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1
EDITORIAL TEAM:
Jorge Eduardo Ramírez, Luisa Fernanda Acevedo, Carlos Fernando Romero, Felipe Andrés Gómez, Karen Heshusius, Juan Manuel Ramírez y Diana Aguilar S.
SOURCE:
Alpinistas.
EDITING AND PROOFREADING: Precise.
DESIGN: 43.
CREATIVE MANAGEMENT:
Adriana Cajiao y Natalia Hernández.
LAYOUT AND DESIGN:
Adriana Cajiao, Natalia Hernández, Olivia Williams, Jose Durán y Sebastián Castro.
GRAPHICS AND ILLUSTRATIONS: Olivia Williams.
COMPUTER GRAPHICS AND ANIMATION: Producción Aparte.
VIDEOS:
Precise.
TRANSLATION:
Precision Translators Ltda. The typefaces used in this report are Archer, LangoPx and Mathilde. Printed on 115g recycled Propal matte offset paper.
2
IN D E X Chapter 01.
FROM OUR PRESIDENT
4
Chapter 02.
ABOUT THIS REPORT
6
Chapter 03.
OUR PERFORMANCE
8
Chapter 04.
ABOUT OUR ORGANIZATION
11
Chapter 05.
JOURNEY FOR SUSTAINABILITY
29
THE 7 SUSTAINABILITY CHALLENGES
31
D1. DIALOGUE
31
D2. ECONOMIC VALUE
37
D3. ALPINISTAS
49
D4. ENVIRONMENT
69
D5. NUTRITION
81
D6. SUSTAINABLE BUSINESSES
89
D7. SOCIAL VALUE
99
Chapter 06.
CHALLENGES 2012+ / 2013+
103
Chapter 07.
EXTERNAL VERIFICATION
104
Chapter 08.
TABLE OF GRI INDICATORS
105
3
Chapter 01 FROM OUR PRESIDENT
ALPINA IS AN ORGANIZATION THAT HAS EVOLVED BY UNDERSTANDING IT IS PART OF A SYSTEM. We have taken a path full of challenges and opportunities, thanks to our industry and to the entrepreneurial and innovative character of our Alpinistas. We were pioneers when we decided that even though philanthropy in itself is a valuable act, it is not enough. We decided to take a step further and make Alpina a socially responsible company, by being a good neighbor that proactively creates projects for and with the communities of our area of influence. Once more, challenged by our surroundings and with the desire to lead the large-scale changes that we want to see in society, we came up with a new social business model to create opportunities for supply, nutrition and job creation for the population at the base of the social pyramid. In 2012, we experienced a new way of evolving. We aimed to increase the value generated by our business and by our partners in the value chain through better and more efficient use of our potential as a system. We gave ourselves an exciting challenge. If we really want our business and that of our partners to be sustainable then, it is time to strengthen sustainability at the center of our operations as a business through innovation, strategic planning and in the way we operate, at the heart of our processes and projects.
FROM THE MOMENT WE STARTED TO IDENTIFY AND UNDERSTAND THE CHALLENGES THAT DETRACT FROM OUR COMMITMENT OF MAKING ALPINA SUSTAINABLE, WE KNEW THAT WE WOULD NOT BE MAKING THIS JOURNEY ALONE. 4
The path is laid out. We developed a strategy to 2020 with our stakeholders. It outlines Alpina’s 7 Sustainability Challenges and the corresponding relevant issues and indicators. This measurable and standardized strategy for our operations allows us to compare ourselves to global standards. This roadmap defines how we will progress in our degree of sustainable maturity as an organization. From the moment we started to identify and understand the challenges that detract from our commitment of making Alpina sustainable, we knew that we would not be making this journey alone. We make the journey with the Alpinistas who carry out our business every day and also with our suppliers, distributors, clients, consumers, communities and other stakeholders that surround us and contribute to our daily tasks. We know that now we have to face a key factor to succeed in this journey. We must strengthen the culture of everyone who builds Alpina, so that sustainability becomes a responsibility, an opportunity that can and must be managed in the daily life of our business.
CHALLENGE 07.
CHALLENGE 06.
CHALLENGE 01.
DIALOGUE
SOCIAL VALUE
CHALLENGE 02.
SUSTAINABLE BUSINESSES
ECONOMIC VALUE
CHALLENGE 03.
CHALLENGE 05.
CHALLENGE 04. NUTRITION
ENVIRONMENT
ALPINISTAS
5
Chapter 02 ABOUT THIS REPORT This is Alpina´s fifth sustainability report, in which we share with our stakeholders our way of developing our business strategy to make it even more sustainable. The guidelines for drafting sustainability reports from the Global Reporting Iniciative (GRI-G3) and the food industry supplement are the methodological framework for creating our 2012 Sustainability Report.
Inclusiveness
With the aim of further increasing our stakeholders’ participation in the creation of our business’s future, in 2012 we carried out an open and interactive dialogue process with the participation of 667 people from five of our stakeholder groups (clients, community, consumers, distributors, agricultural suppliers and industrial suppliers) in Colombia, Ecuador and Venezuela.
Materiality
THE ANALYSIS OF THE DIALOGUES’ OUT COME LED US TO REVIEW AND FURTHER DEVELOP ALPINA’S 7 SUSTAINABILITY CHALLENGES. 6
Materiality refers to the process through which critical topics are identified and defined to ensure the business’ sustainability. The so -cal l e d “ Ma te rial i ty Dialogues” are simply a way to proactively open a process of listening and interaction with our stakeholders to collectively build a stronger and more inclusive sustainable business strategy. The topics of greatest impact and interest for our partners are identified through these conversations and combined
with those that are strategic and relevant for our business. Then, the “material” topics or critical issues that must be addressed in the short, medium and long term to make our business sustainable are selected. The analysis of the dialogues’ outcome led us to review Alpina’s 7 Sustainability Challenges and the relevant related issues. A comparative table of the evolution of these challenges is presented on the following page.
2011 Sustainabil i ty Report
2012 Sustainabil i ty Report
Challenge 01. Ethics and Transparency
Challenge 01. Dialogue
Build trust worthy, long-lasting and transparent relationships with our surroundings
Encourage trust worthy and mutually beneficial relationships with our stakeholders
Challenge 02. Economic Value
Challenge 02. Economic Value
Generate economic growth for our shareholders and our surroundings
Generate additional economic growth for our shareholders and investors and in our value chain.
Challenge 03. Alpinistas
Challenge 03. Alpinistas
Build the best place to work
Build a good place to work.
Challenge 04. Environment
Challenge 04. Environment
Create life from life
Ensure efficient use and preservation of the natural resources needed for our operations.
Challenge 05. Nourish your Life
Challenge 05. Nutrition
Provide healthy food for the world
Challenge 06. Value Chain
Guarantee the sustainability of each link in our value chain
Offer nutritional, healthy and delicious quality foods to the largest number of consumers possible.
Challenge 06. Sustainable Business
Strengthen the businesses of our strategic value chain partners.
Challenge 07. Social Value
Challenge 07. Social Value
Grow and develop together with society
Generate social value in the communities of our area of influence.
We will take the time in each chapter to explain the evolution of some the sustainability challenges. However, we think it is important to highlight the issue of ethics and transparency in this section. Our stakeholders made us see that ethics and transparency should not be expressed like the other challenges, as they feel that Alpina should address them as a higher-level, multidisciplinary issue. Furthermore, as comprehensive values, they must not be limited to quantitative indicators. The stakeholders recognized Alpina as an ethical and transparent company and they urge us to continue promoting and strengthening the mechanisms to ensure this.
7
Scope of the Report and Period
The contents of this report compile information from Alpina Colombia, Alpina Venezuela, Alpina Ecuador, Alpina Foods (United States) and Alpina Peru, for the period from January 1 to December 31, 2012. This report has an A+ self declared application level, according to GRI guidelines.
Chapter 03 OUR PERFORMANCE
Highlights
8
DELOITTE HAS VALIDATED OUR REPORT AND CONFIRMED THAT IT HAS AN A+ APPLICATION LEVEL.
9
Highlights
10
Chapter 04 ABOUT OUR ORGANIZATION
We talk about sustainability with: Juan Fernando Maya Alpina Ecuador General Manager Enrique Suárez Alpina Venezuela Director of Operations Felipe Cardona Business Development Manager
{AUGMENTED REALITY AVAILABLE}
Countries of Operation y Markets Supplied INDUSTRIAL OPERATIONS COLOMBIA VENEZUELA ECUADOR UNITED STATES PERÚ (JOINT VENTURE)
CORPORATE
LISTEN TO INTERVIEWS FROM THE REPORT’S ONLINE VERSION
COUNTRIES OF OPERATION AND MARKETS SUPPLIED COLOMBIA ADMINISTRATION
PRODUCTION CENTERS
REGIONAL DISTRIBUTION CENTERS
COLLECTION CENTERS
BogotáComplejo logístico San Cayetano Bogotá-Oficinas centrales
Caloto Chinchiná Entrerríos Facatativá Popayán Sopó
Barranquilla Bogotá Bucaramanga Cali I and II Cartagena Cúcuta Ibagué Medellín Pereira Popayán Sopó Villavicencio
Chigorodó Entrerríos Guachucal Simijaca Valledupar
ADMINISTRATION
PRODUCTION CENTERS
REGIONAL DISTRIBUTION CENTERS
STORAGE WAREHOUSE
CaracasCentral Offices
Villa de Cura
Caracas
Valencia
ADMINISTRATION Sopó Corporate Building
VENEZUELA
ECUADOR ADMINISTRATION
PRODUCTION CENTERS
REGIONAL DISTRIBUTION CENTERS
QuitoCentral Offices
Machachi San Gabriel
Guayaquil Machachi Quito San Gabriel
PRODUCTION CENTERS
COMMERCIAL PRESENCE
UNITED STATES ADMINISTRATION
Miami
Batavia
PERÚ ADMINISTRATION
Lima
COMMERCIAL PRESENCE
Bolivia
Aruba Barbados Bermuda Canadá Curazao Guyana Haití
Jamaica Puerto Rico St Martin Surinam Trinidad y Tobago
11
Corporate Principles Higher Purpose
At Alpina we are committed with FEEDING THE WORLD HEALTHILY. We firmly believe that LIFE CREATES LIFE. We are an intelligent organization that consistently achieves COLLECTIVE PROSPERITY.
Collective Commitments THE COLLECTIVE COMMITMENTS ARE REFLECTED IN A CONDUCT THAT IS KEY FOR MANAGING OUR 7 SUSTAINABILITY CHALLENGES. FOR THAT REASON: 1. We always work to inspire confidence in our food. And we are dedicated to this work, with the aim to provide food for all families. 2. We are committed to the community. Therefore, we are interested in generating wellbeing and development and we protect our environment. 3. We have great respect for our clients and employees, as well as the communities we work for. We value their diversity. 4. We believe in observing, interpreting, anticipating and responding to our consumers and clients and earning their loyalty and preference. 5. We believe in loving and being loved. Our brand represents us. 6. We believe in being innovative leaders. We provide ingenious and creative solutions. We are passionate about continuously learning and developing. 7. We take our food products everywhere people want to eat healthy. 8. We build a healthy and prosperous future for our clients, consumers, suppliers, employers and shareholders.
12
AT
/ C US
OV
I
NT
CLIE
HIGHER PURPOSE MEGA
2017
OPE EX
NA
BI
ON
AL
LI
TI
TY
RA
2017 Mega1 Our Goal for 2017 is to achieve sales of around COP 3.5 trillion (USD 2 billion) with a 27% share in income from operations outside Colombia.
CE
LLE
NCE
SUS
I TA
OPERATE BETTER
COMPETE BETTER
TO
INN
R ME
ON
Corporate Strategy
Main Brands and Products
At Alpina, we have a wide range of brands and products for different types of consumers in different categories:
1. Affordable Daily Product Line (Milk and Refreshing Drinks)
In the white milk range, we have a wide variety of products: whole, lactose-free, low-fat, skim, enriched and extra-calcium milk, in addition to Alpin flavored milk available in chocolate, strawberry, vanilla and the new cookies and cream flavor. This year, we launched the new Alpilac (not 100% milk) in the milk-based drink segment. On the other hand, in the refreshing drinks product line, we offer the Soka and Fruper soft drinks, Alpina Frutto fruit juice and the new citrus Alpifrut.
1 As part of the normal process of revising our projections and setting goals to expand our horizons, we adjusted our MEGA 2017 model.
13
2. Baby food and Indulgence Product Line In this product line, we have products such as Alpinito (petit and dairy drink), Arequipe Alpina (original, coconut), Alpinette (original and fruit chunks), Flan Alpina and original Boggy and Boggy Premio jelly.
In the baby food category, we have baby food, baby food with fructose, the new vegetable baby foods, baby food with yogurt (Comby),Néctar fruit juice, yogurt, yogurt with cereal, Alpina Baby and Alpinito Bebés ready-to-eat baby food.
3. Nutritional Product Line
In this product line, we offer a variety of traditional products well known among our consumers: Bon Yurt, Yogurt Alpina (original, lactose-free, light and spoonable), Avena Alpina, Kumis Alpina and YogoYogo (bag, cup, premium and cereal), as well the new Alpina-Juan Valdez Café Latte.
14
4. Functional Product Lines
Regeneris (chunks of fruit, fiber + cereal, zero, and with cereal), Finesse (yogurt, avena oat smoothie with cereal, cheese, milk and spreadable cheese) and Yox are the leading products in this category.
5. Cheese and Creams Product Line At Alpina, we have a large variety of cheeses in our portfolio: fresh white cheeses: Campesino and Reques贸n; sliced cheeses such as Mozzarella and Double Cream; yellow cheeses such as Sabana and Gouda; grated cheeses such as Parmesan and the Swiss, Italian and Mexican blends; spreadable cheeses such as Cream Cheese; Alpina aged cheeses such as Blue Cheese, Tilsit (natural, smoked and herbs), Gruyere, Emmental, Provolone, Manchego, Fondue, Brie, Camembert and Pecorino. To complement this product family, we also offer cream and sour cream, as well as sticks of butter and spreadable butter.
15
Production and Plants
Certifications
Percentage of Production Covered by Certifications from External Entities 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
16
ISO 9001
ISO 14001
HACCP
BASC
2009
86%
25%
74%
10 0 %
2010
9 0%
23%
81 %
10 0 %
2011
86%
20%
76%
10 0 %
2012
87 %
21%
78%
10 0 %
Production
Total Production of Plants in Colombia
2011 184,891
Sopó
45,431
Facativá
TONS
Chinchiná
29,621
Popayán
25,317
Entrerríos
TONS
351,916 TONS
35,803 TONS
35,468 TONS
30,894 TONS
VILLA DE CURA
35,420
TONS
2012
10,324 9,7 72
MACHACHI
Caloto
TONS
2011
51,842 TONS
31,236
TONS
Total Production of Plants in Venezuela and Ecuador
7,4 82 12,4 60
SAN GABRIEL
TONS
212,274
8,7 51
9,063
29,906 TONS
396,187 TONS
26,557 31,295
TOTAL
TONS
2012
TONS
TONS
17
Losses in Production
Losses in Production in Plants in Colombia
GOAL
ACTUAL
Sopó
32,982
28,995
Facativá
32,743
29,083
C aloto
7,503
Chinchiná
4,056
2,816
69.43%
Popayán
3,003
1,669
55.58%
Entrerríos
27,257
24,666
90.49%
25,311
22,045
87.10%
T O T A L
PERF ORMA NCE
87.91% 88.82% 67.79%
5,086
Losses in Production in Plants in Venezuela and Ecuador Pérdidas en proceso plantas en Colombia 1o2
LOSSES
%
18
Villa de Cura
5.09%
Machachi
1.43%
San Gabriel
0.55%
Corporate Model
Control by Administration and Management SOCIED AD ALP INA CORP ORATIVO S.A. ( P an amá)
Alpina Productos Alimenticios S.A. (Colombia)
Alpina Cauca Zona Franca S.A.S. (Colombia)
Alpina Productos Alimenticios C.A. (Venezuela)
Alpina Productos Alimenticios AlpiEcuador S.A.
Alpina Foods Inc. (USA)
Alpina Perú SAC
Fundación Alpina
Alpina Colombia S.A. and its subsidiaries are legal entities under the administrative and managerial control of Alpina Corporativo S.A., headquartered in Panama.
Control by Capital
A L PIN A COL OMB I A S .A. CO LOMBIA
E C UADO R
B AR B ADO S
A lp i na C au c a Zo na Fran c a S. A. S.
Al pi na Prod uc t os Al i m ent i c i os Al pi Ec ua d or S.A.
Vadi l bex Inve stm e nt Li m i ted
94%
99.9 %
60.8%
control por administración y gestión
19
Alpina Colombia Governing Bodies
AL P I N A C OL OM B I A S . A . GENER AL SHAR EHOLDER S M EE TIN G
Tax Inspector
Board of Directors
Audit Committee
The Board of Directors is composed of five (5) primary members and their respective personal alternates. By law, the Audit Committee is made up of the members of the Board of Directors. Both have at least three independent members. Deloitte & Touche has served as the Tax Inspector since 2009.
Legal Representative
In 2012, we worked on the Corporate Governance Strengthening and Business Management Monitoring Project, and set the following goals.
Strengthen Corporate Governance by formalizing the role of the key governance bodies and the Corporate Center, and by establishing the decision-making model, roles, responsibilities and powers that regulate interactions between different parts of the business. Design a model to monitor and oversee the management of the Business Units (countries), the Services and Productivity Center, and the Corporate Center for effective and timely analysis of information for making strategic decisions.
2012 Corporate Model Structure
Competitiveness, completeness, and local strategy
Business Units
20
Operational excellence, productivity and process efficiency
Centralized Processes
Corporate Center
Guidelines and policies, monitoring and managerial control, skills development
Innovation
Distribution of Investment in Research and Development 2009
2010
49
59
new products
= 1,4%
100%
= 1,4%
16%
80% 70%
GROSS SALES
= 1,2%
USD 9,59 MM
3% 27%
27%
40%
29%
INVESTMENT I y D
1% 15%
5%
50% 40%
GROSS SALES
= 1,0%
23%
26%
60%
INVESTMENT I y D
10%
8%
90%
new product
USD 7,66 MM
USD 8,03 MM
USD 7,95 MM
51
new products
INVESTMENT I y D GROSS SALES
2012
56
new products
INVESTMENT I y D GROSS SALES
2011
7% 39%
35%
30% 20% 0%
2009
22%
22%
21%
10%
2010
2011
24%
OPERATIONAL IMPROVEMENTS INFRASTRUCTURE DEVELOPMENT MARKET RESEARCH (PRODUCTS AND CHANNELS) NEW PRODUCT DEVELOPMENT NEW MARKET DEVELOPMENT
2012
WE BELIEVE THAT INNOVATION IS COLLABORATIVE AND THAT WE ALL HELP TO BUILD IT. FOR THAT REASON, IN 2012, WE STARTED INNOVAXI贸N, AN OPEN INNOVATION PLATFORM (INITIALLY FOR EMPLOYEES) THAT USES COLLECTIVE INTELLIGENCE AND CREATIVITY TO FIND SOLUTIONS FOR BUSINESS CHALLENGES. We formulated two business challenges, to which a total of 645 Alpinistas from all countries contributed 131 ideas. Experts in each topic are in charge of an in-depth study of the ideas with the greatest potential and the responsible areas implement the winning ideas if they are feasible. Innovaxi贸n is creating a new culture of joint creation and collaboration that will strengthen our capacity to provide innovative solutions for our business challenges faster and at a lower cost.
21
Ethics Hotline The EnthfiicdsentiHaotl lainned is a co s reporting anonymoum whereby, mechanis our employees can initially, nd/or seek advice report a nethical actions about utions that may or situa e interests of affect thnization. the orga In 2012, we focused awareness-raising activities on ethics in everyday situations and ethical dilemmas that Alpinistas may face when carrying out their work. The goal was to make Alpinistas question whether they are acting in line with Alpina’s ethical principles and guidelines. To this effect, we held training sessions with approximately 200 Alpinistas. We have also extended this work to certain stakeholders, such as distributors and industrial suppliers. The idea is to make them aware of the importance of ethics and transparency in Alpina so that they understand how, in their interactions with the company, they can contribute to sustainability through healthy relationships. Around 60 industrial suppliers from Colombia, Ecuador and Venezuela and around 18 distributors in Ecuador and Venezuela have participated in these training sessions.
22
Source of the Report
%
CASES 89
Employee
62.2%
17
Anonymous
11.9%
11
Costumer
7.7%
12
Community
8.4%
3
Client
2.1%
3
Supplier
2.1%
8
No applicable
5.6%
143
TOTAL
100.0%
Ethical Cases Reported by Category CASE
PERCENTAGE
56.6%
30
Other inappropiate activities
9
Conflicts of interest
17.0%
9
Human resources
17.0%
4
Appropriation of resources and assets
7.5%
1
Other
53
1.9 % 100.0%
Corporate Projects Go to Market Project
ALPINA IS NOW COMPETING WITH THE LARGEST AND MOST DYNAMIC COMPANIES IN THE WORLD. THERE ARE NEW COMPETITORS, NEW RETAILERS AND NEW FORMATS. CONSUMERS ARE SEEKING NEW OPTIONS. To keep ahead of this challenge, in the last months of 2012, we launched the transformational Go To Market Project to improve the practices that Alpina uses to reach the markets of Colombia, Venezuela, Ecuador, the United States and Peru. Its main objective is to create a competitive advantage in the market through tools, processes and methodologies that generate value for consumers, buyers and clients. In September 2012, we began the project with the Boston Consulting Group (BCG). BCG provided an initial assessment of our capacities in terms of best practices and conducted three pilot studies related to Comprehensive Portfolio Management, our Pricing Model and Distributor Management.
23
Parallel to this, the Go To Market Corporate Management Team was formed to develop skills, capacity and abilities to strengthen commercial and marketing practices in all of Alpina’s regions. To develop this capacity, the sales and marketing departments of the Business Units will be provided with tools, methodologies and training on pricing strategies, promotions, interactions with consumers and buyers, and channel management, among others, which will lead to the sustainable and profitable growth of the business. The efforts to improve our Go to Market practices contribute to our strategy, as they enable us to be more innovative, they strengthen our operational excellence, and they ensure our sustainability, but, above all, they bring us closer to our consumers and clients. Through a process of change and transformation, this team will bring Alpina closer to the market and closer to our consumers.
The effoMrtsarketot imprpracovtice esour Go to ute to our strategy, contribey enable us to as thore innovative, they be m then our operational streng ce, and they ensure excellen stainability, but, our suall, they bring us abseovre to our consumers and cloents. cli
Lean Six Sigma Model
Operational excellence optimizes the value chain, from relationships with our suppliers to the satisfactory delivery of products to our clients, delivering the best products on time and at the lowest cost and helping the organization to achieve its MEGA. This is based on a business culture of continuous improvement, management principles that create value and practical tools.
For the model to succeed, it is necessary to have a corporate policy supported by the organization’s senior management in order to lead change and maintain a long-term perspective by developing talent and promoting a culture of continuous improvement.
24
CLIENT Challenge
ZERO DEFECTS, STABLE PROCESSES
PROMPTNESS
PLANNING AND LOGISTICAL EXECUTION
W O R L D - CL AS S P E R F O R M A NCE
SUCCESSFUL PRODUCTS
The basis of Lean Six Sigma is that each process and level of the organization contributes to the objectives. This is achieved by a step-by-step methodology of defining, measuring, analyzing, improving and controlling, and the monitoring of the processes by the paths of excellence, which help us to understand where we are and where we are going.
CONTINUOUS KAIZEN IMPROVEMENT, GOOD MANUFACTURING PRACTICES, AND LEAN SIX SIGMA
Applying principles
Kaizen Attitude
EMPOWERMENT L EADER SHI P
Pil ars of the Lean Six Sigma Model
Integration
In 2012, we trained employees from different areas of the company to become green belts2 and black belts3 : Parallel to this first round of training, 13 company improvement projects were implemented in Logistics, Administrative Efficiency and Manufacturing for Colombia and Ecuador.
• Black belts: 15 • Green belts: 48
Strategic Technology plan Through a series of world-class technological support efforts, the project proposes a comprehensive solution for the entire value chain with “end-to-end” process optimization, producing a quick, optimized and efficient model. We implemented four applications:
DEMANTRA DEMAND MANAGEMENT: This program allows us to predict product demand in a given period of time.
ORACLE TRANSPORTATION MANAGEMENT: This program supports logistics and transportation management.
STRATEGIC NETWORK OPTIMIZATION: This program allows us to model and design the network of Alpina’s value chain, supporting decisions to develop the business’s capacity and comprehensive planning.
ADVANCED SUPPLY CHAIN PLANNING: This program helps to plan production, purchasing and the distribution of the end product to the four regions where we now operate. It also takes into account restrictions on equipment, human resources, suppliers and routes for the entire value chain.
2 Green belt: Employee who has completed two weeks of training on the Lean Six Sigma path and who is responsible for applying the tools with the assistance of a Black Belt. 3 Black belt: Worker who has completed five weeks of training on Six Sigma statistical tools and Lean tools and who has experience in leading teams for multi-functional improvement processes. Black belts, together with process owners, are in charge of implementing the methodology to make projects successful.
25
Integrated Protection System for Assets and People (SIPAP for its Spanish acronym) Rigorously analyzing the risks in the processes of our value chain and being committed to ensuring they are controlled led us to implement a comprehensive protection management model. We carry out several activities using this system:
PROTECTION OF FACILITIES: We carry out the control and verification of the company’s specific processes, interacting with the business’s associates and minimizing the risks that could affect our value chain. We designed a loss reduction plan for regional distribution centers (focusing on the control of buckets and containers, liters of raw materials and internal consumption).
SUPPLY CHAIN SECURITY FLEET: We outlined the control and traceability of our transportation fleet, optimizing the operation’s time and resources.
CORPORATE SECURITY RISK ANALYSIS CONTROL CENTER: We established six regional control centers in Colombia, Venezuela and Ecuador to send information in real time about events that affect our value chain in order to carry out the corresponding analyses and make decisions quickly.
