NCPAlcohols Sustainability Report 2009

Sustainability Development Report 2009

Sustainability Development Report 2009

Table of Contents Section 1

.................................................................................................................

Overview CEO’s Message.................................................................................. 3 Chairman’s Message ....................................................................................... 4 Introduction ................................................................................................... 5

Section 2 .................................................................................................................

Our Track Record ........................................................................................... 6 About NCP .................................................................................................... 7

Section 3 .................................................................................................................

Sustainable Development Management............................................................... 8 The Future.................................................................................................... 10

Section 4 .................................................................................................................

Safety.......................................................................................................... 11 Health.......................................................................................................... 12 Environment.................................................................................................. 13 Quality......................................................................................................... 16

page 2

Sustainability Development Report 2009

SECTION 1 CEO’s OVERVIEW Our overall goal is to grow sustainably. This will enhance the return to our shareholders, benefit our staff and serve our customers better. In a word, it will deliver greater value for all stakeholders.

To assist our team achieve our goal, we are following a Game Plan, a strategic management system that tracks our performance from four perspectives. Our strategies in each of the Game Plan perspectives form a value chain, starting with our employees who are involved in our internal processes, to our customers and ultimately to our growth.

In 2009, our growth strategy was severely tested. We responded by re-evaluating all items of controllable spend, and by introducing a number of operational changes that have also cut costs; at the same time, new business opportunities were sought – successfully so.

However, taking a wider view, it is good to be part of the global movement to sustainable development. It is good to be able to satisfy needs, whether they are in our communities, in Africa or further afield. And it is good to make sustainable development an integral part of our plans and decision-making.

But sustainability is more than this. It acknowledges that business has a ‘triple bottom line’, meaning that companies should be mindful of the impact on the social and environmental areas of its operation, as well as the economic.

The social aspect is about people, both our staff and our communities; it cares about their health and safety, their development, and the sustainability of their livelihoods.

The environmental aspect is about minimising our impact on our surrounding ecosystems, to protect them for future generations.

I encourage all our stakeholders to be aware of our commitment to sustainability, and to partner with NCP Alcohols on the road ahead.

Peter Starling Chief Executive Officer

page 3

Sustainability Development Report 2009

FROM THE CHAIRMAN’S OFFICE Welcome to this, our fourth NCP Sustainability Report.

This is part of our initiative to communicate better with our stakeholders, in particular our shareholders, clients, suppliers – and staff.

We have tried to present a balanced and understandable account of both our achievements and our challenges.

We subscribe to the view that sustainable development is about meeting the needs of the present without compromising the ability of future generations to meet their own needs. This drives our thinking at NCP. In practice, this translates into improving people’s lives, and can be seen in the three ‘legs’ or dimensions of sustainability: economic, social and environmental. In other words, we strive to operate prosperously while also paying attention to environmental stewardship and social responsibility.

The consumer is always interested in wider choices, often brought about by innovation, and we thrive on the challenges that this brings us as we explore new ways to be more efficient in our consumption of resources while satisfying the demands of the marketplace.

The manufacture of vinegar and ethanol impacts our environment, most obviously in the form of wastes, effluents and emissions. We have retained, however, our ISO 14000 listing, and our plant is operating well within the licence parameters.

We continue to be committed to Black Economic Empowerment (BEE) and during the year were rated a Level 5 Contributor on the BEE scorecard, an improvement on 2008.

In closing, may I assure you that, while we sometimes do not get everything right, we are systematically working on a path of continuous improvement.

Charles-Albert Peers Chairman.

page 4

Sustainability Development Report 2009

INTRODUCTION NCP embraces sustained development and the principles of broad based economic development. This report will cover our management and operational sustainable achievements for 2009 and our objectives for achieving a number of new initiatives during 2010.

VISION Our vision is to be a world class producer and supplier of quality natural ethanol products, focusing with passion on building strong partnerships to grow with our customers.

MISSION NCP Alcohols is dedicated to the cost effective production and distribution of Customer defined alcohol products.

VALUES We’re passionate about ourselves, the Company, what we do. We honor our commitments, cooperating unselfishly in pursuit of improved performance. We do this to make business pleasurable.

