Cultivos de café en Aguadas, Caldas, pertenecientes a comunidades apoyadas por Fundación Nutresa y el Negocio Café.

Coffee crops in Aguadas, Caldas, which belong to communities supported by Fundación Nutresa and the Coffee Business.

 

Highlights

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Challenges

Managing impacts on and responsibility to society and the environment in an increasingly more globalized corporate environment requires organizations to transcend their own operation.

Grupo Nutresa is committed to mitigating the indirect impacts of its activities, and, thus, has promoted strategies to manage risks and opportunities associated with the supply of goods and contracting of services with its suppliers. It has established policies and manuals that provide a framework for action and direction in our own operations and those of third parties, including policies on selecting suppliers, Hedges, Human Rights and Genetically Modified Organisms, and a manual for contractors, among others. Likewise, we have established public objectives and goals associated with the sustainability of the sourcing processes, such as a 12% reduction in the consumption of packing material, projected to 2020.

 


 

Progress

For Grupo Nutresa, management throughout the entire supply chain is a key part of its operation; within it is the management of supplying goods made by its suppliers, strategic partners in its operations.

During the last update of the Materiality Matrix (2013), sustainable sourcing was considered a material issue by stakeholders, due to the relevance and impact that suppliers have in the three dimensions of sustainability.

To meet the different needs and opportunities associated with sustainable sourcing, Grupo Nutresa has undertaken projects in the different dimensions of sustainability, seeking a balance in each. G4-EN33_G4-LA15_G4-SO10

 

Strategic sourcing

In 2014, we continued the initiative of strategic sourcing begun in 2012, which seeks to achieve savings in the negotiation categories for goods and services in Grupo Nutresa, as an indispensable component in the competitiveness of the businesses. This initiative has been developed through different leveragers in supply management. The savings goal proposed in 2014 was COP 58.710 Billion, which had a fulfillment of 124%, equal to COP 72.722 Billion. Through the management of raw materials, we were able to reduce the negative impacts of the coffee, cocoa and meat markets, by capturing opportunities in the total Grupo Nutresa basket of raw materials.

 

Human Rights

We disclosed the Human Rights policy to suppliers of goods and services, explaining the management system of this policy. The launch took place at the premises of Services Nutresa, where around 150 suppliers attended, in addition to 750 more via streaming. Also, the guidelines were extended to contractors and marketers. We have identified potential human–rights risks, such as child labor, freedom of association and collective bargaining, social impact and forced labor, in suppliers.

For more details on the Human Rights policy and management in the supply chain, go to “Human Rights Material Issue.”

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Human rights training to Grupo Nutresa suppliers.

 

Developing capabilities in our value chain G4-EC8

During 2014, we conducted 199 training sessions for suppliers of raw materials, packing materials and services in different topics associated to the management systems in the Grupo Nutresa Businesses. In the training sessions, topics – such as sustainable development, occupational safety and health, legal updates, contractor manuals, management systems, money laundering and the financing of terrorism, issues associated with human management, the supplier portal and the development of being – were presented. A total of 1.425 hours were invested in trainings, with 1.841 participants.

Grupo Nutresa has a program for the development of direct–material suppliers through which it promotes the appropriation of best practices in the different integrated quality–management systems, compliance of requirements and regulations and the generation and application of sustainable practices.

The Organization also favors local suppliers, provided they comply with the Code of Conduct for Suppliers in the requirements of quality, price and supply conditions established by the different companies. Local supply has positive environmental impacts related to the transport of raw materials and materials to the factories.

Evaluation of suppliers 2014

Derived from the supplier development and evaluation programs, in 2014 suppliers implemented 996 actions to improve their productive and administrative processes, related to improvements in the quality–, environmental– and food–safety management systems; practices in human management; impacting locational conditions; personnel practices; and environmental and safety programs, to improve their ability to produce and provide products and services with high standards. New direct–material suppliers are included in the annual supplier–evaluation program and, according to the results of this evaluation and the level of control assigned to the supplier, the frequency of reevaluation in time is defined.

From the second quarter of 2014, new sustainability elements were integrated into the supplier–evaluation program, derived from the potential risks identified in the consultation made with the BSD Consulting firm. Some of these elements are child labor, freedom of association and collective bargaining, social impact and forced labor. These variables are analyzed and evaluated during the evaluation and/or audit processes on suppliers. Since the inclusion of these new variables, 123 raw–material and packing–material suppliers have been evaluated.

