Corporate Responsibility Report 2012 - Hempel
Corporate Responsibility Report 2012 - Hempel
Corporate Responsibility Report 2012 - Hempel
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>Corporate</strong> <strong>Responsibility</strong> <strong>Report</strong><br />
1
Contents<br />
Introduction 4<br />
About <strong>Hempel</strong> 6<br />
ethical behaviour 8<br />
Health and safety 10<br />
environment 14<br />
environment: reducing vOC emissions 18<br />
Procurement 24<br />
Our people 26<br />
Community engagement 28<br />
<strong>Corporate</strong> volunteering 36<br />
Financial results 38<br />
3
Introduction to the <strong>Hempel</strong> <strong>Corporate</strong><br />
<strong>Responsibility</strong> <strong>Report</strong> <strong>2012</strong><br />
“Being a good corporate citizen is about more than just how we work – we also have a<br />
responsibility to help those less fortunate than ourselves.”<br />
At <strong>Hempel</strong>, we have long been aware of our responsibilities to the communities in which we operate.<br />
Our customers, suppliers and employees recognise our efforts within corporate responsibility. I am proud of<br />
our work in this area and I would like to thank all our employees for their commitment. This report highlights<br />
some of our most important achievements and developments in corporate responsibility during <strong>2012</strong>.<br />
I am pleased to include Crown Paints in this report. Following its integration, Crown Paints is now our<br />
Decorative organisation in the UK, which confirms that Crown is now aligned with our principles, values<br />
and ways of working.<br />
In <strong>2012</strong>, we began many supplementary initiatives to ensure that our employees continue to follow the<br />
same <strong>Hempel</strong> values wherever they work. This included conducting comprehensive training programmes<br />
in our Code of Conduct for our managers and office employees. Our Code of Conduct plays an important<br />
role in ensuring we conduct our business ethically and professionally – and the training will ensure that<br />
we continue to work with the same high standards everywhere on the globe.<br />
We believe that our company can and should contribute to a better environment – and we continuously<br />
focus on reducing waste, emissions and consumption. Our newest factory in Pilar, Argentina, is<br />
an example of how the latest technology can optimise production,<br />
improve the working environment and reduce waste and emissions.<br />
And while we know that our coatings contribute to a better world<br />
by extending product lifetimes and increasing fuel efficiency, we also<br />
acknowledge that our work involves chemicals. Therefore, we have<br />
made reducing the environmental impact of the chemicals we use<br />
a key focus area in recent years. In <strong>2012</strong>, we introduced many new<br />
low-solvent solutions and low-solvent versions of existing products.<br />
We are now documenting our efforts in this area and will continue to<br />
measure the results.<br />
Being a good corporate citizen is about more than just how we work – we<br />
also have a responsibility to help those less fortunate than ourselves. That is why the <strong>Hempel</strong> Foundation,<br />
the owner of <strong>Hempel</strong> A/S, supports schools and education programmes in poor areas around the world.<br />
We now support 18 different projects, working with others to give more than 30,000 children the opportunity<br />
to get a good education and the chance to build a better future for themselves and their families.<br />
I hope you find this review of our current and future corporate responsibility initiatives interesting.<br />
Pierre-Yves Jullien<br />
Group President and CEO<br />
4
MP0274_CSR-newsletter-D07.indd 6<br />
10/8/12 10:23 AM<br />
InTRODUCTIOn<br />
ABOUT HemPel<br />
eTHICAl BeHAvIOUR<br />
HeAlTH & SAFeTY<br />
envIROnmenT<br />
envIROnmenT: ReDUCInG vOC emISSIOnS<br />
PROCURemenT<br />
OUR PeOPle<br />
COmmUnITY enGAGemenT<br />
FInAnCIAl ReSUlTS<br />
8 <strong>Hempel</strong>’s Commitment to <strong>Corporate</strong> Social <strong>Responsibility</strong><br />
HMP0274_CSR-newsletter-D07.indd 8<br />
10/8/12 10:23 AM<br />
6 <strong>Hempel</strong>’s Commitment to <strong>Corporate</strong> Social <strong>Responsibility</strong><br />
5
About <strong>Hempel</strong><br />
A world-leading coatings supplier working in the decorative, protective, marine, container<br />
and yacht markets, <strong>Hempel</strong> is committed to conducting business in a socially responsible<br />
manner and with respect for the environment.<br />
<strong>Hempel</strong> coatings help protect man-made structures – from wind turbines and bridges to ships and homes<br />
– from the corrosive forces of nature. With a strong focus on R&D, advanced production techniques and<br />
professional coating advice, we work around the globe to help keep man-made structures safe, attractive<br />
and corrosion-free for longer.<br />
Our coatings enable structures to remain in active service for longer by extending their product lifecycles.<br />
This helps reduce the overall environmental impact of each structure during its lifetime. However, we also<br />
believe that as a company we must continually focus on improving our environmental performance, and<br />
must help our customers meet their environmental targets.<br />
We produce advanced products for the shipping industry that maintain a ship’s hydrodynamic performance<br />
and so reduce fuel consumption and associated CO 2<br />
emissions. We invest in developing low-solvent<br />
and waterborne products that reduce the amount of volatile organic compounds and other chemicals<br />
released into the environment. And we continually work to reduce the energy we consume and waste we<br />
produce.<br />
Our 5,000 employees live and work in more than 80 countries, and we have 24 factories, 48 sales offices<br />
and more than 150 stock points located strategically around the globe. But wherever we work, we foster<br />
a close dialogue with our stakeholders, customers, suppliers and employees, and conduct business to<br />
the same high ethical standards.<br />
6
The <strong>Hempel</strong> Foundation<br />
<strong>Hempel</strong>’s founder, J.C. <strong>Hempel</strong>,<br />
transferred the ownership of<br />
<strong>Hempel</strong> A/S to the <strong>Hempel</strong><br />
Foundation in 1948. Today,<br />
the Foundation remains<br />
the sole shareholder of the<br />
<strong>Hempel</strong> Group. Its main<br />
purposes are to ensure the<br />
Group maintains a sound<br />
economic basis for its<br />
continued existence and<br />
development worldwide and,<br />
in line with J.C. <strong>Hempel</strong>’s<br />
wishes, to support charitable<br />
causes of a cultural, humanitarian<br />
and scientific nature.<br />
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
To make this contribution<br />
as effective as possible,<br />
the Foundation focuses on<br />
two key issues: the education<br />
of children in need and<br />
research into environmentally<br />
sustainable solutions for<br />
the coatings industry.<br />
You can read about the<br />
<strong>Hempel</strong> Foundation’s<br />
projects in the Community<br />
engagement section of<br />
this report.
