empresas copec’s corporate magazine april 2021
No.106
A NEW KIND OF COMPANY building bonds of trust contributing to a better global future ai to mitigate climate change promoting a circular economy young people who dream big
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No.106 1 _
more than a year after the pandemic was declared, we have witnessed how people, society and the world have changed. meanwhile, companies have had to transform and adapt to a new scenario. in these challenging times, empresas copec reaffirms and strengthens its commitment to be a relevant social player in the creation of value for its stakeholders and thus continue to move forward towards a sustainable future for all.
april 2021 / no. 106
general interest → opinion:
: 06-11
stakeholder capitalism carmine di sibio, ey global chairman and ceo, highlights the importance for companies to have a long-term strategy focused on their stakeholders.
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with first and last name → communications virtual roundtable:
: 12-23
building bonds of trust seven executives from empresas copec and its subsidiaries share ideas and thoughts on the evolution of communications in organizations and the current and future challenges in this area.
from the inside → empresas copec and sdgs:
: 24-35
contributing to a better global future based on their own knowledge and capabilities, the company and its subsidiaries have actively joined the un action plan, which contains the 17 sustainable development goals (sdgs). → arauco:
: 36-43
artificial intelligence to mitigate climate change in december 2020, arauco announced the acquisition of a majority stake in odd industries. both companies have set out to accelerate the use of ai with the mission of establishing development tools that will enable, among other objectives, the mitigation of climate change. → copec:
: 44-49
conquering the new custumer gloria ledermann, chief marketing officer at copec, reflects on how the pandemic accelerated a transformation process of consumer habits, which has digitalization and the ability of brands to empathize with citizens and their needs as the pillars of a new paradigm of relationship between both. → mina justa:
: 50-57
debut in the major leagues of mining in march 2021, start-up phase began at mina justa process plants, a copper site located in peru and that marks the debut of empresas copec, hand in hand with subsidiary alxar, in mid and large-scale metal mining. → arauco:
: 58-65
renewable dissolving pulp from chile to the world in june 2020, arauco produced dissolving pulp for the first time in chile. sales forecasts for 2021 are auspicious, amounting to 470,000 tons. → vía limpia: promoting a circular economy we talked to eduardo gutiérrez, general manager at vía limpia, a subsidiary of copec, today positioned as a leader in the integrated management of hazardous waste in chile, operating from arica to tierra del fuego.
: 66-71
worldwide → abastible: clean energy for the andean region
: 72-73
the mission of abastible and its subsidiaries solgas, norgas and duragas is to bring the clean energy of liquified gas to homes, industry, commerce and other activities, which is possible thanks to its robust network of distributors, who cover almost the entire territory of chile, peru, ecuador and colombia.
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with the people → fundación belén educa:
: 74-79
young people who dream big we share the inspiring stories of marcelo and patricio, former students at belén educa. a portrait of the opportunities that education provides when combined with effort, spirit of self-improvement and perseverance, and which, in the case of both young men, is changing their lives. → arauco and the mapuche people:
: 80-87
building a virtuous relationship for decades, arauco has carried out different activities in its relations with the mapuche people. there is a willingness on both sides to collaborate and to resolve differences with maturity and a high-minded approach, with the well-being of the entire community in mind.
summing it up → empresas copec:
: 88-89
results as of december 2020 after a complex and challenging year, figures for the fourth quarter of 2020 show an interesting recovery in all of the company's business areas.
news → current news: corporate landscape in a challenging global context, during this quarter empresas copec and its subsidiaries achieved important distinctions and progress in terms of sustainability and innovation.
: 90-93
— SPEECH AND TESTIMONY
editorial
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We are going through a time of contradictions. While as a country we are experiencing the peak of the health emergency, a vaccination process that has been an example for the world is simultaneously moving forward. The different economies are beginning to show a slow recovery, but too many households are facing critical situations, with major and urgent needs. These are challenging times, where, more than ever, a collaborative spirit, willingness, adaptability and strength are required. History teaches us that we never go back, that we will never return to that summer of 2020, when Covid-19 was still distant news and far from our lives. But the same history shows us that human beings are always capable of facing threats, overcoming the worst crises and building a new future. To walk this path there is a crucial concept: trust. Trust in people, in institutions, in science and in companies. Because precisely in this period of emergency we have needed to trust others to protect ourselves, to trust the people who make up the health system, to trust the response of the scientific community, the action of the public and private sectors to keep the economy running and, at the same time, to come to the aid of those most affected by the crisis. This period has exposed many of our vulnerabilities, but, in doing so, it has also made evident the importance of our ability to empathize and align ourselves as a country behind a common goal. It is particularly encouraging to discover how, in the worst of times, we have been able to come together to collaborate and come to each other's aid. As the crisis unfolds, the corporate world has shown great signs of this spirit and vision. The private sector in Chile
shows a deep commitment to the country. In difficult times, companies have placed their best virtues at the service of society, often demonstrating a greater capacity for adaptation than other institutions. With the enthusiasm and tenacity of the entrepreneur, we have conceived new work models, innovating and transforming processes to continue fulfilling our usual work and, in addition, offering solutions to unprecedented problems. In the context of the pandemic, trust in companies has strengthened around the world. According to Edelman (2021), today they are more trusted institutions than before (61%), surpassing governments, NGOs and the media. They are also recognized as more ethical and competent. In this edition, we report on various initiatives with which Empresas Copec and its subsidiaries seek to contribute to a better global future, actively working to achieve Sustainable Development Goals (SDGs), with the aim of putting an end to poverty, protecting the planet and improving people's lives. Among the issues they address are, for example, economic growth, social inclusion and environmental protection. These actions are evidence that we are aware of the high expectations regarding the role of the private sector. Companies have evolved in the midst of the crisis, and society expects us to go further in generating solutions to the problems that afflict us as humanity, and to do so along with the public world, based on the interconnection with our environments, with communities, customers and suppliers, with our peers, with governments and with the networks of innovation and thought at a global level. There are great virtues, as a result of public-private partnerships during the pandemic, that we must continue to promote. Just to mention one example, the contribution of
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TRUST IS KEY IN HUMAN RELATIONS AND IS NOT DEMANDED, BUT EARNED. AND IT CAN ONLY BE FORGED BY ACTING CONSISTENTLY, WITH TRANSPARENCY AND HONESTY.
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the private world, as well as that of States and the scientific community, has been key to developing - in the shortest possible time - the vaccines that are giving a glimmer of hope to put an end to this time of emergency.
As you will see in these pages, students from the Fundación Belén Educa demonstrate Empresas Copec's commitment to quality education and how it can transform lives and generate opportunities.
Just like the societies to which they belong, companies are experiencing a scenario of profound redefinitions. The pandemic has forced us to change habits and accelerated processes that were expected to be more gradual, such as digitalization, online sales and new ways of working remotely. Thus, one of our subsidiaries recently embarked on a broad participation project aimed at revisiting its purpose. It is motivating to see what happened there, an organization committed to the collective objective of understanding and determining the purpose of its work, the "why" of its existence. This effort undoubtedly contributed to the strengthening of the company's identity as a human group. A transcendent and shared purpose brings together and motivates the people who make up an organization.
Trust, purpose and inclusion. Three concepts that emerge with particular strength from the experience of our companies in this period of global crisis, that make us stronger as an organization and that provide an optimistic outlook for the future.
These redefinitions will make it possible to face the great challenges of the present and the future. This also requires the inclusion of the best talents and the integration of different views representing society. In this area, Empresas Copec has a strong commitment to diversity, as a principle that allows us to incorporate people of different experiences, nationalities, cultures, ages and gender. We are convinced that the business world has much to contribute in our journey towards more inclusive societies. But this is a task that must be done hand in hand with the public sector. In the challenge of moving towards greater equality, a relevant factor is to create the conditions to strengthen education across the board, especially from early childhood. It is there where gaps can begin to be reduced, creating opportunities that everyone can take advantage of.
Chile can and must work together for a common goal. History summons us to face, during the coming months, the major challenge of a broad process of institutional definitions that will set the beginning of a new cycle for the country. It is a difficult road, which entails risks, but which can provide a new political and social platform for Chile's greater development. A road that we must travel together, without violence, with participation and responsibility, recovering the civic virtues that allowed us to make progress in the past. Trust is key in human relations and is not demanded, but earned. And it can only be forged by acting consistently, with transparency and honesty. As I recently heard, speech and testimony are two concepts that must go hand in hand. This implies consistency between what we say and what we do. Being consistent is a quality that makes us trustworthy in the eyes of our environment and allows us to move towards the dream of being a better country. _
Eduardo Navarro CEO Empresas Copec.
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challenges of the 21st century
STAKEHOLDER CAPITALISM
the author invites to revive this philosophy that brought prosperity to previous generations.
opinion
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"THE COVID-19 PANDEMIC HAS BROUGHT TO THE FOREFRONT THE IMPORTANCE OF PRIORITIZING WELLNESS OF CUSTOMERS, COMMUNITIES AND WORKERS. BUT THIS IS NOT JUST A MORAL IMPERATIVE. THE TRUTH IS THAT IT HAS ALWAYS MADE A LOT OF COMMERCIAL SENSE TO HAVE A LONG-TERM STRATEGY FOCUSED ON STAKEHOLDERS".
In this opinion column, the author reflects on the relevance for companies of having a long-term strategy focused on their stakeholders.
opinion column of: CARMINE DI SIBIO EY Global Chairman and CEO. He previously served as EY Global Managing Partner-Client Service. Throughout his career, he held various leadership positions at EY, including Chair of the Global Financial Services Markets Executive and Regional Managing Partner for the Americas Financial Services Organization (FSO), where he started EY Risk Management and Regulatory Services.
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general interest Capitalismo de los stakeholders
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Earlier this year, nearly 70 companies and global business leaders committed to disclose a set of universal metrics to measure their performance in terms of environmental, social, and governance (ESG) factors. It was the culmination of a years-long initiative led by EY and our fellow Big Four accounting firms, in conjunction with Bank of America and the World Economic Forum’ International Business Council, to help businesses align their own strategic goals with society’s. It was also a sign that there is emerging consensus – and real momentum – that ESG issues – and disclosures—are central to understanding stakeholder impact, and behind the idea that businesses should focus on long-term value
creation over short-term gains. Businesses are better positioned to execute long-term strategies that create value for a broader group of stakeholders when they are able to measure that value, report it, and hold themselves accountable for producing it. The COVID-19 pandemic has made very clear the importance of prioritizing the wellbeing of customers, communities and workers. But this isn’t just a moral imperative. The truth is, it’s always made good business sense to have a stakeholder focused long-term strategy. Companies that invest in their employees and communities are better able to weather crises, understand where their future success lies, and build in resiliency.
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— a virtuous cycle Stakeholder capitalism isn’t new, and it isn’t a fad. After the great depression of the 1930’s and well into the boom of the 1950’s, businesses put themselves at the heart of communities, they were part of a whole, integrated in community life, not operating in isolation. This modern push is, in many ways, a return to fundamentals. We’ve long known we are all better off—and businesses thrive, when the communities around them do too. Look at the economic boom that took place following World War II. Pulitzer Prize-winning reporter Hedrick Smith credits much of America’s prosperity in this period to a “virtuous cycle” that companies fostered by investing in their employees and their wider communities. According to Smith: “the chief executives of the long postwar boom believed that business success and workers’ well-being ran in
tandem.” The prevailing attitude was ensconced in the 1953 classic text, long thought to be the “foundation of CSR”, The Social Responsibility of the Businessman by Howard Bowen— republished recently given its sustained relevance to today’s discussion of stakeholder capitalism. Examples abound of growing companies playing a vital role in their communities. Post WW II, for example, the automobile industry, which often become a hub in a “company town” played an outsized role in “one company town” communities, including distributing emergency food supplies and providing housing in one case, expanding the middle class through higher wages, and offering benefits such as health insurance and pensions.
"IT IS A FACT THAT WE ARE ALL BETTER OFF AND THAT COMPANIES PROSPER, WHEN COMMUNITIES AROUND THEM DO IT TOO," DI SIBIO SAID.
Carmine Di Sibio, EY Global Chairman and CEO.
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general interest Capitalismo de los stakeholders
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— restoring trust and reviving our commitment Since the 1970s, however, many businesses have largely veered away from this broad approach to stakeholder capitalism—and toward a model centered around shareholder primacy. A significant number of CEOs adopted Milton Friedman’s credo: “The Social Responsibility of Business is to Increase Profits.” Strategies aimed at extreme cost-cutting have often led to short-term profits, but also to a significant loss of jobs, weakened R&D, a reduction of efforts to positively impact communities, and damaged value over the long run. Income inequality has soared, the public has lost trust with the business community, and capitalism itself has been seen by many as doing more harm than good.
"AND DURING THE PANDEMIC, TRUST IN THE COMPANY, PERHAPS RESULTING FROM THESE EFFORTS AND PROBLEM-SOLVING MEASURES, IN FACT, INCREASED. BUT WE NEED TO DO MORE."
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1950
Companies were integrated into the life of communities, always operating jointly. Hedrick Smith: "Business success and employees wellness moved in parallel."
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1970
Focus on pure and immediate profits. This principle has damaged the company's long-term value.
2021
"Inclusive capitalism" that builds stronger, more equitable and sustainable communities. Profits can be generated while protecting the planet, expanding opportunities for more people and promoting global prosperity.
Today, business leaders can contribute to reversing this trend and revive the philosophy of stakeholder capitalism that allowed previous generations to prosper. Corporations are uniquely positioned to take action on complex issues ranging from climate change to income inequality to racial justice. We are making some progress—initial research shows that companies which went above and beyond in supporting their employees—including frontline workers— in the midst of the COVID pandemic enjoyed greater financial gains than their peers. And, over the course of the pandemic, trust in business, perhaps generated by these
efforts and problem solving efforts, has actually increased. But we need to do more. By working together, modern business leaders can generate profits while protecting our planet, expanding opportunities for more people, and advancing global prosperity. And we can recapture the spirit of inclusive capitalism that forges stronger, more equitable, and more sustainable communities.
empresas copec´s communications virtual roundtable
BUILDING BONDS OF TRUST
executives from empresas copec and its subsidiaries participated in this virtual conversation space.
with first and last name
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TODAY, COMMUNICATIONS PLAY A STRATEGIC ROLE IN COMPANIES, BOTH INTERNALLY AND EXTERNALLY, BUILDING BONDS OF TRUST AND MANAGING INTANGIBLE ASSETS SUCH AS CORPORATE REPUTATION.
Maintaining transparent, timely and effective communication with all stakeholders has undoubtedly been one of the major challenges faced by companies during the pandemic. In a new virtual conversation, executives from Empresas Copec and its subsidiaries reflected on the management of communications in times of crisis, its evolution in organizations and the main challenges that this area is currently facing.
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with first and last name Building bonds of trust
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On this occasion, the meeting brought together Carole Pastorini, Deputy Manager of Internal Communications at ARAUCO; Carolina Villar, Head of External Communications at Copec; Rodrigo de Madalengoitia, Deputy Manager of Marketing at Solgas; Nicolás Jobet, Deputy Manager of Communications and Corporate Affairs at ARAUCO; Francisca Veth, Director of Corporate Affairs at Abastible; Pamela Saavedra, Communications Coordinator at Inmobiliaria Las Salinas; and Francisca Riveros, Director of Communications at Empresas Copec. The debate was moderated by Soledad Costoya, Head of Communications at Sercor.