In order to increase the capabilities and knowledge in sustainability issues of the negotiating and procurement teams, training with experts in the field from the University of Barcelona, Spain, was conducted. Among the topics discussed were materiality analysis, risks in sustainability, and the management of these risks in the Grupo Nutresa processes.

 

Managing Inclusive Businesses, income generation and entrepreneurship 

Grupo Nutresa and its Fundación Nutresa generated synergies in the development of capabilities of more then 30 local cocoa, cashew, sesame, blackberry and coffee suppliers. With the implementation of formal–education and digital–literacy projects, we were able to benefit more than 2.400 community leaders, who improved their income through the sale of supplies and/or the management of alliances. Collaborative work was reflected in the development of 18 initiatives in food safety and 29 integral business–improvement plans, leveraging the growth of the organizations through scale–economy models and the establishment of 17 public–private partnerships. Through encounters with producers, the social– and technical–management networks, the implementation and replication of best practices, and knowledge transfer were strengthened.

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Promoting Cocoa 

In partnership with the Technology Center of Antioquia (Centro de Tecnología de Antioquia, CTA), Servicios Nutresa and Compañía Nacional de Chocolates Colombia began a project to develop ten cocoa suppliers located in northeast Antioquia, to strengthen producers in aspects of business management, quality, and productivity, among others, and thus increase the level of competitiveness of cocoa producers. During 2014, workshops were conducted to identify losses and opportunities, baseline assessment, and prioritization of gaps, and early improvement actions were implemented.

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Cocoa from producer communities in Montes de Maria, Bolivar.

 

Through Inclusive Businesses, we supported cocoa–producer projects totaling 21.983 hectares, which benefitted nearly 10.000 families in 12 departments and 85 municipalities in the country. In these projects, farmers received technical, social and business advice in the development of their crops and the strengthening of their organizations.

  • In the Research and Technological Transfer Plan, we conducted 146 training sessions and technical tours, which were attended by 2.897 technicians and farmers.
  • The Cocoa–Producer Mass Disclosure Program sent 139.329 text messages to 2.818 farmers with information related to cocoa crops.
  • Investment in these programs (Inclusive Businesses, Technological Research and Transfer) amounted to COP 1.609 Billion in 2014.
  • In 2014, 969 hectares were planted by 55 farmers in nine municipalities. The 2014 investment amounted to COP 7.643 Billion, for a cumulative total of COP 21.816 Billion.
  • The Company purchased 183 tons of cocoa with Organic and Fair Trade Certifications that generated quality bonuses for COP 88 Million. Additionally, it purchased 77 tons of Origin cocoa, for which it paid bonuses for COP 32 Million.
  • The farm in Barrancabermeja generated 78 direct jobs, received 367 visitors for training, produced 65.800 plants of hybrid cocoa and 18.931 timber plants for third parties and received, from the Colombian Institute of Technical Regulations and Certification (Instituto Colombiano de Normas Técnicas y Certificación, ICONTEC) , certifications in Best Agricultural Practices in cocoa and the Forestry Compensation Program (carbon fixation).

 

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Fair Trade in coffee

Colcafé continues to generate benefits to coffee–producing communities certified under the Fair Trade Seal, a program based on cooperation between coffee producers and marketers. Through partnerships and negotiations with international clients, since the beginning of the program the Company has transferred resources for more than COP 19,918 Billions.

Coffee growers in Aguadas, Caldas.

 

The social bonus transferred is mainly used in initiatives aimed at productivity and quality of the crop, environmental projects, social services, education and other projects covered by this certification.

In the last five years, not only has the value of the bonuses transferred increased, but also the number of communities benefitted, located in the different coffee regions of the country.

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Animal welfare 

Of the 94 pig farms that supply the business, 96.8% are certified in best livestock and safety practices. Besides seeking the best conditions for animal care and welfare, we have made adjustments in order to improve water quality and, thus, positively impact the health of the animals. We have set up three treatment plants for consumption and washing. Investments amounted to COP 273 Million.

 

Percentage and total of animals raised G4-FP9

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* All pigs, regardless of breed, receive the same treatment on the farms.

