technologies to efficiently mine copper and refine the harmful chemicals. Although they have a varied base of mines in Chile, they cannot always react to changes in demand and production. Since copper production is effected by many outside factors such as weather, their supply chain is not very flexible. The main methods of transportation for CODELCO’s metals are through trains, ships, and automobiles, which are also very sensitive to outside variables. CODELCO prides themselves on high safety standards, with only 1.39 hours per million worked lost due to injury.
  • 13. 13     Currently, many of the mines are not being used to their full capacities due to lacking technology and increased difficulties with mining and ore quality. CODELCO produced 162 million tons last year, 1.5% drop, five year low due to lower ore grades and trickier mining operations. The company has said that they expect to increase capacity but in order to do that they will have to develop technology to help them meet that demand. Earlier this year they had to cancel 10,000 orders to China, which shows that they cannot currently meet demand to the extent that they have to cancel orders. The cost of CODELCO’s copper depends largely on what copper is being traded for on the commodities market, currently at a 5 year low. The market price for copper peaked around 2010. Currently, Optimiza uses CODELCO as one of their main suppliers and has for many years, which is convenient due to the location of both companies. However, it is unclear if CODELCO will be able to meet the increasing demands of Optimiza going forward.      
  • 14. 14       Part IV   Recommendations Alternative 1: Expedite/Improve Addition of Consulting Branch Currently the consulting branch of Optimiza is fresh and underutilized. Due to the relatively young age of the company we find that adding resources into this branch of the company will likely lead to its continued success and maintain its tremendous rate of growth. A current trend in global business—regardless of industry or market—is the implementation of not only a strategic sourcing plan, but continued re-evaluation of strategic sourcing. While we can provide recommendations as far as current sourcing plans go, we recommend most strongly that infrastructure within the company be arranged so that Optimiza may continue to be a key player in Chile as well as the rest of their global industry. Using strategic tools like supplier scorecards and comparative financial ratios, Optimiza can work internally to continually improve its supply chain and work pursue cost cutting measures. The addition of an internal consulting branch will also play an important role from a sustainability standpoint. Third-party consulting work not only places an enormous cost burden on the company, but it has also been shown to be less effective than internal auditing processes. A team that is permanently dedicated to improving Optimiza’s operations will be much more familiar with the company’s existing assets and corporate structure than a third party consulting arm would be. Form our exclusive interview with CEO Roxana Vásquez, we know that Optimiza has already been considering the idea of expansion to incorporate “an area of consulting” aimed at “improving business productivity.” We would encourage this expansion and suggest that this addition to the company be expedited and realized as soon as possible so that Optimiza can begin collecting data from day-to-day activities and make meaningful, long-term improvements to its operations and supply chain. The only potential drawback to the addition of this consulting arm is the initial cost of creating the department and hiring/training employees to perform these activities. However, with the cost-saving measures the consulting branch would undoubtedly pay for themselves within a few years.   Alternative 2: Phase Out CODELCO, Phase in Anglo American and other non-Chilean Suppliers   Currently, Optimiza sources much of its copper from its home country, Chile. However, Chilean mines are beginning to become depleted and have been producing lower quality ore in recent years. Due to CODELCO’s recent problems fulfilling orders, we would recommend phasing out sourcing with them. However, the problems with Chilean copper production are not limited to to just CODELCO’s mines. Many Chilean reserves are beginning to deplete or are consistently producing lower grade copper ores. Because of
