60733es Holcim Annual Review 2006.indb
60733es Holcim Annual Review 2006.indb
60733es Holcim Annual Review 2006.indb
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<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006
Safety First<br />
Responsibility and accountability begin with safety. <strong>Holcim</strong> is proud of maintaining its zero-hazard<br />
policy towards employees, families, the community and the environment.
Why Water, Earth and Life?<br />
Water, earth and life are elements that are inextricably linked – elements that form an<br />
axis to the continuance of life on this planet. We are an integral part of that cycle of<br />
survival and its continuance and the business we are in must be responsible to maintain<br />
that cycle. Just as much as we use resources for economic benefits, we must in turn,<br />
plough back resources to ensure that a sustainable milieu will be assured for the future<br />
generations to live, thrive and enjoy.<br />
At <strong>Holcim</strong> Lanka, water, earth and life are the three platforms that constitute our<br />
wholehearted attention for sustainable development. It is this reason that prompted us<br />
to base the <strong>Holcim</strong> Lanka Awards to recognize outstanding sustainable community and<br />
national development projects that have contributed in uplifting the living standards<br />
of the communities they serve. Cement plays a key role in society and reflects <strong>Holcim</strong>’s<br />
vision of building foundations for society’s future.<br />
We are committed to ensuring continued sustainability of life by proactively preserving,<br />
conserving and creating awareness among our stakeholders of the importance of<br />
maintaining a planet that will sustain the future.<br />
This report is a detailed review of the year 2006. It gives within these pages, a<br />
comprehensive <strong>Annual</strong> <strong>Review</strong>, key facts and figures and a Sustainability <strong>Review</strong> that<br />
highlights local initiatives across the triple bottom line. <strong>Holcim</strong> Lanka is not a quoted<br />
company and is therefore not required to present in-depth financial reporting. However,<br />
with transparency and accountability being fundamental premises upon which we<br />
have grown our business, we have striven to present all information in this report as<br />
comprehensively and accurately as possible, so that you our stakeholders will be clearly<br />
appraised of your company’s operations, workings and impact of its actions on the varied<br />
stakeholder segments.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
1
School and Pre-school built by the <strong>Holcim</strong> Fund at Kosgoda<br />
Our most treasured contribution is ultimately the enormous end-benefit that our efforts deliver to the roots of human<br />
future - the children - who are given a horizon to look forward to with security.<br />
Contents<br />
2
Contents<br />
Introduction<br />
Global Outlook, Local Feel 5<br />
Scope of this <strong>Annual</strong> <strong>Review</strong> & Sustainability Report 6<br />
<strong>Annual</strong> <strong>Review</strong> 2006<br />
CEO’s <strong>Review</strong> of Operations 9<br />
Sri Lankan Economic Indicators 2006 11<br />
The Cement Industry in Sri Lanka 13<br />
The Cement Market in 2006 13<br />
The Cement Market Beyond 2006 13<br />
<strong>Holcim</strong> Leads the Industry 14<br />
Sustainability Report 2006<br />
Preamble 17<br />
Background & Strategy 18<br />
Why is a Sustainability <strong>Review</strong> Important to <strong>Holcim</strong> Lanka? 18<br />
Our Sustainabillty Platforms 18<br />
The Business Principles that Drive Sustainability 19<br />
Who Drives Sustainability? 19<br />
Sustainable Development Principles & Applications 22<br />
Project SMS 24<br />
Corporate Governance & Management Systems 24<br />
Economic Impact 27<br />
10 Years of Investments 27<br />
Value Addition to the Economy 27<br />
For Our Shareholders, For Our Valued Business Partners 28<br />
Our Plants on a Continuous Growth Cycle 30<br />
<strong>Holcim</strong> in the Market 33<br />
Environmental Impact 41<br />
Project Selection & Methodology 41<br />
Climate & Energy 43<br />
Waste Management 45<br />
Social Impact 51<br />
Multi-Stakeholder Engagement 52<br />
For Our People 53<br />
Health & Safety 58<br />
Housing & Infrastructure 61<br />
Livelihood Support 64<br />
Education 66<br />
Progress Towards Targets 67<br />
Special Report 68<br />
Helping Them Stand Undefeated - Tsunami Work<br />
Concluded 68<br />
And Our Journey Continues...<br />
Our Sustainable Journey at Global Level 72<br />
A Sustainable National Contribution for 2007 & Beyond 73<br />
<strong>Holcim</strong> Lanka Partners IUCN Sri Lanka in Biodiversity<br />
Conservation 74<br />
Annexures<br />
Organizational Structure 75<br />
Our Compliance Tracked Against the Global Reporting<br />
Initiative - Standard Disclosures 76<br />
Abbreviations 85<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
3
The <strong>Holcim</strong> Group is<br />
the largest cement<br />
company in Sri Lanka<br />
VISION<br />
To be the leading and preferred supplier of cement and related building materials to build foundations for Sri Lanka’s future.<br />
MISSION<br />
To be Sri Lanka’s most respected and attractive company - creating value for all our stakeholders
Global Outlook, Local Feel<br />
<strong>Holcim</strong> is a worldwide leading supplier of cement and aggregates as well as downstream activities<br />
such as ready-mix concrete and asphalt and related services. The Group is present in more<br />
than 70 countries on all continents with a strong focus on emerging markets. <strong>Holcim</strong> recently<br />
acquired two large companies in India, the Associated Cement Companies and Gujarat Ambuja<br />
Cements, which reinforces the ambition to participate in the opportunities offered by growing<br />
economies around the globe. <strong>Holcim</strong> employs more than 60,000 people worldwide.<br />
<strong>Holcim</strong> Lanka is a member of the global <strong>Holcim</strong> Group and is Sri Lanka’s preferred supplier of cement.<br />
Being the market leader in the cement industry, the company focuses on economic, social<br />
and environmental performance along the triple bottom line of sustainable development. The<br />
company currently operates the only fully integrated cement plant in Sri Lanka, which is in Puttalam,<br />
while also operating a grinding plant in Galle and warehouses in Kurunegala, Peliyagoda<br />
and Anuradhapura. A new grinding plant is planned for Trincomalee for better customer focus<br />
and coverage.<br />
<strong>Holcim</strong> Lanka at a glance<br />
• Sales of 1.2 million tons of cement per annum<br />
• Operates a fully integrated cement plant and a grinding unit located in different areas<br />
of the country<br />
• Covers all nine regions of Sri Lanka with cement and related services<br />
• Offers application-based cements with the main brands being <strong>Holcim</strong> Supiri for<br />
concrete, <strong>Holcim</strong> Pedereru for masonry applications, <strong>Holcim</strong> Seegra for precast<br />
products and several other application-based cements for specific construction<br />
requirements. <strong>Holcim</strong> Lanka also provides a host of technical services as construction<br />
solutions to its customers<br />
• Employs approximately 1000 (own employees as well as third party contractors)<br />
• Generated annual revenues of approximately LKR 11 billion (USD 102 million) in 2006<br />
Spanning all continents. Enriched with people from all over. Drawing ideas and inspiration from all corners for a better tomorrow.<br />
Our parent company <strong>Holcim</strong> Limited’s <strong>Annual</strong> Report 2005 featured <strong>Holcim</strong> Lanka very<br />
prominently. It highlighted <strong>Holcim</strong> Lanka’s contribution to the Group’s performance and<br />
commended the achievements of the <strong>Holcim</strong> Fund for Reconstruction in Sri Lanka. We<br />
are extremely proud of our <strong>Holcim</strong> family who have unitedly worked hard to conquer new<br />
heights and this recognition is certainly worthy of their hard work. The publication is the<br />
global flagship for <strong>Holcim</strong> and is a ‘must read’ for shareholders and other key stakeholders.<br />
It also plays a key role for the Group at stock exchanges around the world.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Introduction 5
Scope of this <strong>Annual</strong> <strong>Review</strong> & Sustainability Report<br />
This report details and reviews activities and data related to <strong>Holcim</strong> Lanka’s operations<br />
in Sri Lanka and, wherever applicable, to any overseas concerns pertaining to the year<br />
2006, ending 31 st December, across the triple bottom line vis-à-vis economic, social and<br />
environmental performance. The Sustainability Report provides information on the practices<br />
and processes involved in our sustainability endeavours and includes a special report of the<br />
tsunami reconstruction efforts completed this year. Each chapter includes progress reports,<br />
performance data and case studies of local initiatives.<br />
In developing this report, we have striven to embed the guidelines laid down by the Global<br />
Reporting Initiative (GRI), which offers a comprehensive framework for reporting a company’s<br />
activities and impact. We believe that the GRI is a core tool for sustainability reporting and<br />
utilize the recommendations to present an inclusive approach of our interactions with our<br />
stakeholder groups. We have also taken on board the guidelines issued by the Association of<br />
Chartered Certified Accountants whose global initiative in pioneering sustainability reporting<br />
has set benchmarks for reporting standards.<br />
Apart from a strong focus on operational results, <strong>Holcim</strong> is committed to social responsibility<br />
and environmental performance. Being a part of a global network, our local performances<br />
are measured against global targets and processes, and we remain firmly ingrained on the<br />
standards and best practices stipulated by our parent company, which permeates through the<br />
entire Group. Thus, <strong>Holcim</strong> Lanka has the ability to benchmark itself regularly and improve a<br />
number of parameters including plant performance, environment performance, health and<br />
safety measures and internal audit.<br />
Target Audience<br />
Our intended target audience for this report in the immediate forum includes, but is<br />
not limited, to our core stakeholder groups – customers, employees, valued business<br />
partners, shareholders and the community, and in the broader context, potential investors,<br />
regulatory authorities, parliamentarians, decision-makers, academics, non-governmental<br />
organizations(NGOs), multinational companies, advocacy groups, industry leaders, chambers<br />
of commerce, social leaders, environmental bodies and individuals who would be interested<br />
in <strong>Holcim</strong> Lanka for varied reasons.<br />
<strong>Holcim</strong> holds membership in global organizations that practice and set standards for industry<br />
and for sustainability.<br />
<strong>Holcim</strong><br />
• Is a co-founder of the World Business Council for Sustainable Development’s<br />
Cement Sustainability Initiative which supports the UN Global Compact. The UN<br />
sponsored Global Compact is a voluntary international citizenship initiative under the<br />
aegis of the Secretary General which calls for commitment to universal principles in human<br />
rights, labour standards and environmental sustainability.<br />
• Has a strategic alliance with the German Technical Co-operation to introduce, promote<br />
and support the co-processing of waste in cement kilns worldwide. The joint initiative<br />
is called the ‘Drafting and Model Application in Selected Countries of Internationally<br />
Recognized Guidelines Governing the Co-processing of Waste Materials in Cement<br />
Production’.<br />
• Is the acknowledged ‘leader of the industry’ in the Dow Jones Sustainability Index 2006.<br />
The Dow Jones Sustainability Indices are the pioneering global indices tracking financial<br />
performance of the leading sustainability-driven companies worldwide, providing reliable<br />
and objective benchmarks to manage sustainability portfolios.<br />
• Has been repeatedly included in the FTSE4Good, which has been designed to measure<br />
the performance of companies that meet globally recognized CSR standards.<br />
• Is a member of the Ethibel Sustainability Index, which provides a comprehensive<br />
perspective on the financial performance of the world’s leading companies in terms of<br />
sustainability.<br />
All disclosures in this report have been truthfully documented. The intention is to share our<br />
information in a systematic and standardized format that would give our stakeholders a true<br />
and fair picture of our efforts during the year. However, given that this is our first effort in<br />
formatting a sustainability report, there will be shortcomings in our efforts which we intend<br />
to rectify as the process matures year after year.<br />
6
<strong>Annual</strong> <strong>Review</strong> 2006
A firm foundation<br />
Rapidly declining third-party contractor accidents, substantial increase in sales and operating profits,<br />
employee satisfaction and community recognition of sustainable development policies - <strong>Holcim</strong><br />
continues its unflagging impressive performance.
