Sustainable Agriculture

Working closely with external partners featured strongly in much of what Primark achieved during 2010. Highlights include the following:

• In Bangladesh, 16 of the factories from which we buy have been working with Nari Uddug Kendra (NUK), an NGO that focuses on women’s rights. Together, Primark and NUK have provided training for factories on how to manage workers more fairly, and educate them about their rights. In 2009, 974 workers received training through this programme.
• In China and Bangladesh, Primark began projects that aim to create long-term, sustainable improvements in labour standards and provide living wages for people. Several visits had been undertaken to both countries in 2009, to identify suppliers, factories and local implementation partners including NGOs, worker organisations, employer associations, and technical experts.
• In southern India we are working at grassroots level with an NGO to understand and address the challenges faced by workers in communities where our products are made. The programme includes surveys to identify workers, families and children at risk, as well as providing a counselling service and helpline for people. A core part of this initiative is worker education and we have established groups that look at issues from hygiene and personal development to gender equality and workplace rights.
• Through our membership of the ILO and International Finance Corporation (IFC) Better Work programme, we engage and collaborate with retailers and labour experts within countries to reduce audit fatigue and provide localised supplier training, remediation and worker engagement. Our supplier factories in Vietnam are part of the initiative, and we support the efforts and plans of the ILO to implement the programme in other countries from which we source.
• This year we joined Business for Social Responsibility (BSR), a CR organisation with over 250 corporate members. Primark is an active member of the BSR Mills and Sundries working group, a coalition of clothing retailers which looks at ethical and environmental performance within spinning mills, dye-houses and sundry manufacturers. BSR also worked with us on identifying key trends in labour migration in China, and how our suppliers could mitigate potential labour shortages through good human resource management. Finally, we are proud that Primark is BSR’s partner in Bangladesh for the health enabled returns programme, a groundbreaking initiative that provides healthcare and education for women in factories.

As a member of the Ethical Trading Initiative (ETI), Primark continued to be actively involved in a number of ETI groups in 2010 relating to the following: General Merchandise, Homeworking Principles of Implementation, Annual Report, Purchasing Practices, and China.

Primark also increased its collaborative efforts with other brands, via membership of crossbrand forums in a number of countries as well as more informal joint efforts on supplier remediation. As 95% of the factories that supply Primark also supply other retailers, this joined-up approach is one of the best ways to achieve progress.

In South Africa, a high proportion of the land from which Illovo sources sugar cane for its mills is subject to land claim. This includes land owned by private growers, Illovo and that of indigenous farmers who have purchased farms from Illovo as part of the company’s pioneering land redistribution programme, which commenced in the mid-1990s.

This programme, hailed at the time by the Department of Agriculture as ‘one of the most progressive developments in South African agriculture’, remains strongly viable, with a 95% success rate. Those farms put up for sale by unsuccessful growers have been purchased by their neighbours who have consequently doubled up their operations and cane supply.

Land reform

In order to ensure the sustainability of cane supply from land that faces being transferred to historically disadvantaged first-generation sugar cane growers, Illovo has set up multi-stakeholder land reform forums.

These forums are made up of representatives from the Commission on Restitution of Land Rights, Department of Land Affairs, Department of Agriculture and Environmental Affairs and local governments associated with the various sugar cane supply areas, as well as industry stakeholder organisations, such as the South African Cane Growers’ Association and the Inkezo Land Company.

Illovo's approach has since been adopted by the government as a model for managing land claims elsewhere.

Relocation

In Swaziland, the Lower Usuthu Smallholder Irrigation Project, which will supply the Ubombo sugar mill with additional sugar cane, necessitated the relocation of some communities.

However, before this was done, extensive consultation through the government was undertaken with local community members. This ensured that the relocation was carried out with due sensitivity to the communities’ material, social and cultural considerations and with the communities’ approval.

Relocation was carried out with the support of the Swazi and EU governments. This is in line with our commitment to ensuring that our operations are considered to have a positive impact by the affected communities.

AB Mauri is continually finding innovative ways to save energy across its yeast and bakery ingredients plants. In October 2009, the business held its inaugural energy management forum in order to bring together technical experts from across the group.