  • 15. 15     this, we would also recommend a slight decrease in sourcing from Anglo American, beginning to build sourcing relationships with companies that have mines in many different countries, such as the supplier Freeport McMoRan. Headquartered in Phoenix, AZ, Freeport McMoRan has impressive facilities across the globe. Because Freeport McMoRan is smaller in scope and size than CODELCO, Optimiza could exert more power over this particular supplier, giving them the ability to negotiate better shipping terms and potentially even lower prices. Freeport McMoRan could also strengthen Optimiza’s current corporate social responsibility practices. As Freeport McMoRan is very outwardly and actively concerned with the health and safety of its employees, minimizing adverse impacts on the environment, as well as forming long-term relationships with customer, we feel that this supplier would be a very beneficial choice for Optimiza and would push them to become more responsible to their employees, the environment, and their suppliers. The biggest drawback we see to pursing a supplier relationship with Freeport McMoRan is increased shipping costs and tariffs or taxes in order to get the commodity into Chile. But, with the large number of copper mines that Freeport McMoRan has a stake in, we feel that Optimiza could weigh all of the potential costs and benefits of their mining locations in order to chose one that is the most cost effective.   Alternative 3: Create Recycling Incentive to Reuse Old Metals   The global demand for copper is increasing each and every year with more companies developing and requiring it. Developed countries also have shown no signs of stopping consumption of copper. For this reason, we believe it is in Optimiza’s best interest to begin finding ways to recycle and/or reuse copper. There are several initiatives and organizations designed around recycling on a large scale. A partnership with the Institute of Scrap Recycling Industries based out of Washington DC would be advisable. This non- profit organization is designed to equip companies with safety advice, networking opportunities, regulatory information and standards, up to date market research and current publications for the purpose of enabling companies such as Optimiza to figure out how they can best understand new techniques, trends and projects. Some examples over copper recycling programs have been realized through projects like Toyota’s Wire Harness Recycling Project. This project essentially takes copper out of the rubber wiring it is encased it. The drawbacks to this project are the high costs associated with the methods used, however we believe that this is still worth looking into because the price of copper will very soon exceed the cost of recycling it. Further research and development is highly recommended into all manner of copper recycling programs. Recommended Alternative     Given our existing recommendations, the best course of action for Optimiza is to follow our second alternative. This recommendation permits Optimiza to become a more global company, while also benefiting the quality of its products. This recommendation begins with Optimiza reducing its reliance on CODELCO as its primary supplier. We recommend this because the ore coming from CODELCO mines is now rated as an
  • 16. 16     inferior product. Furthermore, there has been speculation with regards to the existing copper supplies in Chile that have resulted in a drop in consumer confidence and increasing prices for copper sourced from these mines. Therefore, we feel that Optimiza should look into building and improving relationships with other suppliers such as AngloAmerican and/or Freeport McMoRan. These suppliers allow access to mines all over the world, allowing Optimiza to obtain the best quality copper they can find, and with more competitive pricing than sourcing the majority of their product from only Chilean mines. Yet, these suppliers also still have Chilean mines, which allow for quick access to copper if Optimiza needs it. This means Optimiza can continue to provide quick and efficient project service to its existing Chilean and South American customers while also taking advantage of competitive pricing abroad and improving its service and delivery times with its foreign clients. Finally, by working with these new suppliers, which are true multinational corporations, Optimiza’s influence will be enhanced throughout the globe. Our existing research with AngloAmerican suggests that sourcing a larger percentage of Optimiza’s copper from it should not pose significant risk to the company. AngloAmerican has a stable amount of equity levied against its debt and its existing growth rates seem sustainable for the foreseeable future. Freeport McMoRan offers proximity to Optimiza’s existing clients as well as access to substantial North American copper reserves. The company is ranked second only to CODELCO, whose share of the market is projected to fall in the coming decade. Increasing sourcing form both of these suppliers should not pose any significant threat to Optimiza from a supplier risk standpoint. If Optimiza complies with this recommendation, it will not only ensure that the company is not affected by potentially dwindling supplies of copper in Chile, but it will help Optimiza to diversify its suppliers, lower procurement costs, and provide superior performance to its increasing number of foreign clients. If the company wishes to continue its tremendous growth and not be stagnated by the copper market or rising commodity prices, improving relations with more geographically diverse suppliers like AngloAmerican and contracting new suppliers like Freeport McMoRan is the best course of action for the immediate and long-term benefit of the enterprise.
