Currency Risk Exposure in Business
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TABLE OF CONTENTS
INTRODUCTION 2-3
CURRENCY RISK EXPOSURE WITHIN THE BUSINESS ENVIRONMENT 4
COMPANY MANAGEMENT OF CURRENCY RISK EXPOSURE 5
PRIMARY ALTERNATIVES IN MANAGING CURRENCY RISKS 6-8
RECOMMENDATIONS AND BENEFITS 9
CONCLUSION 10
REFERENCES 11
INTRODUCTON
Unilever was founded in 1929 when two major companies, Margarine Unie and Lever Sunlight merged.
From its genesis Unilever adopted a dual company structure i.e. having two headquarters, one in London (Unilever PLC) and the other in Rotterdam (Unilever NV) which shared a common board of directors with a citizen from each headquarters as the Chief Executive Officer (CEO) of the organization. By 1930 the United Africa Company (UAC), a company that had a very strong position in Western Africa in export-import trade merged with Unilever. The two parent companies owned factories and trading subsidiaries in Asia and Africa. Unilever in the early years from 1909 to 1933 built and also purchased factories in Japan, Argentina, Brazil, Thailand, Indonesia and India. Between 1945 and 1980 they expanded their activities in mostly Western Europe and the product line in those early years were margarine and soap products until Unilever began to diversify into new areas in the market into the food sector - frozen foods, transport, chemicals and printing. However, Unilever’s food sector remained predominantly a Western European company. (Elshof, 2005)
Unilever have also extended its reach to the Caribbean and this also originated back to 1929 when two predecessor
TABLE OF CONTENTS
INTRODUCTION 2-3
CURRENCY RISK EXPOSURE WITHIN THE BUSINESS ENVIRONMENT 4
COMPANY MANAGEMENT OF CURRENCY RISK EXPOSURE 5
PRIMARY ALTERNATIVES IN MANAGING CURRENCY RISKS 6-8
RECOMMENDATIONS AND BENEFITS 9
CONCLUSION 10
REFERENCES 11
INTRODUCTON
Unilever was founded in 1929 when two major companies, Margarine Unie and Lever Sunlight merged.
From its genesis Unilever adopted a dual company structure i.e. having two headquarters, one in London (Unilever PLC) and the other in Rotterdam (Unilever NV) which shared a common board of directors with a citizen from each headquarters as the Chief Executive Officer (CEO) of the organization. By 1930 the United Africa Company (UAC), a company that had a very strong position in Western Africa in export-import trade merged with Unilever. The two parent companies owned factories and trading subsidiaries in Asia and Africa. Unilever in the early years from 1909 to 1933 built and also purchased factories in Japan, Argentina, Brazil, Thailand, Indonesia and India. Between 1945 and 1980 they expanded their activities in mostly Western Europe and the product line in those early years were margarine and soap products until Unilever began to diversify into new areas in the market into the food sector - frozen foods, transport, chemicals and printing. However, Unilever’s food sector remained predominantly a Western European company. (Elshof, 2005)
Unilever have also extended its reach to the Caribbean and this also originated back to 1929 when two predecessor
References: Bradley, F., 2005. In: International Marketing Strategy 5th Edition. Essex: Pearson Education Limited, pp. 332-334. Cleveland, T., 2011. Multinationals Manage Forex Exposure in a Variety of Ways. [Online] Available at: http://www.bionicturtle.com/how-to/article/multinationals-manage-forex-exposure-in-a-variety-of-ways/ Elshof, P., 2005. Unilever Company Profile. [Online] Available at: http://somo.nl/publications-en/Publication_617/at_download/fullfile Hill, C. W. L., 2009. In: B. Gordon, J. Weimeister & M. Richter, eds. International Business: Competing in the Global Marketplace. New York: McGraw-Hill Companies, Inc.,, pp. 326-328; 345-347; 344. Moffett, M., Stonehill, A. & Eiteman, D., 2005. In: D. Clinton, D. Battista, A. Fleischer & J. Rigney, eds. Fundamentals of Multinational Finance 2nd Edition. Boston: Pearson Education, Inc., pp. 206-210; 236-237; 265-266. Philip, A., 2011. About Unilever Caribbean currency risk management [Interview] (21st December 2011). Unilever, 2012. Introduction to Unilever. [Online] Available at: http://www.unilever.tt/aboutus/introductiontounilever/ Unilever, 2012. Unilever Greater Caribbean. [Online] Available at: http://www.unilever.tt/brands/ Unilever, 2012. Unilever in Trinidad. [Online] Available at: http://www.unilever.tt/aboutus/introductiontounilever/unileverintrinidad/default.aspx