26
Awards and Recognitions Innovation and Product Line
PORTAFOLIO (BUSINESS ELITE SURVEY): Alpina was placed first as the company with the highest quality products and was among the top ten in the following categories: most admired Colombian companies, best consumer service, best marketing strategy, best managed company, greatest social contribution and most powerful brand. RADDAR AND VIEWS: A study by RADDAR and Views Colombia ranks Alpina as the most loved brand among Colombian mothers. LA BARRA 2012: Alpina was recognized as the best dairy product brand. Alpina’s La Recetta was also recognized as the most complete distributor of the year. YANHAAS (ADVANCED MARKET RESEARCH): A study carried out for the Colombian National Federation of Shopkeepers (Federación Nacional de Comerciantes en Colombia, FENALCO for its Spanish acronym) ranked Alpina as the company with the second highest satisfaction rating for service among clients (shopkeepers). EFFIE AWARDS: Soka and its agency, Lowe SSP3, received the Bronze Effie in the Non-Alcoholic Beverages category, Fruper and Lowe SSP3 received the Gold Effie in the Promotions category and Bon Yurt Neón Alpina and its agency Leo Burnett received the Gold Effie in the Food category. P&M MAGAZINE: Bon Yurt Neón received the 2012 P&M award for the Best Digital Strategy in Colombia.
Financial Stability
WORKFORCE INVESTMENT BOARD– WIB: : The Workforce Investment Board (WIB) of the Genesee, Livingston, Orleans and Wyoming(GLOW) counties (New York), awarded Alpina as the Company of the Year in Genesee County. EL COLOMBIANO: EL Colombiano, the largest regional daily newspaper in Antioquia (Colombia), recognized Alpina with the El Colombiano Ejemplar Award in the Economy category.
27
Citizenship and Integrity
CORPORATE REPUTATION BUSINESS MONITOR (MERCO FOR ITS SPANISH ACRONYM): Alpina was fourth in the ranking of the most responsible companies in Colombia. 2012 PORTAFOLIO AWARDS: Alpina was the winner in the Environmental Protection category. BOGOTA CHAMBER OF COMMERCE: Alpina ranked fourth among companies most committed to the creation of shared value.
Reputation
CORPORATE REPUTATION BUSINESS MONITOR (MERCO FORITS SPANISH ACRONYM): Alpina is the company with the fourth best reputation in Colombia. REPUTATION INSTITUTE: Alpina is the company with the best reputation in Colombia. CIFRAS & CONCEPTOS: Alpina is the thirteenth (13th) most admired company in Colombia.
28
A JOURNEY FOR SUSTAINABILITY
Introduction It is interesting to look back, especially after all we have achieved. That’s why I like to re-read the pages of the agenda I kept in 2012, while I went from one place to another, having unforgettable experiences together with people committed to sustainably generating ideas and products supported by the confidence and quality that accompany Alpina every time it is mentioned. As someone who knows Alpina’s work, in these pages, I will record some of my experiences - our experiences, which we have shared as a team. For that reason, they include the words of everyone who has helped to write this story, or rather, this chapter of history we are still writing. Alpina has not just left its footprints in Colombia, but also in Ecuador and Venezuela and, more recently, in the United States and Peru. We are traveling through all these places, strengthening what has been successful and learning from our mistakes, so that the success we are a part of transcends geographical borders and time to become a legacy. When reading these lines, I understand how our daily efforts have helped to improve the lives of so many people, who sometimes remain anonymous, but who will benefit from what we do forever. I do not tire of reviewing everything we learned in this part of the journey. Regards,
A Companion on the Journey to Sustainability
29
Challenge 01
Dialogue
Alpina’s growth has been built on challenges overcame, experiences lived and lessons learned. Because if there is something that sets us apart today, it is the way we respond to the challenges that the business poses for us. The most difficult moments and, above all, the way we face them, defines and tests us. Now it makes sense to say this, especially when I review the determined way we acted when, thanks to a consumer’s report, we realized that there was a problem with the promotional item that came with our Boggy Premio product. Rarely have we had to deal with this type of situation, but I must say that this event served to confirm that, when these situations do arise, we
Sustainability, an issue for everyone.
{AUGMENTED REALITY AVAILABLE} WATCH ANIMATION HERE
30
confront them quickly, responsibly and efficiently, putting our procedures and our response capacity to the test and mitigating the associated risks. I could see how all levels of the organization, from Alpina’s management to our vendors and distributors, worked together to ensure that no unfortunate event occurred. Nobody is exempt from facing difficult situations. And that is exactly why it is so important that, when they do arise, we all know that what comes first is our consumers’ wellbeing and their trust in our products and decisions. This is and will continue to be our commitment.
Chapter 05 THE 7 SUSTAINABILITY CHALLENGES Challenge 1
WE AIM TO ESTABLISH STRONG BONDS WITH OUR STAKEHOLDERS BY CREATING SUITABLE PLATFORMS FOR DIALOGUE AND ENGAGEMENT. WE ENCOURAGE TRANSPARENCY, CONSTANT INTERACTION AND MUTUAL COLLABORATION AND WE INCLUDE THEIR EXPECTATIONS IN OUR STRATEGY AND IN THE COMPANY’S DAILYWORK.
A1. EFFECTIVE MANAGEMENT AND PROTECTION OF OUR REPUTATION
Enabling transparent and two-way communication with our stakeholders, working together and finding opportunities for innovation, in order to achieve recognition and be viewed positively. Our Stakeholders
SHAR EHOLDERS MEDIA
CUSTOMERS
NGOs
CLIENTS
GOVERNMENTS ALPINISTAS DISTRIBUTORS INVESTORS SUPPLIERS
COMMUNITIES 31
a. Dialogue Platforms
WE LAUNCHED OUR CORPORATE WEBSITE (www.alpina.com), WHICH CONTAINS GENERAL AND UP-TO-DATE INFORMATION ABOUT ALPINA, WITH AN AVERAGE OF 15,000 HITS PER MONTH. We strengthened our network of internal communication facilitators to improve the flow of information at all our offices and plants in the Americas. This network is made up of 62 Alpinistas. Thanks to this and other efforts, we produced 54 digital newsletters, 6 corporate magazines, 20 video newscasts, 28 local newsletters and 54 updates to
corporate bulletin boards, with the aim of keeping all Alpinistas informed of our progress. We also created the Dialogue Circle with the State, which is made up of Alpinistas whose responsibilities include permanent dialogue and relationship with government officials in the places where we operate. This community is a great resource as it gives its members the tools to improve the way in which these dialogues are carried out. Finally, we received 101 requests from media outlets to answer questions. Similarly, Alpina proactively issued 59 press releases with relevant information about its operations.
b.fromManagement of Commitments Arising Dialogue Platforms We developed the Healthy Information Program to strengthen dialogue between Alpinistas and the Company. How can we do it creatively? We created Mr. Hermes, the “healthy information messenger” who is the person in charge of linking Alpinistas’ questions and concerns from the Cundinamarca offices and plants with answers from the company. The results soon followed: Mr. Hermes answered the 241 questions asked by the Alpinistas.
Our CEO held eight in-person meetings with Alpinistas from across the organization, four open calls and two corporate forums to have detailed talks on the history, values, culture, strategy and future of Alpina and to acknowledge the contribution of each Alpinista to these actions. Similarly, the country’s general managers held six Alpina meetings attended by around 600 employees to discuss the progress of the local operations.
32
THE RESULTS SOON FOLLOWED: MR. HERMES ANSWERED THE 241 QUESTIONS ASKED BY THE ALPINISTAS.
We will continue to open the doors of our two plants in Ecuador to hold dialogue sessions with community leaders, local government officials and the media, from which specific commitments have arisen. We held 62 institutional meetings with local and national government officials in the five countries where we work. At these meetings, 58 commitments were made on which the organization and the governments can collaborate.
c. Global Reputation Index
At Alpina, we understand that our reputation is an asset that brings us closer to our stakeholders, allows us to create and maintain trust worthy relationships based on mutual benefit, and helps us become increasingly sustainable. We have decided to strengthen and develop our reputation through the systematic and rigorous management of how we act, interact, and discuss. For this reason, in 2012, we made the decision to carry out Alpina’s first Corporate Reputation Study with our stakeholders, in partnership with the Colombian Centro Nacional de Consultoría and the Spanish Análisis e Investigación, using the methodologies of MERCO, one of the most prominent business reputation monitors in the world. The result of the Reputation Study was a Global Reputation Index (GRI) of 862 out of 1,000 points, demonstrating our organization’s healthy reputation. In addition, the research gives us tools to align our business actions and our dialogue mechanisms with what our surroundings expect from us as a company.
WE ACHIEVED A GLOBAL REPUTATION INDEX (GRI) OF 862 OUT OF 1,000. NOTES
33
34
Challenge 02
Economic Value
How would Alpina’s founders feel seeing that, 67 years after laying the first stone of this company in Colombia, we laid the first stone of our first production plant in the United States? It has been a challenge to achieve something like this, a journey in an immense country. We have carefully studied and analyzed this market to understand it and to make the most of all the opportunities that it offers us. We know that Alpina’s products and our way of doing things can win the hearts of many U.S. consumers. We humbly understood that we could not repeat the exact same recipe wherever we go. Our success in winning over new regions is partly due to our curious and respectful approach where we do not assume that we know the markets already and to carefully studying the individual needs of each community and its consumers. Expansion is undoubtedly an inspiring and very demanding journey. We are willing to learn and to work as a team with the tenacity that defines us here and everywhere we go. Daniel Rodríguez, Alpina Foods Shared Services Manager, mentions the importance of “understanding the country’s culture very well” and of “developing a network of local contacts that have the necessary knowledge” to work harmoniously in an unknown territory. In the United States, we have the experience of our Revive Greek yogurt, a product that emerged from a good understanding of our environment and its dynamics: the consumers, the suppliers and even of the government authorities. We have a deep respect for the U.S. culture of immigrants, workers and pioneers, which we are now a part of by providing healthy food to the people who buy our products in this country. We are proud that we can create jobs at our Batavia plant and at milk farms throughout the state of New York. It has been an exciting journey. It excites me to think about how we are building it step by step.
35
Challenge 02
We have had the honor of being visited by people such as Kathleen C. Hochul, congresswoman from the state of New York, who accepted our invitation to attend the inauguration of our plant. As Daniel says: “Combining all the knowledge we have about providing healthy food with local U.S. talent made it possible for us to enter one of the biggest markets in the world.” This is Alpina and now it is also “Made in USA.” Capturing the Peruvian market was another challenge that we decided to take on this year. We studied our neighbors for a long time and offered them certain products that we exported from Colombia. This was how we gradually identified opportunities for growth with our consumers. At the right moment, we decided to take a fundamental step in this adventure, creating an alliance with a Peruvian company that allowed us to start producing our products on Incan soil. Thanks to that alliance, we launched Regeneris and Avena Alpina oat smoothie in Peru, two products that are new items for the Peruvian market. With the satisfaction of a job well done and with the reflection on the big challenge we still have ahead, Felipe Cardona, Finance and Business Development Manager states: “It has been a triumph to see the acceptance of Alpina’s arrival by stakeholders in Peru.” And I continue to reflect. The hours of work, our employees’ dedication, our values and our practices are undoubtedly the foundations that have led us to victory in our conquest of the world, which is just beginning. Taking advantage of opportunities to generate value.
{AUGMENTED REALITY AVAILABLE} WATCH COMPUTER GRAPHICS HERE
36
Challenge 02
WE SEEK TO BE A SOURCE OF GROWTH AND DEVELOPMENT IN THE REGIONS WHERE WE WORK, WHILE GENERATING GREATER VALUE AND STRENGTHENING OUR WIN-WIN BUSINESS RELATIONSHIPS WITH OUR PARTNERS THROUGHOUT OUR VALUE CHAIN.
a. Consolidated Performance
The results presented in this report correspond to the consolidation of our Business Units and not to the company names, except when explicitly stated. The complete audited financial information is attached to this report and refers to the company names, the structures of which are shown in Chapter 4. Our Organization Corporate Model.
Evolution of the Business Units’ Gross Corporate Sales in Tons.
2009
2 01 0
2 01 1
2 01 2
312,855
321,407
364,155
413,503
2.7%
13 .3 %
13 .6 %
TONS
YEAR-ON-YEAR GROWTH
TONS
TONS
TONS
37
Evolution of the Business Units’ gross corporate sales in local currency
2011
201 2
1,377,632
C O LO MB IA COP$ M IL L ION S
1,546,910
205,108
V EN EZU E L A Bs F $ T HOU SA N D S
238,282
52,890
E C UA D OR US D THOUS AN DS
62,295
6,287
U N IT E D S T A T ES US D T H O US A ND S
7,447
530
PERÚ USD THOUSANDS
1,596
Note: The historical assessment of Colombia includes ingredients, that of the United States includes Central America and the Caribbean, and that of Peru includes Bolivia.
Evolution of the Business Units’ gross corporate sales in dollars TOTAL
Gros s s a les in th ous a n ds of USD
2009 2010 2011
2012 38
Y E A R- O N - Y E A R GRO W T H
662,15 2
COP/USD Ac. 2009 BsF/USD Ac. 2009
2 , 15 6 2 . 15
COP/USD Ac. 2010 BsF/USD Ac. 2010
1, 8 9 9 4 . 30 1, 8 5 4 4 . 30 1, 9 14 4 . 30
737,960
11.4%
8 5 0,466
15.2%
COP/USD Ac. 2011 BsF/USD Ac. 2011
935 ,116
10.0%
CO P / U S D A c . 2 0 12 Bs F/ U S D A c . 2 0 12
Note: The historical assessment of Colombia includes ingredients, that of the United States includes Central America and the Caribbean, and that of Peru includes Bolivia.
Evolution of the Business Units’ gross corporate sales in COP YEAR-ON-YEAR GROWTH
TOTAL
Gross sales in millions of COP
20 0 9 20 10 20 11 2012
1,4 27,3 7 0 1,4 0 1 ,1 4 9
- 1 .8 %
1,57 6 ,7 63
12 .5 %
1,7 89,4 67
13.5 %
COP/USD Ac. 2009 Bs/USD Ac. 2009
2.156 2.15
COP/USD Ac. 2011 Bs/USD Ac. 2011
1,854 4.3 0
COP/USD Ac. 2010 Bs/USD Ac. 2010
1,899 4.3 0
COP/USD Ac. 2012 Bs/USD Ac. 2012
1,9 14 4.3 0
Note: The historical assessment of Colombia includes ingredients, that of the United States includes Central America and the Caribbean, and that of Peru includes Bolivia.
The Business Units’ EBITDA Percentage Evolution TO TAL % EB I T DA / G ro ss sale s
2 0 09 2 0 10 2 0 11 2 0 12
10.4 % 9.8% 10.5% 9.3%
Note: The historical assessment of Colombia includes ingredients, that of the United States includes Central America and the Caribbean, and that of Peru includes Bolivia.
39
Evolution of investments in COP
I N VE S TME N T m il l io n s o f C O P
C A P E X / SA L E S
2009
9 1 ,0 80
6.4%
2010
62 ,94 9
4.5%
2011
4 1 ,3 0 8
2.6%
2012
79 ,3 3 9
4.4%
b. Performance in Colombia
Evolution of Gross Sales in Colombia (Tons)
T OT AL
Y EA R-O N -Y EA R GRO WTH
TONS
2009
27 8,6 21
2011
3 3 0,441
2010 2012 40
291,923
4.8%
3 74,46 0
13.3%
13.2%
Note: The historical assessment of Colombia includes ingredients.
Evolution of Gross Sales in Colombia (Value)
TOTAL
mi llions of C OP
2009
1,185,748
2010
1,231,466
2011
1,377,632
2012
1,546,910
YEAR-ON-YEAR GROWTH
3.9% 11.9% 12.3%
Note: The historical assessment of Colombia includes ingredients.
IN 2012, WE CONTINUED OUR DOUBLE-DIGIT GROWTH WITH RESULTS OF 13.3% IN VOLUME AND 12.3% IN VALUE (WITH A GROWTH OF 13.2% AND 11.9%, RESPECTIVELY, IN 2011). WE CLOSED THE YEAR WITH AN EBITDA MARGIN OF 11.4% It is important to highlight the growth of the Refreshing Drinks (23%), Cheese and Creams (16%) and Milk (15%) product lines.
c.in Venezuel Performance a Evolution of Gross Sales in Venezuela (Tons)
TOTAL TONS
YEAR-ON-YEAR GROWTH
200 9
17, 514
2010
11, 20 4
-36.0 %
2011
12 , 875
14.9%
2012
12 , 314
-4.4% 41
2009
2010
2011
2012
141,871
156,193
205,108
238,282
10.1%
31.3 %
16.2%
YEAR-ON-YEAR GROWTH
TOTAL
tho u sand s o f B sE
Evolution of Gross Sales in Venezuela (Value)
In 2012, our sales volume decreased 4.4% and our sales value increased 16.2%. We closed the year with an EBITDA margin of 1.6% THE 2012 RESULTS WERE DUE TO A COMPLEX BUSINESS CONTEXT. In terms of inflation, in 2012, the National Consumer Price Index recorded a variation of 20.1%, lower than the previous year’s figure (27.6%), largely due to the implementation of the Law of Fair Costs and Prices4. Similarly, in terms of growth, the manufacturing sector (food) slowed down, with a GDP of 2.1% compared to 3.8% in 2011. There were also poorer results for the Cheeses, Soft Drinks, Desserts and Milk product lines due to products being held up at the border, low demand, absenteeism at our Villa de Cura plant, insufficient supply, and problems with packaging.
d. Performance in Ecuador Evolution of Gross Sales in Ecuador (Tons)
TOTAL
YEAR-ON-YEAR GROWTH
TONS
42
According to the text the regulations and the administration and control mechanisms necessary to maintain price stability and provide access to goods and services for the entire population under equal conditions within a social and economic framework that favors people’s interests over capital.
2009
14,293
2010
15,770
10.3%
2011
17,706
12.3%
2012
23,091
30.4%
Evolution of Gross Sales in Ecuador (Value)
TOTAL
2009
2010
2011
2012
41,074
47,427
52,890
62,295
15.5%
11.5%
17.8%
tho u sa n d s of U S D
YEAR-ON-YEAR GROWTH
IN 2012, WE ACHIEVED GROWTH OF 30.4% IN VOLUME AND 17.8% IN VALUE. THE EBITDA GREW BY 29%, CLOSING WITH AN EBITDA MARGIN OF 8.7%, COMPARED TO 6.7% IN 2011.
In Ecuador, we must highlight the implementation of industrial productivity, logistics and supply initiatives to benefit from the processes carried out within the Alpina Ecuador value chain and which allowed efficiencies of USD 949,000 to be achieved.
e. Performance in the United States Evolution of Gross Sales in United States (Tons)
2009
2 010
2011
2012
2,100
2,252
2,875
3,023
7.2%
27.7%
5.1%
TONS
YEAR-ON-YEAR GROWTH
TONS
TONS
TONS
Note: The historical assessment of the United States includes Central America and the Caribbean.
43
Evolution of Gross Sales in the United States (Value) In 2012, we achieved growth of 5.1% in volume and of 18.5% in value.
TOTAL t ho u s a nd s o f U S D
IN SEPTEMBER 2012, THE ALPINA FOODS TEAM OPENED THE DOORS OF THE NEW ALPINA PLANT LOCATED IN BATAVIA, NEW YORK.
2009
4,2 13
2011
6,287
2010 2012
YE AR - ON - Y E A R GR OWT H
4,955
17.6%
7,447
18.5%
26.9%
Note: The historical assessment of the United States includes Central America and the Caribbean.
In terms of our products, the oatmeal smoothie was the most prominent, representing 37% of total sales in terms of value, followed by Yogurt with 35% and the Central America and Caribbean range with 12%. In September 2012, the Alpina foods team opened the doors of the new Alpina plant located in Batavia, New York. THIS IS THE TENTH PLANT IN ALPINA’S TOTAL OPERATIONS AND IT WILL PROVIDE DIRECT EMPLOYMENT FOR AROUND 50 PEOPLE. INITIALLY, IT WILL HAVE THE CAPACITY TO PRODUCE AROUND 4,000 TONS OF YOGURT A MONTH. It has a privileged location, as it is near important milk sources, it has high-quality human resources available, there are nearby educational institutions that are experts in the dairy field, and it is a few hours away from important consumption centers such as the cities of New York and Chicago.
f. Performance in Peru
Evolution of Gross Sales in Perú (Tons)
2009
2010
2011
2012
327
257 TONS
258
616
-21.3%
0.0%
1 3 9. 2 %
TONS
YEAR-ON-YEAR GROWTH
44
TONS
Note: The historical assessment of Peru includes Bolivia.
TONS
Evolution of Gross Sales in PerĂş (Value)
TOTAL U S D Mil es
2009
2010
2011
2012
814
664
530
1,596
-18.5%
-20.1%
201.1%
YEAR-ON-YEAR GROWTH
Note: The historical assessment of Peru includes Bolivia.
In 2012, we achieved growth of 139,2% in volume and 201,1% in value. As part of our strategic objective to continue growing internationally, in May, with Avena Alpina, and in June, after an in-depth analysis of the Peruvian consumer and market, we moved into Peru with our functional Regeneris project, with production on Incan soil thanks to a joint venture with Andina Alimentos, a local dairy product producer.
IT IS IMPORTANT TO HIGHLIGHT THAT WE HAVE BECOME THE FIRST INTERNATIONAL DAIRY PLAYER TO BREAK INTO THE FUNCTIONALCATEGORY IN PERU WITH THE LAUNCH OF REGENERIS.
45
NOTES
46
Challenge 03
Alpinistas
I think about the passage of time. And it makes me happy, because I always see a promising future built with effort. We have been formalizing the Collective Pact for more than 30 years, reaching agreements in which all the Alpinistas of Alpina Colombia have participated transparently. Over these decades, we have capitalized on lessons learned, because if there is something that distinguishes Alpinistas, it is our care, responsibility and commitment to our task. I am part of this and it fills me with satisfaction. In May, we sat down with an open mind, ready to move forward with the 20122015 Collective Pact. We talked, we examined, we evaluated and we negotiated. And we achieved it. Best of all, we can tell our families that they will continue to receive extraordinary benefits and that we are still keeping our promise to generate prosperity for the workers and sustainability for the company. Also, we finished collective negotiations with two of our trade union organizations and agreements were reached on the Collective Agreements. I proudly see that dialogue and respect were a priority in this process, something that sets us apart and that has enabled us to go far. Beatriz Cortázar, Alpina’s General and Legal Secretary, was right when she said that “aligning the workers’ expectations with the company’s possibilities is an art. The key is to always be clear that the most important thing is to reach an agreement.” We have been and will continue working on this process, because the pact is part of our lives and the lives of our families. It is also part of Alpina’s past and future. This is our investment in the future.” The results make Alpina Colombia a pioneering company in these types of processes and an example in terms of the benefits it provides for its workers, always in balance with the company’s sustainability. What more could we ask for? Alpina University
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ALPINISTA 48
Challenge 03
WE ARE COMMITTED TO BUILDING A MOTIVATING, CHALLENGING AND PROSPEROUS WORK ENVIRONMENT.
Venezuela
Ec u a do r
United States
P e rú
3,9 38 649 842 5,4 29
168 0 0 168
662 0 0 662
16 1 0 17
0 0 0 0
DIRECT TEMPORARY OTHER SERVICES TOTAL
4,233 390 812 5,435
173 0 0 173
678 0 0 678
54 0 0 54
3 0 0 3
6 , 343
Note: Four project personnel who replaced employees on a project were not included. Due to internal policies, they are not included in the company's headcount.
T OTAL
Characterization of Alpinistas
6 , 276
Colombia
2011
DIRECT TEMPORARY OTHER SERVICES TOTAL
2012
This challenge had a slight variation. We had proposed being the best place to work, based on the name of a standard measurement methodology used in the industry. We are still not the “best” place to work, according to this methodology. Using our principle of transparency and our awareness of the need to improve, we changed the word “best” to “good”, so that it challenges us to continue implementing better and more powerful initiatives.
49
25 92 39 10 2
127 360 151 21 3
3 6 6 1 1
0 0 0 0 0
2012
Under 25 From 25 to 35 From 36 to 45 From 46 to 55 Over 55
537 2,010 1,385 627 64
19 92 48 10 4
117 359 172 26 4
3 26 10 14 1
0 2 1 0 0
Per Ăş
V e n ezu el a
519 2,065 1,402 549 52
E c u ad o r
C o l o mb i a
2011
Under 25 From 25 to 35 From 36 to 45 From 46 to 55 Over 55
Note: Includes only direct and temporary employees
50
United States
Age Groups
Percentage of Male and Female Alpinistas
C o l o mbia
V enez u ela
Ecuador
NUMBER OF WOMEN
PERCENTAGE OF WOMEN
NUMBER OF MEN
PERCENTAGE OF MEN
NUMBER OF WOMEN
PERCENTAGE OF WOMEN
NUMBER OF MEN
PERCENTAGE OF MEN
NUMBER OF WOMEN
PERCENTAGE OF WOMEN
NUMBER OF MEN
PERCENTAGE OF MEN
United States
NUMBER OF WOMEN
PERCENTAGE OF WOMEN
NUMBER OF MEN
PERCENTAGE OF MEN
P er ú
NUMBER OF WOMEN
PERCENTAGE OF WOMEN
NUMBER OF MEN
PERCENTAGE OF MEN
2011
2012
1,048 22.85% 3,539 77.15%
1,065 23.04% 3,558 76.96%
31 18.45% 137 81.55%
30 17.34% 143 82.66%
161 24.32% 501 75.68%
157 23.16% 521 76.84%
8 47.06% 9 52.94%
21 38.89% 33 61.11%
0 0.00% 0 0.00%
0 0.00% 3 100.00%
Note: Includes only direct and temporary employees
51
Length of Time as an Alpinista
C o l o m b ia
V en ez uela
E c u a d or
United States
P er Ăş
2011
2012
2,715 / 59.19% 246 / 5.36% 619 / 13.49% 834 / 18.18% 173 / 3.77%
2,658 / 57.50% 320 / 6.92% 497 / 10.75% 649 / 14.04% 499 / 10.79%
114 / 67.86% 43 / 25.60% 5 / 2.98% 6 / 3.57%
112 / 64.74% 47 / 27.17% 7 / 4.05% 7 / 4.05%
504 / 76.13% 115 / 17.37% 40 / 6.04% 3 / 0.45%
490 / 72.27% 126 / 18.58% 58 / 8.55% 4 / 0.59%
BETWEEN 0 and 5 BETWEEN 6 and 10
16 / 94.12% 1 / 5.88%
54 / 100.00% 0 / 0.00%
BETWEEN 0 and 5
0 / 0.00%
3 / 100.00%
BETWEEN BETWEEN BETWEEN BETWEEN OVER 21 BETWEEN BETWEEN BETWEEN BETWEEN BETWEEN BETWEEN BETWEEN BETWEEN
0 and 5 6 and 10 11 and 15 16 and 20
0 and 5 6 and 10 11 and 15 16 and 20 0 and 5 6 and 10 11 and 15 16 and 20
Note: Includes only direct and temporary employees 52
20 1 0
201 1
201 2
IN TE R N AL
4 . 5%
4 .2%
5.5%
E X T E RNA L
Internal and External Turnover
19 .0%
23.1%
12.2%
INTER NAL TUR NOVER (20 12)= Promotions + Transfers
EXTERNAL TURNOVER(2012)=
INTER NAL TUR NOVER (20 12)=
EXTERNAL TURNOVER(2012)=
Ave rag e h e ad c o u n t 20 12
265
4 ,80 9
Hire s + Re tire e s
Average hea dco u nt 2012
589
4 ,809
Note: Includes direct personnel in Colombia, Venezuela, Ecuador, the United States and Peru with indefinite contracts.