CEO’s <strong>Review</strong> of Operations<br />
<strong>Holcim</strong> Lanka continued to show an impressive performance. In 2006, we have not<br />
experienced any lost time incidents to our own workers, while accidents involving thirdparty<br />
contractors are rapidly reducing. Sales and operating profits are up substantially again.<br />
Net income is firmly in line with our capital cost, rendering Sri Lanka competitive within the<br />
<strong>Holcim</strong> Group for investments. Add employee satisfaction and feedback from the public to<br />
get a full testimony of our solid and sustainable performance.<br />
In 2006, the Sri Lankan economy did remarkably well, driven predominantly by continued<br />
healthy levels of domestic consumption caused by favourable global markets and remittances<br />
from Sri Lankans working overseas. Unfortunately, war-like hostilities have increased and the<br />
Ceasefire Agreement established in 2002 is now defunct. The construction industry kept up<br />
reasonably well. Despite a virtual standstill in tsunami reconstruction efforts, investments<br />
in fixed assets – from large-scale condominiums to small extensions to rural houses drove<br />
the industry’s growth.<br />
Manilal Fernando<br />
Chairman<br />
Peter Spirig<br />
MD/CEO<br />
Paul Hugentobler<br />
Deputy Chairman<br />
Our top-line grew by 20% to LKR 10.4 billion on account of a 10% volume increase and better<br />
price realizations. Our operating profits rose to LKR 1.706 billion with net income for the<br />
first time in eight years matching with our cost of capital. On the flip side, the government<br />
decided to subject cement to price control again as of November 2006 (after having it<br />
rescinded in January 2006), sending a strong signal of arbitrariness and uncertainty to<br />
prospective new investors that contemplate Sri Lanka for their investments.<br />
While keeping our market share steady at 30%, we continued to promote the concept<br />
of application-based cements. Supiri continues to be the mainstay product for general<br />
construction purposes and Pedereru finds increasing acceptance as the perfect solution for<br />
wall-building and plastering. In 2006, a full 7% of our entire sales were Pedereru sales and<br />
the figure is rising.<br />
<strong>Holcim</strong> Lanka’s environmental and social initiatives and related performance are detailed<br />
within the Sustainability Report found in this report. It must be mentioned here that the<br />
<strong>Holcim</strong> Fund for Reconstruction which was initiated to rebuild lives through the construction<br />
of homes and schools for the tsunami victims, was terminated. Having met our targets of<br />
building 670 homes and reconstructing seven schools in seven districts around the affected<br />
coastline, together with our partners, we bade a final farewell to all those we had assisted<br />
during the two years since the disaster. I am truly appreciative of the employees of <strong>Holcim</strong><br />
Lanka who formed the nucleus of the Fund, establishing the vital base for our Group and<br />
allied partners to build upon. A Special Report within the Sustainability Report will highlight<br />
the efforts of the Fund.<br />
Again and again, our company serves our customers and stakeholders at large alike along<br />
the principles of the triple bottom line pertaining to sustainable development, both now<br />
and in the future.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
<strong>Annual</strong> <strong>Review</strong> 2006 9
Building on the past, cementing the future<br />
From creating application-based cement and maintaining market leadership to educating<br />
customers and building powerful stakeholder-value across the board, <strong>Holcim</strong> Lanka continues<br />
to pave the way to becoming the most admired cement company in Sri Lanka.
Sri Lankan Economic Indicators 2006<br />
The economy continued its growth momentum from 2005. International oil prices continued to<br />
be adverse throughout the first nine months of 2006 and security concerns also had an effect in<br />
the later part of the year. According to the Central Bank of Sri Lanka , the economy grew in 2006<br />
(official figures for 2006 have not yet been published by the Central Bank), which is slightly<br />
higher than the upper margin of the historical average growth rate.<br />
Exports have increased by 8.8%, while imports grew by a staggering 17.4% (as at end September<br />
2006) which led to an increase in the balance of trade by 38.4% (January - September 2006) to<br />
USD 2,597 million. Overseas worker remittances increased to USD 1,726 million for the first nine<br />
months, which had a positive impact on the external trade balance.<br />
Key Growth Indicators<br />
10.0%<br />
9.0%<br />
8.0%<br />
7.0%<br />
6.0%<br />
5.0%<br />
The Central Bank credit to government alone jumped from 61.9 billion in March to 108.3 billion in<br />
October, as the monetary authority did not raise interest rates sufficiently to draw savings from<br />
the public into the treasury. However, the Central Bank credit to government would be limited<br />
to 11.5 billion in 2007 as the Central Bank is obliged by law to print and advance up to 10% of<br />
the government’s revenue at the beginning of each year, despite it being contrary to one of the<br />
Bank’s main objective of achieving price and economic stability. The revision in electricity tariffs<br />
yet again had a significant impact on local manufacturing companies. This had an impact on<br />
manufacturers and exporters as their products were found to be less competitive due to higher<br />
production costs. <strong>Holcim</strong> Lanka too felt the impact since energy costs account for a major<br />
portion of the variable costs of the company.<br />
4.0%<br />
3.0%<br />
2.0%<br />
1.0%<br />
0.0%<br />
-1.0%<br />
-2.0%<br />
2001 2002<br />
2003 2004 2005 2006<br />
With increased economic activity unemployment has decreased. As per the Statistics<br />
Department of the Central Bank, the labour force grew by approximately 1% to 8.1 million in<br />
2005 and is expected to increase further to 8.2 million in the full year of 2006.<br />
Source: Central Bank of Sri Lanka, Projected Data<br />
GDP Growth Construction Growth Cement Market Growth<br />
The Sri Lankan Rupee (LKR) devaluated significantly during 2006, sliding from LKR 102 per USD at<br />
the beginning of 2006 to LKR 109 which is a 6-7% devaluation during the period. The Sri Lankan<br />
Government had spent around USD 380 million in order to reduce the effect of the devaluation<br />
against USD for the year 2006.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
<strong>Annual</strong> <strong>Review</strong> 2006 11
Sri Lanka’s inflation began spiralling from March 2006 as the fiscal side buckled due to an<br />
intensifying conflict. This forced the treasury to turn to the Central Bank to finance its cash<br />
deficit, boosting inflation which was until that point lingering around 6.4%. At the end of<br />
2006, inflation stood at 10% throughout the country. However, this position eased due to<br />
some physical measures adopted by the Central Bank including the 50% cash requirement on<br />
a selected number of import goods and the increase of interest rates by 125 basis points during<br />
the year to 11.5%.<br />
The economy is poised to grow by 7.5% in 2007 with the growth being broad-based. All three<br />
sectors are expected to grow at healthy rates. To further facilitate sustainable growth, it is<br />
essential to continue with critical infrastructure projects already identified in the areas of ports<br />
and power, in order to spur the growth of the entire economy. The government has planned<br />
several highway projects such as the Southern Highway, the Colombo–Kandy Expressway and<br />
the Colombo–Katunayake Expressway as well as development of the Trincomalee, Galle and<br />
Hambantota ports. Further, the Government has pledged to begin the development of the<br />
second international airport in Weerawila. The realisation of the above stated infrastructure<br />
projects however remains highly dependent upon the availability of foreign funding to the<br />
Government.<br />
12
The Cement Industry in Sri Lanka<br />
The Cement Market in 2006<br />
The construction industry performed well with a growth of 6.8%. As a result, the overall cement<br />
market also gathered momentum and it hit 3.8 million tons in 2006. This was an increase<br />
of 6.7% compared to 2005. In the Western Province around Colombo, many condominium<br />
apartment building projects sprang to life, while it was the house builder segment that<br />
spearheaded growth in other parts of the country.<br />
However, the shortage of sand remained a thorny issue due to government prohibition of<br />
river sand mining in some crucial areas which have been catering to the main economic nerve<br />
points of the country.<br />
The depreciation of the LKR against the USD caused pressure on the cost of our (predominantly<br />
foreign currency denominated) supplies which had a cascading effect on all cement<br />
importers, as about 65-75% of their costs are dependent upon exchange rates. Local cement<br />
manufacturers also fell victim to the revision of electricity tariffs, which had a considerable<br />
negative effect on production costs.<br />
The Cement Market Beyond 2006<br />
The Government with its latest budget proposal has focused on the improvement and<br />
development of infrastructure facilities in the country; if this momentum continues, it would<br />
clearly drive economic growth and hence would have a considerable effect on the construction<br />
industry. However, these projects are highly dependent upon the Government’s ability to<br />
convince donor agencies to fund such projects. While the industry awaits the initiation of<br />
these infrastructure projects, we believe that the major drive for the construction industry<br />
is expected to come from healthy levels of general demand fuelled by an average Gross<br />
Domestic Product growth of 6%. But two major concerns that continue to fuel uncertainty in<br />
the development agenda are the volatility of Government policies and the future of the peace<br />
process in the country.<br />
Volumes in Metric Tonnes (MT)<br />
Sri Lankan Cement Market (Volumes)<br />
4,000,000<br />
7%<br />
9%<br />
3,500,000<br />
7%<br />
9%<br />
3,000,000<br />
5% 1%<br />
2,500,000<br />
2,000,000<br />
1,500,000<br />
30% 30%<br />
34% 31% 27% 30%<br />
9%<br />
10%<br />
-4%<br />
1,000,000<br />
-9%<br />
14%<br />
-3%<br />
500,000<br />
0<br />
2001 2002 2003 2004 2005 2006<br />
YOY Growth<br />
Total Market<br />
<strong>Holcim</strong> Lanka Market Share<br />
<strong>Holcim</strong> Lanka Dispatch<br />
On the supply side, most parts of the Middle East, South Asia and SouthEast Asia are<br />
experiencing an increase in cement demand due to booming internal construction growth.<br />
This will continue to restrict the cement and clinker net exports from various countries<br />
adjacent to Sri Lanka.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
<strong>Annual</strong> <strong>Review</strong> 2006 13
<strong>Holcim</strong> Leads the Industry<br />
Uplifting the industry through the value chain<br />
In 2006, <strong>Holcim</strong> Lanka yet again sold more<br />
than one million tons of cement. Application-based<br />
cements, namely <strong>Holcim</strong> Supiri,<br />
<strong>Holcim</strong> Pedereru and <strong>Holcim</strong> Seegra, helped<br />
in building strong brand equity. Market<br />
leadership was maintained with a 30%<br />
market share, the highest brand equity and<br />
the highest net realization per ton.<br />
<strong>Holcim</strong> Lanka’s initiative of converting a<br />
typical general purpose cement market<br />
into an application-based cement market<br />
has permeated higher benefits to the end<br />
customer. Consequently, on this platform,<br />
Pedereru (masonry cement) sales increased<br />
rapidly, while a successful WebSALES online<br />
system was also launched in 2006, with the<br />
primary focus of providing enhanced customer<br />
service, especially for the bulk customer<br />
segment.<br />
<strong>Holcim</strong> Lanka with is customer-focused<br />
thinking initiated the Mahagedara Retail<br />
Chain concept in mid 2006. The Mahagedara<br />
Retail Chain, which provides services<br />
and construction solutions to house builders,<br />
opened three franchise stores in the<br />
country. The retail stores have shown great<br />
potential in attracting customers by paving<br />
the way for a one-stop-shop solution, housing<br />
leading quality building materials. The<br />
concept, which has already attracted support<br />
from leading brands speaks positively<br />
for the success of this initiative.<br />
<strong>Holcim</strong> Lanka also concentrated significantly<br />
on Alternative Fuel Resources (AFR)<br />
to reduce the dependency on coal, which is<br />
an expensive component in our production<br />
process. Housed in a fully-fledged AFR Lab<br />
comprising modern analytical equipment<br />
that would maintain stringent quality<br />
standards, <strong>Holcim</strong> Lanka has installed new<br />
weight feeders, and new shredding and<br />
granulating units. The company also significantly<br />
invested in safety, which remains<br />
a fundamental tenet in stakeholder safeguard,<br />