— 24/7 connection The conversation began with an analysis of the development of corporate communications in recent years. Carole Pastorini, Deputy Manager of Internal Communications at ARAUCO, who has been working at the subsidiary for a decade, commented: “The truth is that in this time that I have been with the company I have seen a very big and important evolution. When I arrived, we communicated very little. But I think that in these years we have learned, we have been humble enough to make an introspection process and realize that we had to improve. What surprises me is the tremendous capability for change that this company has. In a short time, we have achieved great results.” As an anecdote, the Director of Communications at Empresas Copec, Francisca Riveros, shares an experience in her early days working in this area. “I started as a communications analyst at an engineering and construction company. I had been in that position for about a week when I was sent to interview a construction manager. And the first thing he said to me was: 'Can I ask you a question? What does a journalist do in this company?' He completely threw me. It completely threw me. That was 13 years ago, and I think today the scenario is very different. Today, all organizations are very clear about the strategic role of communications, both internally and externally. I don't think anyone could question that today.” Francisca Veth, Director of Corporate Affairs at Abastible, agrees on this point: “This also happened to me at the beginning of my career, that they didn't understand what I, a journalist was doing in a company. But not anymore. Today it is already part of the companies' strategic plan to have a Communications area that is strengthened and aligned with such plan.” Pamela Saavedra, Communications Coordinator at Inmobiliaria Las Salinas, comments that the key to this evolution in communications has been the change in the
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way companies are run. “Leaders are very inspiring and today they are much more willing to listen, which, in the end, permeates the entire organization. In addition, it helps us to communicate to the outside in a much more transparent, real and human way. In this sense, the role of management in communication is key.” Carolina Villar, Head of External Communications at Copec, highlights the influence of digitalization in the evolution of organizational communication: “I believe that the biggest change that has taken place is that it has become ubiquitous. Before, communication between the company and the citizen took place at a counter, at a set time and in a branch office. Today, on the other hand, a company is always open, has its digital channels available 24/7. I believe that this is the most radical change in terms of corporate communication. In fact, in a company today there are no spaces of total communication control, especially in relation to the times and places of that communication. For example, in service stations or Pronto, which have continuous working hours, people talk to us during the night through social networks.
So, there are no opening hours, there are no places, we are always open and available to everyone.” In this regard, Nicolás Jobet, Deputy Manager of Communications and Corporate Affairs at ARAUCO, adds: "A very important element in this line is how the context of traditional mass media has changed dramatically, as they have experienced a decline, since their business models have become obsolete. And, to a large extent, this has to do with the evolution of digital media, which generates consequences that can be positive and negative. I am rather optimistic, because it shortens the intermediation between companies and the audience. Before, in order to communicate, you had to get a space in a media, even if it was minimal. Today, on the other hand, it can also be through a social network algorithm, for example, and this creates big opportunities that I believe, if well worked, can lead to greater closeness and less mistrust towards business activities. So, I believe that the rise of digital media is a great opportunity for companies.”
DIGITAL MEDIA HAVE BROUGHT COMPANIES CLOSER TO THEIR AUDIENCES, THROUGH A MORE DIRECT, UBIQUITOUS, IMMEDIATE AND BIDIRECTIONAL COMMUNICATION, AVAILABLE 24/7.
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with first and last name Building bonds of trust EC CORPORATE MAGAZINE
It went from being a printed magazine to a digital publication.
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Francisca Riveros agrees: “I also believe that digital media have positive and negative aspects. In fact, a simple tweet can send the shares of a company soaring or plummeting in the stock market. But, considering the positive aspects, a good example in the case of Empresas Copec is the digitalization of the Corporate Magazine. It went from being a printed media that was only published in Chile, to a digital one with no limits in its distribution. In fact, to date, it has been read in 48 countries. Another advantage of digital communication is that it allows us to get closer to our target audiences, to have their feedback, to be able to listen to them. And the fact is that that way of communicating, where companies basically informed, is obsolete. Today communication is bidirectional, which means that the receivers can also be senders.” Francisca Veth adds: “Social networks are a big issue, because they create a challenge for companies that have to properly manage the messages received. We, at Abastible, have strengthened our social networks by opening Twitter, for example, carrying out immediate response protocols that build bonds of trust with customers. Also, this has been achieved by having an internally integrated work between different areas.”
With this change, it expanded its distribution range to one where there are no limits.
To date, it has been read in:
48 COUNTRIES
Digital communication enables closeness with the audiences of interest and to have their feedback
For her part, Pamela Saavedra, while recognizing the importance of digital media, vindicates the role of face-toface communication. "We at Las Salinas miss face-to-face communication greatly. Digital platforms, of course, have helped us a lot, especially during the pandemic, but in the case of our project, which has a lot to do with communities, with people who need to be heard, consulted and informed, face-to-face communication is essential.”
— restoring trust According to the latest Annual Edelman Trust Barometer, trust in companies, globally, surpasses other institutions such as government, NGOs and the media. In Chile, according to the Social Empathy and Conflict Management Study, Icreo 2020, companies also have a higher trust capital. On a scale of 0 to 100, companies are at number 52, the media at 45 and the government at 26. According to the same research, the public expects these companies to be active and to be part of the solution. Thus, they are required to have direction, purpose and ethics, in
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addition to being able to speak up, have a point of view and even be activists in order to contribute value. In this regard, participants agree that, although progress has been made, there is still mistrust towards the private sector and much of it is due to the fact that companies have not communicated enough about their role beyond the business world. In this regard, Carole Pastorini says, “I believe that it has been difficult for us organizations to better communicate our contribution to society, to explain the job opportunities we provide, the benefits we offer our collaborators, and how we contribute to the communities. Today, ARAUCO has world-class standards that very few companies have. But we have processes and projects that are complex and sometimes difficult to explain. I believe that this, too, is part of the role we have, which goes beyond informing and that also involves educating. In this sense, from Internal Communications we have tried to make an effort to educate our team about everything we do. We have more than 17,000 direct employees and we want them to be our best ambassadors and communicators to the outside world about the benefits and contributions we make to all our stakeholders.”
Nicolás Jobet believes: “The socio-political difficulties we have faced in Chile —and which are similarly replicated in so many countries around the world— are based on a weakening of trust in the broadest sense. Distrust towards the establishment, the political class, certain institutions and private enterprise. The media, perhaps with the exception of radio, have also suffered from falling trust indices. I believe that communications, when misused, can exacerbate this problem, for example, through fake news or lack of transparency. However, if handled in a positive way, communicating in a timely, simple and truthful manner, it can be an important part of the solution.” In this context, Francisca Veth highlights the bigger demands on companies today. “Society demands more openness from us. And today companies are much more willing to open their doors and sit down to dialogue.” Carolina Villar states: “I believe that trust is built when organizations communicate transparently, this makes them approachable, so we should expect to gain in this respect. In communications, closeness and knowledge of the 'other' is directly proportional to trust.”
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with first and last name Building bonds of trust
Francisca Riveros adds: “That transparency must include the good and the bad. As well as the ability of companies to humbly acknowledge their mistakes.”
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For Las Salinas, Pamela Saavedra comments, “the fact that the name of the company starts with ‘Inmobiliaria’ [Real Estate Developer] makes us start conversations with a certain distrust of our counterparts, especially when it comes to neighbors, and rightly so, as we have witnessed some projects that are built with only economic profit in mind and end up harming the city. We propose just the opposite, an urban development that rescues the best of the city and benefits everyone. But it is not easy to be heard when there is this distrust towards the real estate sector. How can we work on this? I think it is fundamental, first, to build confidence within the companies that there is a real intention to do things well, with respect for the law, the environment, people, etc. Because that, in the end, is transmitted to the outside world.” In the case of Peru, as Rodrigo de Madalengoitia, Deputy Manager of Marketing at Solgas, explains, “there is currently a very serious political crisis in the country. It is chaos. There is a lot of distrust. We, as a company, have had two very hard months in social networks, since people who do
not understand the subject see the foreign company as something negative and think that the money is leaving Peru. So, we have had to work on a very important approach with the community and we have been carrying out several social responsibility actions in order to generate dialogue and build a bond of trust in such a turbulent time.”
— challenges and lessons of the pandemic One of the great challenges of the health crisis for companies has been to maintain smooth communication, mainly virtual, with their stakeholders. Pamela Saavedra stresses the importance of providing transparent and timely information. “If you don't do it, you are at risk of people who are detractors, in this case, to our project, making up things. And then you have to go out and deny them, which makes it a much longer round. So, it is better to be proactive in communication. It happened to us during the pandemic
DURING THE HEALTH CRISIS, EMPRESAS COPEC AND ITS SUBSIDIARIES HAVE IMPLEMENTED SEVERAL INITIATIVES TO MAINTAIN SMOOTH COMMUNICATION, MAINLY VIRTUAL, WITH ITS INTERNAL AND EXTERNAL AUDIENCES. Abastible has opened several participatory channels, cascade meetings and debates, which have created opportunities for dialogue with employees.
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In order to provide certainty and greater peace of mind to the team, during the pandemic, ARAUCO has officially and daily communicated all cases of infection in the previous 24 hours.
when opponents of the Las Salinas project said that the microorganisms we were going to use in the field were just as harmful as the virus that caused Covid-19. So, we had to go out and explain. For that, we worked with a group of expert scientists who supported us in explaining clearly how our microorganisms work and that they have nothing to do with the coronavirus. But things like that can easily slip through our fingers if you're not proactive in reporting them.” Regarding the challenges faced by Copec during the pandemic, Carolina Villar points out: “For us, the biggest challenge was to understand that the crisis was a permanent state. First there was the social crisis, where our service stations became casualties of this citizen unrest. Therefore, protecting the workers, their safety, their integrity, with each passing day, was a challenge. Then, the pandemic, which confronted us with a totally unknown scenario, for which we did not have in any risk assessment, it was not on our maps. In this context, I believe that the capability to adapt is what was put to the test and is what - in a way also made us evolve. We had to continue communicating, because things were still happening, and the learning was in how to do it: we became very creative in order not to
lose the connection with the surrounding, which today has become a demand for a large company such as ours.” In the case of Peru, Rodrigo de Madalengoitia says that during the health emergency they have managed to strengthen attributes of their brand such as safety, quality and guarantee. “In the Peruvian liquified gas market there is a lot of informal companies that sell cheaper and have their own clientele. At Solgas, we deliver the message 'feel safe dealing with us'. And we informed about our safety protocols and, given the great fear that the population had of becoming infected, they felt more protected with our service. That meant that new customers came in who wanted to buy safely. We also reinforced the message that we are 'permanent energy', that is, that we were not going to stop, that as an essential service we were going to continue operating and move forward. This was very well received both in our social networks and also by our internal audience.” Nicolás Jobet comments: “I believe that communications have played a role, and in general they do, in generating moods, and that is a very powerful tool that implies a very important responsibility for us. Communications, in our
with first and last name Building bonds of trust
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In times of crisis, Copec has proved its ability to adapt in order not to lose its connection with the environment. Through its social networks, it maintains open and 24/7 communication with its audiences.
case, have managed to give hope in times of adversity, have managed to bring calm or certainty in times of anguish and, many times, to provide prudence in times of division. In other words, communications generate moods, for better and for worse. The same happens with leaders. I think, in this sense, it is very important to highlight and be aware that communications and leaders have a relevant role in generating moods, hope, calm, and providing answers. I think this is an important learning process.” Francisca Riveros adds: “Since the social outbreak until today, I believe that the role of communications in building support has been very important. In our case, some employees have been infected, they have lost loved ones, their families have lost their jobs, in short, it has been a very difficult time. Faced with this reality, our internal message has always been hopeful, without denying the difficulties and the pain we have experienced. In this line, we have held conversations, talks and various recreational activities. It has been a period of much learning and where internal communication has become more human than ever. For this, the leaders have been key, as they have been concerned about listening and delivering that human, positive and hopeful message to the employees.”
In this regard, Francisca Veth shares Abastible's experience. “Continuing with the issue of support, we were immediately concerned about the internal uncertainty created by the pandemic, which was very strong. There were many rumors of different kinds and it was key to open participatory channels, conversations, where it was not just a speaker talking, but there were also opportunities for dialogue, smaller cascade meetings between the boss and collaborators, mood surveys, among others. In addition, through the campaign 'Together we are achieving it' we showed all the initiatives and provided all the relevant information about Covid-19. It has been a very integrated work as a company. And we will not forget it. It has been a great learning experience.” In the case of the ARAUCO team, challenges have been very significant, especially considering the construction of MAPA, a large-scale project with a peak of around 8,000 workers. Carole Pastorini comments that the beginning of the pandemic was very complex, because there were many rumors about infected people. “We realized that it was necessary to officially communicate the cases we had at ARAUCO, so we set up a newsletter reporting cases in the last 24 hours and also providing relevant information
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about the care and protocols associated with Covid-19. As for MAPA, we developed a communication strategy together with the contract administrators to reinforce preventive measures and behaviors. This, together with the active involvement of the leaders, who have carried out regular streaming to respond to workers' concerns, were key aspects to face the pandemic. From the first day we took on the commitment to report everything that was happening in a timely and transparent manner, which has been a success and a great learning experience.” Rodrigo de Madalengoitia also reflects on the lessons learned from this crisis. “These are the moments that push us out of our comfort zone and force us to reinvent or transform our way of communicating and approaching stakeholders. Only through linear, direct and continuous communication will we be able to generate a positive engagement with our audiences, but one that is sustainable over time. I think this is the most important thing,” he concludes.
INTERNALLY, AND THROUGH A MESSAGE OF HOPE, COMMUNICATIONS HAVE PLAYED A KEY ROLE IN PROVIDING SUPPORT TO THE TEAMS.
From the social outbreak until today, the role of internal communications at Empresas Copec in building support has been important. To this end, leaders have been key, delivering a human, positive and hopeful message to the team.
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with first and last name Building bonds of trust
what is the role of corporate communications today?