 

Breeding and genetic practices used

  • We have a productive structure based on the three levels of the genetic pyramid (nucleus, multiplication and commercial).
  • Inclusion of breeds and genetic lines with the best productive characteristics.
  • Importation and national purchase of genetic material (live animals and frozen semen) from genetic houses backed by the country of origin and Colombia (JSR, PIC, SGI, etc.)
  • A program of crossings that permits exploiting the benefits of heterosis to the maximum.
  • Through a mathematical algorithm (Mrode 2000), we take into account the smallest relationship possible in the crossings to avoid the maximum negative effects possible in high consanguinity.
  • A selection program with a performance test system based on quantitative statistics and genetics (Mrode 2000).
  • Infrastructure, tools, procedures and skilled professionals, which allow the application and updating of best practices associated to swine production (genetics, reproduction and growth).
  • Collection and processing of semen, with 99% of the services through artificial insemination.

 

Initiatives carried out that impact animal welfare

The technical procedures applied in the livestock productive process are documented in a technical manual on animal management that is applied to all breeds of pigs. This leads to the standardization of animal handling. Grupo Nutresa has:

  • A facilities maintenance program (intervention of abrasive floors, infrastructure that can harm the animals).
  • Control of environmental temperature, seeking the greatest comfort possible for the animal.
  • A balanced food supply and the permanent availability of treated water.
  • The Internal Work Regulations (Alimentos Cárnicos S. A. S., 2010) requires good treatment of the animals.
  • Euthanasia is practiced to end the suffering of a sick animal and reduce the risk of spreading infectious diseases.
  • Immunocastration in all males destined for slaughter. This practice replaces the former surgical intervention that has been criticized from the point of view of animal welfare.
  • Permanent supervision of deliveries in order to intervene in conditions that threaten the life of the sow (for example, dystocia) and the piglets (for example, crushing).
  • Standardization of the litters in number and size (atetes, suckling pigs) to ensure adequate food intake (mother’s milk) by the piglet.

In the Grupo Nutresa farms, we conduct biosecurity practices aimed at minimizing the risks of introduction and spread of infectious diseases in the pig farms and, therefore, increase animal welfare. Some of these practices are:

  • Entrance to the farms by people outside the process is restricted.
  • Compliance of hygiene regulations for staff and implements (for example, computers, cameras, machinery, etc.) that enter the farm.
  • Vaccination and acclimatization program
  • The “all in – all out” production system.
  • Installation of bird netting.
  • Cleaning routines and disinfection of facilities.
  • Practices in health emergencies.
  • Specialization in transport (movement of animals by productive state to avoid cross contamination among farms).

 

Policies and practices, by species and type of breed, related to physical alterations and the use of anesthesia. G4-FP10

Types of modifications made
  • Teeth clipping of 10% of the population of piglets at birth.
  • Notches in the piglet’s ear at birth (as part of its individual identification) at the core level of the population (that is, 6% of the total births of the population).
  • Tail cutting at birth of 100% of the population of piglets.
  • Ear perforation to place the swine plague chapeta (tag) on 100% of the population at three weeks of age.
  • Numeric identification with a tattoo hammer (individual within the farm) on the skin for 3,500 animal/year (reposition) of the breeding animals.
  • Numeric identification with a tattoo hammer (with the origin farm and lot) on the skin of 100% of the animals destined for slaughter.

No kind of anesthesia is used for any of the physical modifications mentioned. Teeth clipping is a practice performed with a polishing bur that smooths the dogtooth without fracturing it and without touching the nerve. Practices, such as the notches and ear perforation, are carried out in appropriate aseptic conditions with post – intervention management with disinfectants, substances for scarring and curative treatment for infection, if necessary.

 

Percentage and total of animals raised and/or processed by species and breed and by type of feedlot. G4-FP11

Ninety – five point fifty – one percent (95.51%) of the stalls are pens and 4.49% are cages.  The pens are differentiated and have homogenized populations by age and size to equalize development conditions, protect the health of the pigs and reduce stress.

Policies and practices regarding treatments with antibiotics, anti – inflammatories, hormones and/or growth promoters G4-FP12

  • Antibiotics: Penicillin, Tetracycline, sulfa drugs, Enrofloxacin, Amoxicillin, Streptomycin, Florfenicol, Tolutromicine.
  • Anti – inflammatories: Ketoprofen, Meloxicam.
  • Hormones: Oxitocin, Prostaglandin, Chorionic Gonadotropin.
  • Growth promoters: Ractopamin, although – technically – it is not a growth promoter. It is included because it helps to lay down (deponer) the greatest amount of muscle to fat.