53
Collective Agreements AGREEMENT
TOTAL
PERCENTAGE
Not applicable Collective Pact Collective Agreement TOTAL
341 3,671 221 4,233
8.1% 86.7 % 5.2% 100.0%
VENEZUELA
Collective Agreement Not applicable TOTAL
97 76 173
56.1% 43.9 % 100.0%
ECUADOR
Not applicable TOTAL
678 678
100.0% 100.0%
United States
Not applicable TOTAL
54 54
100.0% 100.0%
PERĂš
Not applicable TOTAL
3 3
100.0% 100.0%
COLOMBIA
Note: Includes direct employees and project employees directly hired by the company. For Alpinistas not covered by the collective agreements, additional benefits are provided by the company.
54
A1. CONSTANT IMPROVEMENT OF THE WORK CLIMATE IDENTIFY THE OPPORTUNITIES AND NEEDS IN ORDER TO CREATE A FAVORABLE ENVIRONMENT TO DEVELOP OUR ALPINISTAS AND, IN THIS WAY, IMPLEMENT DIRECT ACTIONS IN RESPONSE.
a. Human Resources
We have a six-dimensional integrated system (work environment, culture, organization, compensation, talent and intellectual capital) that allows us to establish the strategies, tactics and action plans necessary to generate collective prosperity, to increase Alpinistas’ satisfaction and their contribution to the company, and to establish strong foundations for Alpina’s growth through its people.
Dimensions of Organizational Development
GROWTH
Vision toward the future
Intellectual Capital Organizaltional Development
SATISFACTION Retention
Human Resources
Organizational Development
Culture
Climate
Organizational Development
Organizational Development
Organization
CONTRIBUTION
Value generation
Compensation
COLLECTIVE PROSPERITY
Clarity - Transparency - Projection
55
WHAT DO WE WANT TO ACHIEVE THROUGH THIS SYSTEM? WORK ENVIRONMENT
To build a good place to work that is attractive, stimulating and prosperous, generating wellbeing for Alpinistas and sustainability for the business.
CULTURE:
To consolidate a culture model that integrates the attributes, the strategy and the corporate model, and that is tangible in processes and people, respecting the characteristics of each region where Alpina operates.
CULTURAL DEVELOPMENT
In 2012, wpre ocess started theizing the of synchron gy with the people straterategy to business st development promote the inistas’ of the Alp idelines: behavioral gu ulture. Corporate C
To do so, we analyzed our organizational models: Strategic axes, corporate model, model of skills and cultural attributes and the level of comprehension and coordination of each one. What came out of that? We built a critical action path that allows us to develop specific behaviors in Alpinistas that enhance their performance and growth, as well as ensuring that this behavior benefits the organization’s results.
Defines the priorities for investing in people:
Cultural Model
DIMENSIONS OF ORGANIZATIONAL DEVELOPMENT BUSINESS STRATEGY
Defines:
MEGA 2017 Defines the tactic: 56
STRATEGY
+
CORPORATE MODEL STRUCTURE
CULTURAL MODEL
PEOPLE STRATEGY
Great Place to Work Survey – Work environment and Culture
CLIMATE L abo r env iro nment indic ato r
Cu l t u ra l atributes indicator
COLOMBIA
56. 2
79.6
VEN EZUELA
45. 0
63 . 3
57 . 6
66. 7
9 1. 0
86. 0
ECUA DOR
COR P OR AT E ( 1 )
ALPI
NA
CULTURE
Note (1 ): Presid ency, Vice - Pres i d enc y o f C o r po rat e Affai rs , Vi c e- Pres i d enc y o f Fi nanc e and N ew Business Developm ent , Vi c e- Pres i d enc y o f Innovat i o n and Mar k et i ng, and Vi c ePres i d enc y o f S er v i c es and Pro d u c t iv i t y.
CLI M A T E V EN EZ U E LA
CLIMATE
L ab or e nv iron m e n t in d ic a t or
CO L O M B I A Lab or env i ron m e n t i n d ic a t or S u pply C h a i n De pa r t m e n t
4 4.7
M a n u f a c t u r i n g De pa rt m e n t
55.7
M a rk e t i n g De pa rt m e n t
6 1 .0
N a t i o n a l S a le s De pa r t m e n t
8 5.4
Ag r i c u lt u r a l S u pply De pa rt m e n t
9 5.7
Operat ions
39.5 CLI M A T E EC U A D O R L ab or e nv iron m e n t in d ic a t or
Ind us t rial and L ogis t ical Prod uct ivit y Depart ment
46.6
Ecuad or Sales Depart ment
7 9.5
Not e: The res ult s for Peru and t he U.S. have not b e e n record ed s eparat ely as t hey are new regions .
57
Participation in the GPTW Survey
2012 C O LO M B I A
89.0 %
V EN EZ U EL A
67.7 %
EC U AD OR
C O R P O R AT E ( 1 )
93.5% 9 5.8 %
No t e ( 1) : Pre si d e n c y, V ice - Pre s i de n cy of C or porate Af f airs , V i c e - Pre si d e n c y o f Fi n an ce an d Ne w B us in e s s Deve lopm e n t, Vi c e - Pre si d e n c y o f In novation an d Mar ke ti n g, an d V i c e - Pre si d e n c y of Se r v ice s an d Productiv i ty.
58
In September 2012, the fifth survey on the work environment and culture was carried out with the Great Place To Work Institute® to learn about Alpinistas’ perceptions of Alpina as a place to work. An analysis of the information collected revealed that the work climate continues to be a challenge for all Alpinistas. The results showed progress in areas such as the Corporate Vice-Presidency; in Alpina Ecuador in Commercial Management; and in Alpina Colombia in the Agricultural Supplies Department, the National Sales Department, the Regional Distribution Centers of Cali and Ibagué, the Division of Automobile Maintenance and in the Caloto, Chinchiná, Entrerríos, Facatativá and Popayán plants. They also showed that Venezuela should be a region of focus, as should Ecuador, particularly in Industrial Management. In Colombia, Logistics Management and the manufacturing area, specifically the Sopó plant, need the greatest amount of work. This is according to the different aspects that both Alpinistas and Alpina must work on and have been working on as a team (including accessibility, coordination, participation, absence of favoritism and workplace comfort) to ensure that this indicator improves alongside the organization’s results. Building a good place to work continues to be one of our main challenges.
ORGANIZATION:
To consolidate Alpina as a live, dynamic and adaptable system that grows sustainably, in line with the organization’s strategy.
COMPENSATION:
To develop fair and competitive benefits and compensation practices that promote a high-performance culture at Alpina.
HUMAN RESOURCES:
To refine a model to attract, retain and develop talent that generates growth for Alpinistas and the organization, making us leaders in human resource management.
INTELLECTUAL CAPITAL:
To increase the value of intellectual and human capital; to increase the contribution and satisfaction of our Alpinistas through knowledge management and by developing behaviors among Alpinistas and capacities in the organization.
In 2012, we launched and implemented Phase 1 of the Alpina University. The objective of the Alpina University is to teach and manage knowledge throughout the organization, creating knowledge by Alpina for Alpina, under the following training structure:
D E PA R T M E N T S
Alpina University Training Structure SUSTAINABILITY
Ensure positive impact among multiple stakeholders. Act as good corporate citizens.
OPERATIONAL EXCELLENCE
Operate at an exceptional level in all of our processes. Seek and develop world-class operating standards.
HUMAN RESOURCES
Have people who are better trained to meet adaptive and technical challenges of the present and the future.
INNOVATION
Enhance Alpina's Code of Constant Innovation. Challenge, question, improve, evolve.
CLIENT / CUSTOMER
Develop a reputation based on our capacity to surprise and lead clients and customers.
UNIVERSIDAD ALPINA
PHASE 1:
Definition, design and implementation 2012
PHASE 2:
Definition, design and implementation 2013.
59
Alpina University Training
COLOMBIA
ECUADOR
VENEZUELA
UNITED STATES
Hours
People
Hours
People
Hours
People
Hours
Human Resources Department
2,919 19,718
118
472
0
0
46
788
Sustainability Department
2,183 41,356
163
652
300 1,200
0
Sustainable Leadership
30
2,436
20 1,372
10
0
1 286
2
0
Specific Programs
7,750
228
228
769
4
4
0
0 46
0 788
People
TOTAL
5,901 71,260
306
1,438
Number of people trained
6,539
Number of training hours
74,858
Number of training sessions
409
CURRICULUM IN 2012, WE PARTICIPATED
BENEFICIA R IES
Strategic evolution of Alpina's current business models based on sustainability.
FOR SPECIALIZED CONTINUING EDUCATION PROGRAMS.
Structure and alignment of upper management to develop a world-class organization.
We presented the following 10 training
Cultural transformation toward Alpina's competitiveness and productivity.
initiatives:
Development of strategic skills to implement organizational productivity models among human resources to transform them into a competitive advantage.
60
Senior Management Programs
Management of Alpina's productive strategic development through its people.
232 l e a d e r s t r a i n ed
IN THE SENA’S CALL FOR TENDERS
SENA Company Programs CU RRI C U L U M
BENEFICIARIES
Phase 1: SEPA (Alpina Excellence and Productivity System) implementation - Lean Six Sigma.
Sustainability training on Alpina's global competitiveness.
Change management to implement strategic evolution and organizational transformation models.
Comprehensive employee management to develop competitive advantages by generating human capital at Alpina.
1 ,0 72 A l p i n i s t a s i m p a c t ed
Talent development to increase individual levels of contribution and organizational productivity at Alpina. Human capital as a competitive advantage.
We have also established an agreement with the SENA (National Training Service) for online English courses on the Rosetta Stone platform, with the participation of 348 Alpinistas.
b. Occupational Health and Wellness
At Al p ina, we want to Generate a Mutual Care cul t ure, were al l Al p inistas are responsibl e for our care and the care of their col l eagues, with actions designed to protect life, security and wellbeing. In 2012, we developed initiatives as part of the Strategic Occupational Health Plan that achieved changes in behavior that translate into safer conduct and the reduction of accidents and illnesses. The following initiatives and their objectives stand out:
In Your Hands Accident Prevention and Control Strategy – Your Hands are Part of Me:
Prevent and reduce the severity and consequences of accidents that may arise, mainly in the production plants.
61
Lifesaving Program – Reporting Unsafe Incidents, Actions and Conditions:
Report and efficiently ensure that people’s unsafe actions and conditions are corrected to control the risks that cause accidents and injuries.
Dangerous Power Program:
Avoid the occurrence of serious and severe accidents caused by the power from machines and equipment used in the production process.
Program to Prevent Motorbike Accidents:
Reduce the frequency and severity of injuries related to transit accidents by enforcing the responsibility to respect safety regulations.
Cardiovascular Risk Program:
Reduce cardiovascular risk, excess weight and obesity to improve health, quality of life and life expectancy.
Prevention Schools Program:
Reduce the occurrence of muscular problems and diseases with an exercise conditioning plan adapted to Alpinistas’ health and the characteristics of their work.
Active Breaks Program:
Promote healthy lifestyles and prevent the occurrence of muscular diseases through exercise.
Work Inclusion Program - Key People:
Strengthen the leadership capacity of employees with work restrictions.
AT ALPINA, WE IMPLEMENT OUR COMPREHENSIVE CORPORATE WELLNESS PLAN IN LINE WITH THE INTERESTS AND NEEDS OF OUR ALPINISTAS IN ORDER TO IMPROVE THEIR QUALITY OF LIFE, STRENGTHENING THE WORKER, COMPANY AND FAMILY BOND. 62
7. 56
8.00
9. 26
9. 6 5 8. 80
10.00
8. 30
12.00
1 0. 20
14.00
9. 89
1 3. 00
Rate of disabling accidents
6.00
0.00
ALPI
NA
1 . 05
0. 00
2.00
1 . 70
2. 1 0
4.00
20 0 9
2010
VENEZ U ELA ECU ADOR
2012
2009
20 10
20 11
20 12
8.30
8 .8 0
13.00
9.8 9
0 .00
2.10
1.70
1.05
10 .20
COLOM BI A
2011 9.26
9.6 5
7.5 6
36 2
308
COLOM B I A VENEZ U ELA ECU ADOR
7
10
17
22
0
15 9
50 0
22
350 300 250 200 150 100
337
400
35 7
Cases of Disabling Accidents
20 0 9
20 10
20 11
20 12
22
15
22
17
0
9
337
35 7
36 2 10
308 7
63
3,332
Days Missed Due to Accidents
2,500
2, 576
2, 26 9
3,000
2, 4 09
3,500
2,000
32 27
38 61
72 70
20 10
20 11
20 12
0
1,000 500 0
340
1,500
20 0 9
2 00 9
2 010
340
32
0
27
2 , 4 09
C O L OM B I A VENE ZU E L A EC UA D OR
2 011
2 0 12
3,332
2 , 2 69
2,576
38
72
61
70
Note: Based on the February 2012 update for SURA Occupational Risk Management, the consolidated data for the 2011 Sustainability Report have been changed.
25,000
23,0 45
30,000
20,4 52
35,000
23,3 78
31 ,2 40
Absenteeism (Days Missed for Medical Reasons)
20,000
COLOM B I A
VENEZ U ELA
64
ECU ADOR
20 10
20, 452
23,04 5
3, 751
2,305
1, 202
648
20 11
31,24 0 2,309 1,06 4
32 4
1,064
6 48
1,202
3,104
VE NE ZUE L A
2 009
COLOM BI A
2,309
5,000 0
3,7 51
10,000
2,3 05
15,000
E CUA DOR
20 12
23,378 3,104 324
2009 2010 2011 2012
Success Story In 2012, we introduced this program with one main objective: To develop the skills of leaders and the necessary capacity to establish business models and to propose initiatives based on sustainability and shared value. Above all, the program achieved an important change in the degree of awareness of the forty selected leaders regarding the importance of seeing the bigger picture when making business decisions. These high-influence leaders strive to replicate the culture of doing sustainable business throughout the organization by considering the generation of greater value in the medium and long term, making intelligent use of natural resources, and generating social prosperity at the same time as producing greater financial profits. As a result of the program, we created eight business cases that will be investigated to analyze the feasibility and impact of their respective implementation.
BUSINESS CASES The methodological process to decide on the business cases meant that our leaders had to open their minds and learn new concepts, make field visits in new conditions, develop whitepapers, analyze the variables of the company and its surroundings, work alongside different stakeholders, and develop new leadership perspectives to drive change. We defined this process as a way to build strong business cases aligned with Alpina’s need to create shared value and include sustainability in the company’s daily operations.
THE EIGHT BUSINESS CASES ARE: • FORMATION OF ASSOCIATIONS BY SMALL-SCALE PRODUCERS OF GUACHUCAL (COLOMBIA). • COLLABORATIVE COMMERCIALIZATION CHANNELS. • WASTE WITH VALUE. • STUDY OF ALPINA VENEZUELA MILK SUPPLY SOURCES. • MILK SUPPLY AT ALPINA COLOMBIA. • PARTNERSHIP FOR MILK SUPPLY IN THE CARCHI PROVINCE. • FRESH CHEESE ALLIANCE IN CAQUETA (COLOMBIA). • ENVIRONMENTALLY FRIENDLY STRAWBERRY AND BLACKBERRY FARMING CLUSTER.
65
A2. DEVELOPMENT OF KEY TALENT TO HAVE A CORPORATE TALENT SYSTEM SO THAT ALPINISTAS WITH POTENTIAL CAN BE IDENTIFIED AND TRAINED AS SUCCESORS FOR CRITICAL POSITIONS AND SUPPORTED BY HUMAN CAPITAL FOR GROWTH.
Starting in 2013, we will implement a strategy for the organization’s critical positions to be filled by key talent. Alpinistas who have the highest level of knowledge, skills and performance will occupy these positions.
NOTES
66
Challenge 04
Environment
We often forget that we are part of something bigger than ourselves. That, like other living creatures, we are part of a system. When some years ago, we started to talk about caring for the environment and the appropriate management of natural resources, we were just becoming aware of what this meant. As time went by, we started to understand what it really means and how to turn it from theory into practice.
At Alpina, we do not speak in abstract terms when it comes to taking care of the environment. We are very clear about the three priorities that every Alpinista must take into account. The first is that we should use water responsibly. We can make the most impact by reducing our operations’ consumption and encouraging the responsible use of water among our milk suppliers. The second is to work to reduce greenhouse gases, which increase the world’s temperature and affect many of its species and ecosystems. That is why we are seeking more environmentally friendly and clean energy options. Finally, we work to reduce the waste produced at our plants and by our packaging, which must use less material and be more environmentally friendly. Our commitment is to help to conserve the environment throughout the value chain. This dream, which seemed
difficult to achieve a few years ago, we now see as more and more possible, through the simple principle of doing more with less. Everything depends on our capacity for innovation and creativity. An example of this was the experience we had with the Phoenix Group and the proposal we made to reuse the boxes in which the plastic cups for many of our products come packed. We formed a team to take care of the material, finding the workforce in a vulnerable, disadvantaged population that we trained and assisted throughout the process of creating their company. It’s incredible! Now there are two recycling companies, one in Bogotá and another in Medellín, with 15 families benefiting from this initiative. This experience has meant good savings and important environmental benefits for us. In fact, this is a great example of how to make the best possible use of natural resources, obtaining productivity beyond financial profit.
The Water Cycle
{AUGMENTED REALITY AVAILABLE} WATCH VIDEO HERE
67
68
Challenge 04 WE UNDERSTAND THAT GROWTH MUST BE ACCOMPANIED BY THE EFFICIENT AND SUSTAINABLE USE OF RESOURCES IN OUR OPERATIONS AND IN THOSE OF OUR PARTNERS IN THE VALUE CHAIN.
(C OP MM)
8,000
350,0 0 0
6,000
300,0 0 0
5,000
250,0 0 0
4 ,000
200,0 0 0
2,000 P RO D U CT IO N (t)
400,0 0 0
7,000
3,000 EN V IRO N MEN TAL IN V E S TM E NT S (IN C O P)
450,0 0 0
7,9 6 9
1 ,626
1,24 9 313
-
Investment in Environment Projects
150,0 0 0
1,4 71
1,000 T OTAL 2 008
TOTAL 2 009
TOTAL 2 01 0
PR ODU CTION (t )
9,000
TOTAL 2 01 1
100,0 0 0 50,00 0 -
TOTAL 2 01 2
A1. EFFICIENT WATER MANAGEMENT
Work to reduce the consumption of water resources in our operations and in our value chain, as well as ensure the quality of the water that is returned to tributaries.
WE ARE CONTINUING TO MEASURE ALPINA COLOMBIA’S WATER FOOTPRINT WITH THE SUPPORT OF QUANTIS INC, AN INTERNATIONAL CONSULTING GROUP, TO QUANTIFY THE ENVIRONMENTAL IMPACT RELATED TO WATER USE THROUGHOUT THE VALUE CHAIN. We are using a Water Cycle Analysis approach, including surveys and estimations of water management among agro industrial and industrial suppliers, our own operations and our own and outsourced logistics distribution chain. The detailed report of the survey will be submitted in September 2013.
69
THIS EFFICIENT WATER MANAGEMENT WAS FOCUSED ON THE FOLLOWING PLANTS: • •
• •
SAN GABRIEL PLANT (ECUADOR):
We collected information and established actions for efficient water use, which range from the standardization of washing times to installing water recovery tanks for rinsing.
SOPó PLANT (COLOMBIA): We proposed new standard cleaning times with modern hygiene and
disinfecting products, as well as the implementation of guidelines to use water resources efficiently. We also made some recommendations for improvements in infrastructure and equipment required for optimization, including tanks, flow meters, in line meters, pumps and dispensers, and the evaluation of new physical and chemical technologies for washing processes.
CHINCHINá PLANT (COLOMBIA):
We contracted modernization services for the wastewater treatment plant that is currently in design process.
VILLA DE CURA PLANT (VENEZUELA): We are in the process of starting the upgrade of the wastewater
treatment system.
Eco-index of Water Used in Our Operations 9.0 0
5.7 4
6.0 0
40 0,0 0 0
5.9 8
5.5 4
5.4 2
30 0,0 0 0
5.0 0
25 0,0 0 0
4 .0 0
20 0,0 0 0
3.0 0
150,0 0 0
2.0 0
10 0,0 0 0
1 .0 0
50,0 0 0
0.0 0
TOTAL 2008
TOTAL 2009
T O T AL 2010
T O T AL 2011 3
TOTAL WAT ER ECO- IND EX (m / t)
PRODUCTI ON (t) No t e: T hi s i n clud e s A lp ina p la nts in Colom b ia , Venez uela a nd Ec ua d or, t h e S i mi j a c a a n d G u a chuc a l c ollec tion c enters, regiona l d istrib ution c enters, p r i m a r y logi stic s, a nd the Sop ó Corpora te B uild ing.
70
35 0,0 0 0
T O T AL 2012
0
PR OD U CTION (t)
7.0 0
7.2 4
3
TOTAL WATE R E CO-INDE X ( m / t)
8.0 0
45 0,0 0 0
Water Collected in Our Operations 45 0,0 0 0
2,500,000
2 ,384 ,806 1,863,584
2,000,000
2 ,026,127
2 ,09 5,688
2 ,3 00,7 45
3 5 0,0 0 0 3 0 0,0 0 0 25 0,0 0 0
1,500,000
20 0,0 0 0
1,000,000
15 0,0 0 0 10 0,0 0 0
500,000 0
40 0,0 0 0
PR O D UCTI O Nt)
Water con s u mpti on ( m 3)
3,000,000
5 0,0 0 0 TOTAL 20 0 8
TOTAL 20 0 9
TO TAL 2 01 0
TO TAL 2 01 1
TO TAL 2 01 2
0
Alp i na wa t e r c o n s umpt i o n ( i n d us t ri al an d ag e n c i e s ) ( m3 )
PROD U CT IO N (t )
No t e: T h i s i nclu de s A l pi n a pl an t s i n C o lo mb i a, Ve n ez ue l a an d Ec uad o r, t h e Si m i j a c a a nd G u ach uc al c o l l e c t i o n c e n t e rs , regi o n al d i s t ri b ut i o n c e n t e rs , p r i m a r y logi s t i c s , an d t h e S o p贸 C o rpo rat e B ui l d i n g.
Wastewater
98.0 %
9 6,6%
Removed COD lo ad ( %)
97.0% 96.0% 95.0%
96 ,4 %
97.7 %
97.9 %
4 5 0,0 0 0 4 0 0,0 0 0 35 0,0 0 0 30 0,0 0 0
95.0 %
25 0,0 0 0
94.0%
20 0,0 0 0
93.0%
15 0,0 0 0
92.0%
10 0,0 0 0
91 .0%
5 0,0 0 0
9 0.0%
TOTAL 20 0 8
TOTAL 20 0 9
T OT AL 201 0
T OT AL 201 1
T OT AL 201 2
PR O DU CT I ON ( t )
99.0%
0
Rem oved CO D load (%)
P R O DU CTI O N (t ) No t e: T h is in cl u de s A lp i n a p lan ts i n Colom bi a, Ven ez uela an d Ec uad or, t h e Simij a c a a nd G u a ch u c al c ollec ti on c en ters an d the S op 贸 Corporate B ui ld i n g.
71
A2. EFFICIENT MANAGEMENT OF ENERGY AND CLIMATE CHANGE.
Find alternatives to optimize energy consumption and mitigate greenhouse gas emissions in the organization, with the goal of establishing good practices that can be replicated in other links of the value chain.
a. Energy
IN JULY 2012, WE STARTED TO USE BIOGAS GENERATED FROM THE WASTEWATER TREATMENT PLANT AT THE SOPÓ PLANT (CUNDINAMARCA, COLOMBIA), REPLACING MONTHLY CONSUMPTION OF APPROXIMATELY 6,000 GALLONS OF DIESEL FUEL. This is how we are partially using this renewably sourced fuel, which meant a reduction of about 2% in the Carbon Footprint of Alpina Colombia’s operations. We considered and assessed efficient lighting alternatives and we came to the conclusion that induction lighting is best suited to our needs in terms of the cost: benefit ratio. Therefore, we will initially use this type of lighting at the Sopó (Cundinamarca, Colombia) national distribution center (“Cendis”).
Types of Industrial y Consumed Energy
PE R CE N TAG E O F U SE IN OPERATIONS
45 % 35 % 30%
41%
38%
40%
3 6%
29% 23%
25% 20%
20%
15 %
7%
10% 5% 0%
0% NATURAL GAS ( GJ)
EL EC TR IC ITY (G J)
0%
HEAVY CR U D E O I L n o . 6 ( G J)
20 11
5% 0%
D I ES EL ( G J)
P R OP AN E G AS ( G J)
20 12
No t e: This includ es A lpina p l an t s in Colom b ia, Ve n ez u e l a an d Ecu ador, t he S imij aca and G uachuc al c o llec t io n ce n t e rs, region al dist r ib u t ion ce n t e rs, p r imar y logist ics, milk mar ke t in g, an d t he S op ó Cor porat e Bu il din g.
72
0%
G ASOLINE ( GJ )
3.10
3.05
3.0 0
Eco-index of Energy Consumption in our Operations 2.86
2.9 7
2.3 4
2.50
450,000
400,000 350,000 300,000
2.0 0
250,000 200,000
1.50
P R OD U CTI ON(t )
E C O-IN DE X OF TOTAL C ON SU ME D E N E R G Y (GJ/t )
3.50
150,000
1.0 0
100,000
0.50
50,000
0.0 0
TOTAL 200 8
TOTAL 200 9
TO TAL 201 0
TO TAL 201 1
TO TAL 201 2
ECO-INDEX OF TOTA L C O N S U M ED EN ER G Y (EL ECTR I C I TY A N D F U EL ) PRODUCTION (t) Note: This includes Alpina plants in Colombia, Venezuela and Ecuador, the Simijaca and Guachucal collection centers, regional distribution centers, primary logistics, milk marketing, and the Sop贸 Corporate Building.