  • 17. 17       Exhibits   Exhibit 1.1 Entrevista con Roxana Vásquez   ¿Podría  darnos  una  breve  descripción  de  cuál  es  el  propósito  de  su  empresa  y  cuál  es  el  producto  o  servicio   que  esta  ofrece?   R:El   propósito   es   ser   la   mejor   empresa   de   ingeniería   Chilena   para   la   minería.   El   producto   es   desarrollar   proyectos  de  Ingeniería  multidisiciplinarios  para  Plantas  de  Procesamientos  de  Minerales   ¿Qué   le   hizo   decidir   empezar   una   nueva   empresa,   su   propio   emprendimiento?   ¿Cuáles   fueron   sus   principales  razones?   R:La  principal  razón  fue  haber  quedado  sin  trabajo  a  inicios  del  año  1999  debido  a  la  crisis  asiática,  con  casi  10   años  de  permanencia  en  una  empresa  de  ingeniería.   ¿Qué  características  de  su  empresa  considera  únicas?  ¿Existe  algún  valor  agregado  que  usted  considere  que   pertenece  sólo  a  su  compañía?   R:El  clima  laboral  que  hemos  forjado  en  base  a  una  filosofía  de  trabajo  feliz.  La  calidez  y  empatía  con  que  se   trata  a  todos  los  clientes.   ¿Cuáles  fueron  las  percepciones  de  mercado  iniciales  que  le  hicieron  querer  ingresar  a  la  industria  en  que   actualmente   desarrolla   su   negocio?   ¿Fueron   estas   percepciones   completamente   determinantes   en   su   decisión?   R:No   hubo   percepciones,   es   lo   que   yo   sabía   hacer.   No   hubo   análisis   de   ningún   tipo,   solo   la   convicción   de   hacerlo.   ¿Qué  pasos  debió  tomar  correctamente  para  desarrollar  su  negocio  de  manera  exitosa?   R:Los  pasos  fundamentales  fueron:  realizar  el  trabajo  con  estándares  de  clase  mundial  desde  el  primer  día,   dedicación   al   100%,   sin   horario,   ni   fines   de   semana,   ni   vacaciones   durante   los   primeros   años,   identificar   profesionales  con  alto  conocimiento  técnico.  Amor  por  el  trabajo  y  no  tener  permitido  el  fracaso.       ¿A   qué   tipo   de   sociedad   pertenece   su   empresa?   ¿Quiénes   son   los   socios   fundadores,   miembros   o   empleados  claves  de  su  negocio?   R:  Sociedad  Anónima  cerrada.  Yo  soy  la  socia  fundadora,  y  mi  marido  que  además  es  mi  socio,  ha  sido  un   elemento  clave  en  la  gestión  financiera  del  negocio.  
  • 18. 18     Al   inicio   de   sus   actividades,   ¿requirió   usted   de   alguna   ayuda   financiera   externa?   ¿De   ser   así   las   podría   describir?  Si  no,  ¿cómo  se  autofinanció?   R:   Si   se   requirió,   y   conseguimos   un   crédito   del   Banco   de   Chile,   por   5   millones   de   pesos,   como   capital   de   trabajo,  donde  en  realidad  recibimos  4  millones,  ya  que  el  millón  restante  quedaba  como  seguro  del  crédito.       ¿Por  qué  cree  usted  que  sus  usuarios  o  clientes  consideran  sus  productos  o  servicios?   R:  Calidad,  compromiso  y  capacidad  de  respuesta  es  nuestro  sello,  y  nos  esforzamos  por  hacer  de  este  sello   una  realidad,  creo  que  por  eso  los  clientes  nos  consideran.     ¿Qué  características  está  considerando  agregar  a  su  negocio  en  el  futuro  próximo  o  lejano?  De  ser  posible,   nombre  2  o  3.   R:  Estamos  considerando  desarrollar:   -­‐ Una  fuerza  de  venta,  ya  que  en  15  años  de  existencia  nos  hemos  dedicado  más  a  producir  que  a  la   búsqueda  de  oportunidades  o  desarrollo  de  clientes  nuevos.   -­‐ Un  área  de  consultoría,  orientada  a  mejorar  la  productividad  de  las  empresas       ¿Cuál   ha   sido   el   momento   más   difícil   por   el   cual   su   empresa   ha   tenido   que   atravesar?   ¿Cómo   logró   sobrellevar  esa  situación?   