 

Practices used in the administration of these substances

Basically, the substances are applied intramuscularly in the case of treatments and the use of hormones.  Hydrations are applied intraperitoneally and orally.

The choice of the needs depends on the age (size) of the animal.  As the animal grows, the calibre of the needle is increases.

Maximum volumes and withdrawal times are taken from the handling instructions given by the manufacturer.

With regard to animal welfare, the use of a proper calibre according to the animal’s size and its securing contribute to reduce stress.

 

Replenishment practices

During 2014, six vendors were trained and qualified in continuous replenishment services through the portal www.gruponutresaenlinea.com for the collaborative inventory management of high–turnover references, optimizing the inventory levels in the client–supplier chain and the working capital in the client and the supplier.

 

Support and attention to our suppliers

During 2014, 6,679 cases were attended through our Supplier Attention Line.  Next is a percentage comparison of the 2013 – 2014 cases.

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Through the Grupo Nutresa link Contáctenos (Contact Us), we received 525 offers for supplies and/or services as possible sources of future provisioning.

 

Purchases from suppliers in 2014

Grupo Nutresa annually purchases around COP 4 Trillion, with a greater participation of raw materials. G4-12

Annual Purchases by Business

(COP Billion)

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Annual Purchases by Country G4-EC9

(COP Billion)

 

Packaging material

One of the commitments outlined in the sustainability strategies for 2020 is associated with the consumption of packaging material, on which a goal has been established for a 12% reduction (Kg/t.p.), 2010 baseline year. To date, the level of progress in this indicator is a reduction of 5,1%.

Currently, and in order to address the negative environmental impacts in the supply chain, we are working on initiatives that decrease the consumption of packaging materials through the application of the Design To Value (DTV) methodology, which identifies improvement opportunities through the exhaustive analysis of all the components that form part of a product or process, beginning with the understanding of the attributes that truly generate value for consumers. During 2014, we reduced the consumption of packaging material by 207,9 tons through the DTV methodology and we identified significant opportunities for optimization thanks to the teamwork of the DTV Leaders Network in all the Grupo Nutresa companies. Noteworthy are other initiatives, such as the reduction in the calibre of flexible and folding material, the optimization of the area consumed, standardization in corrugated boxes, elimination of some components of low perceived value, the decrease in inks and the substitution of materials for others that are more environmentally friendly.

 

Savings distribution in tons per category of packaging material

 

New suppliers that were examined based on sustainability criteria and suppliers whose impact has been assessed. G4-EN32_G4-EN33_G4-LA14_G4-LA15_G4-SO9_HR10_HR11

At the end of 2013, Grupo Nutresa began a sustainable sourcing project with BSD Consulting, a specialized firm, in order to update the social, environmental and economic risks of each of the categories of supplies and services, and to focus on and develop more activities that positively impact its supply chain.  The analysis of these risks was carried out applying the methodology of the Grupo Nutresa risk – management process.

Among the risks examined were human rights, environmental, labor and those related to safety at work.  One hundred twenty – four (124) categories to purchase direct and indirect materials and service provision were analyzed.  As a result of this work, we will update the intervention and mitigation plans of the sustainable risks, beginning with those categories that present a high risk.

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Analysis process of sustainability risks in the Supply Chain

As a result of this work, we will update the intervention and mitigation plans of the sustainable risks, beginning in 2015 with those categories that present a high risk in first – level suppliers.

 

New suppliers who were analyzed using the criterion of sustainability impacts

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img_30_INGPercentage of the volume purchased from suppliers who comply with the Company Purchasing Policy G4-FP1

The Grupo Nutresa Code of Conduct for Suppliers establishes the basic commitments that suppliers of goods and services must meet in relation to their responsibilities with their stakeholders and the environment, commitments that must also be promoted with their business relations

For more information, consult the Grupo Nutresa Code of Conduct for Suppliers at:

 http://www.gruponutresa.com/sites/default/files/20131122_codigo_de_conducta_para_proveedores_eng.pdf

Of the volume purchased from critical suppliers, 73.2% correspond to suppliers who comply with the Company Supply Policy.

 

Volume purchased thats is in accordance with internationally recognized responsible production regulations G4-FP2

Purchased certified under international standards contribute to reduce the impacts of sustainability in the supply chain, thanks to the requirements detailed in these regulations, aimed at specific products and the places where they are produced.