1 ,0 0 5,9 3 6
Energy Consumption in our Operations
836,7 04
80 0,0 0 0
300,0 0 0 25 0,0 0 0
0
255,7 80
2 4 4,4 9 9
2 18,2 17
1 99,659
20 0,0 0 0
4 00,0 0 0 35 0,0 0 0
6 0 0,0 0 0 4 0 0,0 0 0
4 5 0,0 0 0
20 0,0 0 0
PRODUCT ION (t)
83 1 ,9 0 7
7 9 1 ,7 89 685,518
1 ,0 0 0,0 0 0
2 1 4 ,7 9 4
ALPINA E LE CTRIC AL ENE RG Y C O N S U M P TI O N OPE RAT ION (GJ)
1 ,20 0,0 0 0
150,0 0 0 10 0,0 0 0 50,0 0 0
TOTAL 200 8
TOTAL 20 09
ALPINA ELECT RICA L ENERG Y CONSUMPTIO N OPERATIONS (i n dustri al, ag en ci es) (G J )
TO TAL 201 0 P R O D U CTI O N (t )
TO TAL 201 1
TO TAL 201 2
A L PI N A F U EL C O N S U M P TI O N O PER ATI O N S (i n du s t r i a l, agen c i es ) (G J)
Note: This includes Alpina plants in Colombia, Venezuela and Ecuador, the Simijaca and Guachucal collection centers, regional distribution centers, primary logistics, milk marketing, and the Sop贸 Corporate Building.
73
b. Climate Change
We identified the risks related to corporate legal environmental requirements, establishing the inventory of controls to mitigate them. Once we identified them, we started a project to adapt the chimneys for the boilers at the Entrerríos (Antioquia, Colombia) and Chinchiná (Caldas, Colombia) plants to meet Colombian regulations regarding the environmental aspect of gas emissions from fixed sources, which we hope to complete in February 2013. We are modernizing the industrial refrigeration systems of the Guachucal milk collection center to eliminate the use of coolants that can deplete the ozone layer. In September 2012, we changed the fuel in the boilers at the Entrerríos plant from propane gas to natural gas. This conversion to natural gas was the second biggest in Colombia’s industrial sector. We are developing a project to optimize the occupancy of Alpina Colombia’s primary fleet and reduce the number of journeys from the national distribution center in Sopó to the different regional distribution centers located in the main cities of the country, in order to reduce greenhouse gases by reducing the use of diesel fuel.
TONS C O 2eq
Total Emissions of Alpina Colombia
80,000 70,000 6 0,000 50,000 4 0,000 30,000 20,000 10,000 0 C OOLA NT S
E LE C TR IC I T Y
WAS T E WAT E R
FU E L
T O T AL
This includes Alpina plants in Colombia, Venezuela and Ecuador, the Simijaca and Guachucal collection centers and primary and secondary logistics.
74
23,139 21,9 58 20,9 32 22,282 18,084
FU E L
6,000 8,827 7,4 5 0 8,284 9,676
WASTEWATER
6,598 5,089 4,091 3,846 1,885
EL E CTR I C IT Y
C OOL A NT S
2008 20 09 20 10 2011 2012
TOTAL
39,4 97 37,8 85 4 1,6 11 4 4 ,613 4 5,7 3 4
75,2 3 4 73 ,759 74,084 79,02 5 75,3 79
Graph Note:
It is important to note that there was an error in previous s us t ain ab ilit y reports regarding greenhouse gas emissions. Total equivalen t C O ² e m is s ion s in tons changed from 78,859 to 75,234 for 2008, from 75,33 6 t o 73 ,759 for 2009, and from 77,486 to 74,082 for 2010. This inaccuracy h as b e e n corrected in this report. The estimated reduction in the carbon footprint associated w it h P h as e 1 of the Biogas Project at our Sopó plant is based on the averag e r e place m e n t of diesel fuel energy consumption following the start-up of b iogas b oile r operations. Meters are being installed on the biogas genera t ion an d
consumption lines; we hope that these will produce real data for 2013 and subsequent years.
A3. EFFICIENT MANAGEMENT OF MATERIALS AND WASTE
Identify materials that can be reused at the end of products life cycles, aiming to produce less waste in industrial processes and, if possible, use this waste in byproducts.
In 2012, we changed the packaging materials for our fermented product lines. We will replace the Yogurt Original and Regeneris plastic cup made from polypropylene or polystyrene with a cardboard cover, with a new cup made solely from polystyrene with offset printing and without a cardboard cover. This change helps to create a new use for our packaging in the recycling chain, as it consolidates materials and eliminates the use of cardboard and glue. THIS INICIATIVE GENERATED SAVINGS OF COP 1.66 BILLION AND A REDUCTION OF 155 TONS IN THE USE OF CARDBOARD. In collaboration with Carvajal Empaques, we developed a promotion for our leading product, BonYurt, using a paper label made from pulp called Earth Pact. This type of paper is produced from 100% sugar cane fiber, is completely free from bleaching chemicals and has a very special color given by the sugar cane pulp.
Eco-Index of Waste 3 6.22
4 50,0 0 0 3 4 .9 4
4 0 0,0 0 0 3 0 0,0 0 0 250,0 0 0 20 0,0 0 0
PR OD U CT I O N ( t )
26.89
2 8.23
3 5 0,0 0 0
1 9.0 0
21 .34
22 .26
19.62
20.0 0 15.0 0 10.0 0 5.0 0 0,0 0
16.4 9
4 5.0 0 4 0.0 0 3 5.0 0 3 0.0 0 25.0 0
1 9.9 3
EC O -I ND E X O F TOTAL G EN E R AT E D WAS T E ( k g / t)
5 0.0 0
15 0,0 0 0 10 0,0 0 0 50,0 0 0
TOTA L 2008
TOTA L 2009 E C O - I N DE X O F TOTAL G E N E R ATE D WA S T E (kg / t)
T OT A L 20 10
P R O D U CT I O N ( t )
T OT A L 20 11
T OT A L 20 12
0
E C O - I N D E X O F TOTAL R E C YC L AB L E WAS T E ( k g / t)
No t e: T hi s i nclu d e s A l p i n a p l a n t s i n C o lo m b i a , Ve n ezu e la a n d Ec u a d o r, th e S i m i j a c a a n d G u a ch u c a l c o lle c ti o n c e n te rs , a n d th e S o p 贸 C o r po ra t e Bui ld i n g. Fo r 20 12 , i n fo r m a t i o n ab o u t re cycl able wa s te p ro c e s s ed a t th e regi o n a l d i s tri b u ti o n c e n te rs h a s b e e n i n clu d ed .
75
11 ,4 15,523
3 5 0,0 0 0
20 0,0 0 0 15 0,0 0 0 10 0,0 0 0
2,0 0 0,0 0 0
5 0,0 0 0
T OT AL 20 0 8
T OT A L 20 0 9
TOTAL 2010
TOTAL 20 1 1
TOTAL 2012
0
TOTA L R ECYCL A B L E WA S T E ( k g )
TOTAL GE NE RAT E D WAS T E ( k g )
PRODUCTION (t) No t e: T h i s i n cl u d e s A lp i n a p l a n t s i n Co lo m b i a , Ve n ezu e l a a n d Ec u a d o r, the S i m i j a ca a n d Gu a ch u ca l co l l e ct i o n ce n t e rs , regi o n a l d i s t r i b u t i o n c e n t e rs i n Co lo m b i a a n d t h e S o p 贸 Co r po ra t e B u i l d i n g.
Success Story At the San Gabriel plant, we implemented a waste management program with the community of Salinas. Locals receive around 3,000 kg of sludge daily from the plant. Through a process of coagulation, dehydration, drying and composting, the final product is later distributed evenly among the community members to be used as fertilizer on their crops. THIS STRENGTHENS OUR COMMITMENT TO FOSTERING STRONG, COOPERATIVE RELATIONSHIPS IN THE COMMUNITIES SURROUNDING OUR OPERATIONS.
NOTES
76
P R O D UCT I O N ( t )
7,235,4 0 4
6 ,37 0,0 97
4 0 0,0 0 0
25 0,0 0 0
4 ,0 0 0,0 0 0
0
4 5 0,0 0 0
3 0 0,0 0 0
6 ,4 43,284
6 ,0 0 0,0 0 0
7,226 ,80 7
8,0 0 0,0 0 0
5,4 32,1 92
WAS TE (kg )
10,0 0 0,0 0 0
6 ,565,212
12,0 0 0,0 0 0
11 ,9 8 1 ,531
14 ,0 0 0,0 0 0
13,218,4 4 7
13,7 0 4 ,54 6
Waste Management
Challenge 5
Nutrition Provide healthy food! Whenever I think of Alpina’s Higher Purpose, I remember that what we do is a very important part of people’s lives. We serve our consumers from when they are children to when they are adults and they have their own children, contributing to their wellbeing, enjoyment and health though our products. This year, we launched 51 products in all the regions where we operate, including new products as well as other, familiar ones that we brought to the market with a fresh purpose. A large part of our challenge to constantly innovate in everything we do, not just in our products, but also in our processes, business models and distribution, because everyone at Alpina works for consumer satisfaction. That is why we research our consumers: to understand what they need, to be able to anticipate their needs and to focus efforts on development and offering a range of products and solutions that meets those expectations. It is our raison d’être. Research is intelligent and precise work, but above all, it involves producing solutions to surprise our consumers. We achieved something that makes us strong and committed: Our consumers and clients trust that we deliver products that keep our promise to maintain quality above all else and to provide healthy food for the world. I think that providing healthy food for the majority of the population is not a distant dream but a reality. Children, young people, adults and seniors have put their trust in Alpina and this means we have to be more demanding and improve every day. Innovation and nutrition are always a critical part of this dream.
Alpilac, a product for the majority
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Colombia:
78
Venezuela
Ecuador:
79
United States:
PerĂş:
80
Challenge 5 WE DELIVER ALPINA PRODUCTS TO MORE CONSUMERS AT MORE TIMES, IN MORE PLACES AND WITH GREATER FREQUENCY TO HELP MAKE HEALTHY NUTRITION AN EVERYDAY HABIT IN OUR COUNTRIES. IN THE COUNTRIES WHERE WE OPERATE, ALPINA IS WELL KNOWN AMONG CONSUMERS AS BEING ONE OF THE BEST FOOD BRANDS. We have remained a favorite by providing trustworthy, excellent-quality products and we have managed to make our products nutritional and healthy as well as delicious and fun.
A1. ENSURING THE GREATEST FUNCTIONAL AND NUTRITIONAL VALUE OF THE PRODUCT RANGE AS POSSIBLE
Products with preservatives or higher fiber, vitamin or mineral content vs. total sales
FIBER
VITAMINS AND MINERALS
COLOMBIA
10.8%
24.9%
VENEUELA
9.5%
26.6%
ECUADOR
27.4%
19.7%
UNITED STATES
53.1%
8.4%
In recent years, the company created new products that help to improve the health and nutrition of our consumers. For that reason, we have developed a range of functional products that, when combined with healthy lifestyle habits, are designed to improve people’s physical condition. Similarly, as we are aware of the importance of reinforcing our products’ nutritional value, WE HAVE ENRICHED AND FORTIFIED PART OF OUR PORTFOLIO, ADDING ESSENTIAL NUTRIENTS SUCH AS VITAMINS AND MINERALS THAT ARE PARTICULARLY IMPORTANT FOR POPULATION GROUPS SUCH AS CHILDREN IN THE DEVELOPMENTAL STAGE.
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A2. DEVELOPMENT OF PRODUCTS FOR SPECIFIC CONSUMPTION TIMES AND SEGMENTS
a.to Consumers DevelopmentStage of Products According of Life.
Alpina recognizes that nutrition needs to be adjusted according to the different stages of life and specific needs of human beings. For that reason, it has extended its product development so that it can provide nutritional value for different age groups (product lines for babies, women, children, preadolescents, adolescents, young adults and adults), with recipes designed for each group.
b.Consumers Studies to Learn about Our
With the fundamental objective of producing more relevant and accessible value propositions for the population at the bottom of the pyramid, in 2012, we strove to get closer to consumers from this segment and get to know them better. We developed three projects throughout the year, which aimed to:
Generate an in-depth understanding of the habits, needs and tastes of consumers at the base of the socioeconomic pyramid, in terms of their daily diet. We carried out 22 shadowing activities, observations and interviews in the real environment of mothers and housewives with children under 10 years of age, as well as of young people and adults between 18 and 35 years of age, from socioeconomic levels 2 and 3 of Bogotá, Barranquilla and Ibagué. We also sought the opinion of 11 shopkeepers from these same cities and from the same socioeconomic level (SEL). Through another project, we sought to understand consumption and buying habits, as well as perceptions about the world of milk and its products, through home immersions with a sample of our product and group discussions with housewives from SELs 2 and 3 in Bogotá. Finally, we validated some of our new innovations through product trials in order to bring the market high-quality options that satisfy consumers’ needs, but that are also within their reach. To achieve this, we conducted 341 interviews with men and women over the age of 18 from SELs 2 and 3 in Bogotá and Medellín. 82
c.BaseDevelofopment of Products for the the Socioeconomic Pyramid Ihanve rebceecnomt eyeaawrsa,rewe nimotporjutastnceof fothr eithr e bthuesinreessps,onbsiubtilityalsoweof htoavehelaps imaprocovempany thliviesnge coconmdmituionnitsies’and nutrition.
Aware that a large part of our operations are in developing countries, where there are widespread conditions of inequality and there is limited access to affordable products that satisfy the basic nutritional needs of the most disadvantaged population, Alpina has posed the objective of improving access to healthy nutrition for the population at the bottom of the pyramid. Traditionally, the industry has neglected this part of the population or product ranges did not meet the nutritional requirements of their situation. In recent years, we have become aware not just of their importance for the business, but also of the responsibility we have as a company to help to improve these communities’ living conditions. Nutrition is a critical factor for ensuring that these vulnerable populations have a better future and greater access to all opportunities.
We have developed the following products in Colombia and Ecuador to meet our commitment of providing healthy food for the largest number of consumers possible:
COLOMBIA: • In the Cheeses and Creams product line, we launched AlpiCrema on the market, a high-nutritional-value fresh cheese.
• Alpilac , a milk-based drink, was launched in April, in 900 ml and 450 ml bags, achieving sales of 400 tons in 5
that period.
• Alpifrut, a refreshing drink made from orange juice concentrate with zinc, vitamin B12, vitamin C and folic acid, was launched in August, achieving average monthly sales of more than 600 tons.
ECUADOR: • We launched UHT milk in 1 liter bags on the Ecuadorian market, which has allowed us to increase our consumer
base with a very competitively priced product. The product currently has a sales volume of 400 tons a month.
5 Not 100% milk.
83
d.TheDevel o pment of Products According Consumption Time
The dizzying global trend towards urbanization has brought with it changes in travel within cities, less free time and greater physical inactivity. All this has influenced changes in consumers’ eating habits, as they seek healthy and nutritional options that they can consume while they are on the move or between activities. Aware of that, ALPINA HAS DEVELOPED HEALTHY SNACKS AND SALES CHANNELS THAT ALLOW PEOPLE TO EAT HEALTHIER PRODUCTS WHILE THEY ARE “ON THE MOVE”.
A3. ENSURING QUALITY FROM SUPPLY TO COMMERCIALIZATION
Guarantee quality throughout the product´s life cycle and therefore strengthen our consumers’ trust. Meeting Quality Specifications %
100.0 90 . 0 80 . 0 70.0 60.0 50 . 0 40 . 0 30.0 20 . 0 10.0 0.0
84
97.8%
97 . 8%
97 . 7 %
98. 0 %
2 009
2010
2011
2012
Quality-Claims C L AIM S / TONS PR OD UC ED
0.050 0.040 0.030
0.047 0.038
0 . 0 35
0.030
0.020 0.010 0.0 00
2009
2010
2 01 1
2012
a. Strategic Alliances
IN FEBRUARY 2012, AT THE ANNUAL CONFERENCE OF THE GLOBAL FOOD SAFETY INITIATIVE (GFSI), WE PROPOSED TO THE COLOMBIAN PARTICIPANTS THE CREATION OF A TASK FORCE TO UNIVERSALLY APPLY THE SAFETY MANAGEMENT SYSTEMS RECOGNIZED BY GFSI. In May, with the support of the Colombian Association of Food Science and Technology (ACTA for its Spanish acronym), we formed this team with different interested sectors, such as the food industry, large retailers, suppliers of technical services, academia, and scientific and professional associations. The objectives are to help understand the GFSI guidance document, to provide a national platform for exchanging knowledge and experience on the issue and to present and promote the safety management systems recognized by GFSI.
b. Regulations
As part of the project to implement the ISO 22000 standard at the Entrerríos plant, we started the cross-cutting elements regarding management and the first elements specifically related to operational controls (Analysis of Dangers to Safety, Prerequisite Programs, etc.). The project is 47% complete and our goal is to finish it by August 2013. IN 2012, THROUGH THE INDUSTRY TASK FORCE, WE PARTICIPATED IN THE NATIONAL STANDARD OF THE COLOMBIAN MINISTRY OF HEALTH AND SOCIAL PROTECTION’S STRATEGY TO REDUCE SALT/ SODIUM IN FOOD PRODUCTS. WE REVIEWED THE PRODUCTS WITH THE HIGHEST SODIUM CONTENT TO DETERMINE THE OPTIMAL AMOUNT TO BE USED.
85
Alpinette and YogoYogo Label We worked on our Alpinette and YogoYogo products to more clearly specify the natural fruit sweetener used on our label, meeting the requirement of Colombia’s National Institute of Food and Drug Monitoring (INVIMA in its Spanish acronym), during the audit of the label at the Entrerríos and Sopó plants.
We corrected the Alpinette packaging and made the request to INVIMA for new labels, which was approved. With YogoYogo, we adjusted the product’s health registration and the packaging.
A4. REDUCTION OF SUGAR, FAT, SODIUM AND CARBODHYDRATES IN KEY PRODUCTS Food products comprise elements that are not harmful in themselves, such as fats, sugars and salts. However, the more rushed and sedentary nature of modern life, as well as changes in eating habits, mean that obesity and excess weight are becoming global public health problems. Although our range is one of the healthy options consumers now have, at Alpina, we want to contribute to the global aim of improving our consumers’ health through their diet. For that reason, we have started to work with the support of local authorities on plans to reduce the sugar, fat and sodium content of some of our products. Our Challenge? To reduce these components without altering the flavor, quality and pleasure offered by these products. Initial assessments were carried out in 2012. In 2013, analyses and tests will be started with some select products.
FAT
SUGAR ADDED
COLOMBIA
31.7%
7 .5%
VENEZ UELA
25.6%
1 4 .3 %
ECUADOR
5.1%
1 .9%
UNITED STATES
11.4 %
7 .2 %
Products Lower in Fat and Added Sugar vs. Total Sales
NOTES 86
Challenge 6
Sustainable Businesses When I see how much we have grown over the years, I know that we have not done it alone. In this journey, we have found allies in all the people we have worked with. The search for partners to help build this dream never ends. We have been daring when trying out new channels and incorporating small distributors into our business, such as the Home Channel in Alpina Colombia that seeks to expand our distribution system while generating opportunities for vulnerable populations. With the micro-distribution of our products, working women have found an option to generate additional income and give their families greater quality of life. We have carried out training sessions with them so that they are familiar with our products and develop sales and distribution skills. As they themselves are from lowerincome backgrounds, they know the neighborhoods and the residents where they distribute. Precisely because of this experience and their relationships, they can achieve more effective distribution than we would without their help. These women respect the Alpina brand and believe in it, which allows them to carry out their work with pride and passion. We started the pilot program with 25 housewives and, in a blink of an eye, there were 40. They won and Alpina won. As Óscar González, National Manager of the Independent Sales
Channel says: “There is an enormous opportunity to explore new sales routes to reach the market and we must make the most of it.” We continue to keep our promise to reach our consumers at the bottom of the pyramid, strengthening our small distributors. Although this initiative is still a pilot program, the challenge is to make it a channel that operates across all of our regions, wherever there are people who want to consume affordable Alpina products. We eagerly seek to be a prosperous business that grows and creates added value. We know that this energy creates greater prosperity and allows our allies to grow alongside us. Healthy business encourages us to share the dynamics of development throughout our value chain. I think each one of us is part of a chain, like the threads of a fabric that have been woven together over time.
Our industrial suppliers
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I AM PART OF SUSTAINABILITY
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Challenge 6 OUR GOAL IS TO DEVELOP OUR STRATEGIC PARTNERS, VIA TECHNICAL ASSISTANCE, BETTER PRACTICES AND NEGOCIATION, CONDITIONS, AND ANYTHING ELSE THAT MAKES THEIR BUSINESSES STRONGER.
A1. STRENGTHENING THE BUSINESSES OF OUR AGRICULTURAL SUPPLIERS
Train and strengthen our suppliers in all of their processes, using a model that facilitates their growth alongside Alpina.
Milk Supply
2011 vs. 2012
VARI ATI ON
COL OM BI A
V E N E Z UE LA
11.57%
26.49%
3 6. 6 4 4 3 .0 5 47 . 60 5 4 . 22
3. 59 2.88 3 .4 1 4.31
30 2 . 9 9 31 1 . 74 3 4 1 . 67 38 1 .2 0
5 5 0 .0 0 450 .0 0 40 0 .0 0 3 50 .0 0 3 0 0 .0 0 250 .0 0 2 0 0 .0 0 15 0 .0 0 10 0 .0 0 50 .0 0 0 .0 0
3 4 3 .2 2 35 7 . 6 7 3 9 2 . 67 4 3 9 . 73
MI LLIO N S O F L IT ERS
E C UA D O R
TOTAL
13.92%
11.98%
2009 2010 2011 2012
89
Milk Suppliers
20 0 9
20 1 1
20 1 0
2 01 2
C OL OMBIA 1 ,0 52 1 ,0 4 7 1 ,3 7 7 1 ,4 5 6 Nota de la gráfica: • In Colombia, we started a new collection VEN EZUEL A 4 3 4 4 operation in Buga. EC UAD OR 13 1 15 0 16 0 201 • The increase of milk suppliers in Ecuador is due to the recovery in the demand for TOTAL 1 ,18 7 1 ,20 0 1 ,5 4 1 1 ,6 6 1 cheese at the San Gabriel plant. • In Venezuela we manage a database of suppliers according to the plant’s needs and we started processing operations in Maturín, capital of the Monagas state.
Certification Program for Brucellosis-free-Herds
201 0
201 1
201 2
202
277
404
41 8
93 . 82
95.00
9 5. 71
100.00
99 . 29
% of milk with counts less than 100,000 CFU/ml
9 7. 13
DAIRY F ARMS
2009
90.00
Hygienic Quality of Milk
85.00 80.00 75.00 90
20 0 9 20 10 20 11 201 2
Graph Note: • The reduction in the rate of milk with CFU (Colony Forming Units) counts lower than 100,000 was mainly due to the effects of the floods in Colombia on our suppliers, especial y in the departments of Cundinamarca and Boyacá.
NUMBE R O F VI S I T S
Technical Visits to Dairy Farms.
VA R I A T I O N
2009
2010
2011
2012
6,893
6 ,9 0 0
5,2 82
4 ,7 26
0.10 %
- 23.4 5 %
- 10.53 %
Graph Note: •The decrease in the total number of visits made was mainly due to changes in staff structure and the need to provide support for the new collection operations in Chigorodó, Valledupar and Buga (Colombia). This led the technical assistance team to provide administrative support and to start the team reinforcement process by hiring new professionals.
For more than three years we have maintained stable commercial relationships in Colombia with 54,10% of our milk suppliers and each one received an average of three technical assistance and support visits in 2012.
We also work with 25 indigenous and farmers associations, which are made up of 2,500 small-scale producers that contribute 33.50% of the total sales volume in the south of the country. As part of the Forest Grazing System Project, we choose four farms of one of our providers in the Entrerríos municipality (Antioquia, Colombia) to plant 2,000 yarumo timber-yielding trees and 2,000 Japanese acacia non-timber-yielding trees on 91 hectares. In Venezuela, we contacted livestock farmers about working in a mutually beneficial relationship, comprehensively developing their production units and, at the same time, improving the quality of our supplies through education about animal health and technical visits.
In Ecuador, together with the Development Bank of Latin American (CAF for its Spanish acronym), the Provincial Government of Carchi and Fundación Alpina, we started a project that aims to pass on good practices in the management of pastures, milk quality control and improvement, milking techniques, and appropriate management of supplies. In 2012, we trained 600 families and 20 community leaders, 35 organizations received technical assistance in animal health management and, so far, we have achieved that 40% of our suppliers are above an 8-hour 6 reductase period and productivity (liter/hectare) has been increased by 20%.
6 Reductase is produced by foreign microorganisms in milk and its presence may indicate lower quality.
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A2. STRENGTHENING THE BUSINESSES OF OUR INDUSTRIAL SUPPLIERS
Create mechanisms that facilitate and strengthen the financial, environmental and social performance of our industrial suppliers, sharing lessons learned and increasing knowledge about their businesses. Providers of Industrial Raw Materials
COLOMBIA
VENEZUELA
ECUADOR
QU A N T .
%
QUANT.
%
QUANT.
%
Colombian
135
77%
71
92%
75
87%
Fo r e i g n
40
23 %
6
8%
11
13%
T OT A L
175
100%
77
100%
86
100%
Supplier Management and Development Program
IN 2012, WE CREATED THE SUPPLIER MANAGEMENT AND DEVELOPMENT PROGRAM, WHICH WILL HELP US TO IMPROVE OUR COMMERCIAL RELATIONSHIPS WITH OUR SUPPLIERS OF GOODS AND SERVICES AND TO CREATE PRACTICES THAT WILL CONTRIBUTE TO THE SUSTAINABILITY OF THEIR BUSINESSES AND OF OURS. Our growth and the growth of our suppliers benefit from the open exchange of ideas to incorporate the best practices available. This program recognizes the interdependence beyond commercial relationships that exists between the parties.
92
The activities we carried out were: Analysis of approximately 1,450 suppliers of goods and services in Colombia, through a chart that evaluates financial and operational aspects, allowing us to determine the impact they have on the organization. Design of a model to classify suppliers according to four strategic central issues: Operational Stability, Management Systems, Corporate Responsibility and Environmental Responsibility. Identification of the suppliers’ level of compliance, using a chart with more than 100 questions. According to their score, we will award bronze, silver, gold or diamond status and establish improvement plans and projects with the suppliers. Creation of a reassessment model of standardized management that can be applied to our suppliers of goods and services at a corporate level. Validation of compliance with the 10 principles of the Global Compact, using a chart created by the Global Compact Local Network in Colombia, for 50 suppliers in Colombia. Design and development of a training program on three topics: management systems, risk systems and environmental responsibility, with the aim to ensure the business’s continuity and to share topics that will help our suppliers to constantly improve. Seventeen small and medium suppliers in Colombia participated.