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“Leading the company's communication activity internally and externally. I believe that the main objective today is to continuously strengthen and enhance the company's reputation through a corporate communication aligned with our culture and strategic plan. This way, we can achieve a greater bond and understanding with the communities, position the company in the public opinion and, at the same time, internally, strengthen the belonging and commitment of our collaborators”. Francisca Veth Director of Corporate Affairs at Abastible “For me it has to do with the possibility of building a bond. Beyond just informing, but rather, from these less tangible things, reaching people's emotions, their perceptions. It seems to me that the possibility of reaching people's hearts is what we have to achieve with communications, to generate that match between what we are saying to the internal or external public and what people are effectively expecting”. Pamela Saavedra Communications Coordinator at Inmobiliaria Las Salinas
“Today, communication has become a strategic tool for any organization seeking to position itself in the market in a more competitive way, as it allows us to transmit the image we want our company to have in the eyes of all our stakeholders. Our role is focused on building bonds with society, building trust around the company and its products, approaching and connecting with the community. It is not only about staying in communication, but to go beyond that and generate a positive impact on society". Rodrigo de Madalengoitia Deputy Manager of Marketing at Solgas “I believe that the main purpose of communications is to build bonds of trust between companies and all their stakeholders. This represents a great challenge, since these audiences are different from each other, so we must find the appropriate means or channels to reach each of them in an effective, timely and transparent manner. In this process, it is essential that companies go beyond a merely informative role and promote spaces to listen to their stakeholders and, in this way, generate conversations”. Francisca Riveros Director of Communications at Empresas Copec
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“Today, communications play a strategic role in the development of companies, from providing clear, timely and reliable information about their work, to building bonds of trust and involvement with their different audiences. From internal communications, our task is to strengthen an organizational culture with solid values that promote a job well done, where collaborators feel recognized, proud of the value of their work, motivated to occupy the existing spaces for participation, and to make ARAUCO's challenges their own. Companies live through their people, and it is with them that we are able to generate a more genuine and closer communication". Carole Pastorini Deputy Manager of Internal Communications at ARAUCO “Our role has to do with achieving positive perceptions about the company, providing it with attributes and good experiences so that it can connect with its audiences. This is the only way to build the link that allows a company to occupy a space as a social player and build its reputation from there”. Carolina Villar Head of External Communications at Copec
“I believe that the ability to tell stories is one of the qualities that distinguishes us from other species. It is an eminently human quality and is at the core of what defines us as human beings, and makes communication crucial in any activity and, obviously, in business. In this sense, communications have a role of building links, of connecting, of transforming perceptions, but they also have a political role in the broadest sense of the word. In the sense of transforming realities, of putting issues on the agenda". Nicolás Jobet Deputy Manager of Communications and Corporate Affairs at ARAUCO
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empresas copec and sdgs
CONTRIBUTING TO A BETTER GLOBAL FUTURE
the 17 sdgs embrace seven dimensions and are implemented through 169 goals.
from the inside
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THROUGH A VARIETY OF INITIATIVES, EMPRESAS COPEC AND ITS SUBSIDIARIES HAVE ACTIVELY JOINED THE SUSTAINABLE DEVELOPMENT GOALS (SDGS), WHICH ARE AIMED AT ENDING POVERTY, PROTECTING THE PLANET AND IMPROVING THE LIVES AND PROSPECTS OF EVERYONE.
Agreed upon in 2015 by all United Nations member states, the Sustainable Development Goals (SDGs) are a concrete invitation to collaborate with the dream of having a more inclusive world where all people can fulfill themselves harmoniously with nature. Empresas Copec and its subsidiaries have joined this task, making these goals part of their mission, vision and business strategy.
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from the inside
Contributing to a better global future
Achieving a safe, fair, peaceful and prosperous future for humanity is a desire that must necessarily take real form. This was the understanding of the UN member states that in 2015 brought the 2030 Agenda for Sustainable Development to life, an action plan that contains the 17 Sustainable Development Goals (SDGs) and which Empresas Copec and its subsidiaries have actively joined. 26 _
SDGs cover seven dimensions, which are specified through 169 wide-ranging goals that address the common purpose of ending poverty, protecting the planet and improving the lives of everyone. Some of the aspects addressed are, for example, economic growth, social inclusion and environmental protection. Nations play a key role and Chile has committed to numbers 4, 8, 10, 13, 16 and 17 (see box). However, countries cannot undertake this task alone, they require the joint effort by different social players, such as the private sector. Regarding the role played by companies, Pamela Harris, Director of Corporate Affairs at Empresas Copec, said that "they have the responsibility to join forces and combine efforts that contribute to achieving these objectives. In this sense, our actions must be a contribution to reaching a global and common goal." Empresas Copec has historically been linked to three SDGs: "Quality Education" - through the contribution made to the Fundación Belén Educa, Fundación Educacional Arauco and Enseña Chile, for example-, "Alliances to achieve the goals" and "Industry, Infrastructure and Innovation" given the direct involvement with the Fundación Copec-UC and the UC Anacleto Angelini Innovation Center. Considered as a whole, the various initiatives of the Group of Companies aim to achieve all the objectives, thus attaining a more comprehensive coverage. “The SDGs are very aligned to our way of doing things, that's why it is so natural for us to connect with them. It is not a philanthropic or altruistic issue, but a sustainability issue, a concept we have embraced always, taking a relevant place in the management of our businesses,” the executive said.
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The "Viva Leer" program is one of Copec's most recognized shared value initiatives and is in line with SDG No. 4 “Quality education.”
— copec: building a sustainable future for chile “As a company we have a commitment to Chile, we exist to enhance the development and movement of people, companies and the country. This spirit is reflected in Copec's Sustainability Policy and is also present in the proposed strategy for sustainable development, which is fully aligned with the SDGs. They are comprehensive, indivisible goals that impact the environment and make a lot of sense not only to the states, but also to the different industries and companies,” Constanza Gillmore, Copec's Chief of Sustainability and Communities said. After assessment conducted by the team, nine SDGs were identified as fully consistent with the purpose of the subsidiary. “We said, ‘Here we can move the needle, we can impact and boost development,’ she added. Specifically, Copec's Sustainability strategy adheres to SDGs 4, 7, 8, 9, 11, 12, 13, 15 and 17 (see
box), which address aspects ranging from climate change to responsible production and consumption. One example is the "Viva Leer" (Enjoy Reading) program, one of the company's most recognized shared value initiatives and that is in line with SDG No. 4, “Quality education.” “Copec, since inception, has always been concerned to contribute to improving the quality of education, which is the foundation for thinking about the future,” Gillmore said. The program is made up of three broad guidelines. On the one hand, there is the implementation of libraries at schools for socially vulnerable students, which must be applied for, with libraries open to all the residents of that area. A
from the inside
Contributing to a better global future
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In late 2020, Copec opened Latin America's largest electroterminal, a contribution to SDGs 7, 11 and 13.
second initiative is “Digital Stories”, a platform parents and children can access for free to enjoy interactive stories that incorporate multimedia elements. The third is aimed at democratizing access to reading by selling low-cost books, available at the service stations and at Tienda Copec online store, which is highly appreciated at locations with no access to libraries or bookstores. The company has a department focused on developing new business, with projects or business lines that are aligned with several SDGs. This is the case of the Copec Voltex network, a fast recharge system for electric vehicles with the latest technology available, which covers SDGs 7, 11 and 13. “Currently we have a 1,400 kilometers network nationwide, that allows the infrastructure needed to achieve autonomy,” Gillmore said, adding that in recent years a very significant effort has been made to boost non-conventional renewable energy (NCRE), both at the internal process level and at the development of low-carbon products and services. “For example, last year we signed an agreement with the Cerro Dominador solar complex, which supplies some of our service stations and plants with renewable energy.” Ampere Energy, one of Copec's subsidiary, also falls into that category, since it will allow customers to store clean energy, either solar or wind, directly at their homes, in order to cover all or part of their consumption, with the option to inject the surplus power into the power grid.
— arauco: protecting natural resources “SDGs are an expression of global interest for a new type of development. For companies such as ours, which has been structured from this same interest, to subscribe to SDGs has somehow been a natural process,” said Francisco Oyarce, ARAUCO's Chief of Ecosystem Services. In that sense, the executive, whose tasks are focused on the forestry area, noted that the plans being implemented in line with the SDGs have been carried out through a very fluid process, especially due to the path the company has followed since the FSC® certification (Forestal Arauco FSC®️ License Code: FSC®️ -C108276) up to the COP25. This path helped the company to identify very naturally with the SDGs, because “we saw that there is a lot of similarity between the things we do and what they propose.” Oyarce said that this path has been characterized by the profound conviction of the senior management, as to the relevance of sustainability. “This approach has allowed, for example, the creation of the ‘Water Challenge’ Program, which, in line with SDG No. 6, aims to ensure the availability of drinking water permanently.” The subsidiary, said Oyarce,
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BASED ON ITS CAPACITIES AND RELATIONSHIP WITH THE ENVIRONMENT, EACH SUBSIDIARY MAKES ITS CONTRIBUTION TOWARDS SUSTAINABLE DEVELOPMENT.
conducts its business in the rural world, where access to drinking water is still low, and where, depending on the region, it can vary between 75% and 40%, versus 100% coverage in Chile's urban areas. “This difference is even greater in the case of sanitation. The climate crisis has worsened things, because wells and estuaries have dried up, so the only solution is water tankers. Our neighbors long for a permanent solution so they can get back their dignity lost when you are unable to wash your clothes, when you must ration or even worse, when you have no alternative but to stop having animals or a small garden and you are not only unable to do household things, but also to have an income.” After discussions with all stakeholders, they realized that addressing this problem required a joint effort. This is how this program was born five years ago, through which ARAUCO's forestry division plays both a technical and coordination role. In addition to conducting diagnoses together with neighbors, it brings together and coordinates decisive players, such as municipalities, that have a crucial role when developing a long-term response. Moreover, in many cases ARAUCO contributes to some key parts, such
ARAUCO's “Water Challenge” program has helped more than 40 thousand people to improve their access to this vital element.
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from the inside
Contributing to a better global future
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as conducting engineering studies and design, purchasing water rights and granting usufructs to perform the works required on lands that are in some cases part of the company's assets. “In this sense, we have seen with great joy that we are today recognized as a facilitator and we have earned the trust of several players in the water ecosystem. Now they know us and we are called to participate in solutions.” At present, the initiative extends from the Maule Region to Los Lagos Region and more than 80 local projects have been launched – between 50 and 1,000 families – and about 200 individual projects. In addition, initiatives have been developed covering entire municipalities and large towns, such as the Florida-Quillón project and Santa Olga project. Another highly relevant initiative, and aligned with SDG No. 3, “Climate Action,” is ARAUCO's commitment to the environment. And a good example was to be certified as the world's first carbon neutral forestry company, because its CO2 capture exceeds its emissions globally, taking advantage of the intrinsic virtue of trees to absorb carbon from the atmosphere, which is retained in their timber products. “The country's commitments to climate change mitigation are expected to increase the amount of trees being planted, timber construction and other initiatives linked to naturebased solutions,” Oyarce added. In the same line, ARAUCO's Native Forest Restoration Program, which links with SDG No. 15, “Life on land", seeks to restore 25,000 hectares of native forest. At present, already six thousand hectares have been covered in places such as Caramávida, a high conservation value area, home to species such as the Darwin fox and the Darwin small frog, as well as other endangered amphibians. This area will be part of the almost 296 thousand hectares of native forest that the company owns in Chile, and where the Company's strategic focus is to contribute or maximize the availability of ecosystem services and the biodiversity of the territories.
ARAUCO's Native Forest Restoration Program has already covered 6 thousand hectares in areas of high conservation value home to species such as Darwin small frog (in the photo).
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— abastible: contributing to energy efficiency Sustainability is one of Abastible's strategic pillars, and in this line energy efficiency plays a significant role in its goals. As a company, it has evolved from being a liquefied gas supplier to deliver their customers comprehensive energy solutions that aim at a more sustainable and cost-effective consumption. And that's where SDG 7 comes to play a key role. Pushed by the Development, Innovation and Projects area in the middle of the pandemic, the Energy Management System was created under the ISO50001 international standard. Alejandro Silva, Chief of Innovation and Technology, explained that the company seeks to institutionalize the culture of good energy use and at the same time, be a reference in energy efficiency issues for its customers. “When across the world the discussion is about how to be more sustainable, energy efficiency is a key pillar. When you ask yourself from the general point of view how this can be strengthened, the answer is through an energy management system,” he said. This tool is a step in advance by the subsidiary in the face of the requirements under the recently enacted Energy Efficiency Act, he added, which precisely requires big consumers to have a plan in this line. “It is continuous improvement over time, because
SUSTAINABILITY IS ONE OF ABASTIBLE'S STRATEGIC PILLARS, AND IN THIS LINE ENERGY EFFICIENCY PLAYS A SIGNIFICANT ROLE IN ITS GOALS.
from the inside
Contributing to a better global future
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The Lenga Plant, in Concepción, was the first to have an Energy Management System under the ISO50001 international standard.
the necessary skills are implemented in different areas,” the professional explained. The debut was at the Lenga Plant, located in Concepción, that supplies gas in Chile's southern regions. As a pilot, and being in close contact with Operations Management, Silva's team carried out a survey that aimed at detecting improvement opportunities and acting in practice as catalysts to push for the changes. After that exercise, the decision was to focus on cylinder sealing, optimizing the plant's current infrastructure. And so, in a particularly complex year, saving of 13% was achieved in the process in question when compared to the baseline. Additionally, at the global scale, a 1.2% optimization was achieved, that is to say regarding the total amount of energy the plant needs for each ton of bottled LG. The above has not only had repercussions within the organization. Alejandro Silva said that they also offer the management system to customers, with the guarantee that, when it is implemented internally, it works and
shows results inpractice, thus complementing the business strategy. In that sense, Abastible has been characterized by promoting the development of innovative solutions, geared to companies across all the country's productive sectors, whose purpose is to adopt and implement cleaner production schemes, and to identify energy improvement opportunities, with the aim of achieving more efficiency. These results have been determined by the subsidiary's conviction and commitment, from senior management to the different divisions that are involved, such as Innovation, Development and Projects, Operations, Sustainability and Communications, among others, that have been essential not only in the execution, but also in creating culture. In particular, Alejandro Silva highlights the motivation, commitment and technical expertise of those who work at the Lenga Plant. “They are a fundamental piece, if not, this virtuous circle could not exist.”
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FOR ORIZON, SDGS ARE A FUNDAMENTAL PART OF THE BUSINESS, AS WELL AS A VALUE PROPOSAL FOR CUSTOMERS OF ITS PRODUCTS.