ensuring that <strong>Holcim</strong> Lanka benchmarks<br />
and maintains global best practices<br />
and standards in safety.<br />
<strong>Holcim</strong> Lanka is only involved on the cementitious<br />
materials aspects. As the <strong>Holcim</strong><br />
Value Chain itself shows we consider all our<br />
valued stakeholders within the complete<br />
value chain in order to identify and cater to<br />
new needs of our valued customers.<br />
<strong>Holcim</strong> Lanka Value Chain<br />
Supply<br />
Basic Materials<br />
Processing<br />
Cementitious<br />
Materials<br />
(cement,<br />
mineral<br />
components)<br />
Aggregates<br />
(sand, gravel,<br />
stone, recycled<br />
aggregates)<br />
Channels<br />
Transactional Transformational*<br />
Direct Sales<br />
Distributors<br />
Retailers<br />
Direct Sales<br />
Ready - mix<br />
Concrete<br />
Concrete<br />
Products<br />
Mortars<br />
Asphalt<br />
* Concrete products to be considered as "end-users" for application purposes only<br />
End-users<br />
General<br />
Contractors<br />
Self-builders<br />
Masons<br />
Civil<br />
Engineering<br />
Demand<br />
Applications and<br />
Construction Fields<br />
A<br />
p<br />
p<br />
l<br />
i<br />
c<br />
a<br />
t<br />
i<br />
o<br />
n<br />
s<br />
Housing<br />
Commercial/<br />
Industrial<br />
Building<br />
Infrastructure<br />
14
Sustainability Report 2006
Preamble<br />
This review will document <strong>Holcim</strong> Lanka’s continued commitment towards sustainable<br />
development in Sri Lanka and in that process the world-class best practices, standards and<br />
methodologies that have been imbued into creating a sustainable milieu for our stakeholders.<br />
Our attitude to sustainable development has challenged us to take a hard look at our business<br />
model, understand the implications and impact of our actions and make a concerted effort to<br />
make a change to as many stakeholder segments as we possibly can.<br />
The sustainability ethos at <strong>Holcim</strong> Lanka is an inclusive proactive approach that is driven by the<br />
Managing Director and into which our employees, business partners and other stakeholder<br />
segments buy in and participate wholeheartedly. This has therefore seen a culture of ownership<br />
and accountability become established in each initiative that has been implemented, where<br />
the impact of our collective actions has been tangibly seen in a background of understanding,<br />
tolerance, equality and empowerment.<br />
The theme of this review is ‘Water, Earth and Life’ where <strong>Holcim</strong> Lanka has been broadly<br />
involved in projects based on these trusses – trusses that make up the very core of<br />
sustainability. Whether it’s the manufacturing process, raw material sources, health, safety,<br />
human resources, the community or the environment, water, earth and life are integral links<br />
to the chain of continuance, of survival and of sustainability of life. We are very conscious that<br />
as an industry leader, we are tasked with the responsibility of leading by example, to walk the<br />
talk and to create an environment that will ensure all stakeholders are assured of the right to<br />
a safe, secure and healthy life. While our focus is on creating a sustainable business model,<br />
we also know that in achieving that goal, there are impacts on society and the environment.<br />
Over the years, we have worked to minimize these effects and in some instances led global<br />
initiatives that would make a difference in the lives we interact with daily.<br />
Each year, we try to map a more comprehensive footprint that will help us to work towards a<br />
cohesive vision steeped in good fundamentals, where we will live our values and where the<br />
sincerity of our actions, transparency of our deeds and accountability to all stakeholders will<br />
be paramount in everything we do. We believe that a strong corporate responsibility ethic<br />
will help us deliver value to our core stakeholder groups comprising customers, shareholders,<br />
valued business partners, employees and our community.<br />
Creating a sustainable milieu for Sri Lanka through ‘Water, Earth and Life’<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 17
Background & Strategy<br />
(OH&S), product and service development,<br />
people development, livelihood support<br />
for local communities, natural resources<br />
efficiency, emissions control and waste<br />
management.<br />
Our Sustainability Platforms<br />
Economic<br />
Why is a Sustainability<br />
<strong>Review</strong> Important to<br />
<strong>Holcim</strong> Lanka?<br />
Our core business is fundamental in helping<br />
people gain access to basic human needs,<br />
ranging from shelter to drinking water.<br />
Extending beyond this service to society,<br />
we, as a sustainability-driven company<br />
are committed to helping people and the<br />
environment to grow with us, paving the<br />
way for a sustainable future for us all. At<br />
<strong>Holcim</strong> Lanka, in addition to our focus<br />
on the sustainability of the business, we<br />
are strongly committed to continuously<br />
delivering value to our core stakeholder<br />
groups comprising customers, shareholders,<br />
business partners, employees and the<br />
communities around our operations. We<br />
demonstrate this commitment by engaging<br />
in a wide range of sustainability platforms<br />
including Occupational Health & Safety<br />
This is our first comprehensive Sustainability<br />
<strong>Review</strong>, wherein we have striven to<br />
streamline our reporting process, which is<br />
still in a fledgling state. However, the process<br />
has been a learning curve for us all and<br />
has pointed us towards making the reporting<br />
process more streamlined for the future.<br />
The Sustainability <strong>Review</strong> is of paramount<br />
importance to our company as sustainability<br />
forms the basis of our performance<br />
that falls in line with the triple bottom line<br />
concept. This year’s theme, namely ‘Water,<br />
Earth and Life’, accurately reflects our direction<br />
because, together, these elements form<br />
the very core of sustainability.<br />
In this report we highlight our sustainability<br />
efforts during the year. The report has<br />
also helped us identify the gaps that exist<br />
within the sustainability platforms we<br />
work on, enabling us to initiate plans and<br />
processes to bridge those gaps. It is now<br />
up to us to make these plans and processes<br />
to continuously improve our sustainability<br />
performance a reality in 2007.<br />
Peter Spirig<br />
Social<br />
Health & Safety<br />
Education<br />
Housing & Infrastructure<br />
Livelihood Support<br />
National Impact<br />
Industry Impact<br />
Business Sustainability<br />
Our<br />
Sustainability<br />
Platforms<br />
Responsibility<br />
Climate & Energy<br />
Waste Management<br />
Period of Reporting<br />
This report covers a reporting cycle from 1 st January to 31 st December 2006.<br />
Environment<br />
18
The Business Principles that Drive Sustainability<br />
Working on the precept of mutual benefit, our business principles are driven to deliver value to our<br />
core stakeholder groups, identifying future risks and opportunities while calculating the return on<br />
our social and environmental investments.<br />
• For our customers, we will strive to deliver world-class products that are innovative and are<br />
value for money<br />
• For our people, we will create a knowledge enhancing culture that empowers them to be<br />
dynamic, creative, united and to engage in entrepreneurial excellence aligned with career goals<br />
embedded in values and ethics<br />
• For our valued business partners, we will permeate best practices and global standards that<br />
would uplift the entire industry<br />
• For our environment, we will ensure that our manufacturing and production processes will not<br />
knowingly harm people or resources, and will minimize the negative impacts our business will<br />
have on human life and the environment at large<br />
• For our communities, we will harness meaningful social relationships to ensure that a<br />
sustainable milieu is created for mutual development<br />
Who Drives Sustainability?<br />
Sustainable Development Group Structure<br />
Managing<br />
Director/<br />
CEO<br />
Head of<br />
Sustainable<br />
Development<br />
Sustainable<br />
Management<br />
System (SMS)<br />
Coordinator<br />
Environmental<br />
Manager<br />
Organization<br />
Health & Safety<br />
(OH&S) Manager<br />
Quality<br />
Assurance<br />
Manager<br />
Corporate Social<br />
Responsibility<br />
(CSR) &<br />
Communication<br />
Manager<br />
OH&S Officer<br />
Road Transportation<br />
(as of Q2 2007)<br />
OH&S Officer<br />
Puttalam Cement<br />
Works<br />
OH&S Officer<br />
Ruhunu Cement<br />
Works<br />
CSR Officer<br />
Puttalam Cement<br />
Works<br />
CSR Officer<br />
Ruhunu Cement<br />
Works<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 19
Roles & Responsibilities<br />
Environmental Manager<br />
• Consolidating and analyzing monitoring and measurement parameters related to the<br />
environmental performance of the company<br />
• Reporting on the performance of the Environmental Management System (EMS) and<br />
needs and recommendations for improvement<br />
• Liaising with external parties on matters relating to the EMS<br />
• Ensuring that EMS requirements in the Ruhunu and Puttalam Plants are implemented and<br />
maintained in accordance with ISO 14001:2004<br />
• Coordinating with environmental authorities, and maintaining and updating the legal<br />
register<br />
• Coordinating management review meetings<br />
• Ensuring that corrective and preventive action is taken for environment-related<br />
nonconformities in the plant<br />
• Initiating and strengthening external communication with regard to environmental<br />
promotion, awareness and complaint handling<br />
• Initiating internal communication with regard to environmental promotion and internal<br />
environmental complaints<br />
• Developing environmental programs<br />
Sustainable Management System (SMS) Coordinator<br />
• Reporting Internal Audit activities and follow up status to the Management <strong>Review</strong><br />
Committee<br />
• Ensuring that all processes required for Sustainable Management System (SMS)<br />
requirements are established, implemented and maintained according to the ISO<br />
9001:2000, ISO 14001:2004 and OHSAS 18001:1999 certification standards<br />
• Reporting to top management on the performance of the SMS and any need for<br />
improvement<br />
• Promoting awareness of customer requirements throughout the organization<br />
• Liaising with external parties on matters relating to the SMS<br />
Organization Health & Safety (OH&S) Manager<br />
• Looks into the welfare and safety of employees, service contractors and visitors, as well as the<br />
safety of machinery and equipment of the plants and warehouses<br />
• Develops hazard control designs, methods, procedures and programs; implements,<br />
administers and advises line management on hazard controls and hazard control programs<br />
• Measures, audits and evaluates the effectiveness of hazard controls and hazard control<br />
programs and anticipates, identifies and evaluates hazardous conditions and practices<br />
• Formulates, recommends and provides investigation report for an effective insurance claim<br />
to damages of plant equipment and facilities including that of cement terminals and the<br />
effective management of industrial risks focusing on preventing these from turning into<br />
accidents<br />
Corporate Social Responsibility & Communication Manager<br />
• Developing <strong>Holcim</strong> Lanka’s CSR strategy and integrating it to the company’s business<br />
plan<br />
• Ensuring Community Advisory Panels are set up and needs assessments are conducted as<br />
required at each manufacturing site<br />
• <strong>Review</strong>ing/evaluating <strong>Holcim</strong> Lanka’s social responsibility initiatives with the relevant<br />
stakeholders; identifying partners and projects along the lines of the company’s CSR<br />
strategy<br />
• Planning and producing the quarterly publication of the company’s internal and external<br />
magazines, thus enhancing the corporate identity of <strong>Holcim</strong> Lanka<br />
• Publishing <strong>Holcim</strong> Lanka’s <strong>Annual</strong> <strong>Review</strong> and Sustainability Report<br />
20
Stakeholder Engagement Cycle Stakeholder Group Frequency of Dialogue Form of Engagement<br />
Identify the stakeholders<br />
What are the needs of our stakeholders<br />
(Needs Assessment)<br />
What impact do we/they have on/from our<br />
operations (Impact Assessment)<br />
Appointment of<br />
Community Advisory<br />
Panel<br />
Assess the viable CSR<br />
project to fulfil needs<br />
of stakeholders<br />
Integrate into Business Plan<br />
Implementation of the projects<br />
Measure performance<br />
Feedback & re-evalutions<br />
Economic Performance<br />
Board of Directors Quarterly Meeting<br />
Executive Committee Monthly Meeting<br />
Central Safety Committee Bi-monthly Meeting<br />
Management Coordination (Relevant<br />
Divisional and departmental heads) Monthly Meeting<br />
Leaders’ Group (Senior Management team) Half yearly Workshop<br />