Ethical behaviour<br />
At <strong>Hempel</strong>, we believe that only a reliable and respected company, both in terms of ethical<br />
behaviour and the quality of its products and services, can be successful in the long-term.<br />
As a company, we comply with all relevant laws and regulations in the countries where we operate.<br />
However, we do not stop at compliance. We have policies in place covering business ethics, management,<br />
communication, and health, safety and environment (HSE) – and run training programmes to ensure that<br />
our employees follow our standards and business ethics in all areas of our business.<br />
A high level of business ethics around the globe<br />
Our Code of Conduct and Business Ethics policy are both essential to our responsible business model.<br />
Together, they provide guidelines for our employees about how to act when dealing with our customers, our<br />
suppliers, each other, and any other business partner.<br />
Our Code of Conduct and Business Ethics policy have been in place for many years and are continuously<br />
updated according to best practice. A new initiative is a more comprehensive training programme and<br />
test to ensure these guidelines are fully adopted and understood by all employees. In <strong>2012</strong>, we ran<br />
the programme with our office staff and managers around the globe, achieving an almost 100 per cent<br />
completion rate.<br />
The warehouse staff, factory operators and employees at our Decorative sites in the UK will follow the<br />
programme in 2013, helping ensure that all <strong>Hempel</strong> employees, wherever they work, conduct business<br />
with the same high ethical standards.<br />
Our Anti-bribery policy is included in both our Code of Conduct and Business Ethics policy. We are<br />
determined to avoid any form of corruption or bribery. The payment or acceptance of bribes is prohibited<br />
by <strong>Hempel</strong> and any employees breaking this rule face disciplinary action, including dismissal.<br />
Focus on competition law<br />
As part of our efforts to ensure competition law compliance, we conduct competition law training with<br />
relevant staff. The training consists of online seminars and follow-up tests and takes into consideration<br />
the status of current sales, sales development and <strong>Hempel</strong>’s position in the various markets.<br />
In <strong>2012</strong>, a large proportion of our sales and marketing representatives from our Americas and Asia-Pacific<br />
regions underwent the training. Our work to educate our staff on competition law and new and coming<br />
regulations is continuing.<br />
Ensuring compliance throughout the organisation<br />
Internal audits play an important role in our dedication to ensuring compliance with our policies and<br />
procedures. Each year we carry out an extensive audit programme covering legal compliance, HSE<br />
management, financial and internal controls and our own standard procedures. The findings from these<br />
internal audits are reviewed by our Executive Group Management Team and a corrective action plan is<br />
8
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
established if needed. We carried out a total of 25 audits in <strong>2012</strong>. In addition, competition law compliance<br />
audits are selectively carried out by an external legal counsel.<br />
Incident management and the ombudsman system<br />
Despite our best efforts, there may still be instances when we as a company, or individuals within our<br />
company, fail to follow the principles laid out in our Code of Conduct and Business Ethics policy. In such<br />
cases, we encourage our employees to report any concerns they have to a manager.<br />
In addition, we established a formal ombudsman system in <strong>2012</strong>. As a growing international company, we<br />
want our values and the way we work to be transparent. The ombudsman system enables any employee<br />
to raise concerns about mistreatment or a breach of values with a regional ombudsman.<br />
We also established an Incident Management Function to enable employees to communicate confidentially<br />
any serious breach of the values stated in our Code of Conduct. Launched in December <strong>2012</strong>, it<br />
gives employees the opportunity to bring their concerns directly to the Executive Management and Board<br />
of Directors.<br />
140 sales staff<br />
underwent competition<br />
law training<br />
25 internal financial<br />
and compliance audits<br />
were carried out<br />
9
Health and safety<br />
At <strong>Hempel</strong>, we believe that the safety of our employees and customers is paramount.<br />
Our on-going focus on safety and training helps ensure our company remains a good and safe place to<br />
work. We have a Group Health, Safety and Environmental (HSE) policy to help improve working conditions<br />
for our employees and reduce the risk of accidents. We also provide training and comprehensive safety<br />
information to employees and our customers.<br />
Improving safety training for employees<br />
Following the success of the Accident Prevention and Fire Prevention training programmes introduced<br />
in 2011, we introduced a new training programme in <strong>2012</strong>. The Chemical Risk training programme is<br />
designed for employees who handle chemicals, including HSE coordinators and factory operators, and<br />
covers information on legislation as well as operational best practice.<br />
Employees in half of our factories followed the Chemical Risk training programme in <strong>2012</strong> and employees<br />
at our other factories will be trained in 2013.<br />
Worldwide<br />
‘Safety First’ campaigns<br />
Our Safety First campaign in<br />
Singapore was a great success<br />
in 2011, and we decided to run<br />
campaigns in all our regions in<br />
<strong>2012</strong>. Designed to increase<br />
focus on safety among employees,<br />
the campaigns are based<br />
on best practice as well as the<br />
experiences gained from Singapore.<br />
All our production units in the Middle<br />
East ran Safety First campaigns in<br />
<strong>2012</strong>. One product of the campaign,<br />
new safety rules signs can be found in<br />
all factories in the region.<br />
10