— orizon: nutrition with social commitment “Committed to leading sustainable nutrition through sea products” is the new goal recently set by the company, which in itself contains important sustainability definitions. For Orizon, SDGs are a fundamental part of the business, as well as a value proposal for the consumers of its products. At the heart of its commitment to social challenges, there is its contribution to reduce hunger in the world, a problem that has deepened with the pandemic, while the subsidiary believes the right direction to alleviate the crisis should point to the sea. Only 3% of what the world consumes comes from the ocean, despite the fact that the healthiest and tastiest products come from there. That is why Orizon works hard every day to bring the best from the sea to the families in Chile and all over the world. But to positively impact people's lives does not imply only food, and so Orizon's new commitment involves being an amplifier of the ocean's positive impact. In this regard, the subsidiary recently renewed its brand image. In addition, this way of being and doing business involved taking a deep and daily commitment with sustainability, putting it at as a
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from the inside
Contributing to a better global future
central pillar of the business strategy, and permeating each employees’ decisions. Effectively, Orizon has low emissions, it uses renewable raw materials, it works with communities, it generates jobs with better standards than the rest of the industry in the area, it works with local suppliers, it supports SMEs, and it is constantly seeking innovation. That is to say, there is a real concern about the environment. 34 _
Rafael Eyzaguirre, the frozen products division Sales Manager, has been directly involved in this task. “We know that we belong to a large group. We cannot be a follower, we must lead this transformation.” In that sense, he explained that last year they agreed on the most significant SDGs that are consistent with their tasks, and they have served as a guide in the process of defining the sustainability strategy. Specifically, he explained that two SDGs are the most related to the company: “Zero hunger” and “Industry, innovation and infrastructure,” and those have been reflected in new initiatives and in others that are already in place for a while, such as the Food Innovation Technology Center, (CeTA, for its acronym in Spanish) a public-private corporation aimed at promoting R&D&I. CeTA Norte is located at the fishing facilities of the subsidiary in Coquimbo. In that regard, Eyzaguirre said, the aim is to explore shared value projects, and to associate with communities in activities that can be strengthened by Orizon's presence. One of them saw the light this year, and it involves a working agreement with Agrippes, a trade association in
Concepción that brings together small canned mackerel producers. Given the growing difficulty they face in obtaining the raw material, they are allocated a part of the catch at an affordable price, so that they can continue to operate and generate local employment. Innovation in alternatives for consumers has also been a significant step that Orizon has taken. This is how the traditional mackerel product, one of the healthiest and most accessible foods, has been diversified and specialized and today the company produces not only the traditional “tall” format, but also fillet, croquettes and other new products. “We believe that part of our commitment to leading sustainable nutrition through sea products also involves innovating in the way food products are developed and generate a wider access to them through affordable, healthy, tasty, fun and practical alternatives,” the executive added. This search for bringing healthy, innovative and tasty products to people has led Orizon to establish alliances such as the one signed with Universidad Católica and the Copec-UC Foundation, consisting in the creation of a healthy snack of potato chips that contains three times less fat than similar products. Orizon set up a pilot plant in Coronel for development and validation of this product. In addition, it is sold through its e-commerce platform "La Mesa de todos". “This is about thinkingof collaborating with communities and the environment and to become a contribution to the market and the world,” Eyzaguirre said.
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SUSTAINABLE DEVELOPMENT GOALS
1. NO POVERTY
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2. ZERO HUNGER
3. GOOD HEALTH AND WELL-BEING
4. QUALITY EDUCATION
5. GENDER EQUALITY
6. CLEAN WATER AND SANITATION
7. AFFORDABLE AND CLEAN ENERGY
8. DECENT WORK AND ECONOMIC GROWTH
9. INDUSTRY, INNOVATION AND INFRASTRUCTURE
10. REDUCED INEQUALITIES
11. SUSTAINABLE CITIES AND COMMUNITIES
14. LIFE BELOW WATER
15. LIFE ON LAND
12. RESPONSIBLE CONSUMPTION AND PRODUCTION
13. CLIMATE ACTION
16. PEACE AND JUSTICE, STRONG INSTITUTIONS
17. PARTNERSHIPS TO ACHIEVE THE GOALS
arauco and odd industries
ARTIFICIAL INTELLIGENCE TO MITIGATE CLIMATE CHANGE
through various technologies, both companies aim to contribute to this transcendent purpose.
from the inside
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ARAUCO HAS INDIVIDUALIZED MILLIONS OF TREES WITH TECHNOLOGIES SUCH AS LiDAR, SATELLITE IMAGES AND DRONES, WHICH, TOGETHER WITH ODD INDUSTRIES' MISSION TO MEASURE THE REAL WORLD, BECOMES A PERFECT UNION TO PURSUE IMPORTANT OBJECTIVES.
In December 2020, ARAUCO announced the acquisition of a majority stake in Odd Industries, an ethically-driven Industrial Artificial Intelligence (IAI) pioneer Chilean company, that enables the least digitized companies to become data-driven organizations, helping make their operations safer, smarter, more sustainable and efficient. Both companies have set out to accelerate the use of this technology with the mission of establishing development tools to mitigate climate change, among other objectives.
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from the inside
Artificial intelligence to mitigate climate change
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“ARAUCO DEVELOPED A LiDAR-BASED TECHNOLOGY TO BE ABLE TO MEASURE TREES, AND IT REACHED A POINT WHERE IT COULD IDENTIFY THEM INDIVIDUALLY. THAT IS, IT ALREADY HAS A GLOBAL SCALE, THAT NO OTHER COMPANY IN THE WORLD HAS,” TRUFFELLO EXPLAINS.
The idea emerged in 2018, and it was discussed and shaped in 2019 during their lunch hours, said the promoters, Gianfranco Truffello, Chief Financial Officer at ARAUCO, who leads the IT area at the subsidiary, and Gonzalo Zegers, Senior Vice-President International & Business Development at ARAUCO. “It occurred to us basically that the use we were making of various technologies in the company, such as LiDAR, among others, could be extended to a larger number of plantations and, with that, make a significant contribution to mitigating climate change,” Truffello said. LiDAR (Light Detection and Ranging) is a laser system that allows measuring the distance between the emission point of that laser and an object or surface. The time it takes to reach the target and return from it is what indicates the distance between the two points. This provides a high-resolution 3D map to measure the land in question. “ARAUCO developed a technology to be used in its plantations based on LiDAR, in order to measure the trees, and it reached a point where it could identify a tree individually. That is, it has already a global scale, that no other company in the world has, considering ARAUCO's forest assets and what we have invested,” Truffello said. The executive added: “Our idea was that, if everyone had this technology we have at ARAUCO, that is to say, if it was democratized among all land owners, the costs for everybody would be lower, and so people with a smaller scale maybe could monitor and manage their plantations at similar costs than ARAUCO.”
— a three-page powerpoint After giving the idea a lot of thought, the two executives prepared a three-page PowerPoint to be presented to ARAUCO's Chief Executive Officer, Matías Domeyko, and ARAUCO's President & Chief Operating Officer, Christian Infante. “And we present it to them unexpectedly, because they had no idea what we were talking about. And we told them about this project and they were immediately very enthusiastic about it and supported us to continue to investigate the issue,” Gonzalo Zegers added. Thanks to a partnership that ARAUCO has with MIT on research consulting, the four executives travelled to Boston, with the purpose of talking to experts and putting forward the idea. And so, for four days they met blockchain and Gianfranco Truffello, CFO ARAUCO.
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The time it takes to reach the target and return from it is what indicates the distance between the two points.
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This provides a high-resolution 3D map to measure the land and trees on it.
LiDAR specialists, among others. Zegers recalls: “Everyone thought the idea was great and we came back feeling very excited about it. The problem was how to implement it. After a lot thinking and talking through, we came to the conclusion that this was an ideal project for a start-up. Now the problem was that we were not experts in start-ups.” This was how the two executives proposed to set up an advisory board made up of specialists in this area. And then the name of Leo Prieto came up, a well-known Chilean entrepreneur, Odd Industries' CEO and Co-Founder, and one of the pioneers in Latin America's digital industry, who had previously approached ARAUCO to put forward a project for a satellite to monitor the subsidiary's forestland and he left a very good impression on Truffello. Then he got invited to participate in the board. Finally, the board was made up by the two executives promoters of the idea, together with Matías Domeyko, Christian Infante, Leo Prieto and Alejandro Tocigl,
Co-founder and CEO at Miroculus, a Silicon Valley-based biotechnology company. Leo Prieto recalls that before long he started to realize that there were many shared visions between ARAUCO and Odd Industries. “We had the same approach on how we could use technology to digitalize the natural world and how we could use it to reverse the negative impact humanity has had on the planet and to solve many of the major problems we are going through, mainly the climate and biodiversity crisis. In fact it was very surprising for me, and I was struck when I realized how tremendously innovative ARAUCO is, with decades of investment in highly sophisticated technology. I was impressed by the level of technological maturity the company had and the tools they were using. And at the same time, ARAUCO seemed fascinated with the things we did. There was mutual admiration,” the entrepreneur said.
from the inside
Artificial intelligence to mitigate climate change
— the best candidate 40 _
By mid-2019, the advisory board began a search process, with an external consultant, to find a suitable person to lead the project. “We wanted to find the best talent and we got over 150 resumes. But what happened was that at the committee meetings we realized that the one who best interpreted our idea and the most enthusiastic was Leo. Then we were in a dilemma, because we had the perfect candidate, since he knew this project very well and he was very excited about the purpose of contributing to the fight against climate change. But he already led a company that he also owned,” Zegers said. Finally, they concluded that they should acquire Odd Industries, which included not only technological developments that were complementary to the project, but a highly talented team led by Prieto. “So, we agreed that Matías Domeyko would contact him,” Zegers added.
Leo Prieto confessed later that he was baffled by that call. “To be honest, I always thought the way was a customer/ supplier relation, until Matías surprised me and said, ‘Leo, I think this is an opportunity to join forces in an even more formal way.’” And thus, after only a month of negotiations, the acquisition of Odd Industries was closed. “Normally this type of deal takes longer, but we had an urgency to do it fast because we wanted to start the project soon and because Leo was in the middle of a financing round. He had well advanced discussions with investors to pump more capital into his company, then obviously we made the scenario a lot more complicated, because he had to convince his partners and his executive group of the potential of this project.”
Part of Odd Industries' team, made up of 23 experts in key disciplines such as artificial intelligence, machine learning and data analytics.
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Leo Prieto added: “ARAUCO buys the controlling interest in Odd Industries under unprecedented conditions in Chile. That is to say, we are talking here about a company that is over 50 years old, one of the largest in Chile, with presence worldwide, with thousands of workers, versus a venture that is less than three years old, which has less than 25 employees, without a physical office, and without physical assets, which is fully digital, distributed and decentralized. They are two companies with very different scales and yet the whole conversation was as balanced and fair as possible. I found it very surprising. Big companies are used to just taking over small companies, setting the conditions and somehow align them into their way of doing things. But this was not the case. ARAUCO really demonstrated that they see that the future will be different and that therefore things must be done differently.”
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Then a model was developed that allows Odd Industries to have quite enough autonomy, but taking advantage of all of ARAUCO strengths. “It was thought this way because in this type of projects speed is key. I have seen it at Silicon Valley, where it is a competition who comes first, so you must have a team exclusively dedicated 24/7. At ARAUCO we would have taken much longer to implement it, because none of us can dedicate 100% of the time,” Truffello said. Leo Prieto, CEO and Co-Founder Odd Industries.
A WORK MODEL WAS DEVELOPED THAT ALLOWS ODD INDUSTRIES TO HAVE QUITE ENOUGH AUTONOMY, BUT TAKING ADVANTAGE OF ALL OF ARAUCO STRENGTHS.
from the inside
Artificial intelligence to mitigate climate change
— a transcendent purpose 42 _
Currently, Leo Prieto and his team carry out the implementation of this project arduously and expeditiously. This talented human team is made up of 23 top professionals and experts of various nationalities in key disciplines, inclusing artificial intelligence, machine learning and data analytics, among others, which brings a great push for the project. The team, which is currently working remotely from Chile, and other Latin American and European countries, is considered by ARAUCO as key to provide quality and speed to the project. Regarding how the group has assumed this new challenge, Prieto explained: “It should be understood that we at Odd hire entrepreneurs. And being an entrepreneur is a way of facing life, challenges, of addressing your responsibilities. That means they are self-managed, autonomous people, who are not afraid to take risks or to embark on things they have not done before. At Odd we value much more the attitude than the experience, since all we know is that everything changes constantly and we must be prepared to adapt.” On the other hand, ARAUCO has millions of trees individualized with technologies such as LiDAR, satellite images, drones, airplanes, helicopters, hyperspectral images, “really sophisticated things to be able to measure and understand the natural world and not only ARAUCO plantations, but also native forests, then this goal, this mission of Odd to measure our real world, coupled with ARAUCO massive big data of measurements of the natural world, becomes a perfect union to pursue even more ambitious objectives. We want to use technology to measure different variables, and when you understand which ones have the most positive impact on the creation or increase of ecosystem value, you can deepen precisely into those variables and strengthen them not only to generate that impact within ARAUCO, but rather to take all these tools and technologies and be able to expand them all over the world. It is a very ambitious goal,” Prieto said. It is precisely this greater and transcendent purpose that led Truffello and Zegers to push for this initiative, and they cannot hide their motivation of contributing in a project that can positively impact all humanity. “We are very excited. For me, the most enjoyable thing that has happened to me in my career is to be able to think through this idea as a team and soon be able to see it materialized. What started in a lunch conversation, dreaming, became a threepage PowerPoint and today we already have more than 20
Gonzalo Zegers, Senior VP International & Business Development ARAUCO.
CLIMATE CHANGE IS AFFECTING US NOW, SO WE NEED TO ACT QUICKLY. IT IS A TRANSCENDENT PURPOSE AND WE TRUST THAT IT CAN BE A CONTRIBUTION TO HUMANITY AND FUTURE GENERATIONS.”
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people working, dreaming of the same or more than what we dreamed of. I wish one day this makes a difference. We will be proud. I can retire in peace,” said Gianfranco Truffello. Gonzalo Zegers added: “We want more trees to be planted on the planet and that we really be able to mitigate CO2 emissions. During the pandemic, everyone realized the fragility of human life, and that awareness will be increasingly greater. Climate change is affecting us now, so we need to act quickly. It is a transcendent purpose and we trust that it can be a contribution to humanity and future generations.”
Finally, Leo Prieto noted: “ARAUCO not only has the potential to generate a great impact in this country or in Latin America, but all over the world, and that was the other thing we were so enthusiastic about at Odd. We realized that here we had a partner who has the muscle, not only good intentions. So, it's very motivating and challenging. It will be difficult, but it is the best possible goal. That is to say, being concerned with ensuring the subsistence of life on our planet, what better goal is there, what better reason to wake up motivated every morning!”
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44 _
copec
CONQUERING THE NEW CUSTOMER
the “muevo” app already has almost one million customers and another 580,000 have joined the “full copec” program.
from the inside
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THE PANDEMIC HAS GIVEN RISE TO A NEW KIND OF CUSTOMER DEMAND THAT IS CHARACTERIZED BY BEING MUCH MORE RATIONAL, VALUING LOCAL PRODUCTS AND WHERE ONLINE COMMERCE HAS ACCELERATED EXPONENTIALLY.
For Copec, the ability to understand customers and anticipate their needs is the way to remain relevant to them. This is part of the vision that guides the subsidiary in the evolution of its service proposal, which led it to launch the “Muevo” app in 2020 and, in January 2021, the first loyalty program in the Chilean industry, “Full Copec.”
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from the inside
Conquering the new customer
There is no industry that has not seen its operations affected by the pandemic. Indeed, most of them had to adapt in order to continue. Lockdowns and distancing rules accelerated a transformation process of consumer habits, which have digitalization and the ability of brands to empathize with citizens and their needs as the pillars of a new paradigm of relationship between both. 46 _
For Gloria Ledermann, Chief Marketing Officer at Copec, the pandemic not only determined the behavior of consumers oriented by the efficiency of the shopping experience, but also of people who are opting for much more rational consumption. “We realized the value of the simple and how many things we used to see as absolutely necessary were actually superfluous,” she says. In 2020, the local, the brands or products of entrepreneurs were also more highly valued than ever before, over global companies, the executive reflects. “In that sense, the connection with what is local was deepened, we were so
inserted in our families and in the care of our loved ones, that this led us to say 'let's take care of each other and contribute to the people who are from our country, from our town'. But also, those same people asked themselves during these months of quarantine, of confinement, which brands, which companies were with them and solved their problems? And those are the ones that the public will continue to prefer.” A third issue Ledermann highlights is the importance of online commerce and its future projection. “The digital revolution has accelerated considerably. In what is to come, there is no doubt that the trend will continue and even deepen. The consumer will be much closer to applications and digital commerce that provide a good service, that deliver a good experience. Digitalization was democratized because there was a need to do so. Even the elderly, one of the audiences that are most resistant to technologies, had to be incorporated to this way of consumption,” she says.