Company Development Council Bi-monthly Meeting<br />
Distributors Daily/Weekly Discussions, Meetings<br />
Cement Dealers Weekly, <strong>Annual</strong>ly Conferences<br />
Industrial Customers Daily, Weekly, (Based on Requirement) Discussions, Meetings, Conferences<br />
Masons (influences a purchase) <strong>Annual</strong>ly Training, Demonstrations<br />
Employees Daily Multiple<br />
Trade Unions Daily Multiple<br />
Environmental Performance<br />
EIA Technical Assessment Committee Monthly Meeting<br />
Designated National Authority for CDM Projects Regularly, reporting <strong>Annual</strong>ly Discussion<br />
Provincial Environmental Authority Monthly, Bi-annually Discussions, Meetings, Site Visit<br />
Ministry of Environment Based on Requirement Discussions, Meetings<br />
Central Environmental Authority Monthly/Bi-monthly, <strong>Annual</strong>ly Discussions, Conference<br />
Community Around the Plants Quarterly Discussions, Meetings<br />
Geological and Mine Survey Bureau Yearly Site Visit, Discussion<br />
Social Performance<br />
Community Advisory Panels <strong>Annual</strong>ly/Bi-annually <strong>Review</strong> Meeting<br />
Community Emergency Response teams Bi-monthly Training & <strong>Review</strong> Meetings<br />
<strong>Review</strong>s to Local Community Quarterly Presentations, Discussions<br />
Recipients of Livelihood Support Project-based Discussions<br />
Educational Institutions in Local Areas Quarterly Discussions, Meetings<br />
Religious Groups in Local Areas Bi-monthly Discussions<br />
School Children in Local Community Bi-monthly Presentations<br />
Masons <strong>Annual</strong>ly Demonstrations, Training<br />
Farmers of Local Community Project-based Discussions<br />
Local NGOs Project-based Discussions, Meetings<br />
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Sustainability Report 2006 21
Sustainable Development Principles & Applications<br />
Safety<br />
Environment<br />
Safety<br />
Governance<br />
and Compliance<br />
Quality<br />
Vision: With You in Mind, we assume responsibility and accountability to assure a safe work<br />
environment with Zero Harm to our employees, our families, the community and the<br />
environment<br />
<strong>Holcim</strong> Cardinal Rules<br />
• Do not override or interfere with any safety provision<br />
• Personal Protective Equipment rules applicable to a given task must be adhered to at all<br />
times<br />
• Isolation and Lock Out Procedures must always be followed<br />
• No person may work if under the influence of alcohol or drugs<br />
• All injuries and incidents must be reported<br />
Principles<br />
Application<br />
All occupational injuries can be prevented<br />
Management safety observation tours and associated interventions are a<br />
must<br />
Employee involvement is essential<br />
Without exception, all operations must be performed safely and with minimal<br />
environmental impact<br />
All personnel have the right and responsibility to stop any work they feel may<br />
be unsafe; they must immediately inform their supervisor if they think the<br />
work they are about to commence is unsafe or becomes unsafe at any time<br />
during their job<br />
Working and following <strong>Holcim</strong>’s OH&S policies and procedures as well as the<br />
Cardinal Rules are conditions of employment<br />
We will promote off-the-job safety for our employees and other stakeholders<br />
Develop and maintain a safe work environment through attitude and systems<br />
of work practices within the scope of legislative provisions<br />
Provide necessary guidelines and training on principles of industrial safety,<br />
ergonomics and industrial hygiene<br />
Provide adequate personal protective equipment to protect employees,<br />
contractors and visitors from hazards that cannot be otherwise eliminated<br />
or controlled<br />
Ensure that employees are fit for purpose; monitor fitness for purpose<br />
regularly, ensure that safety/medical emergency procedures are disseminated<br />
to employees and maintain adequate clinic and first aid facilities<br />
Conduct safety tours and audits to monitor effectiveness of existing policies/<br />
procedures, identify work practices/conditions that are potentially harmful to<br />
employees and actively take corrective measures as reasonably practicable<br />
22
Environment<br />
Principles<br />
We want to continuously improve our environmental performance and<br />
provide positive contributions to the community as well as to our business<br />
Governance and Compliance<br />
Principles<br />
Our organizational structure and procedures aim at protecting the legitimate<br />
interests of our stakeholders in an appropriate and effective way<br />
Application<br />
Quality<br />
Principles<br />
Application<br />
Understand our customer requirements and seek to satisfy their needs<br />
and expectations consistently<br />
Set and review periodically our quality objectives and targets, and provide<br />
adequate resources and controls to ensure effective implementation<br />
Investigate and introduce new products and services that meet evolving<br />
customer expectations<br />
Provide our employees appropriate training and support thereby<br />
maintaining a competent workforce that is quality conscious<br />
Periodically review all our processes to maintain customer orientation and<br />
quality of products and services<br />
Communicate our quality efforts to all our stakeholders, including our<br />
employees, the public and relevant authorities<br />
In producing and delivering cement, we commit to consistent levels of<br />
quality that meet locally and internationally accepted standards as well<br />
as customer expectations<br />
Understand our customer requirements and seek to satisfy their needs<br />
and expectations consistently<br />
Set and review periodically our quality objectives and targets, and provide<br />
adequate resources and controls to ensure effective implementation<br />
Investigate and introduce new products and services that meet evolving<br />
customer expectations<br />
Provide our employees appropriate training and support thereby<br />
maintaining a competent workforce that is quality conscious<br />
Periodically review all our processes to maintain customer orientation and<br />
quality of products and services<br />
Communicate our quality efforts to all our stakeholders, including our<br />
employees, the public and relevant authorities<br />
Application<br />
All business transactions are recorded in a true, fair and timely fashion<br />
In accordance with established procedures, appropriate accounting<br />
systems, controls and audits, we ensure the reliability and accuracy of our<br />
accounts, records and reports<br />
Respect the principles and rules of fair competition prohibiting anticompetitive<br />
behaviours and the abuse of a dominant market position<br />
We will not offer or provide, either directly or indirectly, any undue pecuniary<br />
or other advantage for the purpose of obtaining, retaining, directing, or<br />
securing any improper business advantage<br />
We are expected to adhere to these Sustainable Development Principles in both letter and<br />
spirit. Violations against these principles and policies will not be tolerated. Non-compliance<br />
may be subject to disciplinary sanctions including termination of employment.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 23
Project SMS<br />
Formally launched in December 2006, Project SMS (Sustainable Management System) is<br />
aimed at integrating the three separate management systems within the company, namely<br />
the Quality Management System certified to ISO 9001:2000, Environmental Management<br />
System (EMS) certified to ISO 14001:2004 and Occupational Health & Safety (OH&S) System<br />
certified under OHSAS 18001:1999. The integration is expected to deliver a host of benefits to<br />
stakeholders and the company.<br />
The purpose of the integration is to ensure that the systems adhere to certification<br />
requirements and complies with the following specifications:<br />
• Alignment with <strong>Holcim</strong> Lanka’s Sustainable Development Principles<br />
• Compliance with <strong>Holcim</strong> Group standards<br />
• Inclusion of procedures of staff functions<br />
• Availability to users in most convenient and accessible format<br />
Project SMS is designed and documented to promote a mindset for continuous improvement<br />
of the system, a Plan-Do-Check-Act cycle within the organization and develop an organizational<br />
structure comprising trained personnel who will maintain and continually improve the SMS.<br />
<strong>Holcim</strong> Lanka firmly believes that Project SMS is a totally inclusive project that involves every<br />
single employee, and therefore a credible and informative message is cascaded to everyone<br />
to avoid ambiguity.<br />
Corporate Governance & Management Systems<br />
The Organizational Regulations, in line with the Company’s Articles of Association, clearly set<br />
out the organization structure of the Board of Directors and the Executive Committee, and<br />
governs the tasks and powers conferred on the company’s corporate bodies. In addition, a<br />
Legal & Compliance function has been put in place to assist the board and the management<br />
in complying with applicable laws, regulations and processes of <strong>Holcim</strong> Lanka according to its<br />
policy manual and standards of the <strong>Holcim</strong> Group such as accounting rules.<br />
The Internal Audit (IA) function is an independent review and consulting function that<br />
provides assurance to the corporate bodies so that process integrity is meintained, measures<br />
and reporting are accurate and reliable, and polices and regulations are complied with.<br />
<strong>Holcim</strong> Reporting Standards<br />
Built on the <strong>Holcim</strong> Information Platform (HIP), a common and uniform performance<br />
measurement system based on standardized information platforms was initiated by the<br />
Group. <strong>Holcim</strong> Lanka received HIP certification in September 2005 and March 2006 for the<br />
sixth release.<br />
HIP is a set of standard management reports produced using IT tools such as SAP BW (Systems<br />
Applications Processors Business Information Warehouse) with advantages that include<br />
focusing on the real issues of our business, clarity and transparency regarding targets and a<br />
common basis for an aligned performance management for all personnel. The HIP Business<br />
Manual contains standard definitions of performance indicators.<br />
Governance & Compliance<br />
As a value-oriented enterprise, <strong>Holcim</strong> Lanka recognizes the significance of effective corporate<br />
governance in order to promote corporate fairness, transparency and accountability to<br />
all stakeholders. The Board of Directors comprises seven directors who are responsible for<br />
implementing effective governance in order to discharge its duties towards stakeholders,<br />
manage business risks and uphold the company’s reputation. The Executive Committee,<br />
consisting of the CEO and six Vice Presidents, reports to the Board of Directors. This includes<br />
key findings of risk analysis and the mitigating measures taken.<br />
24
<strong>Holcim</strong> Accounting & Reporting Principles<br />
Conscious of the obligation to provide accurate and factual financial information to all<br />
stakeholders, <strong>Holcim</strong> Lanka follows the Group’s overarching accounting and reporting<br />
principles under the banner of <strong>Holcim</strong> Accounting & Reporting Principles, which is aimed<br />
at presenting internationally accepted consolidated financial statements, adopting uniform<br />
accounting and reporting principles that provide a true, fair and comparable picture of the<br />
performance of the Group companies vis-à-vis the Group. Each local Chief Financial Officer<br />
or other Financial Officers are responsible to enforce HARP and to ensure that the financial<br />
statements and management reporting complies with HARP. In addition, Corporate Controlling<br />
conducts HARP Sustainability <strong>Review</strong>s periodically to ensure that all functions and processes<br />
are fully HARP compliant.<br />
Internal & External Audit Standards<br />
As a tenet of good corporate governance, the financial statements are audited by professional<br />
service firms or External Auditors (EA). The Group EA expresses opinion in accordance with<br />
International Auditing Standards and reports that the Financial Reporting Packages and<br />
Treasury Information Management Packages are in accordance with International Financial<br />
Reporting Standards and HARP.<br />
The shareholders of <strong>Holcim</strong> Lanka approve the appointment of the EA during the AGM. In<br />
addition, <strong>Holcim</strong> Lanka practices Good Practice IA process methodology as laid down by<br />
the Institute of Internal Auditors headquartered in Florida, considered the most influential<br />
standards setting body in professional internal auditing.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 25
Hub of plenty<br />
Akin to our sustainable practices in using raw materials from our own soil, the Dambulla<br />
Economic Centre now helps growers harvest the fruit of their labours by facilitating a 24/7<br />
hub for the distribution of fresh produce to the nation.