This forum was designed to share energy reduction projects, capture best practices and discuss novel ideas for further energy reduction. A key objective was to strengthen the global energy network across the business to ensure continuation of the trend that has seen a 9% reduction in energy use since 2007.

During the forum a total of 32 energysaving projects were reviewed with savings of £1.9m, around 5% of the total energy bill for AB Mauri. The majority of these projects can be replicated at a large number of the AB Mauri plants. For example, we invested £56,000 in the installation of two heat recovery exchangers at the La Salle yeast plant in Montreal, Canada, which led to annual savings of £43,000, 4.5% of the plant’s gas bill.

Similarly, at the Camellia yeast plant in Sydney, Australia, installing a more efficient system for producing compressed air has brought annual electricity savings of £23,000 (7%), from a capital outlay of £36,000.

Established in 1944, the Azucarera sugar factory in Toro processes beet from the north of Spain.

This year, the factory installed a new combined heat and power (CHP) plant. This plant is so efficient that, for the same amount of fuel, it has increased electricity production by 9.3 MWh, and now supplies surplus electricity to the national grid.

Costing £3.5m, investments in CHP and a high-pressure steam boiler have reduced Toro’s CO² emissions by more than 12,000 tonnes per year.

In July, Zambia Sugar, part of Illovo, and the country’s largest sugar producer, started generating its own power from sugar cane residues.

The site uses bagasse to produce 40 MW of electricity, of which the factory uses 13 MW, 23 MW is used for irrigation, and the balance is exported to the national grid.

Zambia Sugar is still connected to the grid, but only to access 2 MW of power needed to stabilise the factory load and for initial power generation.

Allied Mills, UK

Allied Mills began supplying Ginsters in Cornwall with specialist flour in 2006. Since then, the business has worked closely with Ginsters to identify and implement sustainable improvements throughout the supply chain.

Ginsters had been concerned that flour supplied to their operations in Cornwall was being milled in Manchester, generating a significant amount of food miles. In October 2009, Allied Mills partnered with Jordans Ryvita to remodel and use its flour mill in Dorset to supply Ginsters.

This project involved a significant level of investment and knowledge transfer between Allied Mills and Jordans Ryvita and we estimate that it will save 165,000 road miles per year; a 55% reduction on the previous journeys. 

Government statistics show that transporting freight by rail rather than road reduces harmful emissions by between four and ten times.

Allied Mills currently transports around 30,000 tonnes of flour per year using an intermodal rail tanker, saving 464 tonnes of CO2 per annum. Allied Mills is also working to improve the fuel efficiency of its fleet through:

• Driver training – an independent assessor accompanies each company driver on a one-to-one assessment every year, to train them in the latest methods of driving efficiency. This is supported with a Royal Society for the Prevention of Accidents (RoSPA) examination that aims to recertify all drivers with a gold award for advanced driving;
• Ensuring all new vehicles are euro 5 standard as a minimum; and
• Piloting vehicle intelligence systems that offer real-time vehicle performance statistics and driver behaviour information. This allows the pinpointing of areas of low performance, whether equipment or driving technique, which can then be addressed by modification or training.

Speedibake, UK

In 2011, Speedibake reported a number of environmental performance improvements, particularly focusing on controls to manage raw material and resource use, energy consumption and waste management. These included:

• elimination of plastic trays used internally to reduce the amount of plastic sent to landfill;
• sourcing of ingredients, packaging and labelling switched to local suppliers – changing our egg supplier from Spain to one based in Harrogate resulted in 125,000 fewer transport miles and a resultant reduction of 132 tonnes of carbon dioxide emissions; and
• back haulage arrangements with customers so that vehicles that previously returned empty now collect their goods for transport to distribution centres saving miles, fuel and carbon dioxide emissions.

Δ This icon identifies examples of our principles subject to independent assurance under ISAE 3000 by KPMG

Boqing, Boxuan, and Bo Hua, the group’s sugar joint ventures in Guangxi Province have invested significantly in energy saving and effluent reduction, whilst increasing production efficiency.