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THE PANDEMIC ACCELERATED A TRANSFORMATION PROCESS OF CONSUMER HABITS, WHICH HAS DIGITALIZATION AND THE ABILITY OF BRANDS TO EMPATHIZE WITH CITIZENS AND THEIR NEEDS AS THE PILLARS OF A NEW PARADIGM.
— copec's experience on the cell phone
PHYSICAL
47 PHYGITAL: is the concept used today to illustrate how companies must be capable of generating more and more integrated shopping experiences.
2020
Copec application that during the pandemic allowed:
Through mobile devices
“Muevo” is the name of the app that Copec launched in January 2020, prior to the start of the most critical months of Covid-19. And “phygital” is the concept used today in the retail world to illustrate how companies must be able to generate increasingly integrated, omnichannel shopping experiences. In this line, “Muevo” was created to take the shopping experience in service stations directly to the cell phone and adds to Copec's track record in the incorporation of new technologies. For example, Copec was the first in its industry to launch a payment app and had been working for years to increase its commitment to digital. Thus, in January 2020 “Muevo” was launched and in April of the same year the pilot of “Muevo
DIGITAL
To refuel
With no need for physical contact
_
from the inside
Conquering the new customer
Empresas” began. Indeed, the app was conceived to make a quantum leap in service and consolidate Copec's “phygital” experience. “'Muevo' was proposed as a new experience for Copec's customers, as it brought together the digital and the physical world. And this allowed us - in the midst of the pandemic - to enable many of them to refuel through the application, without contact, reducing the risks of contagion at service stations,” explains Ledermann. 48 _
“Muevo” has been gaining traction among consumers. By the end of 2020, almost one million customers had the application installed on their phones, which, among other features, allows them to scan a code on the gas dispenser to see the fuel load on their cell phone, pay without contact, tip the operators, evaluate the service, have a history of fuel loads and search for nearby Copec service stations, as well as those of the competition, with their prices and services. In addition, the application can be used in Pronto Copec stores, scanning a code that allows paying digitally and making the purchase faster. But there were not only changes in terms of the shopping experience at service stations and convenience stores. “We knew that Copec had to have e-commerce for those customers who used to go to our service stations to buy the traditional promotional products and, in the context of emergency, were no longer able to do so,” says the executive. With this objective in mind, the company developed the tiendacopec.cl site, which has been very well received and where it is possible to find traditional products from Copec's physical promotions, such as books, eyeglasses, backpacks, summer promotions and other related categories, always thinking of what is of interest to customers. “The experience we have had with tiendacopec. cl has been extraordinary, selling almost $1 billion in 2020, since its launch in April 2020, and with a customer evaluation of 6.5 out of 7,” adds Ledermann.
Gloria Ledermann, Chief Marketing Officer at Copec.
“THE DIGITAL REVOLUTION HAS ACCELERATED CONSIDERABLY. IN WHAT IS TO COME, THERE IS NO DOUBT THAT THE TREND WILL CONTINUE AND EVEN DEEPEN,” SAYS LEDERMANN.
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— understanding the citizenconsumer A customer loyalty process, as the Chief Marketing Officer explains, began eight years ago with Mundo Copec Latam Pass. “It was really a loyalty program that gave us several tools, because we were able to learn first-hand not only about our customers, but also about their consumption habits. Prior to this, the information we had was that each service station sold a certain volume and we knew the customers through market studies. But we had no way of knowing their habits directly. But with this program we were able, for the first time, to give them a name and a surname.” As early as January 2020, the Marketing team was evaluating the most convenient path for Copec in terms of loyalty. Thus, the decision was made to develop its own program, “Full Copec”, which was launched in January of this year and whose best experience is lived within the “Muevo”
application. Its objective is precisely to build loyalty among all customers, recognizing and rewarding their preference, loyalty and recurrence. “It is based on the accumulation of points in the different business units (for now fuel and Pronto stores) and on a catalog where you can find the products that can be redeemed: fuel, convenience store products and car washes, among others. In addition, it incorporates a recognition system, so that if you complete the 'missions' you get prizes.” However, Ledermann adds, the plan is to expand it to other businesses as well. So far, 580,000 customers have joined the “Full Copec” program. “We aim to have one million customers by June of this year. Clearly, expectations have been met. In fact, we achieved it within the month it was launched,” she says.
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mina justa
DEBUT IN THE MAJOR LEAGUES OF MINING
in march 2021, operations started at the copper site.
from the inside
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ALXAR STARTS ITS MINA JUSTA OPERATIONS AT AN EXCELLENT TIME FOR THE COPPER MARKET, WHICH BRINGS AN AUSPICIOUS FORECAST FOR THE MOST IMPORTANT COPPER PROJECT IN EMPRESAS COPEC'S HISTORY.
With a US$ 1,600 million investment and after four years of planning and three years of construction, in March 2021 the start-up phase of Mina Justa’s process plants began. Mina Justa is a copper site located in Peru and it marks the debut of Empresas Copec, hand in hand with subsidiary Alxar, in mid and large-scale metal mining. The copper company forecasts production of about 100 thousand tons of fine copper by 2021 and from that point a production peak of about 150 thousand tons per year would be reached in the next four to five years. The above would result in annual sales revenues which, depending on the copper price, would amount to US$ 1,000 million or more.
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from the inside
Debut in the major leagues of mining
On December 24, 2020, Mina Justa team received the best Christmas gift ever: the port operation license that makes it possible to receive sulphuric acid —essential for the production of copper cathodes— at the port that was specially built for that purpose.
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After a year marked by the difficulties brought by the Covid-19 pandemic, which forced the company to delay works by five months, but without greatly altering the budget, the start-up of Mina Justa marks Empresas Copec's entry, hand in hand with subsidiary Alxar, into medium-large copper mining. A much longed-for dream of the Company, that demanded a thorough search for projects matching the Company's vision and strategy. The foray began to be planned in 2014, when the goal of seriously pursuing this industry was set. “What does that mean? Making more significant investments, which could move the needle of the Group’s results,” explained Erwin Kaufmann, Alxar 's Chief Executive Officer, who added that the priority was copper, which given current and forecasted demand, has a very good future. “In addition, because in Chile and South America we have competitive advantages for production, and because mining of this metal shares certain basic principles regarding what we have also done in pulp, for example. They are assets that require high investment, a cost-driven approach, thorough care of resources and environment and being subject to the price of a commodity, among others,” the executive added.
For several years, Alxar was focused on exploring opportunities that complied with parameters such as size, competitiveness and cost structure, as well as high sustainability standards. Although the initial approach was to search for operations or deposits in Chile, they found Mina Justa in Peru, owned through Minsur by Grupo Breca, a conglomerate with more than 130 years of history and with presence both in their home country and the rest of Latin America. “The opportunity arose to associate with them in a project with features very in line with what we were looking for: a significant magnitude without being extremely large and a very favorable location,” Kaufmann explained. Furthermore, it would work with sea water, therefore it was environmentally friendly. In addition, it was planned to start production at a time where there was some unanimity among the experts that there would be a relative shortage of the red metal. “One of the aspects that we found most relevant was that Grupo Breca was an excellent partner with which we shared many principles regarding long-term investments, environmental care, workers safety, relationship with the community and also a highly professional team,” he added. This is how the longing for venturing into the copper mining sector began taking shape, and doing so with a company in which Empresas Copec, through Alxar International, owns a 40% stake, while the remaining 60% belongs to Minsur, owned by Grupo Breca.
Oxide Plant. Foreground: fluid clarification system, refine and PLS ponds. Background, center: secondary and tertiary crushers and vibrating sifters, conveyor belts and leaching vats. Background, right: Solvent extraction and electrowinning tanks. Background, left: agglomeration drums and conveyor belts.
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— a unique site Mina Justa is a rather peculiar site. Because the usual thing for a mining operation is to be located thousands of meters high and hundreds of kilometers away from the ocean, while in this case it is only 800 meters above sea level, 38 kilometers from the port, 8 kilometers from the Panamerican Highway and 14 kilometers from a major substation of Peru's power grid , all of which has made the logistics much more expeditious. Specifically, the site is located in the department of Ica, bordered on the north by Lima and on the south by Arequipa. Enrique Rodríguez, CEO at Marcobre, the company that owns Mina Justa, explained that it is made up of two open pit sites. The largest and most important one is a copper oxide and sulphide deposit, while the smallest, with mining activities starting in four more years, is a copper oxide deposit. This year approximately 100 thousand tons of fine copper should be produced and from that point a production peak of about 150 thousand tons per year would be reached for four to five years, “and then it goes down a little from that point because mine grades and capacity start declining,” he said. While the life of mine is 16 years, the idea is to go beyond that. “We hope we can extend them, like all mines, because we hope to find more resources or technology upgrades, and something you considered it was not useful, now it is. You always have that expectation,” the executive added. The above, he explained, should translate into annual copper sales revenue exceeding US$ 1,000 million. “For the next 10 years, 70% of the concentrate output is already committed, at spot price, to some of the entities that took part in the project financing, since out of the US$ 1,600 million investment for this project, US$ 900 million came from external sources. Regarding cathodes, there is also a percentage of output already committed to such agencies,” Rodriguez said. As for the operation, Alxar is very involved in development. The CEO of the Empresas Copec subsidiary said that at the time of setting up this joint venture, their wish to participate actively in the construction and later in the management was explicitly stated. “Unlike other projects that have passive partners, we participate actively in the development of the company,” Kaufmann said. Meanwhile, his counterpart at Marcobre, added: “We have had total support. It is true that the mining arm of Empresas Copec is small, but its professionals have interacted very well with us and they manage the relevant topics perfectly.”
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Erwin Kaufmann, CEO Alxar.
MINA JUSTA HAS A PRIVILEGED LOCATION, JUST 800 METERS ABOVE SEA LEVEL, 38 KILOMETERS FROM THE PORT AND 8 KILOMETERS FROM PANAMERICAN HIGHWAY, WHICH HELPS LOGISTICS.
from the inside
Debut in the major leagues of mining
MINA JUSTA: it is made up of two open pit sites.
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OUTPUT FROM LARGE SITE:
FUTURE OUTPUT FROM SMALL SITE:
2024 COPPER SULPHIDE
COPPER OXIDE
2021 FINE COPPER
INVESTMENT AND SALES
COPPER OXIDE
108 MIL
A production peak would be reached for four to five years of:
TONS
MINING OPERATIONS WILL BEGIN
150 MIL TONS PER YEAR
US$1.6
US$900
+US$1
BILLION TOTAL INVESTMENT
MILLION IN PROJECT FINANCING
BILLION ANNUAL SALES
70% of concentrate output for 10 years is already committed to entities that financed the project.
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55 _
Conveyor belt with crushed ore.
Mina Justa is currently in the process of plant start-up, or production ramp-up, which allows testing processes to achieve 100% of nominal production capacity, which should be attained by December 2021. By the end of June, commercial production should be reached. “It is a period of a lot of testing, with the aim of achieving a stable operation by the end of the year. In addition, simultaneously we continue with exploration plans,” Alxar´s CEO emphasized.
— auspicious forecast As one of the leading characters in Chilean history, the copper resource has been, is and will be its most important export product, Erwin Kaufmann said. In that sense, the Company's entry in this sector has much to do with its mission and vision. “Empresas Copec's interest is being in industrial businesses related to natural resources in which we have competitive advantages, and here we have that. And we entered this business because we think we can do it well and add value as a Chilean company.”
In addition, he explained that operations that prove to be efficient in the copper industry must be medium or large scale, a scale that suits the Company, which has always been a very relevant player in the economic sectors in which it has participated. On the other hand, there is the supplydemand factor. While the increase in the first is seen rather restricted, both due to the growing difficulty in developing projects, and due to declining grades, copper demand continues to climb. And not only in China, that continues to require the metal, but in the other Asian giant, India, which will also have a high need for this resource in the coming years. In addition, innovations such as electromobility would keep demand high, because, as Kaufmann explained, “an electric car requires four times more copper than a conventional car.” In the medium and long term, Alxar's CEO explained that the subsidiary's strategy aims to remain in the sector through two methods: acquisition of up-and-running operations, on the one hand, and greenfield projects, on the other, preferably in a state near the project start. “We will continue to be very active in exploring opportunities. Our priority is copper in Chile and Peru. If it is Peru, our vision is that it has to be with a local partner, and if that can be Minsur, it would be fantastic, because we have had very good results. If it is in Chile, it can be alone or with a partner, but with ourselves as operators.”
from the inside
Debut in the major leagues of mining
— a sustainable vision 56 _
Mina Justa is located in a desert area that has rather low biodiversity. However, near its northern border is the San Fernando Natural Reserve, that is home to guano birds, Humboldt penguins and sea lions on its coast, as well as guanacos, that come down from the mountains to feed on plants called Tillandsia, and even condors. “There is wildlife that is protected, so we have constant monitoring processes,” says Enrique Rodríguez, who emphasized that for both Marcobre and Empresas Copec, environmental care is essential. “We meet all World Bank standards, because lending entities are governed by them. But on the other hand, regardless of whether it is required, it is also within our sustainable management policies as a mining company.” The above is reflected also in the management of water resources. Since there are no aquifers, after conducting metallurgical studies, it was decided to use seawater and maximize its use as untreated seawater, that is to say, without desalinization, except for what relates to human consumption and specific processes, such as electrowinning. Meanwhile for dust control in mine roads, the brine from the desalination process is used. Enrique Rodríguez also noted that as there is no surface water runoff in Mina Justa , no sediments are generated which, when not properly managed, can affect the flora and fauna, and people's health.
Multibuoy terminal in Marcona for sulfuric acid handling.
While the site is located in an area without large and dense human settlements, there are two nearby communities with whom a fruitful relation has been developed. In addition to programs to support education, tourism and health, a fluent cooperation relationship has been developed with respect to the core business. The provincial capital, Nazca, is home to the San Luis Gonzaga University's Faculty of Mining Engineering and Metallurgy, in Ica, with which an exchange of knowledge is taking place through lectures for students, for instance, who also have the possibility to complete professional internships at Mina Justa. To the southwest is San Juan de Marcona, a district that in the 1950s began to grow thanks to iron ore operations in the surrounding area, thereby turning from a camp site to a city itself. “As it usually happens with a community used to the mining activity, it has provided us with labor during construction and now also with the operation,” Marcobre CEO said. In the first case, at the peak we had 5,500 workers, 1,300 of them were from the local area. Meanwhile the current phase requires 1,100 officials, and more than 250 of them will come from Marcona. “The community is grateful that we will generate employment in the area and from our side, it´s Enrique Rodríguez, CEO Marcobre.
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been an advantage to have this opportunity to find labour and with a good level of qualification and experience,” Rodriguez said.