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
181 people were<br />
trained in accident<br />
prevention<br />
134 people were<br />
trained in fire<br />
prevention<br />
247 people were<br />
trained in chemical<br />
risks
Special award for<br />
zero accidents<br />
Introducing Crown Care<br />
Crown Care is an integrated electronic reporting and management<br />
tool used by our Decorative sites in the UK for reporting all health,<br />
safety and environmental incidents. As well as powerful reporting<br />
capabilities, it includes preventive features, such as hazard spotting<br />
and training, and corrective measures, such as accident investigation<br />
and audit follow up.<br />
The system runs in real-time, so relevant employees can be notified<br />
of any issues immediately. It also reduces the use of paper in the<br />
offi ce and associated waste. Based on our experiences in the UK,<br />
we are looking into implementing the system in other offi ces and<br />
facilities.<br />
<strong>Hempel</strong> Singapore has<br />
an outstanding safety<br />
record: no accidents in<br />
2009, 2010, 2011 or<br />
<strong>2012</strong>. In recognition of<br />
this, <strong>Hempel</strong> Singapore<br />
received a special <strong>Hempel</strong><br />
Group award in <strong>2012</strong>.<br />
“As a safety professional,<br />
you need to have the right<br />
attitude and passion to<br />
understand what safety is<br />
all about. It requires 100<br />
per cent commitment and<br />
effort. It is not just another<br />
job that you want to finish<br />
within a specific timeframe<br />
and forget about. It’s an<br />
undying love affair.”<br />
Noorman Buang, HSE<br />
Coordinator for Singapore<br />
A dedication to reducing accidents<br />
We believe that one accident is one too many and pay great attention<br />
to reducing the risk of accidents on <strong>Hempel</strong> sites, as well as<br />
external sites where our employees work. When accidents do occur,<br />
we take immediate preventive actions to avoid any re-occurrences.<br />
We keep detailed records of all accidents that occur in our factories,<br />
investigate the cause and implement preventive measures. Over recent<br />
years, these dedicated efforts to improve awareness and training<br />
have led to significant improvements – and this continued in <strong>2012</strong>.<br />
Number of accidents<br />
per 1 million factory working hours<br />
The number of accidents per 1 million factory working hours in<br />
the <strong>Hempel</strong> Group is relatively low for the coatings industry.<br />
19.1 10.7 12.0 11.0 9.9 13.7 10.2 8.5 10.6 9.2 4.0<br />
<strong>2012</strong><br />
2011<br />
2010<br />
2009<br />
2008<br />
2007<br />
2006<br />
2005<br />
2004<br />
2003<br />
2002<br />
12
InTRODUCTIOn<br />
ABOUT HemPel<br />
eTHICAl BeHAvIOUR<br />
HeAlTH & SAFeTY<br />
envIROnmenT<br />
envIROnmenT: ReDUCInG vOC emISSIOnS<br />
PROCURemenT<br />
OUR PeOPle<br />
COmmUnITY enGAGemenT<br />
FInAnCIAl ReSUlTS<br />
A total of 13 accidents (defi ned as an on-the-job injury that results in at least one day’s absence) were<br />
reported across the Group in <strong>2012</strong>, a signifi cant decrease from 2011. When comparing the number<br />
of accidents to the total number of factory working hours, the number is relatively low for the coatings<br />
industry.<br />
In 2011, three of our factories accounted for 70 per cent of all accidents at <strong>Hempel</strong>. We worked closely<br />
with these factories and they all reduced the number of accidents in <strong>2012</strong>. Our factory in France,<br />
for example, reduced the number of accidents by more than 50 per cent.<br />
Improving safety communication for customers with GHS<br />
The safety communication for <strong>Hempel</strong>’s products is gradually changing to the new Globally Harmonised<br />
System for labelling and Classifi cation of Chemicals (GHS). As a worldwide standard, GHS will be more<br />
widely adopted around the world than previous systems and gives a higher level of detail.<br />
Since implementing GHS in China in 2011, we have continued implementation around the world.<br />
Our aim is to implement GHS in all our regions by the end of 2013 (excluding the US and Canada, whose<br />
governments do not allow for the implementation of GHS before 2014).<br />
Improving safety performance in the US<br />
In the USA, each <strong>Hempel</strong> production and logistics department<br />
is safety audited eight times a year. The score, calculated as a<br />
percentage, indicates how well a department meets our safety<br />
requirements. If a department gets a score below 75 per cent,<br />
it is re-audited within one week. This approach saw an improvement<br />
in results from 2011 to <strong>2012</strong>.<br />
USA HSE Audits 2011 vs. <strong>2012</strong><br />
80% 83% 82% 91% 86% 85%<br />
91% 93%<br />
2011<br />
<strong>2012</strong><br />
1 2<br />
3<br />
4<br />
Yearly quarters<br />
13
environment<br />
At <strong>Hempel</strong>, we believe that the coatings industry can and should contribute to a better environment.<br />
We invest in advanced products and innovative ideas that help our customers cut<br />
fuel consumption and reduce emissions. We also invest in research into environmentally<br />
sustainable solutions and continually strive to improve our own environmental performance.<br />
Our Health, Safety and environmental (HSe) management system monitors our environmental performance,<br />
and we are dedicated to reducing our environmental impact by reusing and recycling resources, and reducing<br />
our energy and resource consumption.<br />
A significant drop in waste production<br />
Waste is an element of paint production that is impossible to avoid, and must be managed carefully.<br />
We divide waste into two categories. ‘Hazardous waste’ can be defi ned as waste that requires special<br />
disposal treatment. ‘Other waste’ consists of materials that can for the most part be recycled, such as<br />
metal, plastic and wood.<br />
Our focus and investments in solvent recovery units and wastewater treatment in <strong>2012</strong> led to a signifi cant<br />
drop in both types of waste.<br />
Total waste<br />
kg per ton paint produced<br />