R:  Hemos  tenido  varios  momentos  difíciles,  durante  el  3er  año  para  lograr  financiamiento  vendimos  nuestra   casa,   el   7°   año   fue   muy   difícil   también,   pero   ya   teníamos   una   historia   por   lo   que   el   banco   nos   prestó   financiamiento,  y  este  año  que  también  ha  sido  complicado,  la  baja  demanda  ha  hecho  caer  los  precios  de   ventas,  y  los  clientes  han  aumentado  los  periodos  de  pagos  casi  al  doble,  lo  que  sin  duda  altera  los  flujos  de   caja.       Según  su  percepción,  ¿Cuáles  son  los  mayores  riesgos  de  su  negocio?   R:  Chile  es  un  país  minero,  por  ende  su  economía  depende  fundamentalmente  del  cobre,  por  ende  cualquier   crisis  mundial,  afecta  el  mercado  minero,  y  por  ende  a  los  proveedores  de  la  minería,  de  igual  manera  si  hay   algún  tipo  de  recesión  interna  en  el  país.   ¿Cuáles  son  los  factores  que  limitan  la  velocidad  de  crecimiento  del  negocio?  ¿Cuáles  son  sus  planes  de   crecimiento  para  el  futuro  en  el  corto,  mediano  y  largo  plazo?   R:  La  velocidad  de  crecimiento  se  ve  limitada  por  la  incertidumbre  del  mercado.     Los  planes  de  crecimiento,  obedecen  a  las  oportunidades  de  proyectos  que  puedan  venir,  hoy  día  en  Chile  se   ve  un  notorio  estancamiento,  por  lo  que  muchas  empresas  han  debido  disminuir  su  dotación,  en  nuestro  caso,   estamos  empeñados  en  mantenernos.  Una  vez  que  se  normalice  podremos  analizar  si  podremos  continuar   con  el  ritmo  de  crecimiento  promedio  anual  de  35%,  como  ha  sido  nuestra  historia.       ¿Cuáles  son  las  proyecciones  de  la  empresa  en  los  próximos  3  años  y  cuáles  son  los  supuestos  claves  detrás   de  estas  predicciones?  
  • 19. 19     R:   El   supuesto   clave   es   que   el   segundo   semestre   del   2016   se   recupera   la   economía   en   Chile,   y   por   ende   comienza  un  nuevo  ciclo  en  la  minería  chilena.   Otro  supuesto  clave,  es  que  los  2  contratos  de  servicios  que  Optimiza  tiene  por  2  años,  van  a  demandar  el   trabajo  declarado  por  el  cliente.   Dada  las  condiciones  actuales  en  Chile,  las  proyecciones  crecer  un  20%  en  el  2015,  aumentando  a  un  30%  en   el  2016  y  ojala  recuperar  el  histórico  35%  en  el  2017.       Después   de   convertirse   en   emprendedor,   ¿cómo   logra   balancear   las   responsabilidades   profesionales,   familiares  y  de  desarrollo  personal?   R:  Durante  15  años  me  he  dedicado  al  desarrollo  de  Optimiza  y  de  mis  hijos,  recién  ahora  estoy  pudiendo   ocuparme  un  poco  de  mi  misma  y  de  mi  marido.  Es  difícil  y  desgastador,  pero  con  la  ayuda  y  entendimiento  de   mi  familia  los  logros  han  sido  más  que  satisfactorios,  pero  ha  implicado  un  gran  esfuerzo  y  mucho  trabajo,   pero  me  gusta  hacer  lo  que  hago,  creo  que  eso  es  lo  más  importante,  y  no  lo  podría  haber  logrado  sin  la  ayuda   de  muchas  personas  que  creyeron  en  mí.   ¿Podría   otorgarles   algunas   recomendaciones   a   quienes   estén   por   iniciar   su   propio   emprendimiento   o   a   quienes  no  les  resultó  exitoso?   R:  No  creo  que  haya  una  receta,  ya  que  cada  caso  en  único.  Pero  creo  que  lo  fundamental  es  que  ames  lo  que   haces,   trabajar   sin   límites,   ser   ordenado   en   todos   los   ámbitos,   ocuparse   de   la   calidad   y   de   la   imagen   del   producto,  saber  que  siempre  puede  ser  mejor.  Ser  autoexigente,  y  exigente  con  los  que  trabajan  contigo,  pero   a  su  vez  respetuoso  y  afable,  es  decir  se  debe  “Liderar  y  Trabajar  con  Amor”.        