— talent on both sides of the border Mina Justa is Empresas Copec's first big bet in this sector, and it is also its industrial debut in the neighboring country. Erwin Kaufmann, who developed much of his career at ARAUCO, said that an initiative like this has many similarities with, for example, building pulp plants from the point of view of the investment size, scale, sub-extensions and complexity. “There are several similarities in terms of security and financing. Copper is a commodity, and we have
a lot of experience in this type of industry, so we have been able to contribute with this general knowledge that is also applied here.” This contribution is determined by a high-standard performance on both sides of the border. Enrique Rodríguez said that there is a clear vocation among the employees for the work well done. “It has been a team effort to do things right, because it is the right thing.” Erwin Kaufmann stressed that in Alxar there are workers with a lot of experience both in this sector and in other areas. “It is a highly committed, consolidated human group, where they can complement each other. As we are small, we do a little bit of everything, we work very well as a team. We know the importance of this first experience in the great copper mining for the Company and therefore we want everything to go perfectly, so we are committed to it being a successful experience, because depending on that we will be able to grow in the future.”
Integrated Operations Center.
57 _
production of dissolving pulp
RENEWABLE DISSOLVING PULP FROM CHILE TO THE WORLD
all of arauco's dissolving pulp production is exported to countries that use it to make viscose or rayon, such as china, india, indonesia, thailand and taiwan.
from the inside
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CONSUMERS ARE INCREASINGLY DEMANDING GARMENTS MADE FROM ORGANIC FABRICS AND NATURAL RAW MATERIALS. ALONG THESE LINES, THE FIBER OBTAINED FROM DISSOLVING PULP AT ARAUCO'S VALDIVIA MILL IS BIODEGRADABLE AND RESPONDS TO THE CHALLENGE OF A SUSTAINABLE WORLD.
In June 2020, ARAUCO produced, for the first time in Chile, dissolving pulp. The project, pioneer and until today unique in the country, required an investment of approximately US$200 million and involved converting the Valdivia Mill into a reversible facility that allows the production of paper grade pulp and dissolving pulp, according to market needs. Dissolving pulp, which has environmental and productive advantages compared to cotton, is mainly sold in Asia. In 2021, sales projections are promising and reach up to 470 thousand tons.
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from the inside
Renewable dissolving pulp from Chile to the world
Always thinking about innovating and responding to changing market conditions, about eight years ago ARAUCO started studying the possibility of giving new uses to cellulose. Thus, the idea of producing a different type of pulp arose, to manufacture products beyond the traditional ones. For example, fabrics.
60 _
The analysis considered that, in a global scenario, where consumers are increasingly demanding garments made with organic fabrics and natural raw materials, dissolving pulp is a promising idea. The fiber obtained from it is biodegradable and responds to the challenge of a sustainable world, while also presenting an interesting growth potential in demand. This is how a pioneering initiative in the country and with global projection began in Valdivia. The first challenge was to reconvert the Valdivia Mill from paper to dissolving pulp, using the same machines, people and facilities, and to be able to
return to the original model whenever technical and commercial evaluations advise it. That means, a “reversible” system. Patricio Henríquez, Engineering and Construction Division Manager at ARAUCO, was in charge of the project implementation, which required an investment of approximately US$200 million. “We started by consulting foreign experts to shape a conceptual study and we concluded that Valdivia was the ideal facility to convert for several reasons, such as the technology it has in the digester area, and the installed capacity.” The project strategy was comprehensive, as it included the views of the engineering, construction, purchasing and foreign trade units, among others. Likewise, environmental regulatory processing and consultations with the community were a relevant element, along with the training of staff that had to acquire new knowledge.
DISSOLVING PULP
ORGANIC FIBER
BIODEGRADABLE
SUSTAINABLE
Conversion of the Valdivia Mill, from paper pulp to dissolving pulp, using the same machines, people and facilities.
POTENTIAL FOR GROWTH AND DEMAND
US$ 200 MILLION IN INVESTMENT
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61 _
IN 2020 SALES PROJECTIONS HAD AMOUNTED TO 70 THOUSAND TONS AND 120 THOUSAND TONS WERE SOLD. MEANWHILE, FOR 2021 SALES ARE EXPECTED TO REACH 470 THOUSAND TONS.
“We had to study the areas of the mill, change the technology in some of them, hire consultants and equipment suppliers and learn in simulators. We prepared an investment budget and an implementation program. It was a complex process, which required a great commitment and involved many people”, the professional says. But the biggest challenge was disrupting the mill normal operation as little as possible. Patricio Henríquez emphasizes that maintaining it “was a great challenge and we finally achieved it with only two mill shutdowns.” The longest lasted 58 days, during which interventions were carried out in the areas of pulp machines, causticizing, lime kiln and digesters; bleaching was configured from four to three stages and a new Ozone stage was incorporated; the wood line was modified; wood yards were paved and new biomass crushers were added, among other works. “The issue of safety measures was also very important, because there were many workers at the site and many things to control. However, all the technical complexities inherent to the size of the project were solved,” adds Henríquez.
from the inside
Renewable dissolving pulp from Chile to the world
— production in times of pandemic 62 _
Along with the technical and engineering assessments associated with the construction, aspects related to production were analyzed. This area is led by Manuel González, manager at the Valdivia Mill, who worked side by side with the other areas involved in the project, so that on June 9, 2020 it was possible to produce the first ARAUCO dissolving pulp bales. “The original plan was to start manufacturing in January, but then we decided to do it in March to take a breath after the longest plant shutdown, which was in September 2019. But we were caught by the coronavirus, which involved a series of adjustments, since the formal change from paper to dissolving pulp considered face-to-face support of experts. Therefore, we delayed the date to June,” says the executive. This added a new and unexpected challenge, because “the change required the entire team present and we only had a reduced staff in the plant. So, we had to design a strategy that meant ordering the different areas with an approximation plan and a daily review of all aspects. It was a great effort by the entire operational team, technicians, supervisors, superintendents, among other players”, he adds. In a pandemic scenario, challenges followed one another. Manuel González explains that “we had the notion, but not the experience, and we were not going to have the specialists on site. So, we implemented remote consultancies and at the mill we prepared the questions that we later asked the experts by video call”. Along with materializing the production, another issue was to quickly reach the parameters of quality, chip cleanliness, reactivity and viscosity of the pulp foreseen in the original planning. Constant monitoring made it possible to reach the goal and, in a couple of weeks, reach the levels that can take more than a year to achieve. Production was organized in three campaigns. The first one was of 44 days producing dissolving pulp, during which 72% of the 47 thousand tons produced were grade A, which is the one with the best viscosity. The 90 days that the second campaign lasted totaled 113 thousand tons, with 94% at the highest quality levels. The same percentage was achieved for the 39 thousand tons produced in the third campaign, which spanned 35 days.
Patricio Henríquez, Engineering and Construction Division Manager at ARAUCO.
AFTER OVERCOMING SEVERAL CHALLENGES DUE TO THE HEALTH CRISIS AND THANKS TO THE EFFORTS OF THE ENTIRE OPERATIONAL TEAM, TECHNICIANS, SUPERVISORS, SUPERINTENDENTS, AMONG OTHER PLAYERS, ON JUNE 9, 2020 ARAUCO MANAGED TO PRODUCE THE FIRST BALES OF DISSOLVING PULP.
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— from los ríos region to the world While the first studies were being developed, ARAUCO's commercial area was preparing itself by analyzing the behavior of the dissolving pulp market and making contacts to place the first bales. It was a time of travel, technical meetings, getting to know customers and solving logistical issues, to ensure the successful sale of a more technical product than paper pulp and with a more limited niche.
63 _
For the company’s Commercial Director, Ricardo Strauszer, the entrance to the market took place at a very good time, since as of September 2020 there was a rebound after the negative effect caused by the pandemic. “Although there is currently a little more supply, prices have still risen,” says the executive. In fact, estimated sales for 2020 were 70 thousand tons and 120 thousand were sold. Strauszer says that by 2021 “we had planned to produce 300 thousand tons of dissolving pulp and 230 thousands of paper pulp, but, given the good market conditions, we are going to sell 470 thousand and 40 thousand, respectively. In other words, for the rest of this year we should not switch to pulp for paper”. It should be noted that all of ARAUCO's dissolving pulp production is exported to countries that use it to manufacture viscose or rayon. The main buyer is China, which concentrates 80% of the viscose production in the world, followed by India, Indonesia, Thailand, Taiwan and, to a lesser extent, Europe.
Barge transport of one of the two new batch digesters incorporated in the Dissolving Pulp project.
— the keys to success With the project in full swing, high quality achieved in record time and good sales results, the ARAUCO team continues to work intensely to adjust processes and finetune details of the operation. Manuel González highlights the great learning gained from the beginning, “especially in the area of machines and in the ability to reconcile higher production rates with the work of the other areas of the mill”. He adds that there are always issues to be solved and that the approach is “to go up step by step, be cautious and orderly to do everything correctly.” Manuel González, Valdivia Mill Manager at ARAUCO.
from the inside
Renewable dissolving pulp from Chile to the world
64 _
New centrifugal cleaners incorporated in the pasta preparation area.
In the opinion of Patricio Henríquez, a key factor in the success of the project was having a high-performance and highly committed team, “in addition to an adequate planning of all the activities, a good implementation strategy, and a permanent monitoring of activities to ensure compliance.” Ricardo Strauszer complements by pointing out that “to be among the 'top 4' in quality in the world in a few months is a great achievement. We also think that our performance has ranked us as a very competitive producer.” He warns that since sales started at a time of increasing prices, it is now important to be alert about how the market behaves in a potential downturn. Thus, this project becomes another example of ARAUCO's ability to adapt to new times, to environmental imperatives and to the transformations that the world is experiencing day by day. This ability, developed from its origins and present every day, distinguishes the Chilean company and has allowed it to look long term with optimism and certainty, based on its leadership in the forestry industry.
Ricardo Strauszer, Commercial Director at ARAUCO.
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+ competitive advantages of dissolving pulp Pulp for textile use is similar in appearance to the wood pulp and the raw material is the same, that is, eucalyptus. However, the production has important differences, given the high level of purity that it requires. After dissolving the fibers to molecular levels and resolidifying them, the threads are made and cut to a size that imitates a cotton fiber. Textiles are made with this material, to which it is possible to add elements such as a fire retardant, a special color, a repellent or another, which adds value to the product.
This is an advantage over cotton, its main competitor and the one with the most disadvantages from an environmental point of view. Also, pulp fiber uses less chlorine dioxide for pulp whitening. Added to this is the fact that, in addition, ARAUCO has been able to generate surplus electricity that is transferred to the National Electric System. Thus, ARAUCO, through its dissolving pulp plant, unique in Chile, takes a new step towards the country’s sustainable economic development.
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vía limpia
PROMOTING A CIRCULAR ECONOMY
in 2020 alone, via limpia achieved the collection and valorization of almost 25 million kilos of some of the most polluting industrial waste.
from the inside
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THIS COPEC SUBSIDIARY IS CURRENTLY THE LEADER IN INTEGRATED MANAGEMENT OF HAZARDOUS WASTE IN CHILE. ITS OPERATIONS EXTEND FROM ARICA TO TIERRA DEL FUEGO, PROVIDING CONSULTING SERVICES, TRANSPORTATION, STORAGE AND FINAL DISPOSAL OF USED LUBRICATING OILS, GREASES, CONTAINERS, WATER AND SOLIDS.
Founded in 2006 as a used oil collection program, Vía Limpia, now a subsidiary of Copec, manages hazardous waste, recovering and reusing it and protecting people's health and the environment throughout the country.
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from the inside Promoting circular economy
“One liter of used oil can contaminate a million liters of water,” explains Eduardo Gutiérrez, General Manager at Vía Limpia. He adds: “The consequences of dumping this type of waste - both in the sea and on land - are harmful to ecosystems, health and, of course, life.”
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But none of this happens if it is correctly extracted, stored and valorized for final disposal, according to Gutiérrez, who has dedicated almost 20 years to this activity. Vía Limpia was created out of a need of Copec's Lubricants division, whose industrial and mining customers had to manage their waste more rigorously since the implementation of the Sanitary Regulations on Hazardous Waste Management, enacted in 2003. After several failed experiences with companies dedicated to final disposal, which showed difficulties with destinations, loss of traceability and failure to comply with collection deadlines,
“we understood that Copec could not outsource the used oil collection service, as this could have affected the environment, people and communities, and could have led to a possible breach of legal and regulatory obligations. In addition, we identified an opportunity for customer loyalty,” the executive adds. As a result, in 2006, Eduardo Gutiérrez, together with Project Manager Vinko Agüero, created the National Used Oil Collection Program within the Lubricants division. Its rapid growth, along with the discussion of a new regulatory framework for waste management and extended producer responsibility, led Vía Limpia to become a subsidiary of Copec in 2014 and, as such, to begin exploring new markets, incorporating solid waste and water management with hydrocarbons.
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Currently, Vía Limpia's operations extend from Arica to Tierra del Fuego.
— the road to waste valorization This subsidiary is currently the leader in integrated management of hazardous waste in Chile, operating from Arica to Tierra del Fuego, providing consulting services, transportation, storage and final disposal of used lubricating oils, greases, containers, water and solids. In 2020 alone, Via Limpia achieved the collection and valorization of almost 25 million kilos of some of the most polluting industrial waste. “Circular economy is not only an added value, says Gutiérrez, but the awareness of a planetary urgency. Today there is a lot of waste that is disposed of in landfills without any valorization, which can generate serious damage to the environment and a potential effect on people's health.” In this sense, the REP or Extended Producer Responsibility Law, enacted in 2016, constitutes one of Chile´s greatest steps forward in terms of circular economy, establishing the basis for the development of a systemic approach to the use and reduction of resources, from their production until their reuse and recycling.
VÍA LIMPIA CARRIES OUT ITS ADMINISTRATIVE AND OPERATIONAL ACTIVITIES IN ACCORDANCE WITH THE HIGHEST SERVICE STANDARDS, THROUGH AN INTEGRATED MANAGEMENT SYSTEM CERTIFIED BY INTERNATIONAL STANDARDS SUCH AS ISO 9001, ISO 14001 AND OHSAS 18001.
from the inside Promoting circular economy
However, the realization of its full effects implies the drafting of a series of regulations, whose objective is to set collection and valorization targets for priority products. Of these, only the decree regulating tires has been published, but there are still five other regulations under discussion, including the one on lubricants, which will pose a series of adjustment challenges for the industry. 70 _
All in all, according to the Fifth State of the Environment Report, conducted by the National Environmental Information System (SINIA) in 2019, the national percentage of waste valorization increased from 17% in 2015, to 24% in 2017. According to the Vía Limpia General Manager, a stronger will from the public and private sectors is now required to continue to make progress. “The lack of enforcement and the lack of awareness of many industry players mean that only a part of the segment declares and correctly disposes its waste. As long as there are no resources for an effective control, the preeminence of the circular economy will be low,” explains Eduardo Gutiérrez. The executive lists some obstacles, the same ones that Vía Limpia has had to overcome to reach the position it currently holds. First, the logistics of collection: “Complying with the regulations implies that the producer is responsible for the waste from the cradle to the grave, and that, in a country as long as ours, with final destinations so centralized in the Metropolitan and Valparaíso regions, configures a very complex operational logistics. It is necessary to have a fleet that meets high quality and safety standards, with transporters who have taken hazardous waste management courses and with information technologies for constant monitoring and traceability, from the client's request to final disposal, as well as safe transfer stations and compliance with all the associated document management.” It has taken Vía Limpia years of effort and investment to have all this in place and to ensure that its administrative and operational activity is carried out in accordance with the highest service standards, as it is today through an Integrated Management System certified by international standards such as ISO 9001, ISO 14001 and OHSAS 18001.
