Sustainability Report 2016
In 2016, 18% of Drummond Ltd.’s purchases were made from local suppliers. A local supplier is one whose main offices are located on the Atlantic Coast, specifically in the departments of Cesar and Magdalena, which cover the areas of influence of the company’s mining and port operations. Drummond Ltd. does everything in its power to purchase goods and services from local suppliers
11
and contractors, from the towns located within the project’s area of influence. It does so provided that the technical and economic efficiency of the operations is not affected, considering quality, timeliness, price and after-sales service. During 2016, there was a decrease in the amounts billed by local suppliers for the following reasons:
21
The international coal market during 2016 forced the company to set conservative production targets, due to the drop in international coal prices.
31 During this period, as the result of an internal and external audit process, Drummond Ltd. confirmed ongoing fraud and theft involving several companies from its area of influence. For this reason, there was also a decrease in the volume and amounts of the transactions with local suppliers.
Drummond Ltd. had accumulated inventories that it needed to sell first.
Hiring local labor For all contracts in force during 2016, the service providers were requested to hire as much local labor as possible, achieving the following results:
Percentage of local labor in 2016 by region.
Cesar Other departments in the country Magdalena
18%
42%
40%