  • 20. 20     Exhibit 1.2   Pipe and Tube Designation Title B42 - 10 Standard Specification for Seamless Copper Pipe, Standard Sizes B43 - 14 Standard Specification for Seamless Red Brass Pipe, Standard Sizes B68 / B68M - 11 Standard Specification for Seamless Copper Tube, Bright Annealed B75 / B75M - 11 Standard Specification for Seamless Copper Tube B88M - 13 Standard Specification for Seamless Copper Water Tube [Metric] B88 - 14 Standard Specification for Seamless Copper Water Tube B111 / B111M - 11 Standard Specification for Copper and Copper-Alloy Seamless Condenser Tubes and Ferrule Stock B135 - 10 Standard Specification for Seamless Brass Tube B135M - 10 Standard Specification for Seamless Brass Tube [Metric] B188 - 10 Standard Specification for Seamless Copper Bus Pipe and Tube B251 - 10 Standard Specification for General Requirements for Wrought Seamless Copper and Copper-Alloy Tube B251M - 10 Standard Specification for General Requirements for Wrought Seamless Copper and Copper-Alloy Tube [Metric] B280 - 13 Standard Specification for Seamless Copper Tube for Air Conditioning and Refrigeration Field Service B302 - 12 Standard Specification for Threadless Copper Pipe, Standard Sizes B306 - 13 Standard Specification for Copper Drainage Tube (DWV) B315 - 12 Standard Specification for Seamless Copper Alloy Pipe and Tube B359 / B359M - 12e1 Standard Specification for Copper and Copper-Alloy Seamless Condenser and Heat Exchanger Tubes With Integral Fins B360 - 09 Standard Specification for Hard-Drawn Copper Capillary Tube for Restrictor Applications B372 - 12a Standard Specification for Seamless Copper and Copper-Alloy Rectangular Waveguide Tube B395 / B395M - 13 Standard Specification for U-Bend Seamless Copper and Copper Alloy Heat Exchanger and Condenser Tubes B447 - 12a Standard Specification for Welded Copper Tube B466 / B466M - 14 Standard Specification for Seamless Copper-Nickel Pipe and Tube B467 - 14 Standard Specification for Welded Copper-Nickel Pipe B543 / B543M - 12 Standard Specification for Welded Copper and Copper-Alloy Heat Exchanger Tube B552 - 12 Standard Specification for Seamless and Welded Copper–Nickel Tubes for Water Desalting Plants B587 - 12 Standard Specification for Welded Brass Tube B608 - 11 Standard Specification for Welded Copper-Alloy Pipe B640 - 12a Standard Specification for Welded Copper Tube for Air Conditioning and Refrigeration Service B643 - 12 Standard Specification for Copper-Beryllium Alloy Seamless Tube
  • 21. 21     B687 - 99(2011) Standard Specification for Brass, Copper, and Chromium-Plated Pipe Nipples B698 - 10 Standard Classification for Seamless Copper and Copper Alloy Plumbing Pipe and Tube B706 - 00(2011) Standard Specification for Seamless Copper Alloy (UNS No. C69100) Pipe and Tube B743 - 12 Standard Specification for Seamless Copper Tube in Coils B813 - 10 Standard Specification for Liquid and Paste Fluxes for Soldering of Copper and Copper Alloy Tube B819 - 00(2011) Standard Specification for Seamless Copper Tube for Medical Gas Systems B828 - 02(2010) Standard Practice for Making Capillary Joints by Soldering of Copper and Copper Alloy Tube and Fittings B837 - 10 Standard Specification for Seamless Copper Tube for Natural Gas and Liquefied Petroleum (LP) Gas Fuel Distribution Systems B903 - 10 Standard Specification for Seamless Copper Heat Exchanger Tubes With Internal Enhancement B919 - 12 Standard