Eduardo Gutiérrez, General Manager Vía Limpia.
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Vía Limpia was created in 2006 as a result of a need of Copec's Lubricants area, whose industrial and mining customers needed to manage their waste more rigorously
71 _ Creation of the National Used Oil Collection Program
2006
Vía Limpia becomes a subsidiary of Copec
2014
According to the Fifth Report on the State of the Environment (2019), the national percentage of waste recovery has been increasing
2020
LUBRICANTS
2015
Vía Limpia achieved collection and recovery of nearly:
GREASES
17%
25 MILL
CONTAINERS
2017
24%
kilograms of some of the most polluting industrial wastes
WATER
SOLIDS
worldwide
Abastible: Clean energy for the Andean Region
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Malloco, Metropolitan region, Chile.
Mesa De los Santos, Santander, Colombia.
Spondylus Route, Santa Elena, Ecuador.
Ilo, Southern Peru.
ABASTIBLE: CLEAN ENERGY FOR THE ANDEAN REGION empresas copec
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Chiloé, Los Lagos Region, Chile.
El Chorrillo, Guayas, Ecuador.
Fulfilling the mission of Abastible and its subsidiaries Solgas, Norgas and Duragas to bring the clean energy of liquified gas to homes, industries, commerce and other activities is possible thanks to the work of a great team of employees and its solid network of distributors. They cover almost the entire territory of Chile, Peru, Ecuador and Colombia. This way, clean energy reaches everywhere and millions of people; large cities and small towns; valleys, highlands, coast, jungle and desert. And in each of these places energy contributes to facilitate and improve the quality of life of their inhabitants and their communities.
Huancayo, central zone/sierra of Peru.
Yumbo, Cauca Valley, Colombia.
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fundación belén educa
YOUNG PEOPLE WHO DREAM BIG
two former students of belén educa foundation share their testimonies about how quality education is transforming their lives.
with the people
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THE COMMITMENT THAT COPEC AND ITS SUBSIDIARIES HAVE WITH EDUCATION HAS ALLOWED YOUNG PEOPLE FROM VULNERABLE SECTORS TO DEVELOP, ACHIEVE GREAT GOALS AND DARE TO DREAM WITHOUT LIMITS.
Marcelo and Patricio do not know each other. They attended different schools and grew up several municipalities away. However, they have something in common: they were students of a school of Fundación Belén Educa, an institution that provides quality education to children and teenagers from vulnerable sectors of the population, which has allowed them to achieve great goals. In these lines we share their inspiring stories. A portrait of the opportunities that education provides when combined with effort, spirit of selfimprovement and perseverance, and which, in the case of both young men, is changing their lives.
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with the people Young people who dream big
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Marcelo Cepeda Former student at Fundación Belén Educa
— a journey from puente alto to dubai "Last night was the last night I slept in my bed, my closet is absolutely empty, there is nothing in it. This was the last T-shirt I had to wear. Everything is already in the suitcase," says Marcelo, excited. In a few hours he will take a plane to Dubai, a trip that, at 23 years of age, will change his life. But let's start at the beginning. Marcelo was born in Puente Alto, is the eldest of three brothers and is the son of Mercedes, a housewife, and Héctor, a truck driver at a concrete plant. He studied at Colegio Cardenal Raúl Silva Henríquez, a school run by Belén Educa, a foundation which, since its inception has been supported by Empresas Copec and whose purpose is to provide quality education to young people from vulnerable sectors. Thus, Marcelo had the possibility to access an
education of excellence. "My experience was rewarding. I had a very good foundation. I still went to pre-university to enter university, but the school's education helped me a lot. The teachers were very competent. I remember that they taught me how to take practice tests and in 4th grade [last grade of high school] I didn't understand why. But when I started the university, I understood why I had to do a lot of practice tests. In addition, I learned several things that later helped me for life. Integrity, which is very important, ethics and self-confidence," he says. During his last year of high school, Marcelo participated in Fundación Belén Educa mentoring program, where he was mentored by Eduardo Navarro, CEO at Empresas Copec. "He helped me a lot and guided me in my career choice. He is also a commercial engineer, just like me, so he told me
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what this profession was all about." Marcelo proudly says that in the mentoring meetings they spoke English, because he wanted to practice this language, which he speaks very well. "I took an English course when I was in seventh and eighth grade of middle school, and first and second year of high school." The CEO of Empresas Copec remembers his protégé as "a young man who understood the importance of studying, making an effort, dreaming, that there are no impossibilities. He always showed great formality in all meetings. In addition, he was clear that opportunities were to be seized. Speaking English at the meetings, then asking for help with a job for the university, or looking for a job compatible with his studies, in order to help his family. Beyond the brief period of mentoring, I tell everyone, 'If we can help you with anything in the future, count on us.' And he did." "It has always been a privilege to be part of this mentoring program," Navarro continues, "which allows us to guide young people with our experiences; to open our eyes to look at all the realities of our country and to be useful, not only as part of companies that make large investments, but also of human groups that articulate themselves to help a young person and, perhaps, his or her family at the micro level. One learns and reflects a lot in this program. Giving and receiving.” After finishing his studies at Universidad de Chile, Marcelo asked Eduardo Navarro, with whom he always kept in touch, for an opportunity to complete his professional internship in one of the Group's companies. This is how he arrived at Abastible, in 2019, while he was still studying his career. At the same time, in 2020 he studied a master's degree in Finance and was formally hired by the company. His boss, Miguel Dumay, Deputy Manager of External Services and Corporate Security, says that the young man's performance was outstanding. "Always very gentlemanly, respectful, kind to everyone. His way of integrating with his peers was extraordinary. In his work, he was in charge of managing and controlling the 2019 and 2020 budgets and the company's centralized contract accounts. He executed it with particular efficiency, developing initiatives that clearly qualify him as a professional of excellence. It seems to me that his speed and sharpness to develop his work will allow him to project himself as a great commercial engineer".
area. "I had always wanted to work in investments. They are a challenge. Not so much finance in general, but investments, which are like a little microworld in that area." So, one day, looking through the job offers published by his university, Marcelo found a great opportunity and did not hesitate to apply. Morgan Stanley was looking for an investment analyst in Dubai. "I sent my resume, all in English, of course. And I wrote a cover letter. Then they sent me an e-mail scheduling an interview, also in English, at seven o'clock in the morning in Chile. After that, I had three tests on financial and investment knowledge and another one on economic news." Finally, Marcelo was chosen for the job. "It is an excellent job opportunity. For me it is a challenge, because here in Chile I was very comfortable, living with my parents, with my family, in my country, I had a job, I mean, what greater stability. But I think you always have to leave your comfort zone. Besides, human beings grow in adversity, so, going to a foreign country, what better experience than that to test your capabilities." Marcelo's story, which is just beginning to be written, is the result of a lot of effort, a desire to learn and a tremendous spirit of self-improvement. A young man who, at 23 years of age, will live an experience that, for sure, will define his life. The route of his flight is Santiago-Miami-New York-QatarDubai. "Yes, I have a long trip ahead of me...," Marcelo concludes with a big smile and a lot of illusion.
Marcelo, for his part, remembers his experience at Abastible with great pride and gratitude. "It was my first work experience, so I will always remember it fondly. Besides, when you are starting to work, everything nourishes you. I was fortunate to belong to an excellent team, with whom we had a very good relationship. If we had to fight for a budget, we all fought for it together. We were always well aligned.” Although Marcelo was having a good experience at Abastible, he confesses that his real professional interest was in another
Marcelo Cepeda with Empresas Copec CEO, Eduardo Navarro, during the mentoring program.
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with the people Young people who dream big
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Patricio Hinostroza Former student at Fundación Belén Educa and National Mathematics Top Scorer
— a story of effort with great results "I had my minute of fame," laughs Patricio, who, being a national math score, was interviewed on Radio Biobío, Mega and Canal 13, as well as local media in Maipú, the municipality where he lives with his mother and sister. Patricio studied from kindergarten at Colegio Cardenal Carlos Oviedo Cavada, an establishment of Fundación Belén Educa located in the same municipality where he lives. "My experience was very good. I feel that I developed a lot, not only as a student, but also as a person, because I had classmates who were not constantly looking to compete, as it happens in other places. Also, because it is a technical school, it had that approach of training professionals and preparing them for the working world. For the same reason, they tend to reinforce soft skills, such as respect, perseverance, and they reflect them with the 'Belén seal' that the foundation has. I feel that this helped me to grow as a person, along with my classmates, who were also very important to me.”
The 18-year-old says that since he was a child and thanks to his teachers, he was attracted to mathematics. "In high school I had a teacher who touched me a lot, because he always invited me to participate in challenges. I was in first grade of high school and the challenges were for a level like third or fourth grade. So, he always motivated me to go for more. And that's what happened to me with several teachers." Patricio says he did a lot of preparation for the university admission test. "The first thing I did was sign up for anything that was free on social networks. For example, a virtual preuniversity charged me 100 pesos per month to attend all the classes of all the subjects I wanted. Also, at school they gave me a scholarship for another pre-university, where I studied Language and Mathematics. I also watched classes on YouTube and other social networks. The truth is that I tried to stay connected all day studying."
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The young man highlights perseverance and motivation as two key pillars in this process. "Because it's easy to get carried away, so you have to try to persevere and motivate yourself in what you like." Finally, all that effort, in addition to his excellent school performance, which resulted in an average grade of 6.9 in high school, paid off. The Belén Educa alumnus obtained the highest score in the Mathematics test: 850 points. Thus, Patricio entered the career he always dreamed of: Civil Engineering at Pontificia Universidad Católica. The Belén Educa former student says that his mother, a childcare worker who is currently out of work due to the pandemic, has been the proudest of this important achievement in his academic life. "She was very happy, she started crying, she hugged me. It was very emotional." Patricio recognizes that this journey has not been easy and has involved sacrifices. "During the eighth grade of middle school, and first and second of high school, I attended Universidad de Chile's summer school for mathematics. So, I was always reinforcing that area. It is difficult, because I invested a lot of time in which I could have been doing other kinds of things, like having fun, spending time with my friends, etc. But I feel that, in the end, it was worth it and that I achieved what I had set
out to do: to enter the career I wanted with a good score and thus being eligible for free tuition." Pedro Larraín, executive director at Belén Educa, says that Patricio's achievement is the accomplishment of many players. "First, of his enormous effort, perseverance and dedication, which make us so proud of him, as well as of his family that has supported him. It is also the achievement of all the teachers who have trained and accompanied him, from pre-kindergarten to high school. Patricio's achievement also belongs to those who support us, to the companies that make it possible for our students to have more and better opportunities that open doors for their future." Finally, Patricio sends a message to other young people. "I would tell them to take advantage of all the opportunities that are offered to them and to constantly look for where to study and learn anything that they like. My thing was mathematics, so I researched and found a summer school and got into a math course and strengthened that area. But if a person is interested in languages, they should search. The internet is full of tutorials on how to learn a language, courses and so on. So, it's mainly a matter of looking for what you are passionate about and putting your heart and soul into it," he concludes.
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arauco and the mapuche people
BUILDING A VIRTUOUS RELATIONSHIP
participation and dialogue are key elements in the generation of this relationship.
with the people
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FOR DECADES, BETWEEN THE BIOBÍO AND LOS LAGOS REGIONS, ARAUCO HAS BEEN CARRYING OUT SEVERAL ACTIVITIES OF RELATIONSHIP WITH THE MAPUCHE PEOPLE. THERE IS, ON BOTH SIDES, A WILLINGNESS TO COLLABORATE AND RESOLVE DIFFERENCES WITH MATURITY AND HIGH-MINDEDNESS, THINKING ON THE WELFARE OF THE ENTIRE COMMUNITY.
The forestry subsidiary has an explicit policy that governs its relationship with indigenous communities, establishing concrete commitments that the entire organization must comply with. Künü (ceremonial space in Mapudungún) is a flagship project that represents the collaborative and constructive relationship that ARAUCO holds with 80 Mapuche groups from the Loncoche municipality.
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with the people Building a virtuous relationship
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ARAUCO is present in five regions of the country and its area of influence covers over 120 municipalities where it generates employment, contributes to the local development and links in different ways with the community, always looking to generate long-term virtuous relationships.
to go deeper into the subject through a methodology of participation and dialogue, creating forums attended by representatives of the communities and the company. Knowing each other, understanding each other, identifying gaps, analyzing opportunities and seeking joint solutions was the meaning of these encounters.
Almost 50% of its forest heritage and industrial facilities are located South of the Biobío River, in a large geographical area, that for decades has been related to the Mapuche people. There, between the Biobío and Los Lagos regions, an incessant activity is carried out, marked not only by productive work, but also by collaborative ties and the will to resolve differences with maturity and high-mindedness, thinking on the welfare of the entire community.
One of them was the Mapuche Forum, which generated an official policy in which ARAUCO declares five explicit commitments to the Mapuche people (see figure). It is a framework for common action, based on the understanding of this people as a present living culture, dynamic and with its own and specific vision.
This way of doing business had a significant milestone more than 10 years ago, when the company was in the middle of the process of obtaining a sustainable forest management certification. The relationship with the surrounding is a specific requirement of that certification, so it was decided
In the context of the policy, prior to the beginning of each forest operation, there is an approach to the communities that could be affected, in order to identify the impacts and address opportunities for collaboration. Thus, each year around 50 participation and consultation meetings are held specifically with Mapuche communities.
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— a common vision Mauricio Leiva, Deputy Manager of Public Affairs at ARAUCO, has been, for years, leading the company’s initiatives in the field of its relationship with the community. He is clear about the importance of opening spaces for dialogue and participation to address issues of common interest. “ARAUCO is a company that manages renewable resources and projects itself for the long run. The Mapuche people, for their part, have been present in the regions where we work for many years and also aim for their permanence in time”. In his opinion, this view “is something that unites us, and it is key to understand it, since it is what differentiates us from other industries, that can establish in a place to extract a resource and then leave.”
Mauricio Leiva, Deputy Manager of Public Affairs at ARAUCO.
STRATEGIC IMPORTANCE HAS BEEN GIVEN TO GENERATING MECHANISMS FOR PARTICIPATION AND CONSULTATION; IDENTIFYING AND PROTECTING SITES OF CULTURAL IMPORTANCE; KNOWING AND MANAGING LAND CLAIMS, AND ENABLING CHANNELS TO RESOLVE CONTROVERSIES.