Economic Impact<br />
Economic Impact Highlights 2006<br />
• Sustainable financial results for 2006 - cost of capital recovered, thus enabling further<br />
investments<br />
• The <strong>Annual</strong> <strong>Holcim</strong> Distributor Awards recognizes entrepreneur excellence and the<br />
development of prevalent standards within the industry<br />
• The <strong>Holcim</strong> webSALES online system launched to enhance customer service<br />
imperatives<br />
15 people working for him. This would yet again create another 3,000 approximate employment<br />
opportunities around the country. In total, over 16,000 direct and indirect job opportunities overall<br />
have been created through our presence in Sri Lanka.<br />
The company intends to further invest approximately USD 10 million for a grinding station and<br />
clinker terminal in Trincomalee, which would create around 100 direct employment opportunities<br />
and about another 500 indirect employment opportunities in the local community, while<br />
constructing a strong foundation for economic growth in the Eastern Province.<br />
10 Years of Investments<br />
<strong>Holcim</strong> Lanka is among the top two companies in the industry during the past 10 years to have<br />
made significant investments in Sri Lanka. Since 1996, <strong>Holcim</strong> Lanka has invested an estimated<br />
USD 110 million in Sri Lanka including major investments in:<br />
Purchase of controlling stake in Puttalam Cement Company Ltd<br />
Further share purchase in Puttalam Cement Company Ltd<br />
Equity injections<br />
Voluntary Retirement Scheme<br />
Purchase of Ruhunu Cement Company Ltd<br />
Investments in Lanka Quarries Ltd<br />
Set-up of Galle Cement Company Ltd<br />
Various capacity extensions at Palavi and Ruhunu Cement Works<br />
New cement grinding mill line at Palavi Cement Works and upgrading of<br />
existing cement grinding mill lines in Palavi and Ruhunu Cement Works<br />
New filter systems at Palavi Cement Works<br />
USD 26 million<br />
USD 10 million<br />
USD 7 million<br />
USD 3 million<br />
USD 16 million<br />
USD 5 million<br />
USD 3 million<br />
USD 23 million<br />
USD 15 million<br />
USD 2 million<br />
Currently, over 850 direct employment opportunities have been created through the operations of<br />
<strong>Holcim</strong> Lanka, while over 1200 dealers and 54 distributors are engaged in the distribution of the<br />
products to the market. Under company regulations, each distributor should have over 10 lorries<br />
and each dealer at least two lorries working under them. As a practice, two shifts are being operated<br />
and hence, for a single lorry at least four staff would be engaged in carrying out duties. Therefore,<br />
in logistics alone, we have created around 12,000 indirect employment opportunities. Meanwhile,<br />
each dealer would have at least two workers in the shop while a distributor would at least have<br />
Working, living and caring. The triple bottom line offers untold benefits<br />
Value Addition to the Economy<br />
In order to describe the cement Industry in Sri Lanka, participating companies are categorized<br />
according to the amount of local value creation performed in bringing a bag of cement to the Sri<br />
Lankan market. The basic steps in bringing a bag of cement to the market are:<br />
• production of clinker from limestone;<br />
• grinding of (locally produced or imported) clinker and gypsum to produce cement and<br />
• bagging (locally ground or imported) cement.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 27
The categories are:<br />
• Local Manufacturers (fully integrated plants)<br />
• Companies that produce own clinker in order to grind cement, bag it and bring the product<br />
to market<br />
• Value addition in Sri Lanka: > 80%<br />
• Number of companies: 1 - (<strong>Holcim</strong> Lanka)<br />
• Local Clinker Grinders<br />
• Companies that import clinker in order to grind cement, bag it and bring the product to<br />
market<br />
• Value addition in Sri Lanka: ~33%<br />
• Number of companies: 2 – (<strong>Holcim</strong> Lanka, Tokyo Cement Company (Lanka) Ltd)<br />
For Our Shareholders, For Our Valued Business Partners<br />
In line with the domestic cement market’s year-on-year growth, <strong>Holcim</strong> Lanka saw its sales<br />
portfolio grow by 10% in 2006 compared to 2005. During the same period, net revenue grew<br />
by 25% and is showcased at LKR 10.4 billion on account of better price realizations, despite the<br />
government imposed price control on cement in November 2006. These price control measures<br />
hampered the recovery of increasing costs, especially due to an increase in electricity tariffs by<br />
approximately 30%. Operating profits increased by 33% and net income grew by 55% net of<br />
unusual expenses.<br />
Net Sales<br />
10.00<br />
9.00<br />
• Bulk Cement Importers<br />
• Companies that import bulk cement in order to bag it in Sri Lanka and bring the product to<br />
market<br />
• Value addition in Sri Lanka: < 10%<br />
• Number of companies: 5 – (Tokyo Cement Company (Lanka) Ltd, Lafarge Mahaweli<br />
Marine Ltd, Ceylon Ambuja Cements Ltd, Ceylinco Ultratech (Pvt) Ltd, International<br />
Cement Traders Ltd)<br />
LKR billion<br />
8.00<br />
7.00<br />
6.00<br />
5.00<br />
4.00<br />
2001 2002 2003 2004 2005 2006<br />
• Bag Cement Importers<br />
• Companies that import bagged cement into Sri Lanka<br />
• Value addition in Sri Lanka: Negligible<br />
• Number of companies: 10, (including Lanka Cement Ltd which is a government venture)<br />
EBIT (Earnings before interest and taxes, net of unusual items)<br />
1.80<br />
1.60<br />
1.40<br />
1.20<br />
About 50% of Sri Lanka’s cement demand is met through local clinker grinding (with both locally<br />
produced and imported clinker), while the balance is imported in bulk or bags with little value<br />
addition in Sri Lanka. Hence, it is apparent that local manufacturers are a vital cog in the economy,<br />
due to the very high value addition to the industry coupled with higher employment opportunities<br />
to the local community, making it a crucial facet in economic development.<br />
LKR billion<br />
1.00<br />
0.80<br />
0.60<br />
0.40<br />
0.20<br />
0.00<br />
2001 2002 2003 2004 2005 2006<br />
28
Allocation of Total Revenue<br />
Payments to<br />
Suppliers<br />
Gypsum<br />
Clinker<br />
Other Purchases<br />
for Goods and<br />
Services<br />
Electricity<br />
Fuels<br />
6%<br />
3%<br />
12%<br />
9%<br />
Payments to<br />
Employees<br />
& Distributors<br />
Rebates to<br />
Distributors<br />
Payments to<br />
Employees<br />
4%<br />
6%<br />
8%<br />
2%<br />
7%<br />
Payments to<br />
Capital Providers &<br />
Provision for Depreciation<br />
& Amortisation<br />
Depreciation and<br />
Amortisation<br />
Finance Cost for<br />
third party borrowing<br />
• Payments to employees and distributors are at approximately 13% of revenue.<br />
• Payments to suppliers account for 58% of our total revenue allocation. This includes<br />
payments for clinker and gypsum imports, for fuel and electricity as well as for general<br />
goods and services purchased for production and sales requirements.<br />
• Payments to the government account for 12% of our total revenue allocation.<br />
• Payments to shareholders as dividends and third party capital providers amount to 14%<br />
of our total revenue.<br />
20%<br />
23%<br />
Payments to<br />
Government<br />
VAT & Other<br />
Taxes<br />
Net profit<br />
Net profit<br />
Assets & Liabilities<br />
LKR billion<br />
10.000<br />
9.000<br />
8.000<br />
7.000<br />
6.000<br />
5.000<br />
4.000<br />
3.000<br />
2.000<br />
1.000<br />
0<br />
721%<br />
420% 1448%<br />
90%<br />
107% 84%<br />
2001 2002 2003 2004 2005 2006<br />
Gearing (Net Financial<br />
debt divided by<br />
Shareholders' Funds<br />
at year end)<br />
Assets less Cash Equivalents<br />
Operating Liabilities<br />
Net Financial Debt<br />
Shareholders' Funds<br />
In 2006, our asset base increased only marginally. Improved working capital management largely<br />
offset capacity increases, the most important being:<br />
• Increasing the capacity of pre-processed waste to be used in clinker production (AFR<br />
Materials)<br />
• Capital expenditure to maintain production capacity<br />
Capital expenditure was thus entirely funded through internally generated cash flows. Improved<br />
cash flows have reduced our debt levels with gearing at the end of 2006 at 84% which is a 21%<br />
improvement compared to 2005 and well within the <strong>Holcim</strong> Group’s target for its operating<br />
companies.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 29
Our Plants on a Continuous Growth Cycle<br />
Ruhunu Cement Works<br />
There has been a critical need for <strong>Holcim</strong> to have cover storage for limestone and buffer stock<br />
of clinker at the Ruhunu Cement Works (RCW), a need that has been exacerbated with Supiri<br />
becoming the main flagship brand within the <strong>Holcim</strong> Lanka product portfolio and thus<br />
increasing sales. Until now, a portion of the imported clinker was stored in an open yard with<br />
quality being affected during the rainy season. This problem is now resolved with the completion<br />
of a storage facility catering for the storage of 12,000 tons of clinker and 4, 000 tons of limestone,<br />
guaranteeing cost efficiency as well as the maintenance of environmental and safety standards.<br />
The LKR 42 million storage facility is an archetypal model of <strong>Holcim</strong> Lanka’s strict adherence to<br />
safety and environmental guidelines as stipulated in our Project Management Approach. The<br />
facility will also be the first step towards automating raw material operations, a process that will<br />
be implemented in the future. The negative impact from emissions have also been addressed<br />
at design stage and appropriate measures have been implemented to eliminate the negatives<br />
associated, thus creating further inroads into our proactive measures employed towards<br />
sustainable development.<br />
Puttalam Cement Works<br />
Having been encumbered with numerous production halts due to cyclone blockages and meal pipe<br />
clogging in the Palavi kilns, the company decided to install air blasters to ensure smooth operation<br />
for high production. The manual cleaning process also resulted in burning hazards. Worked as<br />
an AFR Capex (Capital Expenditure) project, both kilns have been successfully installed with<br />
40 air blasters and specially selected nozzles that maximize activation area and intensity of the<br />
compressed air blast.<br />
Plant Management also successfully completed an outstanding engineering feat by replacing<br />
the middle tyre and 7.5m length shell in kiln No. 1, which was in an alarming state after 36 years<br />
in operation. The project was completed under budget and in a record time of nine days and<br />
involved technical input from <strong>Holcim</strong> Group Support in Switzerland, the original equipment<br />
supplier KHD of Germany and a team of expert engineers and technicians.<br />
Housekeeping at Puttalam Cement Works (PCW) was also brought to the fore this year as<br />
housekeeping tended to be a challenge to the plant both in an environmental sense and a<br />
behavioural sense. Ownership and attitudinal change was driven by a specially constituted<br />
housekeeping team in tandem with numerous initiatives which included a comprehensive waste<br />
collection and disposal system, landscaping, construction of a central washing area and removal<br />
of outphased and unwanted buildings. Housekeeping is reviewed weekly and improvements<br />
constantly implemented.<br />
The archetypal storage facility designed to strict environmental guidelines not only helps preserve the quality of limestone but is<br />
