Demonstrating the unique value of its core financial systems, SAP AG yesterday announced that Nyrstar, the world's largest producer of zinc, is using SAP solutions to manage its global business. Formed in 2007 through the spin-off of a business by Zinifex and Umicore, Nyrstar operates smelters and mines on five continents. The company chose SAP to address challenges it faced, both as a result of the complexity of its merger as well as from its vast business dealings in the mining industry.

Following the merger, Nyrstar ran duplicate systems for raw material procurement, sales, hedging and metal accounting. However, the duplicate systems and processes for procurement would at times cause Nyrstar to purchase materials from a single supplier using different names and prices for those materials. The firm also lacked a single view of its metal sales. This confusion trickled down through all processes, leading to inefficiencies within the organization and would have limited the delivery of synergies resulting from growth and acquisitions.

To solve these challenges, Nyrstar implemented the SAP ERP Financials solution, the SAP Best Practices for Mining package and the SAP Treasury and Risk Management solution. The company has also worked with SAP under the customer engagement initiative framework during the development lifecycle for commodity management solutions from SAP. Launched in November 2011 as part of an update to SAP Business Suite software, commodity management solutions from SAP include the SAP Commodity Risk Management, SAP Commodity Procurement and SAP Commodity Sales applications.

The solutions help Nyrstar handle assays and its complex raw materials contracts, and also allow the company to capture all transactions within the supply chain and transfer them to its exposure management process. Nyrstar is also now better equipped to minimize the impact of metal price volatility on its business, with increased visibility across all metal flows and centralized management of global risk exposures. This allows for improved management of its primary business risk around commodity price volatility.

Nyrstar has gained a simplified IT architecture, retired more than 10 legacy systems and achieved improved processes for contract to cash, metal price and currency hedging, metal sales and purchasing, tracking and quantifying risk exposure, tracking raw material and finished goods, and financial closing. Nyrstar was able to centralize and globalize its commercial operations; today, a single sales and marketing organization works from one database and integrated processes, and the global purchasing function has been consolidated in its headquarters.

"SAP software provides the platform we need to run a successful business," said Phil Palmer, CIO, Nyrstar. "By operating a lean, efficient, dynamic and flexible business underpinned by SAP software, we can focus on building a strong and sustainable future and creating value for all our stakeholders."