With this point made clear, it was possible to give greater visibility to the Mapuche culture and share that vision both within the company and towards its different audiences. Thus, it highlighted the strategic importance of generating mechanisms for participation and consultation; identifying and protecting sites of cultural importance; knowing and managing land claims, and enabling channels to resolve controversies. “Working already with around 400 Mapuche communities, we saw that we were falling short, because many things had happened, the social conflict was greater and there were more demands on players such as companies and the State,” says Leiva. Then, in 2018 an advisory council was created, composed of territorial leaders, academics, artisans and political leaders, “each one carrying a relevant vision, who were invited to an incidence space to review the policy and propose two lines of work.” One of them was to promote training of ARAUCO employees through a solid program that would help them learn about the history, culture and essential elements of the Mapuche people. “Those who make decisions that affect the territory must have all the tools to understand the Mapuche world,” says the Deputy Manager of Public Affairs. The second line consists of creating co-management initiatives. Leiva explains that this means “identifying counterparts in the Mapuche community to develop joint projects that cover certain places and positively influence the people who live there.” It is precisely here where an emblematic project arises in the relationship between ARAUCO and the Mapuche people, which involves several actors, collects all the richness of this ancestral culture and embodies in a physical space the value of a constructive dialogue and a healthy coexistence.
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with the people Building a virtuous relationship
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The Elemental team, led by architect Alejandro Aravena, participated in the development of this meeting and dialogue point between ARAUCO and the Mapuche people.
— a new way to live together Künü means ceremonial space in Mapudungún and is the name of the initiative that brings together 80 Mapuche communities from the Loncoche area, on the border between the regions of La Araucanía and Los Ríos. Its origin dates back to the beginning of the last decade, when in extended meetings between ARAUCO executives and representatives of several society groups it was agreed to enable and reestablish the use of certain sites of cultural significance. “We set up together a broad agenda of issues, in which, among others, it was agreed to identify, protect and restore access to sites of cultural significance,” says Mauricio Leiva. He adds that, on that occasion, the president of the Association of Mapuche Communities of Loncoche, Mario Mila, “told us that they dreamed of having a house to accommodate all the communities. The land was in the
town, so we bought it and gave it to them to start developing the Mapuche Development House project there.” At this point in the conversations, the Elemental team joined, led by architect Alejandro Aravena. The entrusted task was to create a large meeting point for dialogue, emulating the old parliaments between indigenous and Spanish people. For Mario Mila, “it is a dream that we had since 1995, when we constituted ourselves as an organization: having a space, a place of our own to carry out our cultural activities and conversations.” This gave birth to what Mila defines as “a Mapuche citadel, in our style, with Mapuche buildings and thinking, within the city and next to the road, so that other people who want to get closer can do so.” All of this is located in an area of
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almost two hectares, where a special place is occupied by Künü, the ceremonial site. It is a semi-circular space of 40 meters in diameter, which forms a kind of horseshoe around the rehue, the ceremonial tree. It is made with 80 pine poles of 15 meters high, representing the number of communities in the association. The fruit of this work, which took place between January and July 2020, is summarized in a video that not only crossed the borders of Loncoche, but also crossed the Atlantic, to be presented at the Venice Biennale. Postponed until May 2021 due to the pandemic, this version of the great event in world architecture will revolve around the question “how will we live together?” The answer to that question is provided by Mauricio Leiva, according to his experience. “One way of living together, in this case with the Mapuche people and others, is building spaces for dialogue, which is what Künü represents and what the Loncoche communities are promoting. Mario Mila and the associations he leads chose permanent dialogue and joint construction. For this reason, we want Loncoche to serve to structure other projects in this way that ARAUCO has also chosen to interact with indigenous communities,” he concludes.
ARAUCO DONATED A LAND TO DEVELOP KÜNÜ -CEREMONIAL SPACE IN MAPUDUNGÚN-, BENEFITING 80 MAPUCHE COMMUNITIES IN THE LONCOCHE AREA.
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with the people Building a virtuous relationship
+ commitments that are fulfilled ARAUCO's relationship policy with the Mapuche communities sets out five commitments that permeate the entire organization: 86 _
1. "Promote knowledge and learning within the company of the several aspects of the Mapuche culture." 2. "Maintain a process of dialogue and ongoing consultation, with the aim of identifying the impacts of our operations, concerns and opportunities and, together, establish with the communities how to manage them." 3. "Identify the sites of religious, cultural and economic interest for the Mapuche communities that are within the
patrimony of Forestal ARAUCO, for which we will establish access criteria and safeguard mechanisms for those sites." 4. "Know and manage the requirements of the lands in our patrimony by the Mapuche communities with which we interact." 5. "Seek dialogue practices and mechanisms for consultation, resolution and management of controversies that consider the elements that belong to the Mapuche culture." All staff working at ARAUCO are responsible for complying and enforcing this policy, keeping it in mind in their daily behavior and decisions.
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PRESENT IN:
5
120
REGIONS OF CHILE
MUNICIPALITIES
Of its forestry heritage and industrial facilities are located south of the Biobío River, in an extensive geographic area where, for decades, it has shared territories with the Mapuche people.
50%
BIOBIO REGION
ARAUCO
400 MAPUCHE COMMUNITIES THAT WORK WITH ARAUCO
DE LA ARAUCANÍA REGION SAN JOSÉ DE LA MARIQUINA LOS LAGOS REGION
KÜNÜ: Means ceremonial space in Mapudungún. It emulates the ancient parliaments between indigenous people and Spaniards and it is shaped as a horseshoe around the rehue, the ceremonial tree.
2
40
HECTARES
METERS OF DIAMETER
80
15
PINE POLES Representing the participating communities.
METERS HIGH
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FORESTRY SECTOR EBITDA: US$ 1,060 million
FUEL SECTOR EBITDA: US$ 718 million
88 _ FISHING SECTOR EBITDA: US$ 39 million
OTHER EBITDA: US$ (15) million
TOTAL NET INCOME: US$ 191 million EBITDA: US$ 1,802 million
empresas copec
RESULTS AS OF DECEMBER 2020
empresas copec consolidated ebitda and net income as of december 2020 amount to us$ 1,802 million and us$ 191 million, respectively.
summing it up
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THE FIGURES FOR THE FOURTH QUARTER OF 2020, RELEASED A FEW WEEKS AGO, SHOW AN INTERESTING RECOVERY ACROSS ALL THE COMPANY'S BUSINESS AREAS. Rodrigo Huidobro Alvarado CFO Empresas Copec
We have closed a very peculiar year. The pandemic, the still lingering effects of the social crisis in Chile and a protracted pulp low-price scenario contributed to make 2020 an enormously painful year in the human aspect and tremendously challenging in business terms. However, the figures for the fourth quarter of 2020, released a few weeks ago, show an interesting recovery across all the Company's business areas. Pulp prices were already higher in the last few months compared to the rest of 2020, triggered by a gradual recovery in demand, the exit of temporary wood fiber producers and some disruptions in global production. In the early months of 2021, pulp has continued a straightforward rebound. The timber and panels division has also been showing surprising results, driven by real estate and home improvement businesses around the world. Meanwhile, fuels continue to show a clear recovery, already surpassing yearearlier volumes in some channels and geographic zones. LPG, which has shown strong resilience throughout the year, also posted growth in three of the four countries where Abastible operates. All in all, EBITDA for the fourth quarter was US$ 567 million and net income was US$118 million, both figures well above the fourth quarter of 2019. For the full year, EBITDA amounted to US$ 1,802 million, down 11% year-onyear. While this is a significant decline, we must consider it was a year of pandemic and one of the longest periods of low pulp prices in the last few years. This proves the strong position of the Company, which has been building up a carefully designed and well-diversified business portfolio in terms of industries, markets, countries and products. Net income, on the other hand, amounted to US$ 191 million, higher than 2019, mainly due to non-operational factors. These results help us to gradually leave behind the debt levels we reported by mid-year, significantly above what is normally recorded by Empresas Copec, and triggered by a confluence of factors that slashed EBITDA in a period of heavy investment. In fact, by year-end the net debt-to-EBITDA ratio fell to 4.2, from 4.6 in the previous quarter, which would hopefully be
the beginning of a downward trajectory that allows us to recover to levels more aligned with our history. In terms of investment, the challenge of building in times of pandemic has been enormous, and huge efforts have been required by all parties to prioritize the health and safety of employees and contractors while at the same time continuing to move forward. But the final months of 2020 also brought good news. Mina Justa ended the year with 99% progress and it is already in the commissioning stage these days. As for MAPA, start-up is expected early in the fourth quarter. In both cases, the product price scenarios that are presented today are very positive. We are therefore moving forward with initiatives that will represent a significant contribution to the company's value creation capacity. We are hence starting the year on the right foot, a year that will undoubtedly bring additional challenges. Empresas Copec, as always, will face them with the peace of mind of having followed a coherent business strategy and with a special concern to contribute decisively to the well-being of all.
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noticias
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empresas copec leads its category in merco rankings
the company ranked first among holding companies in the latest merco corporate responsibility and governance 2020 study. 90 _
This survey gathers opinions from various stakeholders linked to social responsibility and governance issues, who evaluate based on the following dimensions: ethical behavior, transparency and good governance, responsibility with employees, contribution to the community, commitment to the environment and climate change.
for us and are a key part of our Sustainability Policy. At the same time, we take it with great humility because, as a company, we are aware of the need to continuously improve and progress in all these areas, in order to adapt ourselves properly to the new changing and challenging times for companies".
Empresas Copec’s CEO, Eduardo Navarro, said that "we receive this recognition with great joy and pride, since the dimensions assessed by this ranking are extremely important
This ranking also recognized subsidiaries ARAUCO, Abastible and Copec. The latter ranked first in its category: energy and distribution.
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orizon bets on new technology to offer healthy snacks
this is a project by catholic university of chile professor and vice president for research, pedro bouchon, who won a fundación copec-uc contest, secured fondecyt funding and corfo funding for its development. with this support and the engagement of dictuc and puc, a new technology “made in chile” was developed, and protected under trade secret laws. This new breakthrough, unique in the world, makes it possible to produce potato chips with a third of the fat than traditional chips, better preserving nutrients and maintaining their original color, as a result of the preservation of the raw materials’ nutrients. This innovative method is applicable to different types of food, although the researcher has focused mainly on vegetables and fruits, such as potatoes, apples, beetroots, sweet potatoes and carrots. “It is a very non-intrusive and efficient industrial process. I have been working on this for a long time, traveling around the world, and I have never seen such a product that brings together those characteristics, that does not have a high content of some harmful ingredient and that at the same time is so tasty," said Bouchon. In line with its mission to promote a healthy food, Orizon bet on this product. For this purpose, it set up a pilot plant a few months ago in Coronel, Biobío Region, for development and validation. It is currently selling it through its e-commerce platform www.lamesadetodos.com under the brand name “FlipSnacks”.
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empresas copec is part of the s&p ipsa esg tilted index s&p dow jones indices and the santiago stock exchange announced the launch of the s&p ipsa esg tilted index, which joins s&p dji global family of esg indices, based on some of the major regional and global benchmarks. The index follows selection criteria built on rules that are based on relevant ESG (environmental, social and governance) principles, in order to select and weight companies from the S&P IPSA, Chile's major stock market index. Thus, it measures the performance of some of the shares of the largest and most liquid companies, listed on the Santiago Stock Exchange, aiming at offering investors a specific exposure to the Chilean securities market and, at the same time, provide a significant boost in ratings that measure ESG management performance. Empresas Copec is one of the 26 Chilean firms in the new index. “The recent creation of this index at the local level, reflects the importance for all market agents, both national and foreign, that companies continue to move forward in terms of sustainability. Without doubts, being part of this indicator is for us a recognition of our management and good ESG practices”, says Pamela Harris, Director of Corporate Affairs at Empresas Copec.
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noticias
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empresas copec raises rating on climate change
this year, the company’s rating was raised to "b" in the carbon disclosure project (cdp), specifically in the climate change program, which aims to contribute to reducing greenhouse gas emissions from companies and mitigate climate change risk.
To do this, CDP, an international non-profit organization, requests information on climate risks and opportunities to reduce carbon emissions from the most important companies in the world. This data, in turn, is required by major investors globally. "The improvement in the rating we secured this year in the Climate Change questionnaire is the result of the work we have been carrying out to further strengthen our management of environmental impacts," says Pamela Harris, Empresas Copec Corporate Affairs Deputy Manager.
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abastible develops innovative service with blockchain technology
measurement and verification of savings and emissions with blockchain technology is a unique tool in chile and in the industry, which generates traceability and energy and environmental impact certificates of energy efficiency and/or non-conventional renewable energies (ncre) projects. Measurements are carried out using international protocols, so the certificates are valid worldwide. In addition, Blockchain technology does not allow the records to be modified, which makes them highly reliable. “We must always stay at the forefront, thinking of contributing to people's quality of life and to the country’s sustainable development. To achieve this, it is key that we are prepared with state-of-the-art technology and, for this, innovation is essential. In 2021 we will continue developing cuttingedge services and products with a focus on anticipating and responding to the customer's energy needs, developing tailor-made solutions with innovation and technology, promoting energy efficiency, along with concrete and sustainable environmental benefits”, says Paula Frigerio, Abastible Development and Innovation Manager.
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golden omega secures green-e™ energy certification for clean energy use
the company specializing in the production of high-quality omega-3 concentrates for the food and nutraceutical industry, is the first in its line of business globally to secure this recognition, which certifies that all processes at its arica plant are conducted using power from renewable and carbon-free sources.
Green-e™ is the US leading independent program for verification and certification of renewable energy and carbon counterparts, with widespread recognition in international markets. This major recognition is a step forward in the process initiated in 2018 following an agreement signed with power company Colbún, which was renewed in 2020, by which Golden Omega is committed to operating through 2026 using exclusively electric power generated from renewable sources and without contaminating emissions: hydroelectric, wind and solar. “Within Golden Omega's scope of action, with target markets located mainly in developed countries, the concept of sustainability is a key aspect. End users in the United States, Europe and Asia are very concerned about the origin of the products they consume, their manufacturing processes and certainly where the energy that has been used in their manufacturing comes from,” Golden Omega Chief Executive Officer, Jorge Brahm said.
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empresas copec joins the s&p global sustainability yearbook 2021
the company was once again recognized for its environmental, social and governance management globally after being selected for the first time to be part of this annual report, which measures the sustainability performance of the largest companies by market capitalization. To qualify for the Yearbook, companies must be within the top 15% of their industry and achieve a score within 30% of the best sustainable performance in their corresponding sector. The 2021 selection was based on a record 7,032 companies, from 61 industries, analyzed in S&P's Corporate Sustainability Assessment (CSA), which is the basis for S&P Global ESG Score. In addition to being recognized by this study as one of the most sustainable companies globally, Empresas Copec was awarded the “Industry Mover” status for achieving the largest improvement in its industry compared to the previous year.
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94 _ journalistic magazine published by: empresas copec s.a. el golf 150, 17th floor, las condes phone: 2461 7000 legal representative: eduardo navarro beltrán director: rodrigo huidobro alvarado editing and writing: m. francisca riveros novoa journalists: daniela araneda marisol silva proofreading: norinna carapelle photography: fabián vargas luis vargas empresas copec and subsidiaries photographic archives image bank design and graphic production: porta4, design studio translation paulina munita if you have any suggestions and opinions, please write to us at comunicaciones@empresascopec.cl follow us:
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The opinions expressed by the different authors and contributors in this magazine are the exclusive responsibility of those who express them and do not necessarily represent the opinion of Empresas Copec S.A.