Over £1.2m was invested in each of the five sugar factories to build effluent treatment plants. and each effluent treatment plant has a capacity exceeding 500 tonnes per hour.

Throughout the harvest period, all water quality testing met Chinese national standards. Effluent from the sugar mills was reduced dramatically, and the treated and aerated water discharged into the local rivers is now clean enough to support healthy fish stocks.

Although Primark stores have recycled all cardboard and plastic individually for many years, in 2010 we built a centralised recycling plant at our distribution centre in Thrapston.

This takes advantage of our previously empty returning delivery vehicles, and significantly reduces CO2 emissions from transport that was previously collecting recyclate from the stores.

We estimate that in a year, the site will have:

• Cut 21,576 lorry trips to our stores;
• recycled 57,000 m3 of hangers;
• Recycled 14,000 tonnes of cardboard in a closed loop system into the paper carrier bags we use in-store;
• Saved our business £3m, and effectively ensured that our UK distribution network is carbon neutral (calculated using protocols from DEFRA and the Carbon Trust).

We are currently evaluating similar installations in the Republic of Ireland and Spain, and the option of using our recycled hangers to make pallets for packaging.

Sugar in Spain is typically sold in paper bags. The paper itself has to be robust enough to form the pack and prevent tearing.

This year, after detailed analysis and trials, Azucarera was able to reduce the amount of paper it uses in its bags by around 150 tonnes a year, or 12.5%.

British Sugar produces a diverse range of sustainable products, from sugar to electricity and animal feed to biofuel.

Each year, next to its Wissington sugar factory in the UK, the company grows over 80 million tomatoes, using waste combustion gases and heat from the factory’s combined heat and power plant (CHP)  at its Cornerways Nursery.

Glasshouse

Carbon dioxide from the CHP plant is pumped into the enormous glasshouse, encouraging plants to grow at twice the normal rate. The glasshouse is also home to over 5,000 bees which pollinate the plants naturally. The glasshouse is the size of ten large football pitches, so the rainwater from such a large roof is used as the main source of irrigation for the tomato plants.

Cornerways Nursery now supplies some 2% of the UK tomato market from a single site.

British Sugar’s tomatoes are sold through the major retailers, food service suppliers and local businesses, including the Royal Estate at Sandringham.

They hold the Red Tractor mark of accreditation, the British Retail Consortium Quality Scheme Approval, the Tesco Nature’s Choice Gold Supplier award and this year, British Sugar was delighted to learn that Assistant Nursery Manager, Paul Simmonds, had been awarded ‘Young Grower of the Year’, at the prestigious ‘Grower of the Year Awards 2010’, which celebrate the very best in UK production horticulture.

Δ This icon identifies examples of our principles subject to independent assurance under ISAE 3000 by KPMG

In 2008, British Sugar’s factory in York was closed as a result of EU Sugar Regime reform.

After consultation with the Rural Payments Agency and the Environment Agency, an action plan was agreed and implemented for the decommissioning, demolition and reclamation of the site.

Careful consideration was given to species conservation and a site-specific ecological management plan was followed which ensured that wildlife has been protected.

Bees

A disused railway siding was identified as a high-quality habitat for bees. To maintain this habitat, a protective barrier was installed to prevent damage to the bank during demolition and the woodland and scrub on the bank was managed to protect the habitat.

British Sugar sought guidance from local groups concerned with specific species to assist in its work.

Scrap

96% of all materials arising from decommissioning and demolition was recycled. The team segregated over 16,000 tonnes of scrap metal on site, before sending it to a recycling facility. This ensured that transport miles were minimised, reducing potential CO² emissions.

In addition, over 70% of the rubble generated was recycled locally and used in the building of an extension to the University of York campus.

As a result of EU Sugar Regime reform, the group closed a number of its sugar factories. One of these was Azucarera’s Guadalcacin factory near Cádiz, where the decommissioning process included a programme to turn the factory’s water purification ponds into a wetland habitat.

Working closely with the regional Wildlife Department and the Council of Environment, Azucarera’s plan involved extending an existing area of wetland that the company had developed more than five years previously, to cover 36 hectares.