Development of Local Suppliers
IN 2012, WE WENT A STEP FURTHER WITH OUR COMMITMENT TO ESTABLISH ALLIANCES WITH OUR INDUSTRIAL SUPPLIERS TO STRENGTHEN AND CONSOLIDATE OUR COMMERCIAL RELATIONSHIPS, FOCUSING ON FINANCIAL AND ENVIRONMENTAL ASPECTS.
IN VENEZUELA: • We started producing 40 mm and 38 mm tops with some suppliers, with the aim of having other supply alternatives and reducing the use of raw materials.
• We started a certification program with the foil supplier, achieving savings of 8% per unit. This is a local supply alternative that allows us to ensure that we always have access to this material.
I N ECUADOR: • We reduced the weight of the bottles for Alpina products. • We began using a new supplier for yogurt bottles, decreasing transport costs and optimizing the use of materials.
• We produced Yox bottles and wrappers locally, which we had previously imported.
93
A3. STRENGTHENING THE BUSINESSES OF OUR CLIENTS AND DISTRIBUTORS
a. Clients
Aspire to be ideal partners for our clients, facilitating their development and growth, without sacrificing the best possible service for our consumers.
Large Retailers
In Colombia, this channel represents 25.4% of our sales. We went from serving 717 clients in 2011 to 814 in 2012, thanks to the opening of new points of sale. We have continued with our strategy of training sales promoters on topics such as segmentation, visibility in retail outlets, and the promotion and management of product lines, together with a recognition program that awarded around 50 sales promoters throughout the country. As pillars of development in the channel, we work on three aspects:
• Segmentation of the Product Line: decision tree.
Organization of shelves in the retail outlet in line with the buyer’s
• Implementation of Category Management Processes:
Cooperation with channel clients to develop the product lines and focus on providing the greatest value for the buyer.
• Implementation Manual: sale management.
Development of support material for the sales force on topics regarding point of
IN ADDITION, WE CONSOLIDATED THE NEW SALES STRUCTURE, OPENING THE NEW INDEPENDENT SUPERMARKET CHANNEL IN RESPONSE TO THE MARKET’S NEEDS IN TERMS OF SERVICE AND SALES EFFECTIVENESS.THIS IS HOW WE WILL BECOME OUR CLIENTS’ NUMBER ONE STRATEGIC PARTNER, ENSURING THEIR GROWTH AND SUSTAINABLE DEVELOPMENT. 94
In Ecuador, the retailers represents 50% of sales, with a growth of 11% in 2011. We have 409 locations throughout the country, with 100% coverage through 38 sales promoters. We are the number one dairy product supplier, with our Alpina and Kiosko brands present in the main retailers. All the channel’s members visited the plants to learn about our products’ main production and preparation processes and we started training our commercial team through the Sales School module. In Venezuela, this channel represents 43% of our sales. We organized tastings so that consumers could try our product, learn about the brand and ultimately buy Té Alpina and Frutto. We negotiated additional refrigerated displays to promote and strengthen the presence of the company’s premium range: Regeneris, Bon Yurt and Alpina Yogurt.
Shopkeepers
In Colombia, we decided to redesign our loyalty system with shopkeepers, going from a Pareto plan for clients that awarded prizes for increases in sales, to a structured and self-sustainable program designed for 5,000 shopkeepers with high growth potential. Through the benefits of a compensation fund, the Alpina by Your Side plan is providing comprehensive solutions in education, recreation, tourism and housing, in line with the shopkeepers’ main needs of improving their lifestyle and quality of life. We have also continued the Territories Plan in the areas where we have industrial production. This aims to create links with communities of shopkeepers, providing training on consumer service and merchandising. In 2012, we carried out a module that we
called “Recycling in Stores” to train and invite clients to be part of the recycling process, separating items at each point of sale into our bins and establishing relationships with the waste collection companies of each area. This year, we had an impact on 450 clients. In Venezuela, we placed 89 refrigerators labeled with the Regeneris brand in Gran Caracas, Valencia and Maracay, as part of the strengthening strategy in bakeries and small stores, ensuring space for the company’s range and improving the level of service for consumers. In Ecuador, we had an impact on 4,200 points of sale with Trade Marketing shared tools. We also carried out 740 product drives and tastings in Quito, Guayaquil and Cuenca.
95
b. Distributors
Grow alongside our distributors, learning from their experiences and passing on best practices to contribute to their development. WE TRAINED 700 MEMBERS OF THE DISTRIBUTORS’ SALES FORCES ON MERCHANDISING STANDARDS IN RETAIL OUTLETS AND WE STANDARDIZED THEIR REMUNERATION SYSTEM TO PROVIDE AN INCENTIVE FOR PRODUCTIVITY.
In Colombia, we documented and shared the good practices of our strategic partners. Among these, it is important to highlight the inclusion of recycling initiatives, the use of rain water to wash vehicles, the use of transparent roofs in storehouses to minimize energy consumption, and the donations by distributors to children’s homes and senior homes. To identify areas of opportunity, we carry out monthly assessments of our 41 distributors’ financial statements. Furthermore, we trained 700 members of the distributors’ sales forces on merchandising standards in retail outlets and we standardized their remuneration system to provide an incentive for productivity.
In Venezuela, we developed and strengthened new distributors in the eastern part of the country, establishing a presence throughout the region. Similarly, we consolidated distribution operations in the Acarigua and Barquisimeto areas, increasing Alpina’s presence there, which is in line with our objective of being leaders in the yogurt market. In Ecuador, we increased our base of distributors by 59%, reaching 27, meeting our commitment to provide work opportunities and progress for small and medium businesses. Of these distributors, we have two clearly differentiated types: 2 medium distributors and 25 micro-distributors. We are working together on developing a model that allows them to grow in a profitable and structured way, so that they can achieve the growth the company has planned in the medium term.
NOTES 96
Challenge 7
Social Value Thinking about people, about their dreams, their needs and about what we can do to improve their quality of life has always been a part of Alpina’s work. This vocation comes from daily life with the communities in the areas where we operate. Often, our company is the only economic activity in the region and therefore, an important driving force for the communities that live there. Initially, our interest was expressed in actions such as donations of products or money and time dedicated to social causes. Then we evolved, as we felt that we had a great opportunity to help improve the living conditions of many people and families in vulnerable living conditions. Today we understand that if we want to have a greater impact, we have to see social value as a pillar that we work on everyday in our business. We generate day-to-day social value when we sell healthy quality products to our consumers, when we talk to our stakeholders and transparently keep them informed, when we strengthen the businesses of our suppliers, when we train our employees and develop their talent and when we create dignified working conditions. But, furthermore, by
virtue of our business, we have proposed two areas of social value action: To be a driving force for the promotion of food and nutritional safety by promoting and improving healthy eating habits in the population, and supporting access to opportunities through sustainable and inclusive business models and projects. We have reached the best place, understanding sustainability as one of our strategic axes that permeates the entire organization and its processes. Every time Alpinistas make a decision, they will consider how what they do and what they decide will have a positive impact on their life and the lives of those around them, respecting the balance with our planet.
Social Value, a priority for Alpina
{AUGMENTED REALITY AVAILABLE} WATCH ANIMATION HERE
97
AT ALPINA WE ALWAYS THINK ABOUT YOU
WITH THE HEART
98
Challenge 7
WE GROW SUSTAINABLY AND CREATE COLLECTIVE PROSPERITY IN THE COMMUNITIES WITH WHICH WE INTERACT.
a.UnitStructuring the Social Business
SOCIAL BUSINESSES ARE INNOVATIVE BUSINESS MODELS DESIGNED TO SOLVE A SOCIAL PROBLEM WITHOUT SEEKING FINANCIAL REWARD OR TO MAXIMIZE PROFITS FOR THE COMPANY THAT SPONSORS THEM. THEY ARE MAINLY DESIGNED FOR POOR AND VULNERABLE POPULATIONS AND CREATE OPPORTUNITIES FOR INCOME GENERATION.
“ConSentido” is the first social business that Alpina has undertaken, aiming to meet its higher purpose of providing healthy food and generating collective prosperity. The objective of the social business is to develop affordable food products that have a high nutritional value and help to reduce the problem of critical and chronic malnutrition in Colombia, especially for the population living in poverty and extreme poverty. Studies show that investment in nutrition, education and health at an early age has a more significant
socioeconomic impact than other types of investment. ConSentido is a Business Unit with its own independent model. All the profits generated from this unit are reinvested into it in order to fulfill its social objective. The value proposition is complementary and coherent with Alpina: “To make possible access to quality food products with high nutritional value, which are relevant and suitable for the target population for which they are designed, through effective and efficient commercialization channels, adapted to the needs of the environment.” It is a unit that generates social value in two ways: On the one hand, it provides access to a nutritional product, with a nutritional profile that makes up for deficiencies identified in the target population. On the other hand, it generates income through a productive connection with a vulnerable population (directly, through distribution with micro-allies, and
99
indirectly through the promotion of good practices of inclusion with suppliers of goods and services). To ensure the offer was relevant and appropriate, we carried out an ethnographic study in the cities of Bogotá and Medellin with the aim of understanding the consumption habits, beliefs and preferences in the target population’s diet, to identify how this population
prioritizes its food shopping decisions and what it understands to be a good diet. The first product of this Business Unit will be launched in 2013.
b. Eat Better, Live Better - Colombia
This is a food and nutrition education project led by Alpina Colombia with the support of Fundación Alpina.
THE OBJECTIVE? WE WANT TO HELP IMPROVE OUR EMPLOYEES’ EATING PRACTICES AND LIFESTYLES THROUGH THE DEVELOPMENT OF PARTICIPATORY ACTIONS AND STRATEGIES AT WORK. This initiative is carried out comprehensively, as dietary practices (consumption, purchase, selection and preparation), as well as lifestyles, are an essential part of the family. Although initially we will work with Alpinistas, there will be a point when their families will get involved, and the promotion of knowledge, skills and aptitudes in the family environment will constantly be encouraged. The strategy combines in-person elements (workshops), visual communication (posters, flyers and communication through Alpina’s internal media) and educational material to take home and share with everyone. This project reflects our commitment to generate wellbeing for our employees and their families. Currently, 804 Alpinistas at the Sopó plant (Cundinamarca, Colombia) are directly participating in these activities.
100
c.Commercial Good Practices in Food Production and i zation for Food and Nutritional Security in the Cesar Department – Fundación Alpina.
Through a partnership with the departmental government of Cesar in Colombia, communities, and public and private entities, we supported the development of the dairy and fruit and vegetable sectors in some of the department’s municipalities. The factors that led to us proposing this initiative were the underuse of the department’s food and agriculture production capacity, the limited possibilities of income generation for the poorest rural families, the inefficiency in the supply of quality food and the food vulnerability of the region, which depends 75% on food provided by other parts of the country. The results included two strategic plans to promote good practices in the dairy and fruit and vegetable sectors; 10 municipal work plans to implement these good practices; the provision of equipment; the design and delivery of the Nutritional Monitoring System for the department of Cesar; and the definition of commercialization channels for fruit.
d. Nutrition Schools - Venezuela
With this project, our objective is to instill good eating habits in the children and adults (teachers, administrative team, parents and representatives) involved in the schools of the communities near our Villa de Cura plant, through a talk with a professional nutritionist so that they can internalize knowledge about good habits and a healthy diet.
WE ARE IMPLEMENTING THIS INITIATIVE AT THE FOLLOWING EDUCATIONAL INSTITUTIONS: • CHAGUARAMAS SMALL STATE EDUCATIONAL UNIT: CHILDREN REACHED: 70 • EL SALMáN SMALL STATE EDUCATIONAL UNIT: CHILDREN REACHED: 40 • CREACIóN LOS CANALES NATIONAL PRIMARY SCHOOL: CHILDREN REACHED: 15 • CREACIóN LOS CHORROS NATIONAL EDUCATIONAL UNIT: 85 101
e. Volunteering
In Colombia, we organized four activities focused on Environment, Nutrition and Education, through which 308 Alpinistas participated in volunteering sessions in Bogotá, Barranquilla and Cartagena. We have invested 1,800 man-hours in these sessions, directly benefiting 43,728people through the foundations with which we have worked with. In Ecuador we participated in a celebration of Children’s Day by spending time with children with cancer at Solca Hospital. We organized a puppet show and gave away various products, letting the children forget their problems for a moment and enjoy some fun.
f. Promotion of Healthy Eating Habits Teaching Material
“Up to Date with Your Wellbeing” Digital Newsletters - Venezuela We send out “Up to Date with Your Wellbeing” digital newsletters every month to Alpina’s database of doctors and consumers. In each edition, we address a health and wellbeing topic and analyze what we need to do to achieve a healthy lifestyle. Nutrition - Peru In 2012, we generated very specific visibility about nutrition in printed media (magazines and publications) and visual media (television). The audience of these programs has been the end consumer, which includes mothers and people interested in health issues.
Online Media – Web 2.0
Launch of Social Networks - Venezuela In March 2012, we opened the Facebook and Twitter accounts of Alpina Venezuela, where we shared information about how to achieve a healthy lifestyle with good eating habits, physical activity and balanced recreation. Social Network Contests - Venezuela In September 2012, we organized the “Nutritional Lunchbox” contest, through which consumers shared their best ideas for preparing a nutritional lunch box. Participants won goody bags of Alpina products.
102
Fan Page - Ecuador: In October 2012, we launched our fan page on Facebook, with the goal of positioning Alpina in an interactive, clear and different way on online media, and as a brand that is an expert in nutrition that provides relevant dietary knowledge for each phase of life.
Sponsorship of Events WOMEN’S RACE - COLOMBIA
In 2012, we extended this event to Medellin and Cali, where we also got involved in raising awareness among women and their families about the importance of a healthy diet and lifestyle to prevent cancer. Through different institutional and brand (Finesse, Avena and Baby) activities, we interacted with the women participating. In Bogotá, 16,000 women and 1,500 mothers with babies attended.
MEDICAL CONGRESSES - COLOMBIA:
We took part in six medical congresses to develop relationships with the profession. This will involve a series of medical visits so that professionals can promote healthy eating habits for their patients.
ALPINA HEALTH CENTERS - VENEZUELA:
We sponsored events for healthy lifestyles, inviting a nutritionist to give free advice.
MEDICAL VISITS - ECUADOR
We have developed a medical visits program with the main professionals of Guayaquil and Quito, with the objective of communicating the nutritional and functional benefits of brands such as Regeneris, Avena Alpina, Compotas, Yox and Alpinin.
Chapter 6 Chal enges 2012+ 2013+ WE PROPOSED SOME CHALLENGES TO MEET IN 2012 AND 2013
TO LEARN MORE ABOUT THESE CHALLENGES, VISIT WWW.ALPINA.COM 103
Chapter 7 External Verification
RESPONSIBILITIES OF DELOITTE AND ALPINA MANAGEMENT • The preparation of the 2012 Sustainability Report and its
Independent Review Report
content is the responsibility of
Scope of Our Work
responsible for defining, adapting
Independent review of Alpina’s 2012 Sustainability Report.
We have reviewed the adaptation of the content of the 2012 Sustainability Report according to the Global Reporting Initiative (GRI) Guide Version 3.0 (G3) for preparing sustainability reports, as well as the indicators of the Food Sector Supplement proposed in this guide. The data from previous fiscal years included for comparison have therefore not been verified in our review.
Verification Processes and Standards
We have carried out our work in line with ISAE 3000, the International Standard on Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the International Auditing and Assurance Standard Board (IAASB) of the International Federation of Accountants (IFAC). Our review work has consisted of posing questions to the Administration, as well as to Alpina’s different units that have been involved in writing up the Sustainability Report and in the application of certain analytical procedures and review tests samples that are described below: • Meetings with Alpina personnel to identify the management approaches, systems and principles used. • Analysis of the processes to collect and validate the information presented in the 2012 Sustainability Report. • Analysis of the adaptation of content and indicators of the Sustainability Report to those recommended in the G3 Guide of the GRI and the Food Sector supplement. • Review of the actions carried out regarding the identification and consideration of stakeholders throughout the fiscal year and the participation processes of stakeholders through the
104
www.deloitte.com.co
Alpina’s Vice-Chairmanship of Corporate Affairs, which is also and maintaining the internal control and management systems from which the information is obtained. • Our responsibility is to produce an independent report based on the procedures used in our review. • This report has been prepared exclusively in the interests of Alpina and in line with the terms of our services proposal. We do not accept any responsibility to third parties other than Alpina Management. • We have carried out our work in line with the independence requirements of the Code of Ethics of the International Federation of Accountants (IFAC). • The scope of an independent review is substantially smaller than that of an audit. Therefore, we do not provide an audit opinion on Alpina’s 2012 Sustainability Report.
DELOITTE & TOUCHE LTDA. Jorge Enrique Múnera D. Socio Bogotá, Febrero 2013
analysis of internal information and available reports of third parties. • Verification, through review tests based on the selection of a sample of quantitative and qualitative information corresponding to the GRI indicators included in the 2012 Sustainability Report and its appropriate compilation from the information supplied by Alpina’s sources of information.
Conclusions
Based on our review, there has been no evidence that has led us believe that the 2012 Sustainability Report contains significant errors or has not been prepared according to the Global Reporting Initiative’s Guide for Preparing Sustainability Reports Version 3.0 (G3) and the Food Sector Supplement. According to our review of indicators and content, we consider the report to meet the A+ rating according to GRI standards.
Recommendations
We have also presented our recommendations to Alpina’s Vice-Chairmanship of Corporate Affairs about areas for improvement to consolidate the processes, programs and systems related to sustainability management. The most relevant recommendations are: • Alpina must assess the relevance of migrating to the new GRI G4 methodology, which will be available in May 2013, for preparing sustainability reports. This will allow Alpina to stay on the cutting edge in its communication of its responsible and sustainable management. • In order to continue improving the management of environmental information, we suggest making a visit in August to review the key environmental GRI indicators, as this will ensure greater reliability of the information at the time of reporting. • Alpina should strengthen the Supplier Management and Development Program, especially the verification of suppliers’ compliance with the ten principles of the Global Compact and the supplier classification model with its four strategic axes: Operational Stability, Management Systems, Corporate Responsibility and Environmental Responsibility.
Chapter 8 GRI Table of Indicators
TO SEE THE TABLE OF INDICATORS, VISIT WWW.ALPINA.COM
105
NOTES
106
NOTES
107
m.co o c . a n i p l a . www
Alpina Productos Alimenticios S.A. Consolidated Financial Statements for the years ending December 31, 2012 and 2011 and Tax Inspector's Report
Report of the Tax Inspector
To the shareholders of
ALPINA PRODUCTOS ALIMENTICIOS S.A. and its Subsidiaries: I have audited the consolidated balance sheets of ALPINA PRODUCTOS ALIMENTICIOS S.A. and its Subsidiaries as of December 31, 2012 and 2011 and the corresponding consolidated statements of income, changes in stockholders’ equity, changes in the financial position, and the cash flows for the years ended on those dates, as well as a summary of the significant accounting policies and other explanatory notes. Management is responsible for the preparation and accurate presentation of these financial statements in accordance with accounting principles generally accepted in Colombia. This responsibility includes: designing, implementing and maintaining an adequate internal control system for the preparation and presentation of financial statements free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. My responsibility is to express an opinion on these consolidated financial statements based on my audits. I obtained the information required to comply with my duties and carry out my work in accordance with generally accepted auditing standards in Colombia. Such standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit of financial statements involves examining, on a selective basis, the evidence supporting the amounts and disclosures in the financial statements. The audit procedures selected depend on the auditor’s professional judgment, including the assessment of the risk of material misstatements in the financial statements. In making that risk assessment, the auditor considers internal control of the Company that is relevant to preparation and reasonable presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial
1
statement presentation. I believe that my audits provide me a reasonable basis to express my opinion. In my opinion, the consolidated financial statements referred to above, taken from the accounting books, fairly present, in all material respects, the financial situation of ALPINA PRODUCTOS ALIMENTICIOS S.A. and its Subsidiaries as of December 31, 2012 and 2011, the results of its operations, the changes in its stockholders’ equity, the changes in its financial position, and its cash flows for the years then ended, in conformity with generally accepted accounting principles in Colombia, uniformly applied. Further, based on the scope of my audits I report that the Company has kept its accounting books in accordance with legal rules in force and accounting technique; the operations recorded in the accounting books and management actions conform to the bylaws and to the decisions by the Stockholders’ Meeting and the Board of Directors; the correspondence, account vouchers and books of minutes and stockholders’ ledgers are duly kept and preserved; the management report is in due agreement with the basic financial statements and the Company is not in default in the payment of contributions to the Integral Security System. My evaluation of internal control, conducted with the purpose of establishing the scope of my audit tests, did not indicate that the Company has failed to follow adequate internal control and preservation and custody measures for its assets and those of third parties in its possession.
ANDREA XIMENA BERNAL DÍAZ Statutory Auditor Professional Card No. 136092-T Designated by Deloitte & Touche Ltda. February 12, 2013.
Consolidated Balance Sheet as at December 31, 2012 and 2011 (In millions of Colombian pesos) 2012
ACTIVO
Current Assets Available (Note 4) Investments (Note 5)
2011
$ 43,403 17,320
$ 55,911 4,976
Clients (Note 6) Associated companies (Note 7) Miscellaneous debtors (Note 8) Tax advances
79,920 47 85,464 49,447
88,177 1,035 36,432 48,699
Accounts Receivable Total
214,878
174,343
127,298 2,466 3,022
105,804 1,705 3,179
Total Current Assets
408,387
345,918
Investments (Note 5) Inventory (Note 9) Differed charges (Note 10) Intangibles (Note 12) Plant, property and equipment (Note 11) Other assets Appreciations
877 1,926 56,406 26,862 367,671 526 360,961
877 2,194 63,187 28,077 370,273 341,414
$ 1,223,616
$ 1,151,940
$ 1,154,797
$ 1,025,453
Accounts Receivable:
Inventory (Note 9) Expenses paid in advance Deferred tax
Total Assets Suspense Accounts
The attached notes are an integral part of these financial statements. The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the accounting books included in these financial statements and that these have been taken directly from the accounting books.
CARLOS MEJĂ?A B. Legal Representative
ADRIANA OSORIO ROMERO Accountant T.P. 54630-T
ANDREA XIMENA BERNAL DĂ?AZ Tax Inspector T.P. 136092-T (See my enclosed report) (Appointed by Deloitte & Touche Ltda.)
2
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities:
2012
Financial obligations (Note 13)
2011
$ 60,141
$ 42,929
Colombian Foreign
41,772 1,156
24,073 5,046
Total Suppliers
42,928
29,119
87,910 7,245 36,375 20,467 50,634 1,986 14,150
65,420 7,172 33,078 17,481 68,683 698 5,919
321,836
270,499
92,269 260,000 840
85,216 260,000 842
674,945
616,557
13,088
13,189
15,656 32,017 16,868 82,101 33,529 254 360,961 (5,803)
15,656 37,129 12,197 84,564 30,086 341,414 1,148
535,583
522,194
$ 1,223,616
$ 1,151,940
$ 1,154,797
$ 1,025,453
Suppliers:
Accounts payable Associated companies (Note 7) Taxes, levies and charges (Note 15) Labor obligations (Note 16) Estimated liabilities and provisions (Note 17) Retirement pensions (Note 16) Other liabilities
Current Liabilities Total Financial obligations (Note 13) Bonds and commercial papers (Note 14) Retirement pensions (Note 16)
Total Liabilities Minority interest
Shareholders' Equity: Share capital (Note 18) Capital surplus Reserves Net worth revaluation Net profits for the year Profit from previous years Appreciation surplus Conversion effects
Shareholders' Equity Total Liabilities and Shareholders' Equity Total Negative Suspense Accounts (Note 25)
The attached notes are an integral part of these consolidated financial statements. The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the accounting books included in these financial statements and that these have been taken directly from the accounting books.
CARLOS MEJĂ?A B. Legal Representative
3
ADRIANA OSORIO ROMERO Accountant T.P. 54630-T
ANDREA XIMENA BERNAL DĂ?AZ Tax Inspector T.P. 136092-T (See my enclosed report) (Appointed by Deloitte & Touche Ltda.)
Consolidated Income Statements for the Years Ending December 31, 2012 and 2011 (In millions of Colombian pesos) 2012
Net Operating Income (Note 19) Cost of Sales
$ 1,619,538
$ 1,440,198
991,486
875,732
628,052
564,466
343,345 181,126
307,225 161,544
524,471
468,769
103,581
95,697
30,365
34,533
(79,348)
(77,712)
54,598
52,518
(178)
(3,187)
20,891
19,245
$ 33,529
$ 30,086
Gross profit
Operating Expenses Sales (Note 20) Overhead (Note 21)
Operating Expense Total Operating profit
Non-Operating Income (Note 22) Non-Operating Expenses (Note 23) Earnings before tax and minority interest
2011
Minority Interest Income Tax Expense Net Profits for the Year
The attached notes are an integral part of these consolidated financial statements. The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the accounting books included in these financial statements and that these have been taken directly from the accounting books.
CARLOS MEJĂ?A B. Legal Representative
ADRIANA OSORIO ROMERO Accountant T.P. 54630-T
ANDREA XIMENA BERNAL DĂ?AZ Tax Inspector T.P. 136092-T (See my enclosed report) (Appointed by Deloitte & Touche Ltda.)
4
Consol i dated Net Worth Change Statements for the Years Ending December 31, 2012 and 2011 (In millions of Colombian pesos)
Reserves (Note 19) Statutory
Capital Surplus
Share Capital
Tax Provisions
Legal
Future expan- Asset replacesions ment
Balances as at December 31, 2010
$ 15,656
$ 37,129
$ 8,855
$ 23
$ 11,255
$ 59
Appropriations and/or reclassifications Declared dividends Increase for appreciation Investment exchange difference Wealth tax payment Conversion effects Changes for the year Results for the year
-
-
(1,027) -
3,776 (23) -
(10,721) -
-
Balances as at December 31, 2011
15,656
37,129
7,828
3,776
534
59
Appropriations and/or reclassifications Declared dividends Increase for appreciation Conversion effects Wealth tax payment Results for the year
-
(5,112) -
-
4,391 -
(1,673) 1,953 -
-
Balances as at December 31, 2012
$ 15,656
$ 32,017
$ 7,828
$ 8,167
$ 814
$ 59
The attached notes are an integral part of these consolidated financial statements. The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the accounting books included in these financial statements and that these have been taken directly from the accounting books.