Over recent years, we have steadily reduced the amount of waste we produce. In <strong>2012</strong>, waste produced per ton<br />
of coating manufactured dropped by 4 per cent. (This graph does not include figures from Decorative in the UK.)<br />
Hazardous waste<br />
Other waste<br />
26.3<br />
22.2<br />
20.0 17.2<br />
17.5<br />
17.0 17.2<br />
16.4<br />
8.4<br />
8.1<br />
7.7<br />
17.3 17.0 16.4 16.6 15.7 13.7 13.7 15.7 14.1 16.7 13.6<br />
<strong>2012</strong><br />
2011<br />
2010<br />
2009<br />
2008<br />
2007<br />
2006<br />
2005<br />
2004<br />
2003<br />
2002<br />
14
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
Global HSE<br />
competition<br />
We hold an annual HSE<br />
competition in all our<br />
factories to help focus<br />
employees on health, safety<br />
and environmental issues.<br />
As part of the competition,<br />
each factory submits one or<br />
more examples of how they<br />
have reduced the risk of<br />
accidents, improved energy<br />
efficiency, reduced waste or<br />
saved costs. The winners in<br />
<strong>2012</strong> were:<br />
1. Guangzhou, China. By<br />
completely mapping electricity<br />
use, the factory was<br />
able to significantly reduce<br />
energy consumption in<br />
utilities as well as air and<br />
water treatment systems.<br />
2. Kuwait. The factory<br />
introduced new plastic bag<br />
packaging for putty products<br />
that helps limit waste.<br />
3. Poland. The installation<br />
of a regenerative<br />
thermal oxidiser plant<br />
ensures minimal emissions<br />
to the atmosphere. The<br />
oxidiser is also integrated<br />
into the factory heating<br />
system to help reduce gas<br />
consumption.
Continued focus on energy consumption<br />
<strong>Hempel</strong> significantly reduced energy consumption per ton of product manufactured from 2002 to 2007,<br />
mainly due to energy saving efforts and increased production. Since 2008, we have managed to keep<br />
our energy consumption stable, despite opening more automated factories, which reduce the risk of<br />
accidents and waste (high priorities for us), but also use relatively more energy.<br />
Total energy in kWh per ton product manufactured<br />
In <strong>2012</strong>, energy consumption remained around level with previous years, despite the opening of more automated factories.<br />
(This graph does not include fi gures from Decorative in the UK.)<br />
187 183 161 160 145 127 131 143 139 148 141<br />
<strong>2012</strong><br />
2011<br />
2010<br />
2009<br />
2008<br />
2007<br />
2006<br />
2005<br />
2004<br />
2003<br />
2002<br />
HSE audits and management systems<br />
We carry out HSe audits in each of our factories and warehouses, typically every third year, as part of our<br />
HSe management system. These audits are an important part of our risk management efforts, and help<br />
ensure the safety of our employees and the uninterrupted supply of products to our customers.<br />
In <strong>2012</strong>, we conducted HSe audits in seven of our factories, as well as HSe inspections of our warehouses,<br />
external warehouses, <strong>Hempel</strong> offi ces and customer sites where our coating advisers work. The audits<br />
help ensure we comply with local legal requirements and our own high standards.<br />
ISO and OHSAS certifications<br />
We have global ISO 9001, ISO 14001 and OHSAS 18001 certifi cates, illustrating our commitment to<br />
quality and HSe. In <strong>2012</strong>:<br />
• Our sites in Bahrain and Guangzhou achieved certifi cation according to the<br />
ISO 14001 standard. As a result, 28 <strong>Hempel</strong> sites are now ISO 14001 certifi ed.<br />
• Our Guangzhou factory obtained OHSAS 18001 certifi cation, bringing<br />
the number of OHSAS-certifi ed <strong>Hempel</strong> sites to seven.<br />
• Our factories in India and Argentina achieved ISO 9001 certifi cation, bringing<br />
the number of ISO 9001 certifi ed sites to 47.<br />
16
New factory better for<br />
the environment<br />
Opened in February <strong>2012</strong>,<br />
our factory in Pilar in<br />
Argentina is designed to<br />
produce more than 10<br />
million litres of coatings<br />
each year. The factory<br />
uses the latest technology<br />
to ensure good working<br />
conditions for staff and<br />
minimum impact on the<br />
environment. This includes<br />
new dissolvers that employ<br />
an advanced vibration<br />
technique to ensure the<br />
powder is dispensed with<br />
the minimum of dust<br />
released into the air.<br />
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results
environment:<br />
Reducing vOC emissions<br />
At <strong>Hempel</strong>, we give careful consideration to vOC emissions during product development to<br />
ensure that the concentrations used in our products do not lead to unnecessary emissions.<br />
Our coatings protect man-made structures from corrosion. This extends the structure’s product lifecycle,<br />
helping reduce the structure’s overall environmental impact. However, coatings use chemicals that can<br />
be damaging to the environment. Our Health, Safety and environmental policy requires that we focus on<br />
sustainable technologies when developing new products, so both we and our customers can continue to<br />
improve environmental performance.<br />
Working actively to reduce VOC emissions<br />
vOCs (volatile Organic Compounds) make up the liquid part of solvent-borne paints. After application,<br />
the liquid evaporates to leave a dry painted surface. However, during this evaporation process, vOCs are<br />
released into the atmosphere. In large concentrations, some vOCs are harmful to human health and<br />
damaging to the environment and, as a result, many countries limit the maximum concentration of vOC<br />
in different products.<br />
We focus on developing coating solutions that reduce the amount of vOC used. In <strong>2012</strong>, we gave<br />
particular focus to reducing the level of vOC in our products for the marine segment. As a result of this<br />
work, we managed to bring down the average amount of vOC in our marine coatings from 451 grams per<br />
litre sold in 2011 to 420 grams per litre sold in <strong>2012</strong>, a reduction of 7 per cent.<br />
This work will continue to have an impact in 2013 and beyond. In total, we introduced 11 new marine<br />