Our uncompromising quality is as a result of our global standards in leadership, manufacturing, products and the building of partnerships with our Customers. Above all in creating an environment where our people can develop to enhance the companies’ competitive performance.

Honesty is important for us to grow. We’ll do this by accepting constructive criticism, encouraging openness, frankness, challenge and debate to build trust while behaving with Integrity and Respect.

We keep it Simple.

page 5

Sustainability Development Report 2009

SECTION 2

OUR TRACK RECORD DURING 2009 • Awards - Double gold at

the Monde Selection’s most prestigious quality awards during the 2009 International Monde Selection.

• CO2 emissions – We reduced our CO2 emissions by 60% during 2009 with the fuel switch from coal to gas.

• IT - Our innovative culture has us implementing advanced Information Technology to secure, improve and simplify our business.

• Quality standards - We maintained our ISO 9000, 14000 certification and HACCP accreditation.

• Injuries - Zero Disabling Injuries and a substantial reduction in First Aid Cases.

• Service Delivery – Our goals of continuous improvement are supported by an Improvement Opportunity (IO) System.

• Communication – An active internal and external communication system keeps staff and stakeholders informed.

• B-BBEE - Achieved a level 5 empowerment contributor status for our clients.

• Skills Development - Increased focus on internal training by implementing a training system to facilitate our internal training delivery.

• Students - Provide eleven students with workplace experience in defined South African scarce and critical occupations.

• Enterprise Development - Continued support of a cooperative to maintain and

rehabilitate the verges of the Umgeni River up to where it mouths into the Indian Ocean.

• Socio Economic Development - Financial and non-financial support in the form of volunteering staff to two NPO’s and two Emerging Enterprises.

page 6

Sustainability Development Report 2009

ABOUT NCP We pride ourselves in the production of our high quality fermentation alcohol from molasses for the African and international cosmetic, pharmaceutical and beverage markets. All our products are manufactured on a world class modernized 140-year old site on the banks of the Umgeni River in KwaZulu-Natal, South Africa under the strictest quality control measures.

NCP has deep roots in the Southern part of the African continent dating back to 1868 where the first rum distillery in South Africa was built on the current site.

Known as Umgeni Distillers during the 1920’s, National Chemical Products (NCP) acquired the distillery. During the late sixties NCP became a founding member of the Sentrachem Group whereafter it was purchased by the Dow Chemical Company.

In 2001 NCP Alcohols became part of the AlcoGroup, one of the largest alcohol trading and distribution organizations in the global ethanol market and with production facilities on four continents. NCP’s numerous International Monde Selection awards symbolize our culture of presenting customers with only the finest product.

page 7

Sustainability Development Report 2009

SECTION 3 SUSTAINABLE DEVELOPMENT MANAGEMENT OUR PEOPLE AND OUR BUSINESS SUPPORT Our commitment and approach to transformation is evidenced by the fact that we have undergone two SANAS accredited BEE Audits on the generic scorecard which saw our rating increase from Level 7 to Level 5 during 2009.

The company invests a substantial amount of money in the development of its workforce across the board, with a major focus on employing equitable and improving the skills of black employees.

Skills Development at NCP is part of an ongoing culture as we strive to uplift our staff through the commitment of their managers.

Our Annual Training Report (ATR) and Workplace Skills Plan (WSP) is submitted to the Chemical Industry’s Education and Training Authority (CHIETA) on an annual basis.

Our training department works closely with CHIETA to keep abreast with the latest legislation updates and developments on the training front.

All our operational staff goes for annual re-training that covers the legality and responsibilities related to the issuing of work permits and general plant safety.

Staff and their children who qualify to further their education have access to an Educational Assistance and Bursary Scheme.

International correspondence studies in distilling are offered to employees and to support our programme to develop and invest in the future of our youth today, we have strong alliances with selected educational institutions. We have annual in-service students on registered workplace experience programmes (WIL - Work Integrated Learning) in partnership with the Durban University of Technology and CHIETA - in the engineering, chemical engineering and chemistry fields.