5
Voluntary Total
Net worth revaluation
Net profits for the year
Profit from previous years
Appreciation surplus
Conversion effects
Total
$ 20,192
$ 87,027
$ 17,805
$-
$ 303,014
$ (2,990)
$ 477,833
3,776 (11,771) -
(2,463) -
(3,776) (14,029) 30,086
-
38,400 -
4,138 -
(25,800) 38,400 (2,463) 4,138 30,086
12,197
84,564
30,086
-
341,414
1,148
522,194
2,718 1,953 -
(2,463) -
(2,718) (27,257) (111) 33,529
254 -
19,547 -
(6,951) -
(27,003) 19,547 (10,221) (2,463) 33,529
$ 16,868
$ 82,101
$ 33,529
$ 254
$ 360,961
$ (5,803)
$ 535,583
CARLOS MEJÍA B. Legal Representative
ADRIANA OSORIO ROMERO Accountant T.P. 54630-T
ANDREA XIMENA BERNAL DÍAZ Tax Inspector T.P. 136092-T (See my enclosed report) (Appointed by Deloitte & Touche Ltda.)
6
Consolidated Change in Financial Position Statements for the Years Ending December 31, 2012 and 2011 (In millions of Colombian pesos) Working capital obtained from:
Operations: Net profits for the year Plus or minus items that did not affect the working capital Minority interest Depreciation Amortization of deferred charges Amortization of intangibles Loss (profits) from the sale of plant, property and equipment
Total working capital obtained from operations
Increase in long-term financial obligations Retirement of plant, property and equipment Decrease in long-term accounts receivable Decrease in intangibles Net effect of consolidation
Total working capital obtained
2012
2011
$ 33,529
$ 30,086
(101) 35,650 19,404 2,242 164
3,273 38,815 20,021 2,697 (1,948)
90,888 7,053 5,879 -
92,573 5,657 920 628 4,138
103,820
103,916
(39,091) (27,003) (12,623) (1,027) (258) (2) (2,463) (10,221) -
(5,475) (25,800) (15,492) (1,269) (1) (2,463) (21,381)
(92,688)
(71,881)
$ 11,132
$ 32,643
Working capital used for: Additions of plant, property and equipment Declared dividends Increase in deferred charges Increase in intangibles Increase in other non-current assets Decrease in retirement pensions Wealth tax payment Net effect of consolidation Decrease in long-term financial obligations
Total application of funds Increase in working capital 7
2012
Analysis of changes in working capital Current assets: Available Investments Accounts receivable Inventory Deferred assets Financial obligations Suppliers Accounts payable Associated companies Taxes, levies and charges Labor obligations Estimated liabilities and provisions Retirement pensions Other liabilities
Increase in working capital
2011
$ (12,508) 12,344 40,535 21,494 604 (17,212) (13,809) (22,490) (73) (3,297) (2,986) 18,049 (1,288) (8,231)
$ 13,144 4,885 34,683 13,957 (822) (2,648) 9,914 1,229 (3,692) (9,778) (1,419) (26,381) (45) (384)
$ 11,132
$ 32,643
The attached notes are an integral part of these consolidated financial statements. The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in these financial statements.
CARLOS MEJĂ?A B. Legal Representative
ADRIANA OSORIO ROMERO Accountant T.P. 54630-T
ANDREA XIMENA BERNAL DĂ?AZ Tax Inspector T.P. 136092-T (See my enclosed report) (Appointed by Deloitte & Touche Ltda.)
8
Consolidated Cash Flow Statements for the Years Ending December 31, 2012 and 2011 (In millions of Colombian pesos) CASH FLOWS FOR OPERATING ACTIVITIES Net profits for the year
Adjustments to reconcile the net profits with the net cash provided by (used for) operations Minority interest Allowance for doubtful accounts Inventory provision Depreciation Amortization of deferred charges Amortization of intangibles Tax on deferred income Net profits on the sale and/or retirement of plant, property and equipment
Net changes in operating assets and liabilities Accounts receivable Inventory Intangibles Deferred charges Other assets Suppliers Accounts payable and taxes, levies and fees Labor obligations and retirement pensions Estimated liabilities and provisions Other liabilities Net effect of consolidation
Net cash provided by operating activities
CASH FLOWS FOR INVESTMENT ACTIVITIES Resulting from the sale of plant, property and equipment Additions of plant, property and equipment
Net cash (provided by) used for investment activities
9
2012
2011
$ 33,529
$ 30,086
(101) 3,143 1,512 35,650 19,404 2,242 157 164
3,273 173 (307) 38,815 20,021 2,697 1,030 (1,948)
95,700
93,840
(43,678) (22,738) (1,027) (13,384) (526) 13,809 25,860 4,272 (18,049) 8,231 (10,221)
(33,314) (14,919) 628 (15,701) (6,222) 8,549 1,463 26,381 4,138
38,249
64,843
5,879 (39,091)
5,657 (5,475)
(33,212)
182
2012
2011
CASH FLOWS FOR FINANCING ACTIVITIES 24,265 (27,003) (2,463)
(18,733) (25,800) (2,463)
(5,201)
(46,996)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(164)
18,029
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
60,887
42,858
$ 60,723
$ 60,887
Increase (decrease) in financial obligations Dividend payment Wealth tax payment
Net cash used for financing activities
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
The attached notes are an integral part of these consolidated financial statements. The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the accounting books included in these financial statements and that these have been taken directly from the accounting books.
CARLOS MEJÍA B. Legal Representative
ADRIANA OSORIO ROMERO Accountant T.P. 54630-T
ANDREA XIMENA BERNAL DÍAZ Tax Inspector T.P. 136092-T (See my enclosed report) (Appointed by Deloitte & Touche Ltda.)
10
Notes of the Financial Statements for the Years Ending December 31, 2012 and 2011
(In millions of Colombian pesos and United States dollars, except when indicated otherwise) 1. Operations
Operations - Alpina Productos Alimenticios S.A. was incorporated on October 30, 1969 by Public Deed No. 6363 issued by the First Notary of Bogotรก as Lรกcteos Colombianos S.A. The company's name was later changed to Alpina Productos Alimenticios S.A. by Public Deed No. 8717 issued by the Fourth Notary of Bogotรก on December 28, 1978. By Deed No. 6115 issued by the Seventh Notary of Bogotรก DC, September 22, 1984, Sociedad Alpina Productos Alimenticios S.A. merged with Distribuidora Lacol Ltda. The Company's term expires on October 29, 2019. By Public Deed No. 001 issued by Notary 61 of the Capital District on January 2, 2008, Sociedad Alpina Productos Alimenticios S.A. acquired Alpical S.A., Copacking S.A., Copacol S.A., Passiflora Colombiana S.A. and Los Alpes S.A. The company's activity primarily involves the manufacture, purchase, sale, import and export of all types of food products and all types of agricultural and livestock activities. Reporting entity - These consolidated financial statements include the financial statements of Alpina Productos Alimenticios S.A. and its subordinate companies: Alpina Productos Alimenticios Alpieducador S.A., Alpina Antioquia Zona Franca S.A. (in liquidation), Alpina Cauca Zona Franca S.A.S. and Vadilbex Investment Limited, as described below:
11
Vadilbex Investment Limited - This company was incorporated on December 18, 2008 under the corporate laws of the constitutional monarchy of Barbados. It began operation in October 2009. This company receives income from its holdings in Sociedad Alpina Productos Alimenticios C.A., of which it owns 100% of the company's capital. The company acquired goodwill of USD 3,709,807 to be paid off in 20 years. Alpina Productos Alimenticios Alpiecuador S.A. - This company was incorporated by a public notary deed on September 18, 1995, approved by the Superintendence of Companies under Resolution No. 95.1.1.1.3499 dated October 26, 1995 and recorded in the Commercial Register on November 6, 1995. The company is involved in the manufacture, sale, commercialization, export and import of food products as well as supplies and raw materials used in the food industry. Primarily, the company manufactures and commercializes dairy products, a significant portion of which are imported by Alpina Productos Alimenticios S.A. Its activities and results are therefore dependent in large part on existing relationships and agreements with the aforementioned company. Alpina Cauca Zona Franca S.A.S. - This company was incorporated by Public Deed No. 2176 issued on November 21, 2008 by Notary 61 in Bogotรก. Its corporate life extends until February 4, 2108. Its primary activity involves the manufacture, transformation, development, exploitation, purchase, sale, distribution, import and export of all types of food products, products for
domestic use, agroindustrial materials, products for livestock raising, and raw materials needed for producing these products, which it then exclusively promotes once designated as an industrial user of goods and services in one or more permanent free trade zones established by Decree 780 of 2008 and any other regulations that may complement and/or modify it. Pursuant to Minute No. 3 of the General Shareholders' Meeting from September 29, 2010, recorded on November 23, 2010 under number 00027617 of Book IX, the company changed its name from Alpina Cauca Zona Franca S.A. to Alpina Cauca Zona Franca S.A.S., reforming its bylaws, transforming the corporate structure from a public limited liability corporation to a simplified joint stock corporation, and defining the life of the corporate entity as indefinite. On June 14, 2012, the company was classified as an Industrial User of Goods and Services of the Cauca Permanent Free Trade Zone.
bodies and its General Shareholders' Meeting. These serve as the basis for profit sharing and other appropriations. In addition, the Colombian Code of Commerce requires the preparation of general consolidated financial statements. These are also submitted to the General Shareholders' Meeting for approval, but they do not serve as a basis for sharing profits. The consolidated financial statements include the accounts of companies of which the Company possesses directly or indirectly more than 50% of the share capital or for which it holds administrative control. The consolidated financial statements dated December 31, 2012 and 2011 include financial statements for Alpina Productos Alimenticios S.A. and its subordinates: Vadilbex Investment Ltd., Alpina Productos Alimenticios Alpiecuador S.A., and Alpina Cauca Zona Franca S.A.S. The direct share percentages as at December 31 were as follows:
Bases for filing financial reports The Company and its subordinates must prepare and submit general unconsolidated financial statements to its highest supervisory
Share % 2012 Vadilbex Investment Ltd. Alpina Productos Alimenticios Alpiecuador S.A Alpina Cauca Zona Franca S.A.S.
Share % 2011 60.83 99.99 94
60.83 99.99 94
The value of the assets, liabilities, net worth, and fiscal year earnings for Alpina Productos Alimenticios S.A. and its subordinates before special items are subtracted is as follows:
As at December 31, 2012
Entity Alpina Productos Alimenticios S.A. Vadilbex Investment Ltd. Alpina Productos Alimenticios - Alpiecuador S.A. Alpina Cauca Zona Franca S.A.S.
As at December 31, 2011
Entity Alpina Productos Alimenticios S.A. Vadilbex Investment Ltd. Alpina Productos Alimenticios - Alpiecuador S.A. Alpina Cauca Zona Franca S.A.S. Alpina Antioquia Zona Franca – In liquidation
Total Assets $ 1,165,492 56,395 57,396 9,191
Total Assets $ 1,096,645 58,773 66,676 1,313 74
Total Liabilities
Total Net Worth
Profit (loss)
$ 629,738 23,018 38,345 8,978
$ 502,171 32,937 18,517 123
$ 33,583 440 534 90
Total Liabilities
Total Net Worth
Profit (loss)
$ 574,789 30,340 39,479 1,190 -
$ 491,881 18,932 25,288 123 64
$ 29,975 9,501 1,909 2 10
12
2. Summary of accounting policies The financial statements were prepared according to the accounting principles generally accepted in Colombia and stipulated by law, primarily Decrees 2649 and 2650 of 1993 and the regulations of the Commercial Superintendence, requiring that companies' management make certain estimates and use certain assumptions for assessing certain individual line items on financial statements and making relevant disclosures. Although they may differ from the final amounts, the management believes that the estimates and assumptions used were appropriate for the circumstances. Certain accounting principles used by the Company that comply with the accounting principles generally accepted in Colombia may not comply with the accounting principles generally accepted in other countries. The main accounting policies used by the Company to prepare its financial statements are described below: a. Bases of consolidation - The consolidated financial statements include the accounts of Alpina Productos Alimenticios S.A. consolidated with those of the subordinates mentioned in Note 1. As such, the financial statements cover all assets, liabilities, equity and income of the affiliates after the deduction of investments, operations, and any offsetting balances. Any significant balances or operations between related companies were discounted during the consolidation. b. Currency unit - The currency unit used by the Company is the Colombian peso. c. Accounting period - The Company's bylaws establish that books be closed and general financial reports be prepared and released on December 31 of every year. d. Relative importance or materiality - Economic events are recognized and reported according to their relative importance. When the financial reports are prepared, materiality shall be determined in relation to all current assets and liabilities, the total assets and liabilities, the working capital, or the results for the year, as appropriate. As a general rule, material events are equal to 5% of the total value of assets, liabilities, and shareholder equity and 5% of the value of the operating income.
13
e. Recognition of revenue - Revenue is recognized and recorded based on orders delivered and invoiced from the moment the essential risks and benefits associated with the ownership and possession of the property are transferred to the client. f. Cash and cash equivalents - For the purposes of the presentation of the cash flow statement, the company classifies high liquidity investments in the cash equivalents line item. g. Investments - Fixed marketable investments are recorded at cost and are valued by the accrual method; variable and permanent marketable investments are valued at cost adjusted for inflation until December 31, 2006 and adjusted according to their intrinsic value. h. Provision for bad debts - The provision for bad debts is reviewed and updated at the end of every period based on a management analysis of the status of the balances and the collectability of individual accounts; sums considered unrecoverable are occasionally charged to this provision. i. Inventories - Recorded at the lesser of the cost of acquisition or production, and the market value. Inventories are valued by the weighted average cost method. An inventory protection provision is recorded based on the technical analysis of obsolescence and slowmoving inventory. j. Deferred charges - The Company recognizes as differed charges those expenses incurred for the items described below and whose amortization occurs according to the straight line method for periods that vary for each item as follows:
Payback period Prepaid expenses: Interests, rents, utilities and others Insurance and bonds Deferred charges: Studies, investigations and projects Computer software Molds and dies Buckets Baskets and pallets Improvements on other property
Term of contract Term of contract 10 years 1 to 7 years 1 year 3 years 3 years Term of contract
k. Plant, property and equipment - Plant, property and equipment is carried at cost and primarily includes financing expenses and differences in liabilities incurred for the plant, property and equipment's acquisition until they are in a condition to be used. The sale and retirement of such assets are discounted from the respective adjusted net cost and the differences between the sale price and the net adjusted cost are applied to the results. Depreciation is calculated on the cost adjusted for inflation until December 31, 2006 based on the likely useful life of the assets at the annual rates of:
Depreciation method Buildings Machinery and equipment Furniture and appliances Vehicles Computer equipment Medical and scientific equipment Sewage, plant and networks Security system
5% 10% 20% 20% 10% 10% 10%
Straight line Production units Straight line Straight line Straight line Straight line Straight line Straight line
l. Goodwill - Goodwill is generated by acquisitions made at a higher value than the book value, specifically the investment made in the Ecuadorean Proloceki company (2007). This asset is amortized over a period of 20 years according to the straight line
method. The contingent liabilities associated with the acquisition of investments is carried as the higher goodwill value. m. Appreciations (depreciations) - Appreciations and depreciations correspond to the differences between a) the replacement value as determined by technical appraisal and the net book value of the plant, property and equipment, and b) the cost of the investments and their intrinsic value. Permanent equity investments in stocks or share capital of entities not controlled by the Company are carried at cost. At the end of the fiscal year, they are adjusted to their market value determined according to the intrinsic value of each investment. Positive adjustments are recorded as asset appreciations with a credit or debit made to the appreciation surplus. Negative adjustments are recorded as depreciations, regardless of the net balance. Appreciations of plant, property and equipment correspond to the difference between the replacement value and the net book value carried by homogeneous groups of assets, which are recorded in separate asset accounts and as an appreciation surplus not subject to distribution. n. Labor obligations - Liabilities corresponding to the Company's obligations related to statutory and non-statutory employee benefits. o. Income tax provision - The company determines the income tax provision based on its taxable income or presumed income, if higher, estimated according to specific rates in the tax code. The temporary differences between the books and the taxes while certain line items are being processed are also recorded as differed income tax, provided that there is a reasonable expectation that these differences will be resolved. p. Wealth tax and its surcharge - In accordance with the law regulating the accounting principles generally accepted in Colombia and the alternative recording practices established therein, the Company has opted to annually charge the equivalent amounts due for the respective wealth tax and surcharge period to the net worth revaluation account. q. Retirement pensions - This represents the value of all future payments the Company must make to
14
those employees that satisfied or will satisfy certain legal requirements regarding age, time of service and other obligations. The value is determined by actuarial studies that the Company obtains each year. For employees covered by the new social security system (Law 100 of 1993), the Company covers their pensions obligations by paying into pension funds under the terms and conditions set forth in said law. r. Suspense accounts - This includes contingent responsibilities and rights and differences between book and tax values. s. Transition to International Financial Information Reporting Standards - Pursuant to Law 1314 of 2009 and regulatory decrees 2706 and 2784 of December 2012, Alpina Productos Alimenticios S.A. is required to begin transitioning from the accounting principles generally accepted in Colombia to the International Financial Reporting Standards (IFRS). For this purpose, the Public Accounting Technical Council issued strategic guidelines that classified three groups of companies. As the Company belongs to Group One (1), the mandatory transition period will begin on January 1, 2014 and the first comparative financial statements to be drafted according to the IFRS shall be issued on December 31, 2015.
Vadilbex Investment Limited, Alpina Productos Alimenticios Alpiecuador S.A. were converted into Colombian pesos according to the procedure described in bulletin 100 of 1995 issued by the Colombian Financial Superintendence. The following procedure was used: 1. The balances in bolĂvars were converted into dollars at the exchange rate of 4.30 bolĂvars per dollar. 2. Balance account balances were converted into Colombian pesos at the year-end exchange rate, which was $1,768.23 per dollar for 2012 and $1,942.70 per dollar for 2011. The balances from the income statement were converted using the average exchange rate certified by the Financial Superintendence, which for 2012 was $1,798.23 per dollar and for 2011 was $1,848.17 per dollar.
t. Balance conversion - The financial statements for
3. Balances in foreign currency On December 31, the Company and its subordinates declared the following assets and liabilities in foreign currency, which were recorded in their peso equivalents on that date:
US$
15
2012 Equivalent in millions of pesos
US$
2011 Equivalent in millions of pesos
Assets Liabilities
US 43,995,528 51,226,414
$ 77,794 90,580
US 21,387,904 31,043,393
$ 41,550 60,308
Net (liability) asset position
US (7,230,886)
$ (12,786)
US (9,655,489)
$ (18,758)
4. Available 2011
2012 Petty cash General cash (includes 2012 US $42,085 and 2011 US $23,678) Foreign banks (includes 2012 US $3,999,202 and 2011 US $5,702,373) Colombian banks Total
$ 166 7,053 7,342 28,843
262 4,301 14,166 37,182
$ 43,403
$ 55,911
5. Investments 2011
2012 a) Investments: Investment trust rights Tax refund instruments Subtotal b) Permanent investments: Stocks in unaffiliated companies La Recetta Soluciones Gastron贸micas Integradas S.A. Other shares in social clubs Sociedad Portuaria de Buenaventura (Buenaventura Port Authority)
$ 17,122 198
$ 4,966 10
$ 17,320
$ 4,976
$ 696 167 14
$ 696 167 14
$ 877
$ 877
6. Clients 2012 Colombian currency Foreign currency (2012 - US $986,430 and 2011 - US $1,160,240) Minus provision for bad debts Total
2011
$ 81,198 1,744
$ 88,522 2,254
82,942 (3,022)
90,776 (2,599)
$ 79,920
$ 88,177
16
The change in the provision for bad debts was as follows:
2011
2012 Balance at the beginning of the year Write-offs Recoveries Provisions
$ 2,599 (2,720) (3) 3,146
$ 3,041 (615) (64) 237
$ 3,022
$ 2,599
Balance at the end of the year
7. Economic associates
The balances and transactions with associated companies as at December 31 comprised:
2011
2012 Accounts receivable: La Recetta Soluciones Gastron贸micas Integradas S.A Sucursal Colombia Sociedad Alpina Corporativo S.A. Accounts payable: Sucursal Colombia Sociedad Alpina Corporativo S.A. La Recetta Soluciones Gastron贸micas Integradas S.A
$47
$ 965 70
$ 47
$ 1,035
$ 7,245 -
$ 7,142 30
$ 7,245
$ 7,172
The above transactions were carried out according to the conditions, terms, risks and interest rates in effect on the market. Transactions with directors and managers - In 2012 and 2011, the transactions were for $624 and $787, respectively. The conditions reflect terms between three and four years without financial cost.
8. Miscellaneous accounts receivable 2011
2012 Loans to individuals US $35,824,058 (2011 - US $11,135,533)1 Other2 Advances Accounts receivable for workers Deposits Claims Total
$ 63,345 12,626 6,556 2,413 524 -
$ 21,633 8,882 3,509 2,262 126 9
$ 85,464
$ 36,432
1 For 2012 and 2011, this corresponds to loans made to Alpina Foods for working capital of $63,345 and $21,633, respectively. 2 For 2012, this corresponds primarily to the sale of the Casa Matriz line of bottles to Spain for $3,798.
17
9. Inventory 2011
2012 Raw materials and packaging Finished products Products in process Supplies and replacement parts Inventory in transit Merchandise not produced by the Company or its subordinates Provision for obsolescence
$ 55,699 34,098 28,044 8,981 2,105 893 (595)
$ 47,455 27,986 21,481 6,485 3,716 959 (84)
129,224
107,998
(1,926)
(2,194)
$ 127,298
$ 105,804
Subtotal Minus: Long-term portion Total The change in the provision is as follows: Balance at the beginning of the year Provisions Uses during the period
84 1,512 (1,001)
Balance at the end of the year
391 (307)
$ 595
$ 84
10. Deferred charges 2012 Computer programs Studies, investigations and projects Other Licenses Improvements on other property Molds and dies Total
2011
$ 39,551 6,857 6,395 3,085 417 101
$ 47,418 5,475 4,733 3,504 2,039 18
$ 56,406
$ 63,187
The amortization of differed charges applied to the results of the years ending December 31, 2012 and 2011 was $19,404 and $20,021, respectively.
18
11. Plant, property and equipment 2012 Net Value
Appraisal value
Appreciation
$ 175,184 124,012 4,506 3,946
$ 369,096 180,099 48,562 7,591
$ 218,853 67,634 41,084 7,076
31,640 7,151 -
20,866 3,354 -
329,350
644,139
358,867
Construction works in progress1 $ 5,607 $$Assembled machinery and equipment1 30,467 - -
$ -
$ -
- -
-
-
$ 644,139
$ 358,867
Net Value
Appraisal value
Appreciation
$ 174,242 139,459 13,799 1,887
$ 378,830 201,331 48,408 8,080
$ 204,588 61,872 34,609 6,193
34,884 8,060 2,720
22,471 2,667 -
Cost Machinery and equipment $ 395,311 Constructions and buildings2 186,851 Transportation equipment and freight 63,268 Computer and communication equipment 15,060
Cumm. Dep. $ 218,060 62,839 58,762 11,114
Land 13,543 13,543 8,504 Office equipment 15,078 6,574 1,585 - 1,585 Machinery and equipment in transit Subtotal
690,696
Subtotal Total
36,074 $ 726,770
359,279
$ 359,279
$ 329,350
2011 Cost Machinery and equipment $ 383,800 Constructions and buildings 188,169 Transportation equipment and freight 63,063 Computer and communication equipment 15,162
Cumm. Dep. $ 209,558 48,710 49,264 13,275
Land 12,413 12,413 9,760 Office equipment 15,153 5,393 2,720 - 2,720 Machinery and equipment in transit Subtotal
330,567
349,913
682,313
332,400
Construction works in progress1 Assembled machinery and equipment1
$ 581 $19,779 -
$581 19,779
$ -
$ -
Subtotal
20,360 -
20,360
-
-
$ 370,273
$ 682,313
$ 332,400
Total
19
680,480
$ 700,840
$ 330,567
There are no restrictions or taxes on plant, property and equipment. The depreciation of fixed assets charged against the results during the years ending December 31, 2012 and 2011 was $35,650 and $38,815, respectively. 1 As at December 31, 2012 and 2011, construction works in progress and assembled machinery included projects to establish and improve production lines. 2 In 2012, the assets of the Casa Matriz warehouse in Cali, lots in Melgar and plant in Pasto were sold. These sales generated profits of $798.
12. Intangibles 2011
2012 Goodwill1 Rights Acquired trademarks
$ 31,685 5,091 231
$ 32,598 3,857 231
Subtotal
37,007
36,686
Accumulated amortization
(10,145)
(8,609)
$ 26,862
$ 28,077
Total
1 Goodwill corresponds to the difference between the transaction price and the book value of the net assets acquired in the purchase of Proloceki S.A. (Ecuador) for $26,117.
The amortization of intangibles was charged against the results of the years ending December 31, 2012 and 2011 was $2,242 and $2,697, respectively.
13. Financial obligations Effective annual average interest rate Promissory notes US $48,108,199; (2011 - US $31,043,393)2 Rental contracts and leasing1 Overdrafts (in the books) Current portion
FTD + 2.4 FTD + 4.0
2012
2011
$ 149,903 2,435 72
$ 127,001 1,076 68
152,410
128,145
(60,141)
(42,929)
$ 92,269
$ 85,216
Long-term portion The due date of the long-term obligations in upcoming years is as follows: 2014 2015 2016 onward
$104 1,346 90,819
$ 92,269
1 The types of property covered by "leasing" include vehicles and computers with an average term of three years. 2 This category includes obligations with Colombian financial institutions subject to market interest rates and whose payback periods vary depending on the type of obligation. The interest paid in 2012 was $34,446 (2011: $34,625). As at December 31, 2012, there were no delinquent obligations.