products during <strong>2012</strong>, with an average vOC content of 188 grams per litre. These products will have an<br />
impact on the amount of vOC per litre sold in the next 1-3 years, when they have been established on the<br />
market and constitute a greater volume of the coatings we sell each year.<br />
Average contents of VOC (g/l)<br />
The diagram shows the average amount of vOC in our products by segment (Decorative is not included here as the vast majority<br />
of decorative coatings are waterborne). Yacht, like marine, saw a decrease in vOC per litre sold in <strong>2012</strong>, and this should continue<br />
in 2013 as new products become established on the market. The vOC per litre sold remained level in our Protective range in <strong>2012</strong>.<br />
However, we introduced a number of new Protective products during the year, with an average vOC content of 271 grams per litre,<br />
and we expect these products will have a signifi cant impact as they become established on the market in the coming years.<br />
* In Container, we introduced a fully waterborne coating system in 2010 called EcoBoxcoat. However, the container industry has<br />
been shrinking over the last couple of years and the market has remained reluctant to switch to a new technology in an uncertain<br />
economic climate.<br />
442 442 271 451 420 188 542 542 434 412 308<br />
VOC per litre sold 2011<br />
VOC per litre sold <strong>2012</strong><br />
Average VOC content<br />
of products introduced<br />
in <strong>2012</strong><br />
Protective<br />
Marine Container* Yacht<br />
18
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
Reducing VOC emissions through product development<br />
The case stories here are just two examples of how product development can have a direct impact on<br />
reducing harmful VOC emissions.<br />
Case story: advanced solution increases production without increasing emissions<br />
Ultra-High Solids and Speed (UHSS) is a unique protective system for steel surfaces that reduces the<br />
number of coatings required from three to two, and significantly cuts VOC emissions compared to similar<br />
systems.<br />
Using two coatings with low VOC content, UHSS produces just 399 kilograms of VOC per 10,000m²<br />
compared to around 1,375 kilograms for a standard three-coat system. In addition, it requires less<br />
waiting time between coats – as well as fewer cans, thinners and cleaners – which enables manufacturers<br />
to increase production without increasing emissions.<br />
We originally developed UHSS for a wind tower manufacturer in Sweden, however it can be used in a large<br />
number of industries. The system was granted a patent by the European Patent Office in September <strong>2012</strong>.<br />
21
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
Case story: new versions of existing products help lower VOC emissions<br />
We released new high-solids versions of some of our existing antifouling products in <strong>2012</strong> to help customers<br />
reduce VOC emissions from their operations. The products – <strong>Hempel</strong> GLOBIC, OCEANIC and OLYMPIC – are<br />
all anti-fouling coatings that stop fouling organisms attaching to a ship’s hull.<br />
A major concern for ocean-going vessels, fouling organisms, such as barnacles and biological slime,<br />
cause extra drag in the water. As a result, the vessel requires more power to move – which consumes<br />
more fuel and leads to higher emissions. GLOBIC, <strong>Hempel</strong>’s top antifouling coating, uses nano-capsule<br />
technology to give the hull a smooth finish that fouling organisms cannot attach to.<br />
As well as cutting emissions by reducing the amount of fuel a vessel uses, the new high-solids products<br />
release less VOC into the atmosphere than their predecessors. <strong>Hempel</strong> GLOBIC 9000 for example,<br />
contains 15 per cent less VOC than the previous product, GLOBIC NCT.<br />
23
Procurement<br />
Our products are made from raw materials sourced from around the globe. Irrespective of<br />
their country of origin, we strive to achieve a solid relationship with our suppliers, built on<br />
the highest business ethics.<br />
We expect our suppliers to develop and produce high quality products under safe conditions and with<br />
respect for their employees and the environment. We have a Supplier policy in place to help ensure<br />
all suppliers know what is expected of them and, when signing a Supply Agreement with <strong>Hempel</strong>, our<br />
suppliers agree to conduct their business in a way that does not compromise our Code of Conduct.<br />
Benchmarking supplier performance<br />
In order to ensure that our suppliers adhere to our Supplier policy, we entered into an agreement with<br />
an external partner to perform compliance audits of a number of our suppliers in <strong>2012</strong>. The evaluations<br />
enable us to benchmark each supplier’s performance in regards to quality management, HSE management<br />
and business ethics.<br />
Transparency through the entire supply chain<br />
Our Decorative sites in the UK use an electronic supplier management system called VINE (Vendor<br />
Information Network Exchange), which enables us and our suppliers to work together within the supply<br />
chain process.<br />
VINE gives both parties full transparency across the supply process, from reporting and information<br />
submissions to inventory vendor management and invoicing. This helps simplify and accelerate the<br />
supply process, allowing for greater efficiency and transparency.<br />
We have a Supplier policy<br />
in place to make sure all<br />
our suppliers know what<br />
is expected of them when<br />
they work with us.<br />
24
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results
Our people<br />
An innovative and enthusiastic workforce is essential for our success and the future<br />
existence of our company. That’s why we strive to give our 5,000 employees a great<br />
place to work and continuing opportunities for professional and personal growth.<br />
With 5,000 employees spread across 80 countries, we are present in most parts of the world, and have<br />
employees with a wide range of cultural backgrounds and experiences. We welcome this diversity, because<br />