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Future vision

Understanding that a significant portion of the risks and opportunities that sustainability presents for a company in the food sector is found in its supply chain, Grupo Nutresa has proposed programs and projects that will attend these risks and capitalize on opportunities for economic savings, eco–efficiency and growth of alliances for joint benefit.

Among the short– and medium–term plans are the construction of actions to align the supply chain with the challenges of sustainability and mitigate or remediate the impacts. The plan to close gaps will include actions on the most relevant risks associated with the ten main raw materials purchased by Grupo Nutresa: sugar; fats; coffee; cocoa; wheat; beef, pork and chicken; milk; and concentrates derived from corn and soy.

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Cocoa.

 

We will study possible alliances with specialized agencies, in order to mitigate risks and potential impacts.

We will continue to develop actions focused on fulfilling the Mega 2020 in sustainability, which are related to the use of and reduction in waste generation and the reduced use of packing material per ton produced. This, through programs to buy and manage supplies that, throughout its value chain, can be reduced, reused or recycled.

img_t_244In order to impact the risks associated with money laundering and the financing of terrorism (MLFT) in the value chain, in 2015 we will enable virtual–training modules that will sensitize related third parties in the management to prevent MLFT.

In raw materials, we will deepen management strategies in more categories of supplies, or whose price inductor is one of these, and cover more areas in which Grupo Nutresa operates.

In late 2014, we launched the supplier–recognition program called Exemplary Suppliers, which will have its first awards ceremony in the first semester of 2015. The program aims to annually recognize those suppliers (small and large industries) in different categories of goods and services that stand out for their contribution to achieving the Grupo Nutresa objectives through the supply chain, and for their effort to improve every day in changing environments.

We will continue expanding the base of suppliers trained in MLFT risks, and who – in turn – know the Human Rights policy, who have adhered to the Code of Conduct for Suppliers and who know the ten principles of the United Nations Global Compact for all the companies belonging to Grupo Nutresa.

During 2015, with support from the Cuenca Verde Water Fund, we will explore the possibility of developing programs to control and mitigate water pollution that could be generated by the pig–production farms located in the areas of influence of the watersheds that supply the Riogrande and La Fe reservoirs, the main water supplies for the city of Medellín, in Colombia.

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Cocoa drying in the north area of Chocó.

 


 

Some initiatives

 

Analysis of sustainability risks for the supply chain

This project was carried out with the support of expert consultations and was aimed to update the social and environmental risks of the supply chain, applying the Grupo Nutresa methodology for the risk–management process. It analyzed 124 categories of purchases; the risks analyzed included some related to human rights, the environment, and occupational labor and safety, among others. As a result of this work, we updated the intervention and mitigation plans of the sustainability risks, beginning in 2015 with the categories that present a high risk in first–level suppliers.

 

Atlas Strategic–Sourcing Project

During 2014, the operation and development of the purchase representation office in Shanghai, China, was consolidated, which was established to leverage the competitiveness of the Grupo Nutresa purchases and take advantage of new global–sourcing opportunities through a team made up of Colombians and Chinese nationals. The savings initiatives in 2014 reached COP 2.568 Billion.

 

Migration of the strategic–sourcing model to platforms

The migration of the strategic–sourcing model was begun in Tresmontes Lucchetti to increase the competencies of the negotiating teams and seek improvements in the competitiveness of the negotiation and purchasing processes. During 2014, savings for COP 337 Million were achieved.

 

logo_innovacion Supplier recognition program

In late 2014, we launched the supplier–recognition program called Exemplary Suppliers, which will have its first awards ceremony in the first semester of 2015. The program aims to annually recognize those suppliers in different categories of goods and services that stand out for their contribution to achieving the Grupo Nutresa objectives through the supply chain, and for their effort to improve every day in changing environments.

Twenty (20) recognitions will be awarded in the following purchasing categories: agriculture and agribusiness, livestock, industrial raw materials, packaging materials, indirect supplies for administrative and plant use, and continuous and discontinuous services. These prizes will be awarded among large, medium and small companies, according to their performance in four aspects: innovation, productivity, environmental and social sustainability, and level of logistics service.

The program will give a special award to those suppliers whose practices in innovation and sustainable development are outstanding. Likewise, the Nutresa Exemplary Supplier will be elected, which best stands out in all the dimensions evaluated.