the future of automation in raw material processing<br />
Continuous rehabilitation of existing facilities in terms of waste collection and disposal, landscaping and phased out removal of<br />
unwanted buildings has brought about further benefits to the surrounding locality as well as the environment<br />
30
Net Working Capital Optimization<br />
Project<br />
The Net Working Capital Optimization<br />
Project was completed in May 2006 at the<br />
PCW achieving certification and delivery of<br />
expected benefits. The five areas where the<br />
programme had to achieve optimum levels<br />
of the company’s working capital were the<br />
warehouse, maintenance, procurement,<br />
payables and production.<br />
The most significant improvements were<br />
implemented in the warehouse optimizing<br />
operational processes with a self-service area<br />
for high rotation/low value items, which has<br />
reduced employee workload by 42%, a new<br />
barcode system for goods issuing which frees<br />
employee time and keeps accurate records<br />
and inventory counting.<br />
Discussions are under way for the replication<br />
of this barcode solution at other <strong>Holcim</strong><br />
Group companies in the Asia Pacific region.<br />
Locally Driven Automation<br />
Given the challenges faced in operations due<br />
to the stand alone front-end solid feeding<br />
system at the PCW, the solution called for<br />
the integration of the solid feeding system<br />
to the Process Control System of the plant.<br />
We are very proud that an in-house team set<br />
about identifying the hardware requirement,<br />
programmed the Programmable Logic<br />
Controller (PLC) and commissioned and<br />
tested the entire system, making the entire<br />
automation a totally internally conducted<br />
project. The addition of the PLC to the system<br />
was a complicated and expensive task and<br />
never before done locally, but the dynamic<br />
team took on the challenge and successfully<br />
completed it, thus saving LKR 5 million to the<br />
company, which would otherwise have been<br />
expended on foreign consultants.<br />
The upgrading of the AFR feeding system<br />
increases the plant’s thermal substitution<br />
rate and the automation has enhanced the<br />
feeding accuracy and operational flexibility,<br />
making operators jobs easier and faultfinding<br />
and troubleshooting more accurate<br />
and timely.<br />
Replacing the Middle Tyre of Kilns<br />
Rotary kilns, the heart of the cement plant, are<br />
generally run for nine months continuously<br />
between two major shutdowns. Operation<br />
of kilns need very high technical and<br />
managerial skills. The life expectancy of shell<br />
in high temperature zones is around 15 years<br />
and for tyre around 30 years, and considered<br />
a very special maintenance task and a great<br />
challenge for plant management. In Palavi,<br />
the middle tyre of kiln No. 1 proved to be in<br />
bad shape after operating for 36 years.<br />
Realising the importance of replacement<br />
at this crucial point, plant management<br />
planned for a major shutdown in August<br />
2006 with preparation for this beginning<br />
in January 2006. This included, erection<br />
of supporting steel structures, removal of<br />
obstructive concrete structures, purchase<br />
of required equipments, selection of lifting<br />
cranes, pre-assembling, welding and nondestructive<br />
testing. During the re-preparation<br />
phase, technical support was given by the<br />
<strong>Holcim</strong> Group Support based in Switzerland<br />
and original equipment supplier, KHD of<br />
Germany.<br />
The middle tyre and 7.5m length shell in the<br />
mid kiln was replaced. The project was carried<br />
out by a cross-functional team comprising<br />
the project management team, expert<br />
from <strong>Holcim</strong> Group, local engineers and<br />
technicians.<br />
Challenge: Completion of task in 10 days<br />
below the budgeted LKR 15 million.<br />
Result: Project completed within nine days<br />
with a total expenditure of LKR 13.6 million<br />
Contracting and Contracting<br />
Management Issues<br />
Several key processes and procedures govern<br />
contracting and contract management<br />
including the purchase requisition approval<br />
process, contractor selection process,<br />
preparation and signing contract documents<br />
and monitoring compliance to terms and<br />
conditions. This year, a ‘Contracts Sign<br />
Off’ procedures was communicated to all<br />
company personnel with templates created<br />
for tendering awarding and terminating<br />
contracts.<br />
However, with not all personnel<br />
understanding the established procedures,<br />
loopholes were discovered and it was found<br />
that not all contracts were implemented<br />
in accordance with the ‘Contracts Sign Off’<br />
procedures.<br />
The following issues were of concern:<br />
• Employees’ failure to realize the<br />
importance and responsibilities over<br />
contracts and contract management<br />
• Employees’ failure to apply the established<br />
company procedures, i.e. ‘Contracts Sign<br />
Off’<br />
• The ‘Contracts Sign Off’ procedure did<br />
not fully define certain requirements,<br />
and were also too complicated and<br />
cumbersome<br />
Completed middle tyre replacement in 10 days<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 31
Management identified these issues and speedily responded to resolve them by recommunicating<br />
the importance and responsibilities over contracts and contract management<br />
to employees. However, being a behavioural issue, its rectification will be achieved over time and<br />
the progress is closely monitored.<br />
Air Blasters for Palavi<br />
To eliminate production stoppage due to cyclone blockages and meal pipe clogging in the Palavi<br />
kilns, which also resulted in unwanted deposits inside the pre-heater, frequent manual cleaning<br />
using compressed air and hammers to clear build-ups inside the pre-heater to avoid blockages,<br />
burning hazards for personnel engaged in cleaning and mandatory daily intense cleaning of preheater<br />
cyclones and meal pipes all resulting in low production, and 40 air blasters from VSR Gmbh<br />
Germany (on an AFR Capex project) were installed in both kilns. At a certain frequency and sequence,<br />
the air blasters compressed air and caused the effect of cannons to break the build-ups. According<br />
to the geometry and the location, the nozzles of the blasters were selected from a range of nozzle<br />
shapes to maximize the activation area and the intensity of the compressed air blast.<br />
Project Status: Completed in December 2006<br />
Project Result: Reduction in frequency of manual cleaning, elimination of burning hazards.<br />
Production has improved significantly<br />
Executing Capex Projects<br />
The Company’s Capex project is simply a project that adds value to increase the asset base of<br />
our company. However, the projects are not based on profits alone but rather fall in line with our<br />
sustainable development strategy, working on a win-win situation on a sustainability platform.<br />
While maintaining an economic focus, Capex projects must contribute towards society and<br />
environmental performance.<br />
All projects must be over the value of LKR 2 million; in 2006, the company completed 46 projects<br />
and is continuing an additional 20 into 2007, while having invested a total of LKR 931 million.<br />
LKR 939 million has been earmarked for investment in 2007.<br />
The projects are:<br />
• Strictly carried out in accordance to the ProMAP (Project Management Procedure)<br />
• Clearly identifies stakeholder requirements and KPIs (Key Performance Indicators)<br />
• Defines timelines and responsibilities<br />
• Delivers projects on time within budget<br />
• Divided into six main types - expansion and diversification, rationalisation, replacement, quality<br />
improvement, social and safety, and the environment<br />
Highlights of main projects in quality improvement which essentially deals with producing<br />
a sustainable product, safety and the environment are detailed below. Projects in the other<br />
categories have been dealt with in the previous pages of this report, while the social projects will<br />
be detailed in the Social Impact section.<br />
Quality Improvement<br />
• Installation of the XRF Spectrometer project at RCW facilitating speedy provision of accurate<br />
chemical results on cement samples and close monitoring of product parameters to ensure high<br />
product quality. It can also be used as a backup in the event of a failure of the XRF at PCW too.<br />
Safety<br />
• Two projects dealing with plant safety improvement - the rehabilitation of handrails, walkways<br />
and overhead bridge and construction of a changing complex for contractors adhering to the<br />
requirements of the Fatality Prevention Elements (FPEs) Programme and the stringent <strong>Holcim</strong><br />
Safety Standards.<br />
• Equipping the Aruwakkaru quarry with a new hydraulic drilling machine for better efficiency<br />
and a safer and more environmental friendly quarry operation<br />
Environment<br />
• The Oil Unloading Bay Project launched to improve the conditions of the waste oil handling<br />
operation for a safer environmentally friendly operation. The previous unloading bay and storage<br />
tanks used for alternative fuel waste oil did not have secondary containment to retain oil in case<br />
of a spill or a leak and tended to be very unsafe. The first phase of this project has a new pump<br />
house with state of the art facilities for oil handling with new pumps and accessories, a new<br />
concrete secondary containment and oil water separation facility to drain water.<br />
32
<strong>Holcim</strong> in the Market<br />
Our Products<br />
Year 2006 was one of the most challenging yet rewarding years in <strong>Holcim</strong> Lanka’s history with the<br />
launch of the initial introductory cycle of the application-based cements concept, while striving<br />
to retain the price premium and market leadership in a highly competitive market.<br />
The leap forward strategy of diversifying the cement offering by introducing the “right cement<br />
for the right application” - <strong>Holcim</strong> Supiri for concrete works, <strong>Holcim</strong> Pedereru for wall building<br />
and plastering and <strong>Holcim</strong> Seegra for precast purposes - continued its journey with remarkable<br />
success.<br />
The application-based cements concept itself posed varied challenges for different stakeholders<br />
including house builders, masons, dealers, distributors and employees as the profile and interest<br />
diversity in these stakeholder segments made the concept even more challenging.<br />
In the cement retail business, the house builder (end-customer) and the value of the brand play a<br />
vital role for success. This was equally important and relevant for the success of application-based<br />
cements concept, since the customer acceptance of the offering and demand created is what is<br />
desired by the brand. This proved to be a relatively difficult task due to several factors including<br />
a low level of knowledge and interest on technical aspects of cement as well as non-routine<br />
and comparatively low product association with fast moving consumer goods, as exampled in<br />
personal care products.<br />
Proven and trusted practices and the apparent simplicity of using Ordinary Portland Cement for<br />
all applications remained a massive constraint in convincing on-site masons of the advantages in<br />
using <strong>Holcim</strong>’s application-based cements as preconceived perceptions of cement and associated<br />