we believe that innovation comes from people thinking differently. We believe that ensuring equal rights and<br />
promoting diversity will help us to attract the best people and so better serve our customers.<br />
Equal rights for all employees<br />
We are committed to eliminating any form of negative discrimination. This includes discrimination based<br />
on age, disability, gender, pregnancy, maternity, race, religion, political beliefs, family responsibilities and<br />
sexual orientation.<br />
It is our policy to ensure that all decisions on employment and career<br />
development are based on merit and support business goals. This<br />
is achieved through the continuous review of workplace policies,<br />
practices, procedures and behaviours to ensure that they enable all<br />
employees to achieve their full potential.<br />
We have implemented a diversity strategy for hiring into leadership<br />
positions that requires executive search companies to present a<br />
diverse list of external candidates.<br />
Building for the future with the <strong>Hempel</strong> Academy<br />
The success of our company depends on retaining an innovative and<br />
skilled workforce – and we are committed to helping our employees<br />
build their skills by offering a broad range of courses and development<br />
programmes.<br />
Taking care of our people<br />
J.C. <strong>Hempel</strong> established<br />
the Employee Foundation<br />
in 1954 to provide financial<br />
support for <strong>Hempel</strong><br />
employees or their relatives<br />
who are in special<br />
need of assistance, such<br />
as those suffering due to<br />
long-term illness, natural<br />
disaster or other tragic<br />
circumstances.<br />
A global academy for training and development, with centres in Copenhagen and Shanghai, the <strong>Hempel</strong><br />
Academy develops and delivers training programmes for both employees and customers, ranging from<br />
industry-specific paint technology courses to courses in leadership and finance. In <strong>2012</strong>, <strong>Hempel</strong> Academy<br />
conducted training for more than 1,000 people, including 120 customers following industry-specific<br />
technology courses. In addition, close to 3,000 people followed e-learning courses run by the Academy,<br />
with the majority taking the <strong>Hempel</strong> Code of Conduct course.<br />
In March <strong>2012</strong>, we opened a new Learning & Development Centre at our production site in Darwen in<br />
the UK. The Centre hosted more than 3,000 people in its first nine months, including employees, local<br />
school classes and special needs groups. Activities range from one-to-one training with key customers to<br />
networking events for local businesses.<br />
26
2,926 people<br />
followed training<br />
courses at the<br />
<strong>Hempel</strong> Academy<br />
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
120 customers<br />
completed our technical<br />
training courses<br />
Explorer – Next Generation<br />
We launched the Explorer – Next Generation programme in 2010.<br />
Employees from around the globe who have been identified as potential<br />
future leaders within <strong>Hempel</strong> join the programme to develop<br />
general leadership skills and improve specific business skills and<br />
expertise. Since its inception, 62 employees have completed the<br />
programme. 29 per cent of these employees have since been promoted,<br />
of which 16 per cent have been promoted twice within a<br />
two-year period.<br />
An opportunity for global trainees<br />
Our trainee programmes give young people the opportunity to<br />
kick-start their career and develop their skills with <strong>Hempel</strong>. The<br />
programme in China, for example, admits up to 16 young graduates<br />
each year, offering them the chance to pursue a career in sales,<br />
technical service or supply chain management. The programme provides<br />
structured training over 18-24 months, and valuable on-the-job<br />
experience.<br />
Distribution of employees<br />
14%<br />
5%<br />
30%<br />
51%<br />
Europe & Africa<br />
Asia-Pacific<br />
Middle East<br />
Americas
Community engagement<br />
28
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
29
Community engagement<br />
At <strong>Hempel</strong>, we believe that a company has a responsibility that stretches beyond business.<br />
That’s why we contribute to positive development in the communities where we live<br />
and work.<br />
Ending poverty and hunger by providing universal education are part of the eight Millennium Development<br />
Goals conceived by the United Nations in 2000, and the <strong>Hempel</strong> Foundation has joined with others to<br />
try to make these goals a reality. The <strong>Hempel</strong> Foundation has made education of children in need the<br />
main focus for its donations, and concentrates on supporting projects that help give some children the<br />
opportunity to get a better education.<br />
In <strong>2012</strong>, the <strong>Hempel</strong> Foundation more than doubled the number of education projects it supports from<br />
8 to 18. Spanning 12 countries, these projects are seen as a way for our company to make a small<br />
difference to communities around the world. To increase the impact of its results, the <strong>Hempel</strong> Foundation<br />
works with strategic partners, both locally and internationally, and more than half of its projects are run<br />
in cooperation with Save the Children or IBIS, a Danish non-government organisation.<br />
A focus on education<br />
There are many reasons why children in certain areas do not have access to education. We work with projects<br />
that are designed specifically to address the challenges of the region and people where the project<br />
takes place, because we believe this will have the most sustainable long-term impact.<br />
The educational projects supported by the <strong>Hempel</strong> Foundation can<br />
be divided into four main categories: Helping child labourers into<br />
education, building new schools, improving local schools, and after<br />
school education and clubs.<br />
You can read about some of the projects we support here, and see a<br />