Specification for Welded Copper Heat Exchanger Tubes With Internal Enhancement B937 - 04(2010) Standard Specification for Copper-Beryllium Seamless Tube (UNS Nos. C17500 and C17510) B944 - 11 Standard Specification for Copper-Beryllium Welded Heat Exchanger and Condenser Tube (UNS No. C17510) B956 / B956M - 10e1 Standard Specification for Welded Copper and Copper-Alloy Condenser and Heat Exchanger Tubes with Integral Fins Plate, Sheet, and Strip Designation Title B19 - 10 Standard Specification for Cartridge Brass Sheet, Strip, Plate, Bar, and Disks B36 / B36M - 13 Standard Specification for Brass Plate, Sheet, Strip, And Rolled Bar B96 / B96M - 11 Standard Specification for Copper-Silicon Alloy Plate, Sheet, Strip, and Rolled Bar for General Purposes and Pressure Vessels B100 - 13 Standard Specification for Wrought Copper-Alloy Bearing and Expansion Plates and Sheets for Bridge and Other Structural Use B101 - 12 Standard Specification for Lead-Coated Copper Sheet and Strip for Building Construction B103 / B103M - 10 Standard Specification for Phosphor Bronze Plate, Sheet, Strip, and Rolled Bar B121 / B121M - 11 Standard Specification for Leaded Brass Plate, Sheet, Strip, and Rolled Bar B122 / B122M - 11 Standard Specification for Copper-Nickel-Tin Alloy, Copper-Nickel-Zinc Alloy (Nickel Silver), and Copper-Nickel Alloy Plate, Sheet, Strip, and Rolled Bar B129 - 12 Standard Specification for Cartridge Brass Cartridge Case Cups B130 - 13 Standard Specification for Commercial Bronze Strip for Bullet Jackets B131 - 12 Standard Specification for Copper Alloy Bullet Jacket Cups B152 / B152M - 13 Standard Specification for Copper Sheet, Strip, Plate, and Rolled Bar B169 / B169M - 10 Standard Specification for Aluminum Bronze Sheet, Strip, and Rolled Bar B171 / B171M - 12 Standard Specification for Copper-Alloy Plate and Sheet for Pressure Vessels, Condensers, and Heat Exchangers B194 - 08 Standard Specification for Copper-Beryllium Alloy Plate, Sheet, Strip, and Rolled Bar
  • 22. 22     B248 - 12 Standard Specification for General Requirements for Wrought Copper and Copper-Alloy Plate, Sheet, Strip, and Rolled Bar B248M - 12 Standard Specification for General Requirements for Wrought Copper and Copper-Alloy Plate, Sheet, Strip, and Rolled Bar (Metric) B370 - 12 Standard Specification for Copper Sheet and Strip for Building Construction B422 / B422M - 10e1 Standard Specification for Copper-Aluminum-Silicon-Cobalt Alloy, Copper-Nickel-Silicon-Magnesium Alloy, Copper- Nickel-Silicon Alloy, Copper-Nickel-Aluminum-Magnesium Alloy, and Copper-Nickel-Tin Alloy Sheet and Strip B432 - 14 Standard Specification for Copper and Copper Alloy Clad Steel Plate B465 - 11 Standard Specification for Copper-Iron Alloy Plate, Sheet, Strip, and Rolled Bar B506 - 09 Specification for Copper-Clad Stainless Steel Sheet and Strip for Building Construction B508 - 08 Standard Specification for Copper Alloy Strip for Flexible Metal Hose B534 - 14 Standard Specification for Copper-Cobalt-Beryllium Alloy and Copper-Nickel-Beryllium Alloy Plate, Sheet, Strip, and Rolled Bar B569 - 14 Standard Specification for Brass Strip in Narrow Widths and Light Gage for Heat-Exchanger Tubing B591 - 09 Standard Specification for Copper-Zinc-Tin and Copper-Zinc-Tin-Iron-Nickel Alloys Plate, Sheet, Strip, and Rolled Bar B592 - 11 Standard Specification for Copper-Zinc-Aluminum-Cobalt Alloy, Copper-Zinc-Tin-Iron Alloy