We have endeavored in a Chemical Operations Learnership programme and have one Electrical Apprentice who will be completing his qualification in 2010. We have plans of taking on a Mechanical and Electrical Apprentice in the future.

During 2009 we employed 7 students from the Durban University of Technology for their workplace experience in the fields of Mechanical, Electrical, Instrumentation, Analytical Chemistry and Chemical Engineering.

To retain skills to meet future demand and plan for succession, innovative strategies are used to retain and build a pool of skills. A number of these initiatives are focused development plans for

page 8

Sustainability Development Report 2009

key positions. These initiatives have gained momentum in 2009, where operations controllers have been included in the developmental group From a B-BBEE audit perspective, NCP has achieved 14.23 points out of a possible 15 points for Employment Equity.

With our B-BBEE plan we believe that the success of empowering South Africans relies on the growth of entrepreneurs at two levels; by means of preferential procurement and enterprise development.

NCP ensures that black service providers have access to the mainstream economy through our procurement opportunities and enterprise development opportunities.

EMPLOYMENT EQUITY (EE) AFRICAN 2008

INDIAN 2009

2008

COLOURED 2009

2008

WHITE 2009

2008

2009

Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female 44

16

39

13

29

10

28

10

2

0

1

1

14

7

14

8

COMMUNITY UPLIFTMENT NCP will continue to be a good corporate citizen in the community where we operate our business in and where our staff resides.

• We support our NCP United Football club as •

•

• •

part of contributing towards our staff’s social wage.

We developed and support the Umvubu Environment Management Services Cooperative to maintain and rehabilitate the sensitive Umgeni River bank area.

We are members of the Look Good Feel Better initiative and continue to donate and offer our staff as volunteers during workshops that present female cancer patients with make-overs as part of their oncology treatment at Durban’s Addington Hospital.

During 2009 we supported Sfiso’s Car Wash, an informal entrepreneur washing staff’s cars on site.

We give study assistance to our staff and bursaries to their children at tertiary level.

Corporate Social Investment Focus Areas Education Environment Safety Health

page 9

Sustainability Development Report 2009

THE FUTURE NCP Alcohols has always regarded it’s sustainability as a business and social must and have included our performance measures in a Game Plan, our strategic management system, that tracks our performance from four key balanced perspectives;

• Financial measures that highlight improved bottom line results and improved financial performance.

• Customer related measures that indicate how well we focus on new opportunities in the market to grow with our current and potential customers.

• Internal processes that ensure sustained operational excellence with improved costs and the use of assets while ensuring focus on those processes that support the development of growth partnerships with customers and new business opportunities in the market place.

• Learning and growth processes that aim to create an environment that encourage employee cooperation, commitment and focus. This will be achieved by focusing on and measuring success in key areas including personal competencies and development, effective cooperation and communication.

We are achieving these ambitious targets we deeply commit to our current status amongst our various stakeholders and align sustainable development to contribute to our goal of being a company of choice and create long-term value for all.

page 10

Sustainability Development Report 2009

SECTION 4 SAFETY Our target is to eliminate all injuries by creating a culture which prevents injury and ill health at work.

Our disabling injury frequency rate in 2009 achieved our target of zero with first aid cases reduced to three.

We encourage our staff to be responsible for their own and others safety.

Because of the risks posed by our main product, ethanol, we have our own fire station, state of the art foam monitors and automated sprinkler deluge systems to reduce the possible impact of fire.

All hot, cold and vessel entry work is carried out via permit systems where the authorized officials and recipients are trained to manage such work. Hazops and risk assessments are now a regular feature of any plant modification.

SHE Awareness and safety talks have shown some improvement in the plant, two of the three first aid cases reported were office employees.

page 11

Sustainability Development Report 2009

HEALTH Our staff has access to an on-site clinic focusing on occupational, primary health care which includes voluntary HIV/Aids tests off-site.

Staff medicals are done every two years an additional test are carried out where appropriate.

Food Safety (HACCP) SANS 10330: 2007 certification was obtained in June 2008. Our Improvement Opportunity System, verifications and internal audits assist us in maintaining our certification.

