Market Entry/Exit Risk Assessment

Assessing threats during a market withdrawal

The client:

A US-headquartered manufacturer

The issue:

The client was planning to close its operations in Russia and sought Control Risks’ support in planning its withdrawal to ensure the security of its assets and personnel and to minimize any security or integrity risks to its business and reputation.

Our solution:

Control Risks provided the client with both preventive and reactive support to manage its planned market withdrawal successfully. Prior to the withdrawal we conducted an assessment to identify any potential risks that might arise in relation to third parties and the likely reactions of the local administration and the national government in Moscow. The threat assessment analysed the intent and capability of the local and national authorities to pose a threat to the client and to obstruct its withdrawal plans. It also considered the authorities’ likely attitude towards the client once the withdrawal was announced, including the possibility of retaliatory measures such as potential bureaucratic harassment and negative public campaigns. As part of this, it examined experiences of other companies in the sector in their interaction with the authorities in similar circumstances. Based on the threat assessment we subsequently provided specific advice and input on security management plans for the client’s scheduled meeting with its local staff and assessed the need for physical security during the meeting. We also undertook monitoring of employees’ social media profiles to gauge any negative reaction to the client’s exit.

The result:

Our assessment enabled the client to identify and mitigate threats and risks to its operations and personnel during its withdrawal from the Russian market.

A new venture in Egypt’s energy sector requires a market-entry assessment

The client

An international resources company

The issue

Our client is considering investing in two natural gas blocks in Egypt as a concession owner without a physical presence in the country. We were engaged to carry out a market entry assessment to help them gain a greater understanding of the various political, corruption, security, operational, social and business risks they would face.

Our solution

We provided our client with an in-depth, independent market entry assessment that use our institutional knowledge of Egypt, our online database of security incidents and threat mapping, our Arabic- and English-language capabilities to conduct online research, our access to corporate records in Egypt, and our wide network of in-country sources that included former intelligence officials, oil and gas executives, and social impact experts.

Drawing on this expertise and access, we evaluated the nature and extent of risks they faced in the sector, identified key details about the main Egyptian stakeholders they would be required to engage with, and assessed the reception our client would receive amongst local communities in their area of operations. We identified a range of reputational and other risks that our client would face in Egypt and highlighted ways to mitigate these. Our recommendations included enhanced due diligence on their potential partners, recommendations for a stakeholder engagement plan, and scenario planning to assess possible changes in the political and security environment over the duration of their concession.

The result

Our client used the report to inform their go/no-go decision to invest in the country. Our assessment gave our client the confidence to move forward with its market entry based on a second phase of more in-depth due diligence on its partners’ exposure to corruption, and the country’s military and intelligence services.

Market entry assessments for a global company in the mining sector

The client

A global company specialising in commercial explosives and blasting systems for the mining industry.

The issue

The client was evaluating opportunities to enter the Guinean and Mauritanian markets to provide services to mine operators in the two countries. The client sought to gather detailed information on a variety of non-technical risks that could affect it there and approached Control Risks to commission independent, in-depth country risk assessments of Guinea and Mauritania covering political, regulatory, operational, security and integrity risks to its planned operations.

Our solution

We mobilised our institutional expertise and source networks and conducted multilingual open-source research to provide the client with a comprehensive assessment of the political stability, regulatory, reputational and security risks prevailing in Guinea and Mauritania, as well as human rights issues that the client would face in both markets. Our assessment included an overview of both countries’ political and macroeconomic stability and their governments’ attitudes toward foreign investment, as well as stakeholder mapping of the key institutions in the two countries’ mining sectors.

We also provided a detailed assessment of security issues that could affect the client’s operations, given the high sensitivity of the products it supplies, and the risk of those products being specifically targeted by militant groups or criminal networks. Our security threat assessment analysed security conditions along the supply routes that the client was considering using to deliver to its end-customers in Guinea and Mauritania. We also identified and analysed issues that could harm the client’s reputation, including an assessment of corruption risks and human rights-related risks, such as forced labour and modern slavery, in both markets.

The result

Our findings helped the client gain a deep understanding of the risk environments in Guinea and Mauritania, as well as insights into what it should expect and prepare for when entering these markets. This allowed the client to make informed decisions about its prospective investment in both countries, evaluate its exposure to the various political, regulatory, reputational, security and compliance risks there, and mobilise the adequate resources to mitigate those risks.