Birds

The development included not only a reservoir of over 40,000m³, but a bird-watching area and car park. The wetland development, which is already attracting significant numbers of birds, has also become an educational facility for the area’s schools.

Azucarera has invested more than £870,000 in the project, which is due to be completed at the end of 2010.

When we invested in the newly formed Bo Tian Sugar in 2007, a number of beet sugar factories in northern China had no effluent treatment facilities.

Since then, we have invested £23m in environmental protection. To reduce air pollution, £5.7m was invested in the Yi’an factory on a new, highly efficient boiler; the only one of its kind operating in China’s beet sugar factories. A further £1.3m was invested to achieve the target of reducing borehole water usage by 20% during 2008/9.

Waste water

Bo Tian scientists face significant challenges to find effective solutions to improve the quality of the waste water. In 2009, the installation of an effluent treatment plant was completed and the site became the first sugar factory to comply with Chinese standards in the region.

The Bo Cheng and Qianqi factories will complete similar treatment plants by the end of 2010 and the two factories will then meet required environmental standards for the first time in their 40 year history.

Irrigation

Bo Tian engineers are also working with water specialists to develop a controlled irrigation technology to recycle waste water in its factories.

An irrigation project is being carried out at Wang Kui factory, the success of which will be very good news not only for the environment, but also for local agriculture.

AB Enzymes is working to develop enzymes which can be used instead of chemicals. Enzymes are naturally occurring proteins which enable biological reactions to occur in temperatures and conditions that would not otherwise be possible.

Moreover, as enzymes are produced with the help of micro-organisms such as bacteria or moulds, the production process (fermentation) is significantly less harmful to the environment than the production of chemicals. This means that enzymes can replace harsh chemicals and organic solvents, and reduce energy use and waste effluent.

Heat-stable

This year, AB Enzymes introduced a novel heat-stable enzyme for the animal feed industry which releases the organic phosphorus in the feed, making it available for animals such as pigs and poultry through their diet.

Less inorganic phosphorus now needs to be added to the feed, and more importantly, less organic phosphorus is emitted into the environment by the animals. This new enzyme provides customers with improved processability, excellent performance and a smaller ecological footprint.

We have introduced the concept of integrating the enzyme into the manufacture of ‘second generation’ bioethanol from agricultural residues, which reduces energy and waste.

We have a 45% interest in Vivergo Fuels, a joint venture with BP and Dupont to build a major new wheat to bioethanol plant at Saltend.

Health and safety is a key priority in the construction of the plant. By September 2010, over two million construction hours had passed without a single injury requiring a day away from work.

There are currently over 500 people working in Vivergo to complete the construction and prepare for operation. This record has been recognised by RoSPA of its Silver Award for Occupational Health and Safety.

Illovo Sugar employs over 12,030 permanent and around 24,000 seasonal employees making 1.9 million tonnes of sugar this year. Situated in Africa, healthcare for our people and those who depend upon them is a top priority for our managers due to the risks of contracting HIV, malaria or tuberculosis.

Healthcare facilities

Access to healthcare is provided to all employees and their dependants, either through the network of group-run primary healthcare clinics and hospitals or through the provision of medical insurance schemes. Where no other public medical facilities exist, these services are extended to members of surrounding communities. Illovo operates 24 primary healthcare clinics and four hospitals.

These facilities are staffed by 16 doctors, 150 nurses and other qualified medical staff, and 135 auxiliary personnel, providing a service to approximately 32,000 employees and their 70,000 dependants. During the past year, there were approximately 560,000 patient visits to the group’s healthcare facilities. 

Illovo attempts to ensure the health of employees and their dependants by addressing public health services not provided by governments, such as the provision of potable water, sanitation and refuse removal, where deficient.

On the job

Occupational health is an important facet of the medical services delivered at every site. Qualified nursing practitioners perform duties that include regular job-related medical examinations, along with medical surveillance, such as hearing and lung-function testing and biological monitoring of employees, in line with the health and safety regulations of the respective countries of operation.

Illovo continues to take a proactive stance against life-threatening conditions such as HIV/Aids, malaria and tuberculosis (TB). These diseases are being managed, largely on a preventative basis, to negate their impact on employees and on the business.