Food safety awareness is ongoing through training of personnel.

page 12

Sustainability Development Report 2009

ENVIRONMENT NCP Alcohols strives to responsibly manage our impact on natural resources and reduce waste generation.

Our Company achieved ISO 14000:2004 status in 2007 and this in turn has directed our attention to a number of longer term objectives relating to reducing our environmental impacts. Practices are now in place to comply with the statutory and legal requirements.

Our evaporator process enables us to provide as a by-product Concentrated molasses solids (CMS), which is used in the animal feed industry, and due to its high potassium content, is also an important component for the fertilizer industry.

Progress with bunding continued during 2009 and a four year plan is in place to ensure our entire site is protected from potential contamination.

Energy Conversion of our boilers from coal to gas during 2008 has resulted in substantial savings in carbon emissions. Comparing 2007 (coal fuel only) to 2009 (gas fuel only) a saving of 60% in carbon emissions has been achieved. In its first year of operation, a reduction of 6% was achieved in gas usage due to improved boiler and operational control.

Electrical power consumption decreased by 14 % during the year because of variable speed drives on the Fermentation cooling tower fans and two of the Evaporator circulation pumps. Trimming of pump impellers on several other pumps has further reduced power consumption.

Further reductions should occur during 2010 with the proposed installation of two VSD fans on the main cooling towers.

A compressed air survey was conducted to identify and reduce the usage on the plants. Effluent aeration, condenser cleaning and waste water from the resin regeneration process and molasses aeration reduced the air consumption from 23m3/min to 17m3/min and consequently the power consumed by the VSD compressors.

Water The molasses entering our factory contains 25% water. This water is recycled to produce mash as well as for Cleaning in Process (CIP) procedures. This reduces the need for water from the eThekwini Municipality.

page 13

Sustainability Development Report 2009

Effluent Progress has been made in reducing the volume of solids to effluent and this is to be accelerated during 2010. Over the past years we have produced a detailed waste stream map of our processes which has promoted a number of initiatives. Goals for 2010 and 2011 are to reduce the impurity levels of certain effluent streams and simultaneously improve our plant efficiencies.

Our volume of effluent per kl of product has remained fairly constant at 4.3 over the last four years. Future focus on water consumption is expected to reduce this level. One aspect of reducing water consumption is to improve steam condensate return and in this regard there has been a steady improvement from 80% to 84% over the last four years.

Strict monitoring of condensate quality and return is measured against the steam usage per plant. This has resulted in higher recovery of condensate. Initiatives are in place to recover condensate from steam traps during 2010.

page 14

Sustainability Development Report 2009

Packaging And Waste We aim to eliminate waste at source, an approach which reduces cost to our business and the impact on the environment.

A skip system is operated on site to separate ferrous and nonferrous metals, general waste and high pressure cleaning residue.

Paper, fluorescent globes, oil and aluminium cans are collected and disposed of separately.

In 2008 NCP Alcohols commenced the disposal of drums with a company which is SANS 10406 accredited. Used drums are collected for re-conditioning or disposal for which the relevant certificates are provided. In 2009 after extensive trials our 250 litre drums were replaced with drums of a lower mass. This annual saving translates to 30 tons of HDPE (plastic). Future focus will be on reducing the number of drums to be recycled.

For every kl of product we now generate 6.9 kg of waste and we remain committed to reducing this level further.

page 15

Sustainability Development Report 2009

QUALITY We’ve been receiving international quality awards from the International Monde Selection since 1961 and comply with ISO 9001, 14000 and HACCP Quality Management Systems.

Our products are manufactured under rigorous control measures to meet the most demanding quality standards internationally.

Our QA/QC Laboratory equipped with modern instrumental and wet chemistry techniques assures our product produced meets the highest quality standard requirements.

We have achieved Grand Gold status for the last three years, a testament to our commitment to quality.

page 16

E-mail: info@ncpalcohols.com Website: www.ncpalcohols.com Physical address: 121 Sea Cow Lake Road, Durban, 4001, South Africa Tel: +27 (0)31 560 1111 Fax: +27 (0)31 579 1541