Plate, Sheet, Strip, and Rolled Bar B694 - 13 Standard Specification for Copper, Copper-Alloy, Copper-Clad Bronze (CCB), Copper-Clad Stainless Steel (CCS), and Copper-Clad Alloy Steel (CAS) Sheet and Strip for Electrical Cable Shielding B740 - 09 Standard Specification for Copper-Nickel-Tin Spinodal Alloy Strip B747 - 11 Standard Specification for Copper-Zirconium Alloy Sheet and Strip B768 - 11 Standard Specification for Copper-Cobalt-Beryllium Alloy and Copper-Nickel-Beryllium Alloy Strip and Sheet B882 - 10 Specification for Pre-Patinated Copper for Architectural Applications B888 / B888M - 13 Standard Specification for Copper Alloy Strip for Use in Manufacture of Electrical Connectors or Spring Contacts B936 - 13 Standard Specification for Copper-Chromium-Iron-Titanium Alloy Plate, Sheet, Strip and Rolled Bar Rod, Bar, Wire, Shapes and Forgings Designation Title B16 / B16M - 10 Standard Specification for Free-Cutting Brass Rod, Bar and Shapes for Use in Screw Machines B21 / B21M - 14 Standard Specification for Naval Brass Rod, Bar, and Shapes B98 / B98M - 13 Standard Specification for Copper-Silicon Alloy Rod, Bar and Shapes B99 / B99M - 11 Standard Specification for Copper-Silicon Alloy Wire for General Applications B124 / B124M - 14a Standard Specification for Copper and Copper Alloy Forging Rod, Bar, and Shapes B134 / B134M - 08 Standard Specification for Brass Wire
  • 23. 23     B138 / B138M - 11 Standard Specification for Manganese Bronze Rod, Bar, and Shapes B139 / B139M - 12 Standard Specification for Phosphor Bronze Rod, Bar, and Shapes B140 / B140M - 12 Standard Specification for Copper-Zinc-Lead (Red Brass or Hardware Bronze) Rod, Bar, and Shapes B150 / B150M - 12 Standard Specification for Aluminum Bronze Rod, Bar, and Shapes B151 / B151M - 13 Standard Specification for Copper-Nickel-Zinc Alloy (Nickel Silver) and Copper-Nickel Rod and Bar B159 / B159M - 11 Standard Specification for Phosphor Bronze Wire B187 / B187M - 11 Standard Specification for Copper, Bus Bar, Rod, and Shapes and General Purpose Rod, Bar, and Shapes B196 / B196M - 07(2013) Standard Specification for Copper-Beryllium Alloy Rod and Bar B197 / B197M - 07(2013) Standard Specification for Copper-Beryllium Alloy Wire B206 / B206M - 12 Standard Specification for Copper-Nickel-Zinc (Nickel Silver) Wire and Copper-Nickel Alloy Wire B249 / B249M - 14 Standard Specification for General Requirements for Wrought Copper and Copper-Alloy Rod, Bar, Shapes and Forgings B250 / B250M - 13 Standard Specification for General Requirements for Wrought Copper Alloy Wire B272 - 12 Standard Specification for Copper Flat Products with Finished (Rolled or Drawn) Edges (Flat Wire and Strip) B283 / B283M - 14a Standard Specification for Copper and Copper-Alloy Die Forgings (Hot-Pressed) B301 / B301M - 13 Standard Specification for Free-Cutting Copper Rod, Bar, Wire, and Shapes B371 / B371M - 08(2013) Standard Specification for Copper-Zinc-Silicon Alloy Rod B411 / B411M - 14 Standard Specification for Copper-Nickel-Silicon Alloy Rod and Bar B441 - 04(2010) Standard Specification for Copper-Cobalt-Beryllium, Copper-Nickel-Beryllium, and Copper-Nickel-Lead-Beryllium Rod and Bar (UNS Nos. C17500, C17510, and C17465) B453 / B453M - 11e1 Standard Specification for Copper-Zinc-Lead Alloy (Leaded-Brass) Rod, Bar, and Shapes B455 - 10 Standard Specification for Copper-Zinc-Lead Alloy (Leaded-Brass) Extruded Shapes B570 - 06(2010) Standard Specification for Copper-Beryllium Alloy (UNS Nos. C17000 and C17200) Forgings and Extrusions B870 - 08(2014) Standard Specification for Copper-Beryllium Alloy Forgings and Extrusions Alloys (UNS Nos. C17500 and C17510) B927 / B927M - 13 Standard Specification for Brass Rod, Bar, and Shapes B929 - 05(2011)e1 Standard Specification for Copper-Nickel-Tin Spinodal Alloy Rod and Bar