full overview of all 18 projects at www.hempelfoundation.com<br />
30
The <strong>Hempel</strong> Foundation helped<br />
fund the construction of a<br />
new school in Battambang in<br />
Cambodia in 2009. Today, the<br />
Foundation co-funds the daily<br />
running of the school, enabling<br />
children from poor areas to<br />
get a good primary education<br />
at no cost to their family.<br />
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results
Helping child labourers into education<br />
As a part of our ethical standards, <strong>Hempel</strong> is committed to not using any kind of child labour, either<br />
directly or through our suppliers. We also believe that children should have access to a good education<br />
and so help fund projects that focus on giving children the opportunity to leave work and attend school.<br />
One such project helps child labourers in the brick kilns of West Bengal in India leave work and start education.<br />
The <strong>Hempel</strong> Foundation is working with Save the Children to build two education centres, where<br />
children get an effective pre-education (as well as food and healthcare) instead of working. The aim is to<br />
equip the children with the skills they need to enter the educational system.<br />
Building new schools<br />
In some cases, children are not able to attend school because there is simply no school for them to go<br />
to or the school is too far away for them to make the journey each day. We support projects in different<br />
areas of the world to build new schools and hire and train teachers.<br />
In Saboda in northern Ghana, for example, many children must walk up to 15 kilometres just to get to<br />
school. Working with the Danish non-government organisation IBIS, the <strong>Hempel</strong> Foundation is funding the<br />
construction of eight satellite schools, giving 800 children a chance to attend school.<br />
Improving local schools<br />
One of the main reasons that children drop out of school, especially in poor areas of the world, is because<br />
the quality of the school they attend is very low. The majority of the <strong>Hempel</strong> Foundation’s education projects,<br />
therefore, focus on upgrading schools to a level that enables the children to attain the education<br />
they need to build a better life for themselves and their families.<br />
Migrant schools in China are one example. Due to recent economic growth, millions of workers and their<br />
families have moved to the big cities, and private schools have been set-up to cope with the influx of<br />
children. However, many of these schools are short of funds. Working with Save the Children, the <strong>Hempel</strong><br />
Foundation supports five private migrant schools in Shanghai by helping train teachers and school managers,<br />
developing teaching materials and running workshops with parents.<br />
After school education and clubs<br />
Many developed countries still have segments of the population who live in poverty. Often, children in<br />
these areas go to school, but struggle to reach their full potential as their family situation and life in the<br />
neighbourhood is not conducive to study. In these cases, after school projects give children a chance to<br />
improve their grades and get away from the difficulties of their everyday lives.<br />
In Rio de Janeiro, for example, the <strong>Hempel</strong> Foundation works with the non-profit organisation Gol De Letra<br />
to improve education and cultural development of young people in the poorest areas of the city. Started<br />
by two Brazilian soccer players, the organisation runs classes for children to improve their academic performance<br />
and encourages them to help with cultural activities in the district.<br />
32
Research into environmentally<br />
sustainable solutions<br />
The <strong>Hempel</strong> Foundation also supports<br />
research into environmentally<br />
friendly technologies, particularly<br />
in the area of surface protection.<br />
This is done through a long-term<br />
partnership with the Department<br />
of Chemical and Biochemical Engineering<br />
at the Technical University<br />
of Denmark, where we help drive<br />
fundamental research and raise<br />
awareness of sustainable technologies.<br />
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
The partnership supports a number<br />
of programmes. The Elite Master’s<br />
Programme, for example, offers<br />
grants for living expenses and<br />
tuition to international students<br />
working on a master’s degree in<br />
chemical and biochemical engineering.<br />
<strong>Hempel</strong> employees act<br />
as mentors, guiding the students<br />
as they learn to work globally with<br />
sustainable technologies.
The <strong>Hempel</strong> Foundation’s<br />
projects around the world<br />
Education of<br />
child workers in<br />
Guatemala<br />
Building new<br />
schools in Ghana<br />
Education for<br />
unemployed youth<br />
in Rio De Janeiro,<br />
Brazil<br />
Bilingual education<br />
for indigenous<br />
children in Bolivia<br />
After school<br />
education for<br />
underprivileged<br />
children in<br />
Rio De Janeiro,<br />
Brazil<br />
Improving reading<br />
and writing skills in<br />
San Juan, Argentina<br />
An after school<br />
social centre in<br />
Lujan, Argentina<br />
34
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
Training children<br />
in life skills in<br />
Xinjiang, China<br />
A children’s<br />
village in<br />
Chengdu, China<br />
Supporting migrant<br />
schools in<br />
Shanghai, China<br />
Supporting girls<br />
schools in<br />
Banswara, India<br />
Providing education<br />
for child workers in<br />
West Bengal, India<br />
Building and running<br />
a new school<br />
in Cambodia<br />
Improving reading<br />
and writing skills<br />
in Uganda<br />
Upgrading local<br />
schools in<br />
Mozambique<br />
Upgrading local<br />
schools in Pune,<br />
India<br />
Upgrading local<br />
schools in<br />
Indonesia<br />
High quality<br />
education for<br />
underprivileged<br />
children in<br />
South Africa<br />
You can read more<br />
about these projects at<br />
www.hempelfoundation.com<br />
35
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