usages were strong. The situation was no different to the universal norm that “perception is the<br />
reality in consumer marketing”, thus making the task even more difficult.<br />
Our Channel Partners<br />
Continuing to build solid business relationships with our dealers, <strong>Holcim</strong> Lanka held dealer<br />
conventions with almost 5,000 dealerships across the country. We strongly believe that these<br />
relationships have contributed positively towards increasing market penetration, augmenting<br />
the <strong>Holcim</strong> cement portfolio and significantly contributing towards the success of our flagship<br />
brand in the application-based cements concept portfolio, Pedereru.<br />
As the market leader in the cement industry, our efforts in education and awareness have<br />
seen fruition and we have seen our competitors following our leadership strategy, offering and<br />
promoting the world-renowned application-based cements concept. We have always believed<br />
that by presenting customers suitable options and educating them on the positives, effects and<br />
impacts of these options, customers now are more knowledgeable on the proper applications<br />
and usages of the products on the market and can make informed decisions for domestic, local<br />
or national infrastructure projects.<br />
Continuing to infuse global best practices and protocols in all processes including manufacture<br />
and standardization, our unparalleled product is ably supported by an efficient distribution<br />
system which ensures availability and accessibility to the products we offer. These are buoyed<br />
effectively by a comprehensive and integrated communication strategy which has enabled Brand<br />
<strong>Holcim</strong> to command a premium price in a highly competitive market, leading to significant value<br />
additions for our stakeholders while we retain and grow our market leadership position.<br />
However, <strong>Holcim</strong> worked on the single-minded focus of simple creative concepts built on<br />
the foundation of ‘cut through the clutter’, fully integrating above the line and below the line<br />
communication initiatives, which ultimately enabled <strong>Holcim</strong> Lanka to showcase growth well<br />
above market average, with <strong>Holcim</strong> Pedereru recording an outstanding 400% growth in portfolio<br />
share since its re-launch in mid 2005.<br />
Paving the way for application-based cement<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 33
The <strong>Holcim</strong> Distributor Awards 2006<br />
We continued our annual <strong>Holcim</strong> Distributor Awards this year, recognizing the invaluable<br />
partnership they have rendered in the success of our business. These awards celebrate entrepreneur<br />
excellence and encourage the development of prevalent standards within the industry. In addition<br />
to five coveted trophies, distributors were also financially rewarded in proportion to their sales<br />
volume.<br />
<strong>Holcim</strong> Dealer Convention 2006<br />
On an initiative of one our business partners, Dealer Awards 2006 was organized for <strong>Holcim</strong><br />
Dealers, further strengthening the relationships between <strong>Holcim</strong> Dealers.<br />
The <strong>Holcim</strong> Dealer is a key business partner and the company strives to reinforce these partnerships<br />
and create a win-win environment for both the dealer and the company. <strong>Holcim</strong> Voice is a quarterly<br />
magazine for the dealer community and gives dealers a platform to share their achievements,<br />
milestones and skills and <strong>Holcim</strong> also prompts regular visits from our area managers, giving them<br />
advice and support.<br />
However, the most important event in the dealer calendar is the <strong>Holcim</strong> Dealer Convention. This<br />
year over 4,000 dealers participated at 19 Dealer Conventions held around the country, which while<br />
consolidating the concept of application-based cements, appreciated the Dealers’ entrepreneurial<br />
success and their contribution to the business.<br />
Building value and strengthening partnerships through recognition for excellence<br />
34
The Mahagedara Retail Chain<br />
Constantly striving to present innovative solutions to our customers, <strong>Holcim</strong> Lanka decided to<br />
expand the Mahagedara Retail Chain, which brings construction services and solutions under<br />
one roof. This one-stop-shop concept is a milestone in the industry as it brings together the<br />
synergies of not only the <strong>Holcim</strong> brand, but works on a neutral brand concept where leading<br />
manufacturers and suppliers of construction-related products and services provide solutions<br />
to customers in one location.<br />
We expanded our presence with two franchise shops in Panadura and Embilipitiya enabling<br />
customers in those areas to avail themselves of numerous benefits pertaining to constructionrelated<br />
products and services, including:<br />
• The availability of high quality leading brands<br />
• Free delivery service<br />
• Technical support<br />
• Free housing plans and Bill of Quantity<br />
• Contacts for related professional and support service personnel like masons, painters and<br />
electricians<br />
• Information on housing loans<br />
• Convenience in placing orders through the Mahagedara Link software system<br />
Innovating uncharterd retail terrain<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 35
Customers & Projects<br />
Forming an integral part of our stakeholder profile, our customers remain the key to our success.<br />
The support and co-operation we have perceived in our customers has been rewarding. The<br />
innovative sometimes unconventional initiatives we have introduced to the market have<br />
been accepted by our customers as initiatives that are aimed at constantly developing the<br />
product and thereby the end result. This has resulted in considerable mindset change but has<br />
in tandem, forged and strengthened the relationships we have fostered with our customers<br />
over the years.<br />
1 2<br />
It remains crucial therefore that <strong>Holcim</strong> Lanka continues to maintain and fortify a sustainable<br />
platform of continuous innovation, manufacturing quality products to world-class standards<br />
assuring our customers that the product they finally use is made by an ethical, quality-oriented<br />
global company, based on very high principles, values and standards.<br />
The <strong>Holcim</strong> Awards<br />
In 2000, <strong>Holcim</strong> Lanka launched the world’s first ever awards for sustainable construction under<br />
the banner name of Sanstha Awards. It was meant to encourage our industry customers to focus<br />
on projects that contribute towards community upliftment and national development. Having<br />
seen the success of the awards in Sri Lanka, the <strong>Holcim</strong> Fund for Sustainable Construction, a <strong>Holcim</strong><br />
Group inititiave which was established in December 2003, took the concept of the awards globally<br />
and today, the Global <strong>Holcim</strong> Awards for Sustainable Construction is one of the most important<br />
events in the global industry’s calendar.<br />
4<br />
At the <strong>Holcim</strong> Awards this year, among a gathering of 700 guests from 50 countries, Venezuela and<br />
Germany won gold awards, while projects from Italy and Canada were silver and bronze medalists,<br />
collectively winning a total of USD 1 million in prize money at a gala ceremony held in Thailand. The<br />
winning entries were chosen from 1,500 projects sent in from 118 countries. The criteria included<br />
quantum change and transferability, ethical standards and social equity, ecological quality and<br />
energy conservation, economic performance and compatibility and contextual response and<br />
aesthetic impact.<br />
We are proud that Sri Lanka too submitted six entries for these globally acknowledged awards for<br />
3 5<br />
sustainable construction, which had its roots in Sri Lanka but has now impacted every continent<br />
in the world.<br />
1. Research & Application of Compressed Earth Blocks 2. Ambuluwawa Biodiversity Conservation<br />
3. Cyclone-Resistant and Thermally Comfortable Roof Slabs 4. Multi-purpose Auditorium at University of Moratuwa<br />
5. Structural Properties of Rammed Earth<br />
36
Sales Goes Hi-Tech<br />
From July 2006, yet another example of infusing global best practices into the local domain<br />
was when the <strong>Holcim</strong> ‘WebSALES system’ went live, enabling select customers to order cement<br />
online, further enhancing our customer service imperatives and helping us to streamline<br />
our sale processes. The initiative is in response to customer requests for an online real time<br />
ordering process available 24/7. It is a secure web-based transaction system, currently also<br />
being used in Thailand, Vietnam and Indonesia and is in line with <strong>Holcim</strong>’s IT strategy of<br />
implementing Smart Solutions to encourage maximized utilization of existing tools within<br />
the Group. The project is supported by <strong>Holcim</strong> Services Asia and fully complies with <strong>Holcim</strong>’s<br />
Project Management Approach metholodogy.<br />
Our customer service philosophy revolves on the belief that our service levels must be timely,<br />
above the norm, efficient, speedy, qualitative and uninterrupted. In the event of the total<br />
failure of the SAP system, in the past, sales and distribution may have come to a temporary<br />
standstill – but not anymore. In November 2006, the Sales & Distribution Standby System was<br />
put to the test and successfully achieved the target of excelling in an uninterrupted service<br />
milieu. Continuity of business is crucial at <strong>Holcim</strong> Lanka and the Sales & Distribution Standby<br />
System falls in line with the broader part of the Business Continuity Plan that encompasses<br />
all departments. While it does not fully replace SAP, it temporarily provides support for<br />
continuing business uninterrupted.<br />
CCI Exhibition<br />
As a strategic partner to the Chamber of<br />
Construction Industry (CCI), <strong>Holcim</strong> Lanka<br />
continued its endeavours of improving<br />
the standards of the construction industry,<br />
assisting the Chamber in its most important<br />
event, the CCI Exhibtion, which was held<br />
this year under the theme, ‘Exposition for<br />
the Construction Industry’.<br />
Customer Satisfaction Survey<br />
Independent Survey carried out by TNS Lanka Limited<br />
<strong>Holcim</strong> Lanka decided to invest on research to glean customer satisfaction Levels among<br />
stakeholders, namely house owners, masons, dealers and industrial customers as a part of<br />
our continuous business development process. This also leads to a comprehensive SWOT<br />
(Strengths Weaknesses Opportunities & Threats) analysis which would detail weaknesses,<br />
problems, areas for improvements and solutions to be found.<br />
An external research agency TNS Lanka Limited was contracted and using their proprietary<br />
‘Trim Index’ model carried out the survey. Trim Index is a single number that conveys the<br />
standing in terms of customer satisfaction on a scale of 0-120.<br />
Findings:<br />
Average Trim Index (In similar working climate in the Indian subcontinent) 70<br />
<strong>Holcim</strong> Trim Index 93<br />
Result:<br />
The company’s Trim Index findings convey superior customer satisfaction levels in<br />
comparison to the industry in the Indian subcontinent. This is considered a strong bond<br />
that drives customer loyalty and confidence in products and services.<br />