  • 24. 24     B967 / B967M - 12a Standard Specification for Copper-Zinc-Tin-Bismuth Alloy Rod, Bar and Wire B974 / B974M - 12a Standard Specification for Free-Cutting Bismuth Brass Rod, Bar and Wire B981 / B981M - 12 Standard Specification for Low Leaded Brass Rod, Bar and Shapes F68 - 10 Standard Specification for Oxygen-Free Copper in Wrought Forms for Electron Devices
  • 25. 25       Bibliography "Annual Report 2013." (n.d.): n. pag. Angloamerican.com. Anglo American Plc, Spring 2014. Web. 6 Dec. 2014. ASTM. (n.d.). Copper Standards. Retrieved December 2, 2014, from http://www.astm.org/Standards/copper- standards.html Web. 06 Dec. 2014. Basov, Vladamir. "Top 10 Copper Companies in 2012." Mining.com. N.p., n.d. Web. 06 Dec. 2014. "CODELCO - Corporación Nacional Del Cobre , Chile - Inicio." CODELCO - Corporación Nacional Del Cobre , Chile - Inicio. CODELCO, n.d. Web. 06 Dec. 2014. "Copper." – Anglo American. N.p., Dec. 2014. Web. 06 Dec. 2014. <http://www.angloamerican.com/products/copper.aspx>. "Copper Supply & Consumption — 1993–2013." EpscoHost. Copper Development Association, Inc., 1 Jan. 2014. Web. 06 Dec. 2014. “Comodity Information” Optimiza, S.A. Ltd., n.d. Web. 06 Dec. 2014. Crane, Tom. "Member Services & Benefits." Member Services. N.p., n.d. Web. 06 Dec. 2014. <http://www.isri.org/about-isri/membership/member-services-benefits#.VIPczjHF-So>. DraKoln, Noble. "Commodities: Copper." Investopedia. Investopedia, LLC., n.d. Web. 06 Dec, 2014. "FCX_Freeport-McMoRan Inc. - Our Company, Who We Are." FCX_Freeport-McMoRan Inc.Web. 1 Dec. 2014. <http://www.fcx.com/company/who.htm>. "History." – Anglo American. N.p., Dec. 2014. Web. 06 Dec. 2014. http://www.angloamerican.com/about- us/history Hoffman, Liz. "Freeport-McMoRan Nears Settlement Over McMoRan, Plains Deals." The Wall Street Journal. Dow Jones & Company, 1 Jan. 2014. Web. 1 Dec. 2014. <http://online.wsj.com/articles/freeport- mcmoran-nears-settlement-over-mcmoran-plains-deals-1417379391>. "How Do They Do That? How Copper Is Made." Copper Development Association, Inc. BHP Copper, n.d. Web. 06 Dec. 2014. "Long-Term Availability of Copper." Copper Alliance. International Copper Association, Ltd., n.d. Web. 06 Dec. 2014. "Market Share of Major Copper Producing Companies 2013." Statista. 1 Jan. 2014. Web. 1 Dec. 2014. <http://www.statista.com/statistics/274260/market-share-of-major-copper-producing-companies/>.
  • 26. 26     "Revenue and Profit of Copper Manufacturer CODELCO 2013 | Statistic." Statista. N.p., n.d. Web. 06 Dec. 2014. "Reviving CODELCO." The Economist. The Economist Newspaper, 23 Oct. 2010. Web. 06 Dec. 2014. Sprovieri, John. "Wire Harness Recycling." Assemblymag.com. Assembly, 1 July 2014. Web. 6 Dec. 2014. <http%3A%2F%2Fwww.assemblymag.com%2Farticles%2F92263-wire-harness-recycling>. Troszkiewicz, Agnieszka. "Copper Substitution Seen by KME Accelerating on Slow Growth." Bloomberg.com. Bloomberg, 5 Mar. 2013. Web. 06 Dec. 2014. Vásquez, Roxana. "About Optimiza." Telephone interview. 6 Nov. 2014.