<strong>Corporate</strong> volunteering<br />
At <strong>Hempel</strong>, being a responsible corporate citizen goes beyond policies and projects. We<br />
would like to make corporate responsibility part of our employees’ everyday lives, and<br />
encourage our employees to donate their time to causes that mean a lot to them.<br />
We give our employees the chance to take part in global volunteering events, and encourage them to<br />
volunteer at events in their local community. We believe these experiences are an important part of<br />
actively taking responsibility for the world and the communities in which we live and work.<br />
Global volunteering<br />
<strong>Hempel</strong> began its global volunteering programme for employees in 2010. Each year, one employee from<br />
each <strong>Hempel</strong> region is given the opportunity to visit one of the education projects supported by the<br />
<strong>Hempel</strong> Foundation. During the trip, the employee volunteers educate the children about their home<br />
country and introduce them to games and culture from their country. This is an extremely exciting time<br />
for the children, who may have never been outside their local village or met anyone from another culture.<br />
In <strong>2012</strong>, the employee volunteers visited a project in the Altiplano in Bolivia focused on providing bilingual<br />
and inclusive education to indigenous children. Seven employee volunteers joined the trip, experiencing<br />
life at 4,000 metres above sea level and working with the teachers and children at the schools.<br />
Bartlomiej Hoffman,<br />
Laboratory<br />
Technician,<br />
<strong>Hempel</strong> Poland<br />
Ursula Cubillo,<br />
Technical<br />
Assistant R&D,<br />
<strong>Hempel</strong> Spain<br />
Rachel Demain,<br />
Sustainability<br />
Technology Officer,<br />
Crown Paints<br />
Chen Zhang,<br />
Marketing Segment<br />
Manager, OEM,<br />
<strong>Hempel</strong> China<br />
Erika Solis,<br />
Technical Service<br />
Administrator,<br />
<strong>Hempel</strong> USA<br />
Agustin Blasco,<br />
Engineering<br />
Department Manager,<br />
<strong>Hempel</strong> Argentina<br />
Priscilla Henry,<br />
Sales Executive,<br />
<strong>Hempel</strong><br />
Malaysia<br />
Local volunteering<br />
We also encourage<br />
employees to take part in<br />
local volunteering events.<br />
In <strong>2012</strong>, for example,<br />
the employees in <strong>Hempel</strong><br />
China participated in the<br />
volunteering event Caring<br />
Dedication at the Silver<br />
Star Primary School in<br />
Shanghai, supported by<br />
the <strong>Hempel</strong> Foundation.<br />
The event aimed at educating<br />
children in healthy<br />
living through storytelling,<br />
drawing and other engaging<br />
activities.<br />
37
Financial highlights of the Group<br />
Key fi gures in EUR million<br />
group<br />
2008 2009 2010 2011 <strong>2012</strong><br />
Income statement<br />
Revenue 598.6 714.2 889.1 1,077.3 1,242.3<br />
eBITDA 60.8 93.0 118.3 105.1 126.2<br />
Depreciation 10.8 19.7 26.7 33.6 42.8<br />
Operating profi t (eBIT) 50.0 73.3 91.6 71.5 83.4<br />
Profi t before tax 51.2 65.8 86.8 60.9 65.2<br />
net profi t for the year 36.1 44.4 52.9 34.8 34.6<br />
Balance sheet<br />
Total assets 421.6 599.6 763.4 1,063.5 1,066.7<br />
equity 210.3 265.1 316.3 326.9 355.7<br />
Employess<br />
Average number of employees 2,168 2,867 3,638 4,468 4,977<br />
External sales (EUR million)<br />
Employees<br />
599 714 889 1,077 1,242<br />
2,168 2,867 3,638 4,468 4,977<br />
<strong>2012</strong><br />
2011<br />
2010<br />
2009<br />
2008<br />
<strong>2012</strong><br />
2011<br />
2010<br />
2009<br />
2008<br />
38
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
Profit and loss account<br />
In EUR thousands<br />
group<br />
2011 <strong>2012</strong><br />
Revenue 1,077,324 1,242,254<br />
Production costs 707,959 780,498<br />
Gross profit 369,365 461,756<br />
Selling and distribution expenses 212,526 259,802<br />
Administrative expenses 85,338 118,519<br />
Operating profit 71,501 83,435<br />
Share of net profits of associates 2,314 2,581<br />
Profit before financial income and expenses 73,815 86,016<br />
Net financials 12,951 20,756<br />
Profit before tax 60,864 65,260<br />
Corporation tax 18,031 18,800<br />
Profit after tax 42,833 46,460<br />
Minority interests 7,987 11,873<br />
Net profit for the year 34,846 34,587<br />
39
Balance sheet<br />
In EUR thousands<br />
group<br />
2011 <strong>2012</strong><br />
Intangible assets 176,513 166,343<br />
Property, plant and equipment 183,911 193,209<br />
Fixed asset investments 29,212 46,901<br />
Fixed assets 389,636 406,453<br />
Inventories 184,388 165,365<br />
Receivables 383,182 367,873<br />
Cash and cash equivalents 106,288 127,010<br />
Current assets 673,858 660,248<br />
Assets 1,063,494 1,066,701<br />
Total equity 326,853 355,734<br />
Minority interests 37,005 43,149<br />
Provisions 73,260 80,371<br />
Long-term debt 231,771 210,268<br />
Short-term debt 136,534 120,122<br />
Trade and other payables 258,071 257,057<br />
Debt 626,376 587,447<br />
Equity and liabilities 1,063,494 1,066,701<br />
40
introduction<br />
about hempel<br />
Ethical behaviour<br />
HEALTH & SAFETY<br />
Environment<br />
Environment: Reducing VOC emissions<br />
Procurement<br />
our people<br />
Community engagement<br />
Financial results<br />
Cash flow statement<br />
In EUR thousands<br />
group<br />
2011 <strong>2012</strong><br />
Operating Profit 71,501 83,435<br />
Adjustment for non-cash operating items 37,765 43,022<br />
Change in working capital -13,466 23,986<br />
Corporation tax paid -32,834 -22,310<br />
Total cash flow from operating activities 62,967 128,133<br />
Business acquisitions, net -160,683 -9,153<br />
Purchase and sale of property, plant and equipment -27,600 -25,499<br />
Purchase and sale of intangible assets -4,517 -2,881<br />
Dividend received from associates 1,243 1,174<br />
Total cash flows from investing activities -191,557 -36,359<br />
Total cash flows from financing activities 126,576 -62,563<br />
Change in cash and cash equivalents -2,014 29,211<br />
41
HEMPEL A/S<br />
Lundtoftegårdsvej 91<br />
DK-2800 Kgs. Lyngby<br />
Denmark<br />
Tel: +45 4593 3800<br />
Fax: +45 4588 5518<br />
www.hempel.com