Head Office
32 A Cherni vrah blvd., fl. 4 | 1407 Sofia, Bulgaria
tel. +359 2 962 11 50 | fax: +359 2 962 11 46
e-mail: contact@monbat.com
The vertically integrated business model comprises four integrated functions which cover all aspects of the supply chain, from the extraction of recycled lead, through its recycling operations, to the production and sale of lead-acid batteries to the market
The vertically integrated group, with currently four recycling plants allocated to its diverse sourcing base, allows Monbat Group to constantly apply opportunity gain management.
Vertical integration not only brings high integrated margins; it also allows for natural hedging to lead price variations on the London Metal Exchange throughout the year.
In instances of abrupt LME behavior, many players can suffer missing trading volumes or squeezed margins. At Monbat, this brings the chance to tap into a window of opportunity.
Recycling is no longer a matter of sourcing but rather a conscious business choice.
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The vertical integration model has a three-fold benefit:
Enabling higher integration margin due to the synergy benefits of recycled technology lead coming from the group battery plants
Exercising a natural hedging rebalancing mechanism in case of moderate LME fluctuations, thus keeping the integration margin intact (on an annual basis)
Provide the ability to steal an advantage in the event of extreme or abnormal LME fluctuations, which, if the business as usual ‘mode of operation’ were maintained, would result in a sharp downturn in results.
The LME lead price fluctuation defines a price curve, which influences the market behavior of the industry chain, namely scrap battery providers, distributors of batteries and final clients.
The vertical integration model provides a tactical response to these behaviours by securing margin gain in all scenarios, including the extremes of market-driven margin squeeze and margin spread.