20
14. Bonds and commercial papers 2012
2011
Commercial papers Bonds
$ 260,000
$ 260,000
Total
$ 260,000
$ 260,000
Operations - Public issuer of securities The Colombian Financial Superintendence, by means of Resolution Number 2125 of December 24, 2008, authorized the Company to record straight bonds and its public offer with the National Registry of Securities and Issues. The authorized amount of the issue was $360,000 with a nominal value of $1,000 for each bond and a term be-
15. Taxes, levies and charges
Tax returns for the tax years 2011 and 2010 are subject to the acceptance and review of the tax authorities. The management of the Company and its legal advisors believe the amounts recorded as liabilities for taxes due are sufficient to bear any liability that may occur for these years. The tax laws applicable to the Company stipulate that: a. The base for determining the income tax shall not be less than 3% of the liquid assets on the last day of the previous tax year. The rate applicable to the Company is 33%. For 2012, the company recognized an estimated income expense of $17,455 (2011: $10,950), determined by the ordinary income system. b. Since the 2007 tax year, taxpayers may readjust the cost of movable and immovable property considered to be fixed assets on an annual basis. The adjustment percentage for 2012 is 3.04% and shall only apply for tax purposes. c. Since 2004, income tax payers that carry out operations with economic affiliates or related foreign parties and/or with residents of countries considered to be tax havens are, for income tax purposes, required to determine their ordinary and extraordinary income, their costs and deductions, and their assets and liabilities, using prices and profit margins set by the market for these operations. As at this date, the Company's management and advisors had
21
tween eight (8) and fifteen (15) years from the date the bond is issued. On February 10, 2009, the first round of bonds was placed on the Colombian stock exchange at $260,000 through a Dutch auction. These bonds were primarily used to replace bank loans for $238,566. The characteristics of the bond issue were as follows: Series A10: $121,920 million, 10-year term, CPI + 6.7% Series B12: $51,580 million, 12-year term, 11.49% $86,500 million, 15-year term, CPI + Series A15: 7.4% In 2012 and 2011, quarterly interests of $26,655 and $37,092, respectively, were paid.
not yet updated the study for 2012, but they feel that based on the satisfactory results of the study in 2011, that they will not need major additional tax provisions. d. Since the 2011 tax year, no income taxpayer may use the special deduction for real productive asset investment. e. By virtue of the legal stability contract signed between the Company and the Colombian Ministry of Industry, Trade and Tourism in 2006 for a term of six (6) years, some of the changes mentioned do not apply to the Company as these regulations were issued after the year in which the contract was signed. Wealth tax - The Company paid $9,853 for this tax based on the liquid assets in its possession on January 1, 2011 at a rate of 4.8% plus 1.2% for the surcharge. The return was file in May 2011 and paid in eight equal installments in the months of May and September of 2011, 2012, 2013 and 2014. For 2012, the Company paid and carried the amount of $2,463 for the installments due for the wealth tax and its surcharge in the asset revaluation account. The amount of $4,926 due for subsequent periods is recorded in suspense accounts. The tax regulations that apply to Alpina Productos Alimenticios C.A. stipulated that (figures expressed in
thousands of bolivares fuertes (Bs.Fs.): a) Taxable income is taxed at the rate of 34%. b) In January 2001, taxation on worldwide income, the capital gains tax, and regulations on international fiscal transfers were incorporated into the Income Tax Reform Law published in October 1999. In December 2001, the Reform Law was enacted. Among other things, it introduces certain modifications to the capital gains tax, the transfer price system, and inflation adjustments. For 2012, the Company did not incur an income tax expense due to a tax loss for the fiscal year. In 2011, the Company recorded an estimated income tax expense of Bs.Fs. 8,299. Venezuelan tax law requires an annual inflation adjustment calculation for non-monetary line items and net worth. This includes counting the net tax income as a taxable or deductible line as appropriate. As for plant, property, equipment and other similar assets, this regular inflation adjustment is depreciated or amortized for the rest of the useful fiscal life of the respective assets. For inventory, this adjustment is made in the sale cost of products once they are bought or sold. The total regular adjustment for the year is determined as the algebraic sum of the amount of the different inflation adjustments for each non-monetary line item and the net worth. Transfer prices - Taxpayers subject to income tax that carry out transactions with associated foreign entities must determine their income from exports and their costs for the goods and services acquired from associated foreign entities according to legally established procedures. The management carried out the study on transfer prices required to document said transactions. This did not reflect significant differences for the amounts used to determine the net tax income from the year ending on December 31, 2011. The tax regulations that apply to Alpiecuador stipulate that (figures expressed in dollars): The 2012 income tax rate is calculated at 23% on profits subject to sharing and 15% on profits subject to capitalization. Until 2009, cash dividends that were filed or distributed to Ecuadorean or foreign shareholders were not subject to any additional withholding. Since 2010, pursuant to the latest tax reforms, dividends distributed to individuals residing in Ecuador or companies domiciled in tax havens or jurisdictions with lower tax rates have been subject to income tax. For 2011, the expense provided for income tax rose to US $455,143 (2010: US $414,884). Transfer prices - The company does not possess the
transfer price study for 2012 required by law as the deadline for filing it with the tax authorities is not until June 2013. This study constitutes a basis for determining whether operations with related entities have been carried out at reasonable prices that are close to market values. On the date on which the financial statements were issued, this study was in progress and the Company's management felt that any outcomes would lack relative importance. On December 31, 2011, the Company completed a price transfer study that established that transactions with related entities were carried out at reasonable prices close to market values. Tax reform - Below are summaries of some modifications introduced to Colombian tax law for 2013 onwards by Law 1607 of December 26, 2012: Income tax - The taxable income rate for corporate entities changed to 25% on January 1, 2013. CREE income tax for social contributions - This tax was created on January 1, 2013. This tax is calculated based on the gross income minus income not included in income taxes, costs, deductions, exemptions and occasional earnings at a rate of 8%. For 2013, 2014 and 2015, the rate will be 9%. When the basis for paying the CREE tax is settled, income from the tax period cannot be offset by tax losses or excesses of presumed income from previous periods. Contribution exemption - Corporate entities filing income tax are exempt from making social contributions to the Servicio Nacional del Aprendizaje ("National Training Service," SENA) and the Instituto Colombiano de Bienestar Familiar ("Colombian Institute for Family Wellbeing," ICBF) for workers that earn up to ten (10) times the legal minimum monthly salary. This exemption takes effect from the time the withholding system is put in place to collect the CREE income tax (no later than July 1, 2013). Accounting standards - For tax purposes only, references in tax regulations to accounting standards shall remain in effect for the four (4) years following the application of the International Financial Reporting Standards. Consequently, during the aforementioned period, the tax concepts based on line items and included in tax returns shall continue unchanged. Likewise, accounting requirements to recognize special tax situations shall no longer be applicable once the new accounting framework comes into effect.
22
Obligation for businesses to file consolidated financial statements - Duly registered economic and/or business groups must electronically submit consolidated financial statements and their respective attachments to the National Tax and Customs Agency no later than June 30 of every year.
16. Labor obligations 2012 Consolidated severance packages Vacations Social benefits Severance package interest
Total
17. Estimated liabilities and provisions
2011
$ 6,938 6,018 3,457 3,328 726 $ 20,467
$ 6,968 5,503 4,328 682 $ 17,481
Retirement pensions - The value of the Company's pension obligations as at December 31, 2012 and 2011 have been determined at a technical annual interest rate of 4.8% pursuant to legal regulations. The balance is entirely amortized. Actuarial calculation for Colombia Actuarial calculation for Ecuador
Current portion Long-term portion
$ 1,030 1,796
$ 1,033 507
2,826
1,540
(1,986)
(698)
$ 840
$ 842
The value of the pension obligation at the end of each period is based on actuarial calculations. Said calculations were made by an independent actuary pursuant to applicable regulations. As at December 31, 2012 and 2011, the amortization of the calculation was charged against the results at $109 and $110, respectively. In Ecuador, it was charged at $43 and $48, respectively.
23
2012
2011
Other Supplies and replacement parts Interest Contingencies for legal proceedings Advertising Transport, freight, hauling Utilities Fees Technical services Travel expenses Commissions
$ 15,872 15,140 4,726
$ 24,524 17,979 6,633
4,644 4,444 2,540 1,358 952 904 14 39
4,138 7,915 2,172 1,034 1,573 1,348 783 584
Total
$ 50,633
$ 68,683
18. Equity
2012
Share capital - As at December 31, 2011 and 2010, the capital could be broken down as follows: $ 18,000 Authorized: 180,000,000 common stocks at a nominal value of $100 each. $ 15,656 Underwritten and paid capital 156,556,992 stocks in 2012 and 2011. Declared and paid dividends - At the ordinary General Shareholders' Meeting held on March 2012, a dividend for each subscribed and paid stock was approved. April 2012 July 2012 October 2012 January 2013 Total
$ 6,750 6,751 6,751 6,751 $ 27,003
Dividends were paid as follows: Legal reserve - Colombian law requires that the Company reserve 10% of its profits after taxes until at least 50% of the underwritten capital has been reserved. The law prohibits this reserve from being distributed during the Company's life, although it may be used to absorb losses. The Company has exceed this profit appropriation percentage required by law. Voluntary reserves - These include reserves for future expansions and for stock repurchases authorized by the General Shareholders' Meeting for specific purposes. These reserves are unrestricted and are at the disposal of the General Shareholders' Meeting. Equity method surplus - This surplus corresponds to increases or decreases in the equity of subordinate companies that arise from equity line items other than those for earnings but that increase or decrease the value of the investment registered by the controlling entity. Net worth revaluation - The revaluation of net worth cannot be distributed as profit but it can be capitalized. Minute No. 90 of the General Shareholders' Meeting from December 1, 2011 authorized the wealth tax as a way to lower the net worth. The decrease for 2011 was valued at $2,463 and corresponds to the amortization of one fourth of the wealth tax (see Note 16).
For plant, property and equipment For investments Total
2011
$ 360,021 2,686
$ 332,400 9,014
$ 362,707
$ 341,414
19. Operating income 2012 Manufacturing Wholesale and retail trade Minus: Returns Discounts Discount provision Total
2011
$ 1,755,276 11,893
$ 1,556,835 15,103
(14,010) (130,695) (2,928)
(11,068) (118,598) (2,074)
$ 1,619,536
$ 1,440,198
20. Sales operating expenses 2012 Personnel Advertising Transport, freight, hauling Other services Temporary Miscellaneous Maintenance and repairs Depreciation Rents Taxes Provisions Travel expenses Amortizations Insurance Legal expenses Fees Contributions and memberships Total
2011
$ 100,754 90,802 53,425 18,495 15,804 15,358 12,920 10,988 10,189 4,345 2,577 2,074 2,073 2,017 758 568 198
$ 89,924 84,751 45,315 17,207 14,612 14,180 10,519 9,846 7,930 4,539 1,051 1,887 2,419 1,920 633 373 119
$ 343,345
$ 307,225
Appreciation surplus - The company recorded the following appreciations:
24
21. Overhead operating expenses 2012 Fees Personnel Amortization Rents Maintenance and repairs Taxes Travel expenses Miscellaneous Advertising Housekeeping and security Other services Provisions Depreciation Transport, freight, hauling Temporary Contributions and memberships Insurance Legal expenses Fitting and installation Total
23. Non-operating expenses 2011
$ 49,744 48,011 16,095 13,455 12,252 8,980 6,339 4,834 3,938 3,885 2,898 2,420 2,047 1,605 1,575 1,199 900 846 102
$ 30,139 49,527 17,345 18,987 10,273 7,729 3,768 3,670 7,858 3,227 2,589 17 2,246 783 474 1,180 1,067 595 70
181,125
$ 161,544
22. Non-operating income 2012 Exchange differences Financial returns and discounts Provision recovery Profits from the sale of plant, property and equipment Rents Miscellaneous Indemnifications Services From previous years Total
Interest Exchange differences Miscellaneous Other financial expenses Commissions Extraordinary expenses Sales from sales and property retirement
$ 9,839 4,198
$ 20,931 5,894
7,022 1,296
3,928 1,946
442 6,779 390 141 258
656 630 289 248 11
$ 30,365
$ 34,533
2011
$ 35,225 10,795 9,756 8,718 6,951 4,965
$ 35,761 18,884 5,339 7,373 5,652 1,617
2,939
3,086 $ 77,712
24. Suspense accounts 2012 Debtor contingent rights Control debtors: Totally depreciated plant, property and equipment Assets acquired under financial lease
Contingent creditors: Guarantees and commitments Disputes and/or claims Goods and securities received in guarantee Goods and securities received from third parties
Control: net worth adjustment for inflation Debtors Creditors
Suspense account total
2011
$ 654
$ 653
181,705
171,403
25,535
2,076
2,076 1,148 395
394 25,535 1,147
211,513
200,555
10,690 1,163
11,345 6,694
1,660 1,882 15,395
1,660 1,882 21,581
58,263
58,263
384,448 485,178
365,540 378,861
927,889
25
$ 79,349
Total
Unused letters of credit Other rights and assets Write-offs
2011
2012
$ 1,154,797
802,664
$ 1,025,453
25. Contingencies As at December 31, the Companies had various civil, commercial, administrative and labor lawsuits pending against them related to the normal course of business. The management of the Companies and their legal advisors do not believe that the results of the suits will generate significant additional liabilities that should be recorded, or, if they do, that these liabilities should not significantly affect the Companies' financial position. As such, it has not been deemed necessary at this time to create any additional provisions to cover these risks.
26. Indexes As at December 31, the most important financial indexes were:
2012 Liquidity indexes: Liquidity ratio (Current assets/current liabilities) Inventory days (Inventory/sales cost) * (365) Solvency and coverage (Net worth - appreciations - net worth revaluation) / share capital Total assets / total liabilities Profitability: Net margin Net profitability / sales Operating margin Operating profits / ROA (return on assets) sales ROE (Return on Equity) Net profits / (equity - year profits)
1.27
2011
1.27
47.57
45.01
5.91
6.14
1.81
1.86
2.07
2.01
6.40
6.64
6.68
6.11
26
27
TABLE
OF
INDICATORS
GRI
No. 1. 1.1 1.2 2.
INDICATOR
SCOPE
2012 COMMENTS
PAGE
STRATEGY AND ANALYSIS Statement about the relevance of sustainability Main impacts, risks and opportunities
4
See Chapter 1. From our President
6
See Chapter 2. About This Report Materiality
ORGANIZATIONAL PROFILE
2.1
Name of the Organization
2.2
Main brands, products and services
13
Operating structure of the Organization, including the main divisions, operating entities, affiliates and joint ventures
See Chapter 4. Our Organization Main Brands and Products
19
See Chapter 4. Our Organization Corporate Model.
2.3
2.4 2.5
2.6 2.7
2.8 2.9
2.10 3.
Sociedad Alpina Corporativo S.A
Location of the Organization's headquarters Number of countries in which the Organization operates and where the Organization engages in significant activities
11
Type of ownership and corporate structure Markets served (including geographic breakdown, end use sectors, and types of clients/beneficiaries)
Address: Km. 3 v铆a Brice帽o-Sop贸, Sede Administrativa, Sop贸, Cundinamarca, Colombia. See Chapter 4. Our Organization Countries of Operation and Markets Supplied. Sociedad Alpina Corporativa S.A. is a limited liability corporation.
11
See Chapter 4. Our Organization Countries of Operation and Markets Supplied.
Description of the reporting organization
37
Significant changes to the Organization's size, structure and ownership during the period covered by the report
See Chapter 5. Sustainability Challenges - D2. Economic Value.
19
See Chapter 4. Our Organization Corporate Model.
Awards and distinctions received during the period
27
See Chapter 4. Our Organization Recognitions.
6
See Chapter 2. About This Report.
PARAMETERS OF THE REPORT Organizational Profile
1
3.1
Period covered by the information included in the report
3.2
Date of the previous report (if applicable)
Alpina 2011 Annual Sustainability Report.
3.3
Timeframe for preparing reports (annual, biennial)
Annual
3.4
Contact person for questions about the report or its contents
www.alpina.com
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
6
See Chapter 2. About This Report.
Scope of the Report 3.5
Definition of the contents of the report
3.6
Scope of the report (countries, divisions, affiliates)
The report covers countries where we are present: Colombia, Venezuela, Ecuador, United States and Peru.
3.7
Limits to the scope and coverage of the report
We did not identify limits to the scope or coverage of the report.
3.8
Basis for including information about joint ventures, affiliates, rented facilities, subcontracted activities and other entities that can significantly affect comparability between periods
No information was reported on joint ventures, affiliates, rented facilities, subcontracted activities.
3.9
Techniques to measure data and bases of calculation, including hypotheses and techniques for estimates applied when collecting indicators and other information for the report
3.10
3.11
Description of the effect that restating information from previous reports could have, along with the reasons that motivated this restatement
Each table or graph with GRI indicators or data included in the report has comments that explain the methodology and assumptions used for the calculation.
72
Significant changes relating to previous periods in terms of the scope, coverage and evaluation methods applied to the report
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change. There were no significant changes from previous periods in terms of the scope, coverage or evaluation methods used for this report.
Report Table of Contents 3.12
Table that indicates the location of the basic contents of the report
3
See Table of Contents.
104
See Chapter 7. External Verification.
Verification 3.13 4.
Current policy and practices related to requesting external report verification
GOVERNANCE, COMMITMENTS AND PARTICIPATION BY STAKEHOLDERS Governance
4.1
The governance structure of the Organization, including the highest governing committees responsible for tasks such as defining the strategy or supervising the Organization
20
See Chapter 4. Our Organization Corporate Model - Alpina Colombia Governing Bodies.
2
No.
SCOPE
PAGE
2012 COMMENTS
4.2
Indication whether the chairperson of the highest governing body also occupies an executive post (and if so, explanation of this function within the Organization and justifications)
The person who chairs the Board of Directors and the Audit Committee does not hold an executive post at Alpina Productos Alimenticios S.A.
4.3
For organizations that have a unitary board structure, the number of members of the highest governing body that are independent or not executives
Alpina Productos Alimenticios S.A. has a Board of Directors and a Committee of five primary members and their respective alternates. Of these, three primary members and their alternates are independent in accordance with the terms of the legislation affecting issuers of securities. The two remaining members and their alternates belong to the parent or controlling company and are not independent.
4.4
3
INDICATOR
Mechanisms for shareholders and employees to communicate recommendations or advice to the highest governing body
Mechanisms for shareholders are established in the bylaws and in the regulations of the Shareholders' Meeting and the Board of Directors. They are based on reporting opportunities and situations to both the Legal Representative and the Tax Inspector. There are mechanisms for employees to escalate their requests to the Company's management. "Spokespeople" are non-unionized employee representatives who not only play a major role during collective bargaining, but also represent employees with Human Resources at their respective locations. Human Resources trains employees and provides information about specific topics. Unionized workers have their respective "Claims Committees" governed by law and collective bargaining agreements. There is also an "Abuse Committee" that complies with legal requirements and internal work regulations. As for specific mechanisms to present recommendations to the highest governing body, the company's Board of Director, there is no concrete method.
No.
INDICATOR
4.5
Relationship between the compensation of the members of the highest governing body, upper management and executives and the performance of the Organization
4.6
Procedures to avoid conflicts of interest in the highest governing body
4.7
Procedures for determining the necessary training and experience for members of the highest governing body to be able to guide the Organization's economic, environmental and social strategies
4.8
Statement of the internally developed mission and values, code of conduct, and principles related to economic, social and environmental performance, and the status of their implementation
4.9
Procedures of the highest governing body to supervise the Organization's identification and management of economic, environmental and social performance including associated risks and opportunities, in addition to adherence to or compliance with international standards, codes of conduct, and principles
4.10
Procedures to evaluate the performance of the highest governing body, especially in relation to economic, social and environmental performance
SCOPE
PAGE
2012 COMMENTS The Balance Scorecard is the tool that aligns Alpinista efforts with Alpina strategy and that monitors our Organization's strategic goals.
The Board of Directors is subject to its regulations and, as part of the company's Corporate Governance measures, the Code of Good Governance, and the Ethics Handbook, there are specific regulations about this body. On an annual basis and within the official notification period for the General Shareholders' Meeting, the list(s) of candidates for the company's Board of Directors and Audit Committee are presented with the candidates' respective resumes. The candidates are evaluated on their compliance with bylaw and legal requirements. Likewise, if during the annual period it is necessary to make changes to the compositions of these bodies, candidates nominated by the shareholders are presented with their resumes for evaluation.
12 and 13
See Chapter 4. Our Organization Corporate Principles - Higher Purpose and MEGA 2017.
The General Shareholders' Meeting takes place on a yearly basis.
The satisfactory performance of the members of the Board of Directors is evaluated annually. Members are given relevant feedback.
4
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Commitments with External Initiatives 4.11
Description of how the Organization has adopted a precautionary approach or principle
4.12
Externally developed social, environmental and economic principles or programs as well as any other initiative that the Organization has signed or approved
4.13
5
Main associations to which the Organization belongs (such as industry associations) and/or national and international entities that the Organization supports
The Corporate Risk Management System is a structure that manages and continually improves the Organization's processes through a logical and systematic method to monitor, identify, analyze, manage, and communicate risk.
99
See Chapter 5. Sustainability Challenges - D7. Social Value.
Colombia: Asociación Nal. Industriales (ANDI) (National Association of Industry), Asociación Nal. Comercio Exterior (ANALDEX) (National Foreign Trade Association), Asociación Nal. Anunciantes (ANDA) (National Advertising Association), Asociación Col. Procesadores de Leche (ASOLECHE) (Colombian Milk Processors), Consejo Emp. Col. Desarrollo Sostenible (CECODES) (Sustainable Development Business Council), CEMPRE (Recycling Association), Centro Regional Pacto Global (Regional Global Compact Center), Consejo Privado de Competitividad (Private Competition Board), Cámara Colombo Venezolana (Colombo-Venezuelan Chamber of Commerce), Cámara Colombo Suiza (Colombo-Swiss Chamber of Commerce), Cámara Colombo Americana (Colombo-American Chamber of Commerce), Cámara Colombo Ecuatoriana (Colombo-Ecuadorean Chamber of Commerce), Cámara Colombo Peruana (Colombo-Peruvian Chamber of Commerce), Fundación para el Progreso de Antioquia (PROANTIOQUIA) (Antioquia Foundation for Progress), Fundación Prodesarrollo Occidente Sabana (PRODEOCSA) (Western Sabana Development Foundation), Fundación Prodesarrollo Norte Sabana (PRODENSA) (Northern Sabana Development Foundation), FUNDESINPA (Cauca Association of Industry and Trade), Corporación Empresarial Norte del Cauca (Norte del Cauca Business Corporation), Asociación de Gestión Humana (Regionales) (regional human resource asscoiations) and Instituto Colombiano Derecho Tributario (Colombian Institute of Tax Law). Venezuela: Cámara Venezolana de Industrias Lácteas (Venezuelan Chamber of Dairy Industry), Asociación Profesional de Crédito Empresarial (Professional Association of Business Credit), Cámara Venezolana de Industrias de Alimentos (CAVIDEA) (Venezuelan Food Industry Association), Cámara Colombo Venezolana (Colombo-Venezuelan Chamber of Commerce), Cámara Venezolano Americana de Comercio e Industria (Venezuelan-American Chamber of Commerce and Industry). Ecuador: Centro de la Industria Láctea (CIL) (Dairy Industry Center), Asociación Nal. Fabricantes Alimentos y Bebidas (ANFAB) (National Association of Food and Drink Manufacturers), FEDEXPOR, Cámara de Industrias y Producción (Chamber of Industry and Production); and Cámara Ecuatoriana Colombiana (CAMECOL) (Colombo-Ecuadorean Chamber of Commerce). United States: All Star Dairy Association and International Dairy Foods Association.
No.
INDICATOR
SCOPE
2012 COMMENTS
PAGE
Participation by Interest Group 4.14
Relationship with included stakeholders
31
See Chapter 5. Sustainability Challenges - D1. Dialogue
4.15
The Organization's basis for identifying and selecting stakeholders with which to engage
31
See Chapter 5. Sustainability Challenges - D1. Dialogue
4.16
Approaches adopted to include stakeholders, including the frequency of participation by stakeholder types and categories
4.17
Main concerns and topics of interest that have arisen from stakeholder participation and the way the Organization has responded to them when drafting the report
5.
To ensure fluid and meaningful dialogue with our stakeholders, we use the following process: 1. Establishment of communication and involvement metrics for each stakeholder. 2. Definition of a corporate communication and involvement policy for each stakeholder. 3. Implementation of various channels designed to encourage dialogue with our stakeholders. 4. Assessment and feedback on these dialogues.
6
See Chapter 2. About This Report.
MANAGEMENT APPROACH AND PERFORMANCE INDICATORS Economic Performance Indicators Economic Performance
EC1
Directly generated and distributed economic value, include income, operating costs, employee compensation, donations and other community investments, undistributed benefits, and payments to providers of capital and governments
Total
This indicator was calculated as follows in 2012: - Direct economic value created (net sales + other financial income + profit from the sale of assets): Alpina S.A. in MM COP1,424,141 / Alpina C.A. in thousands of BsF233,154 / Alpina Ecuador S.A. in thousands of US $62,808 / Alpina Foods Inc. in thousands of US$5,771 / Alpina PerĂş SAC in thousands of US$1,087. - Direct economic value distributed (operating costs + employee expenses + social contributions + taxes + donations): Alpina S.A. in MM COP1,019,570 / Alpina C.A. in thousands of BsF156,584 / Alpina Ecuador S.A. in thousands of US $54,073 / Alpina Foods Inc. in thousands of US$10,814 / Alpina PerĂş SAC in thousands of US$931.
6
No.
INDICATOR
SCOPE
PAGE 72
2012 COMMENTS
EC2
Financial consequences, other opportunities and risks for Organization activities due to climate change
Partial
EC3
Coverage of the Organization's obligations for social benefit programs
Total
Alpina complies with the law in the countries in which it operates and enrolls Alpinistas in governmentcompliant pension plans: Colombia: -Prima media - Social Security Institute -Ahorro individual - Private pension fund Venezuela: Pensions y salud Venezuelan Social Security Institute Ecuador: Ecuadorean Social Security Institute United States: Our benefit package includes a 401(k) plan through which the Company contributes a portion for each employee to increase his or her savings. Peru: The law states that each employee is 100% responsible for contributions to his or her pension.
EC4
Significant financial support received from governments
Total
Benefit from investments in real fixed productive assets: COP 1,998 MM and an unused balance at the preferential Finagro rate of COP 9,200 MM.
Total
Colombia: 18.29% Venezuela: 78.47% (an increase took place in November following collective bargaining) Ecuador: 0.33% Peru: There are no employees at the operational level.
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
Market Presence
7
EC5
Percentage difference between the standard starting salary and the minimum local salary in places where major operations take place
EC6
Policy, practices and proportion of expense corresponding to local providers in places where major operations take place
EC7
Procedures to hire local personnel and percentage of upper management coming from the local area in places where major operations take place
Total
Total
89
See Chapter 5. Sustainability Challenges - D6. Sustainable Business.
Colombia: 96% of the upper management are Colombian citizens. Venezuela: 83% of the upper management are Venezuelan citizens. Ecuador: 90% of the upper management are Ecuadorean citizens.
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Indirect Economic Impact EC8
EC9
Development and impact of infrastructure investment and services provided primarily for public benefit through commercial, pro bono, or in kind commitments
Understanding and description of significant indirect economic impact and the scope of said impact
Total
102
A donation worth COP 1,561 MM was made to Fundaci贸n Alpina. COP 534.3 MM in donations were made in Colombia, approximately BsFs 750,000 in Venezuela, and USD 28,000 in Ecuador. See Chapter 5. Sustainability Challenges - D7. Social Value Volunteering. The number of jobs created by distributors is 4,179, broken down in each country as follows: Colombia: 3,079 Venezuela: 964 Ecuador: 136
Total
Economic Performance Indicators Materials EN1
Materials used by weight and volume
Total
EN2
Percentage of materials used that are recovered materials
Partial
89
See Chapter 5. Sustainability Challenges - D6. Sustainable Business - A1. Strengthening the Businesses of our Agricultural Suppliers. Colombia: In 2012, 100% of the material used to manufacture storage crates was recycled. In total, 804 tons of material were used. Venezuela: Damaged storage crates and pallets were sold for recycling purposes to reduce energy consumption and greenhouse gas emissions. Ecuador: Eight thousand (8,000) storage crates made from 100% recycled material were bought from a Colombian provider, as buckets in Ecuador are generally made from unrecycled material. This equaled 18.8 tons of material.
Energy EN3
Direct energy consumption broken down by source
Total
72
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
EN4
Indirect energy consumption broken down by source
Total
72
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
8
No. EN5
EN6
EN7
INDICATOR Energy savings due to conservation and efficiency improvements
Initiatives to provide products and services that are energy-efficient or based on renewable energies, and reductions in energy consumption as a result of these initiatives Initiatives to reduce indirect energy consumption and the reductions achieved through these initiatives
SCOPE Partial
PAGE 72
2012 COMMENTS See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
Nonmaterial
This indicator is not relevant to Alpina's operations.
Nonmaterial
This indicator is not relevant to Alpina's operations.
Water EN8
Total water collection by source
Total
69
See Chapter 5. Sustainability Challenges - D4. Environment - A1. Efficient Water Management.
EN9
Water sources that have been significantly affected by water collection
Total
69
See Chapter 5. Sustainability Challenges - D4. Environment - A1. Efficient Water Management.
EN10
Percentage and total volume of water recycled and reused
Not reported.
This indicator has not been calculated. There are plans to report it in subsequent reports with the water footprint measurement.
Biodiversity
9
EN11
Description of lands/water adjacent to or located within protected natural areas or unprotected areas with a high degree of biodiversity. Location and size of lands owned, rented or managed with significant biodiversity outside of protected areas
Nonmaterial
The plants or their areas of influence are not located in protected or unprotected natural spaces with a high degree of biodiversity. The impact of activities on the agricultural food chain has not yet been examined.
EN12
Description of the most significant impacts on the biodiversity in protected natural areas or unprotected areas with a high degree of biodiversity from activities, products and services in protected areas and unprotected areas with significant biodiversity value
Nonmaterial
The plants or their areas of influence are not located in protected or unprotected natural spaces with a high degree of biodiversity. The impact of activities on the agricultural food chain has not yet been examined.
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
EN13
Protected or restored habitats
Nonmaterial
The plants or their areas of influence are not located in protected or unprotected natural spaces with a high degree of biodiversity. The impact of activities on the agricultural food chain has not yet been examined.
EN14
Strategies and actions implemented or planned to manage impacts on biodiversity
Nonmaterial
The plants or their areas of influence are not located in protected or unprotected natural spaces with a high degree of biodiversity. The impact of activities on the agricultural food chain has not yet been examined.
EN15
Number of species broken down by risk of extinction, inclusion on the IUCN, and inclusion on national lists whose habitats are in areas affected by operations and the degree of threat to the species
Nonmaterial
The plants or their areas of influence are not located in protected or unprotected natural spaces with a high degree of biodiversity. The impact of activities on the agricultural food chain has not yet been examined.
Emissions, Run-Off and Waste 72
EN16
Total direct and indirect greenhouse gas emissions by weight
Total
EN17
Other indirect greenhouse gas emissions by weight
Not reported.
Scope 3 of the carbon footprint methodology was not measured. This will be done in future studies for Colombia, Venezuela, and Ecuador.
EN18
Initiatives to reduce greenhouse gas emissions and reductions achieved
Partial
The first phase of the project to partially replace diesel fuel with biogas in the boiler of the water treatment plant is currently underway. It enabled us to consume approximately 35,275 gallons of diesel fuel in 2012, a reduction in our carbon footprint of 3,179 tons of carbon equivalent. This was a 7.9% reduction in the Sop贸 plant's carbon footprint as a whole, which in 2011 was 40,087 tons of carbon equivalent per year. It also represents a 4.0% reduction in Alpina's carbon footprint in all of Colombia, which was estimated to be 79,025 tons of carbon equivalent per year. Furthermore, this reduction represents cost savings of fuel worth COP 269,736,284. The estimated reduction in the carbon footprint associated with Phase 1 of
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
10
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS the Biogas Project is based on the average replacement of diesel fuel energy consumption following the start-up of biogas boiler operations. Meters are being installed on the biogas generation and consumption lines; it is hoped that these will produce real data for 2013 and subsequent years. Furthermore, we are changing the type of fuel for the EntrerrĂos and PopayĂĄn boilers, transitioning from LPG to natural gas, which will correspond to a theoretical 16% reduction in carbon equivalent emissions per unit of energy consumed by the boilers.
EN19
EN20
EN21
EN22
Emissions of ozone-depleting substances, by weight
Partial
72
NOx, SOx and other significant airborne emissions by type and weight
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
Partial
72
Total waste water discharge by type and destination
See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.
Total
69
See Chapter 5. Sustainability Challenges - D4. Environment - A1. Efficient Water Management.
Partial
75
See Chapter 5. Sustainability Challenges - D4. Environment - A3. Efficient Management of Materials and Waste.
Total weight of processed waste by type and treatment method Total number and volume of the most significant accidental spills
EN23
EN24
EN25
11
Weight of waste transported, imported, exported or treated that is considered dangerous according to the Basel Convention and Appendixes I, II, III and VIII and the percentage of waste transported internationally Identification, size, state of protection and biodiversity value of water resources and related habitats significantly affected by water spills or runoff produced by the reporting organization
Total
Nonmaterial
Total
There were no significant spills.
At this time, Alpina does not consider this indicator to be relevant.
No water resources have been significantly affected by spills.
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Products and Services EN26
EN27
Initiatives to mitigate the environmental impact of products and services and the degree by which this impact has been reduced
Percentage of products sold and packaging materials recovered at the end of their useful life by
Colombia: We developed the Hydrogen Plan, which saved COP 13,943 MM through improvement projects, negotiations, and changes to the technical specifications of certain packages. We continued with the packaging reuse model that makes additional uses possible. We were able to use the same box up to five times, which had an economic and environmental impact. Venezuela: We carried out a project with a provider of 330 g, 750 g, and 1,600 g yogurt bottles to reduce the amount of plastic used in the manufacturing process, namely 9 g for each 1,600 g bottle, 7 g for each 750 g bottle, and 4 g for each 33 g bottle. These results reduced the impact of this material on the environment. Ecuador: We developed the Oxygen plan and, through negotiations, product optimization, and process improvement, saved USD 412,769. We reduced the weights of the 1,750 g, 1,000 g and 180 g Alpina bottles, a 5.4% reduction of the packages' weight or a 13,000 kg reduction of polyethylene.
Total
Total
75
See Chapter 5. Sustainability Challenges - D4. Environment - A3. Efficient Management of Materials and Waste.
Compliance EN28
Cost of significant fines and number of non-monetary penalties for non-compliance with environmental regulations
Total
There were no fines or penalties in 2012 for non-compliance with environmental regulations.
Total
The "Roll Out" fleet occupancy project was implemented, which improved the efficiency of vehicular loads by reducing the number of trips needed to transport products from the national distribution center in Sop贸 to Alpina's various regional distribution centers in Colombia, located in major cities and a few smaller cities. This
Transportation EN29
Significant environmental impacts from the transportation of products and other goods and materials used for the Organization's activities, as well as staff transportation
12
No.
INDICATOR
SCOPE
2012 COMMENTS
PAGE
product saved 331,849 km of trips in 2012, which corresponded to 50,280 gallons of diesel fuel saved and 505.7 tons of CO2 equivalent not emitted.
General EN30
Breakdown by type of all environmental expenses and
Total
69
See Chapter 5. Sustainability Challenges - D4. Environment.
Social Performance Indicators: Labor Practices and Dignified Work Employment LA1
LA2
LA3
Breakdown of all workers by type of job, contract, and region
Total
49
Total number of employees and average rotation of employees broken down by age group, sex and region
See Chapter 5. Sustainability Challenges - D3. Alpinistas Characterization of the Alpinistas
Total
53
Internal rotation: 5.51% (includes all countries) External rotation: 12.2% (includes all countries)
Social benefits for full-time employees that are not offered to temporary or part-time employees, broken down by main activity
For more information, see Chapter 5. Sustainability Challenges - D3. Alpinistas In Colombia, the benefits of the Collective Agreement are classified as educational assistance, funeral benefits, health benefits, transportation benefits and additional Agreement benefits. In Venezuela, the benefits of the Collective Agreement are classified as educational assistance, funeral benefits, health benefits, athletic benefits, family benefits, overtime, and vacations. In Ecuador, the benefits are classified as health, food, and loan assistance. In the United States, benefits are classified as pension assistance, disability assistance, vacations, and cellular phone use. In the Peru, benefits are classified as health assistance, disability assistance, family benefits, and cellular phone
Total
Company / Worker Relations
13
LA4
Percentage of employees covered by a collective agreement
Total
LA5
Minimum period of advance notification about organizational changes, including whether these notifications are defined in the collective agreements.
Total
54
See Chapter 5. Sustainability Challenges - D3. Alpinistas Although the Collective Agreement and Alpina's applicable conventions do not define warnings or formal guidelines about event notification, the Organization has developed good practices for informing all employees
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS about organizational changes in a timely manner. Channels include the intranet, mass media, audiovisual communications, posters and magazines, informational meetings held by team leaders, and open channels with management, as well as support structures to resolve concerns and receive comments.
Occupational Health and Safety LA6
LA7
LA8
Total percentage of workers represented on joint managementemployee health and safety committees established to help oversee and guide occupational health and safety programs
Rates of absenteeism, occupational illness, lost days and number of workplace fatalities by region Education, training, guidance, prevention and risk control programs about serious illnesses available for workers, their families, or community members
Colombia: Nineteen (19) Health and Safety Committees made up of 136 people from different plants, locations and/or collectives, representing 3.4% of the Alpinistas with direct contracts. Venezuela: One (1) Health and Safety Committee made up of 6 people or 3.46%. Ecuador: Five (5) Health and Safety Committees made up of 60 people or 9%.
Total
Total
61
See Chapter 5. Sustainability Challenges - D3. Alpinistas - A1. Permanent improvement of the work environment - Occupational health and wellbeing.
Total
61
See Chapter 5. Sustainability Challenges - D3. Alpinistas - A1. Permanent improvement of the work environment - Occupational health and wellbeing.
Health and safety issues covered in formal agreements with unions
Total
LA9
The company observes, complies with, and implements all applicable health and safety regulations for all Alpinistas.
Training and Education LA10
Average training hours per year per employee broken down by employee type
Total
60
For more information, see Chapter 5. Sustainability Challenges - A1. Permanent improvement of the work environment - Human Resources.
LA11
Skill management and continuing education programs that enhance the employability of workers and help them at the end of their professional careers
Total
60
For more information, see Chapter 5. Sustainability Challenges - A1. Permanent improvement of the work environment - Human Resources.
14
No. LA12
INDICATOR Percentage of employees that receive regular performance and professional development evaluations.
SCOPE
PAGE
2012 COMMENTS
Total
Voices (360째) evaluations have been carried out for approximately 500
Total
Colombia - Management -> Men: 94 and Women: 46 - Administration -> Men: 422 and Women: 435 Venezuela - Management -> Men: 5 and Women: 1 - Administration -> Men: 29 and Women: 21 Ecuador - Management -> Men: 10 and Women: 0 - Administration -> Men: 55 and Women: 32 United States - Management -> Men: 9 and Women: 4 - Administration -> Men: 8 and Women: 11 Peru - Management -> Men: 1 - Administration -> Men: 2
Total
A study validated the difference in salaries between men and women in the same category and did not find significant differences.
Diversity and Opportunity LA13
LA14
Composition of governing bodies and workforce broken down by sex, age group, ethnicity, and other diversity indicators
Ratio of base salary for men to base salary for women, broken down by professional category
Social Performance Indicators: Human Rights Management Practices HR1
HR2
HR3
15
Percentage and total number of significant investment agreements that include clauses on human rights or that have been the object of human rights analysis
Total
During the period covered by this Report, no human rights clauses were included in the agreements.
Percentage of main distributors or contractors that have been the object of human rights analysis and measures taken as a result
Total
Total training hours for employees on policies and procedures related to those aspects of human rights relevant to their activities, including the percentage of employees trained
Validation of 50 providers' compliance with the 10 principles of the Global Compact was begun. This was presented as a case study at the Colombia Global Compact Congress held on September 3.
Total
In 2012, Alpina organized sessions related to labor relations that covered various topics relevant to employee rights through a corporate orientation program and employee group sessions for a total of 220 hours for more than 550 employees, with 100%
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS participation from our new Alpinistas.
Non-Discrimination HR4
Total number of discrimination events and measures taken
Total
In 2012, there were no incidents of labor discrimination and, as such, corrective actions were not taken.
Total
In 2012, collective bargaining agreements were renewed, covering more than 3,600 Alpina Colombia employees. Two collective agreements were signed with the Sintralpina and Sintraimagra unions, covering approximately 120 employees. All collective contracts essentially guarantee fairness in their economic, salary, regulatory contents.
Total
Alpina's policy is to not hire children on its direct staff and to ensure that contractors do not do it, either.
Total
Alpina's hiring policies and Internal Work Regulations guarantee that there are no incidents of forced labor.
Total
One hundred percent (100%) of the Asset and People Protection Division were trained by the company operating this service on issues related to human rights.
Total
No incidents were reported during 2012. Alpina operates in an area of indigenous settlements in Cauca.
Freedom of Association HR5
Company activities in which the right to freedom of association and the right to sign collective agreements entail significant risks, and measures taken to protect these rights
Child Labor HR6
Activities that may entail the risk of child labor and measures taken to help eliminate it
Forced Labor HR7
Operations identified that entail a significant risk of incidents of forced or involuntarily labor and measures taken to eliminate it
Safety Practices HR8
Percentage of safety personnel that have been trained on the Organization's human rights policies and procedures as they relate their activities
Indigenous Peoples' Rights HR9
Total number of incidents related to violations of indigenous peoples' rights and measures taken
16
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Social Performance Indicators Community SO1
Type, scope and effectiveness of programs and practices to evaluate and manage the impact of operations on communities, including the entry, operation, and exit of the company
Total
99
See Chapter 5. Sustainability Challenges - D7. Social Value
Corruption SO2
SO3
SO4
Percentage and total number of business units analyzed in terms of risks related to corruption
Percentage of employees trained on the Organization's anticorruption policies and procedures Measures taken in response to incidents of corruption
Total
In 2012, an assessment was carried out with our auditor (PricewaterhouseCoopers) of the current situation of Alpina's Fraud Prevention and Response Program. The strength of the Organization's structures and the existing tools for Alpina to prevent and respond to fraud were evaluated. The assessment identified breaches in three aspects of the operating model, technology, processes and organization from a general perspective of strengthening Alpina's ethics culture. These aspects will be taken into consideration during risk evaluations.
Total
22
See Chapter 4. Our Organization Ethics Hotline.
Total
22
See Chapter 4. Our Organization Ethics Hotline.
Public Policy SO5
17
Position on public policy, involvement therein, and lobbying activities
Total
- Construction of thematic agendas with government entities that allow for the management of issues related to Alpina and the government from their respective roles. - Active participation in the construction of public policies related to Alpina's business and its sustainability strategy. - Development of relationships pursuant to strict ethics and transparency parameters and in accordance with the regulations that govern these relationships in the countries where we operate. - Characterization and monitoring of Alpina's institutional and regulatory environment. - Documentation of interactions with
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS government officials, management and follow-up of commitments, and timely response to said commitments.
SO6
Total value of financial and in kind contributions to political parties or related institutions, by country
Total
Under no circumstance is the involvement of our Organization intended to intervene in, take positions on, or make public declarations about political matters or to contribute ideologically or financially to campaigns or candidates involved in them.
Total
Suits filed against the Company by Compagnie Gervais Danone and Unilever are in progress. These are expected to be favorably resolved in 2013.
Total
There were no fines or penalties.
Anti-Competitive Behavior SO7
Total number of lawsuits for reasons caused by monopolistic practices and practices that inhibit free competition, and their results.
Regulatory Compliance SO8
Monetary value of significant fines and penalties and total number of non-monetary fines arising from non-compliance with laws and regulations
Social Performance Indicators: Product Responsibility Customer Health and Safety PR1
PR2
Life cycle phases of products and services in which they are evaluated for improvements, their impact on customer health and safety, and the percentage of significant product and service categories subject to these evaluations Total number of incidents arising from non-compliance with legal regulations or voluntary codes related to the impact of products and services on health and safety during their life cycle, broken down by the results of said incidents
Total
Total
We continued to implement ISO standard 22000 and carried out activities related to the evaluation of safety risks.
30
See A Journey to Sustainability - D1. Dialogue.
18
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Product and Service Labeling PR3
Types of information about products and services that are required by current procedures and regulations, and percentage of products and services subject to these information requirements
Total
Colombia: Various technical regulations were modified and observations were sent to the authorities, including: Resolution 2310 Dairy products; Decree 616 Unprocessed and processed milk; Resolution 7992 Processed fruits; Resolution 11488 Infant foods; Resolution 126 Oils and Fats; Decree 574 Salt; and Draft Resolutions on Contaminants in food, Fortified food, Dried fruits, Dried vegetables, Processed vegetables, Lists of additives, and Flavoring agents. Alpina also completed the survey on sodium content in several food categories as part of the Ministry of Health and Social Protection's program to reduce the amount of sodium in food. Venezuela: There were no initiatives to draft or modify guidelines. Ecuador: Observations were sent for the bill on school cafeterias and advertisements about beverages made from fermented milk and whey.
PR4
Total number of incidents of non-compliance with regulations and voluntary codes related to product and service information and labeling, broken down by the results of these incidents
Total
In Colombia, there was a case of an alleged label violation for Aplinito Petito Suisse filed in 2009 for failure to properly identify the vanilla flavoring agent. A payment of COP 9,445,000 was made.
Total
The consolidated TSF service level examining the satisfaction of customers/consumers when calling the customer service line was 89%. Wait times for service were decreased, which had a drastic impact on service satisfaction.
Total
The Advertising Committee's goal is to ensure that Alpina's consumer communications (advertising, labels) comply with current legal, nutritional, and technical quality requirements. During the year, 25 Advertising Committee meetings were held.
PR5
Practices related to client satisfaction, including the results of client satisfaction studies
Marketing Communications PR6
19
Programs to comply with laws or adhere to standards and voluntary codes related to marketing communications, including advertising, other promotional activities, and sponsorships
No. PR7
INDICATOR Total number of incidents resulting from non-compliance with regulations related to marketing communications, including publicity, promotion and sponsorship, broken down by the results of said incidents
SCOPE
PAGE
In 2012, Alpina had to pay COP 17,001,000 worth of fines for the following case:
Total
- Violation of the Consumer Protection Guidelines by breaching commercial advertising and information regulations with the Christmas stuffed animal campaign carried out with OlĂmpica by not disclosing complete information about the promotional activity.
Customer Protection PR8 Total number of founded
complaints related to privacy and the disclosure of personal customer data
2012 COMMENTS
Total
No complaints were made.
Total
There were no fines.
Total
One hundred percent (100%) of our suppliers adhere to our established supply policies.
Partial
We continued certifying our industrial suppliers and expect to finish this process in 2013.
Total
There were no work stoppages or plant closures
Regulatory Compliance PR9 Value of significant fines resulting from non-compliance related to the supply and use of the Organization's products and services
6. FPSS1
FPSS2
FOOD SECTOR SUPPLEMENT Supply Percentage of supplies bought from providers that adhere to the Organization's supply policy Percentage of the volume of purchased supplies that is certified by international responsible production standards and others, broken down by standard if relevant
Company / Worker Relations FPSS3
Percentage of work time lost due to industrial disputes, strikes or closures by country
Accessible and Healthy Food FPSS4
Type, application and effectiveness of programs and practices that facilitate access to economic and healthy foods and wellbeing in vulnerable communities.
Total
81
See Chapter 5. Sustainability Challenges - D5. Nutrition.
20
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Customer Health and Safety FPSS5
FPSS6
FPSS7
Percentage of volume produced at plants certified by an independent third party according to international food safety standards Percentage of food products sold that have a lower content of saturated fats, trans/hydrogenized fats, sodium, and added sugar
Percentage of food products sold that have a lower content of preservatives or a higher content of fiber, vitamins, minerals or phytochemicals
Total
16
See Chapter 4. Our Organization Production and Plants - Certifications - Percentage of Production Covered by Certifications from External Entities (see HACCP).
Total
a. Low-fat products vs. total sales: - Colombia: 31.7% - Venezuela: 25.6% - Ecuador: 5.1% - United States: 11.4% a. Low-sugar products vs. total sales: - Colombia: 7.5% - Venezuela: 14.3% - Ecuador: 1.9% - United States: 7.2%
Total
a. Products with preservatives or greater fiber content vs. total sales: - Colombia: 10.8% - Venezuela: 9.5% - Ecuador: 27.4% - United States: 53.1% a. Products with preservatives or greater vitamin and mineral content vs. total sales: - Colombia: 24.9% - Venezuela: 26.6% - Ecuador: 19.7% - United States: 8.4%
Total
At Alpina, we continue to be committed to providing responsible information to consumers about the nutritional characteristics and properties of our products. Nutritional label: - Colombia: An external laboratory verified the nutritional content of products for which nutritional charts are not necessary because no statements about nutrients or health are made. Packages were corrected for products in the cheese, dairy beverages, refreshing beverages, and baby categories for which there were significant differences. - Venezuela, Ecuador and Peru: All labels are based on external analyses.
Product and Service Labeling FPSS8
21
Policies and practices to communicate ingredients, nutritional information, and additives and their function beyond the legal requirements.
No.
INDICATOR
SCOPE
PAGE
2012 COMMENTS
Animal Health FPSS9
Percentage and total number of animals raised and/or processed by species and breed
Total
Animals by age: - Females >3 years: 69,252 - Females 2-3 years: 15,845 - Females 1-2 years: 16,997 - Calves >1 year: 18,962
FPSS10
Policies and products by species and breed related to physical alterations and anesthesia use
Total
This topic is not relevant to Alpina's operations as anesthesia practices are set at each farm and applied according to the supervising veterinarian. Surgeries are minimal and generally only involve minor procedures such as supernumerary teat removals or dehorning when the animal is young.
Total
Nearly 100% of the cows in Colombia, Venezuela and Ecuador are raised on ranches thanks to these countries' tropical climates.
Partial
Alpina offers farm training programs about proper treatment management with recommendations on usage, dose, route of administration, and respecting the required treatment holidays described on the label of each pharmacological product.
Total
Alpina does not transport animals. Animal transport is carried out by each farmer with authorization from ICA (Instituto Colombiano Agropecuardio, "Colombian Agricultural Institute"), which certifies that the animals meet all health requirements.
FPSS11
Percentage and total number of animals raised and/or processed by species and breed by housing type
Percentage of animals by species and breed subject to regular FPSS12 antibiotic, anti-inflammatory, hormone and/or growth treatments
Total number of incidents of non-compliance with laws and regulations, and compliance with voluntary standards related to FPSS13 the transport, management, and slaughter of live animals (land and water animals)
22
1
CHAPTER Challenge 1 Dialogue
ISSUE A1. Effective Management and Protection of our Reputation
Challenge 2 Economic Value Challenge 3 Alpinistas
2013+ CHALLENGES -Set our Global Reputation Index goals through 2016 -Prioritize the stakeholders that will be strengthened through dialogue platforms -Introduce a new methodological proposal for the economic, social and environmental evaluation of projects
A1. Constant Improvement of the Work Environment
-Set our Cultural Environment and Work Environment Index goals through 2016 -Define which positions are critical for the Organization, along with the concept of Key Talent
A2. Development of Key Talent
Challenge 4 Environment
Challenge 5 Nutrition
A1. Efficient Water Management.
-Complete the process of measuring Alpina's carbon footprint in Colombia -Measure Alpina's carbon footprint in Ecuador and Venezuela
A2. Efficient Management of Energy Use and Climate Change.
-Complete the process of measuring Alpina's carbon footprint in Colombia -Measure Alpina's carbon footprint in Ecuador and Venezuela
A3. Efficient Management of Materials and Waste.
-Begin an in-depth assessment of the packaging used in Alpina's portfolio
A1. Ensuring the Greatest Functional and Nutritional Value possible for the Product Portfolio
-Develop functional products -Formalize the assessment of the portfolio's nutritional profiles
A2. Developing Products for Specific Consumption Times and Segments
-Develop products for the base of the socioeconomic pyramid -Define specific target population groups for portfolio development
A4. Reduction of Sugar,
-Define for which key products sugars, fats, sodium and carbohydrates should be reduced
2
CHAPTER
ISSUE
2013+ CHALLENGES
Fat, Sodium and Carbohydrates in Key Products.
Challenge 6 Sustainable Business
A1. Strengthening the Businesses of our Agricultural Suppliers
-Develop and implement the training and evaluation model for agricultural suppliers
A2. Strengthening the Businesses of our Industrial Suppliers
-Advance with the implementation of the training and evaluation model for industrial suppliers
A4. Strengthening the Businesses of our Distributors
-Design a model for standardizing distributors' business
-Launch the first ConSentido product in BogotĂĄ and MedellĂn -Explore opportunities for expanding the product portfolio and its geographic reach -Continue developing definitions for the creation of social value by the company Challenge 7 Social Value