Commissioned annually, the research findings now declare that <strong>Holcim</strong> must maintain,<br />
strengthen and improve on the high rating further.<br />
Setting Industry Standards, CCI Exhibition<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 37
Significant Contributions Made in Infrastructure Projects<br />
Current projects include:<br />
• Southern Highway (biggest contribution)<br />
• Weheragala Irrigation Project<br />
• Kakiriobada Irrigation Project<br />
Past projects include:<br />
• Balangoda Road Projects<br />
• Kukulegama Project<br />
• Mauara Irrigation Project<br />
• Kalu Ganga Water Supply Project<br />
Foundations for the future<br />
Mauara Irrigation Project<br />
38
Case in Point to Drive Customer Satisfaction: Minimizing Bag Breakages<br />
A Quality Circle has been established to look into minimizing bag breakages, which<br />
though manufactured in compliance to international standards to withstand rough<br />
handling conditions, has to be continuously monitored with waste being minimized.<br />
The team comprising personnel from Logistics & Imports, Procurement and Marketing<br />
& Sales regularly visit the bag manufacturing facility and monitor quality control and<br />
are available for advice and consultation. The team is also responsible for a quarterly<br />
review upon which preventive or corrective action is taken.<br />
Some of the problems encountered previously include damage during transport<br />
of new bags to packing plant due to damaged truck beds and wet weather. A third<br />
party auditor monthly audits the systems and processes of the bag manufacture and<br />
provides recommendations for improvement.<br />
The following is also done at the <strong>Holcim</strong> Lanka plants to ensure the final objective of<br />
minimizing bag breakages:<br />
• Additional curing of 2-3 weeks in addition to the curing of three weeks by the<br />
manufacturer<br />
• The roller press project has reduced cement temperature by 30% lowering bag<br />
breakage causes due to thermal reasons<br />
• Adopting the First-In-First-Out method<br />
• Belt conveyor and rotating mechanical devices modified<br />
• Bag storage area at PCW renovated and enlarged<br />
• Dropping height from spout to the first conveyor reduced at PCW<br />
• Mouth of the bag optimized at RCW<br />
• Stacking limited to a maximum of 10 bags at warehouse<br />
• Continuous skill development of loaders<br />
Improving the package<br />
Project Status: Completed but on a continuous improvement cycle<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 39
Building on nature<br />
Sri Lanka is a natural paradise. That is why <strong>Holcim</strong> Lanka is continuously developing products<br />
that will contribute towards the preservation and enhancement of nature’s resources - we<br />
recognized Vil Uyana Tourist Hotel as a project built on the ethos of sustainable tourism.
Environmental Impact<br />
Environmental Impact Highlights 2006<br />
• Eliminating dust emissions from our operations by installing a Bag Filter system for<br />
safe management of clinker dust<br />
• The Oil Unloading Bay Project launched to improve the conditions of the waste oil<br />
handling operation<br />
• Implementing an internationally recognized Environmental Management System<br />
(EMS) within our plants<br />
• Safe disposal of rice husk and sawdust found in the community through cement kiln<br />
co-processing through our Biomass Collection Initiative<br />
After water, concrete is the second most used resource in the world and there is no practical<br />
substitute that would match the versatility and durability of this product. The chief ingredient<br />
in concrete is cement, the manufacture of which is a resource and energy intensive process.<br />
Our environmental sustainability goal therefore is to continuously pursue strategies that<br />
would build on the premise of manufacturing more cement but using fewer resources and<br />
eliminating waste and pollution. This we believe will have a cascading impact on better<br />
performance while increasing our understanding on meeting the challenges that pertain to<br />
environmental sustainability.<br />
Project Selection & Methodology<br />
Environmental impacts are a challenge for any company, especially a manufacturing one<br />
where resources are utilized for profit making and waste is imminent. At every stage of the<br />
product life cycle, we are faced with environmental challenges from sourcing raw materials to<br />
disposal of goods and it is therefore imperative that we learn more about the macro picture<br />
of the environment and the impact our actions have on it and work on a better footprint that<br />
will fall in line with our values.<br />
Our one goal therefore has been to create innovative sustainable products that are ecologically<br />
friendly. We have tried to instill a business-relevant integrated approach that will help us<br />
achieving our long-term goals of eliminating waste, utilizing resources and energy judiciously<br />
and permeating our best practices to our multi-stakeholders.<br />
Each year, we identify areas that challenge us – areas that our business influences are not very<br />
positive and have an effect on the environment. In the past, we have worked on:<br />
• Installing a Bag House Filter by replacing old Electro Static Precipitators, which reduced<br />
dust emission up to 10 mg/Nm 3 ; this is comparable to the European Union guidelines<br />
which permit up to 50 mg/Nm 3 .<br />
• Installing new Jet Pulse Bag Filters to Blending Silos 3 & 4 to reduce fugitive dust emission<br />
• Continuing the quarry rehabilitation process covering more than 2.5ha annually<br />
• Installing the Continuous Emission Monitoring System that monitors gaseous emission<br />
around the clock over 365 days<br />
• The Canteen Waste Water Treatment plant<br />
• Grassing and vegetation projects with annual improvements<br />
• Demonstrating the destruction removal efficiency of our kilns for Polychlorinated Byphenyls<br />
contaminated oil<br />
Our EMS is a continuously evolving one where goals are constantly refined and strategies<br />
refocused towards the final goal of sustainable product innovation. Projects are chosen by<br />
intently looking at the effect our business has on the environment due to these negative<br />
areas, prioritizing them, analyzing the methodology and process improvements that would<br />
have to be incorporated in order to implement it and the investment involved.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 41
Case in Point – Providing Access to a Responsible Solution<br />
Issue<br />
The current practice of burning biomass in fields release harmful fumes to the<br />
environment and lack of appropriate methods for the treatment of industrial waste<br />
in Sri Lanka is causing significant socio-economic and ecological problems. Such<br />
environmental pollution can be eliminated if it is burnt in a cement kiln.<br />
Response<br />
Being the country’s only fully integrated cement manufacturing plant, <strong>Holcim</strong> Lanka<br />
has begun offering the services of its cement kilns to develop a sustainable industrial<br />
waste management solution employing a proven and globally accepted technology<br />
called cement kiln co-processing. In 2006, we helped manage more than 20,000 metric<br />
tons of waste through our kiln systems which would otherwise have caused detrimental<br />
socio-ecological impact to the community.<br />
Sustainable Platform<br />
A recent independent study conducted and supervised by international and local<br />
experts from various bodies demonstrated that the Destruction and Removal Efficiency<br />
of our cement kilns was more than 99.999999%. This result shows that all elements in<br />
the organic waste studied are destroyed in an irreversible and environmentally effective<br />
manner.<br />
Therefore, in partnership with the environmental authorities of Sri Lanka, we gradually<br />
increased the range of wastes to be co-processed in our kilns and together we have<br />
begun to provide a sustainable industrial waste treatment solution that contributes to<br />
solving socio-economic and ecological concerns in Sri Lanka.<br />
The main technical leverage which enables the cement kilns to provide a sustainable<br />
solution for waste are the high temperatures of the cement manufacturing process<br />
and the relatively long retention time that gases spend in the kilns, presenting ideal<br />
conditions for the destruction and removal of organic components of difficult-to-dispose<br />
waste streams. It also contributes to the conservation of non-renewable resources such<br />
as fossil fuels.<br />
Cement kiln co-processing introduced in Sri Lanka by <strong>Holcim</strong> is a globally accepted technology for waste disposal management and<br />
provides immeasurable benefits to the environment and the conservation of non-renewable resources.<br />
42
Climate & Energy<br />
As the key element in concrete, cement is a key requirement of modern society but its<br />
manufacture is a resource and energy intensive process, accounting for 5% of global manmade<br />
carbon dioxide (CO2) emissions. These result primarily from fossil fuels combustion<br />
(40%) and the calcination of limestone (50%). While CO2 emissions per unit of cement or<br />
concrete is comparatively low in the building materials sector, per unit of financial added value<br />
it is high. Meanwhile, CO2 is the primary greenhouse gas that drives global climate change.<br />
In recognition of this business risk and our commitment to sustainable development, climate<br />
and energy are hence the most important environmental issues we face.<br />
Our strategy to reduce CO2 emissions hinges on product development (including composite<br />
cements), thermal energy efficiency (improving process technology), optimization of fuel<br />
composition (including use of waste as fuel) and reduction/prevention of cement kiln dust.<br />
The Kyoto Protocol’s Clean Development Mechanism (CDM) is environmentally beneficial and<br />
can be financially attractive, providing a solid business imitative for early action. <strong>Holcim</strong> Lanka<br />
has currently designed the validation process of its Cleaner CDM project, which will support<br />
Certified Emission Reductions under the Kyoto Protocol.<br />
Mineral Components & the Clinker Factor<br />
Substituting clinker in cement with appropriate secondary materials reduces both the fuels<br />
and raw materials required per tonne of cement produced. <strong>Holcim</strong> Lanka’s Mineral Component<br />
Implementation project is expected to support the environment by saving 65,000 tons of CO2<br />
to the atmosphere.<br />
Average % of Clinker in<br />
Cement<br />
Clinker Factor<br />
95<br />
90<br />
85<br />
80<br />
75<br />
70<br />
2001 2002 2003 2004 2005 2006<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 43
<strong>Holcim</strong> Lanka advocates co-processing of waste in clinker production. We are<br />
convinced of the sustainable development benefits of alternative fuels as we<br />
believe that it is one method of utilizing resources astutely with minimum harm<br />
to the environment.<br />
MJ/Ton Clinker<br />
Thermal Energy Efficiency of Clinker Production<br />
4050<br />
4000<br />
3950<br />
3900<br />
3850<br />
3800<br />
3750<br />
3700<br />
3650<br />
3600<br />
2001 2002 2003 2004 2005 2006<br />
Reporting CO2 Emissions<br />
We are on target to reduce our global average net specific CO2 emissions by 20% by 2010<br />
with 1990 as the based year, reported according to the World Business Council for Sustainable<br />
Development (WBCSD)/World Research Institute Cement CO2 Protocol. According to the latest<br />
report from <strong>Holcim</strong> Global independently assured by KPMG, CO2 emissions have reduced to<br />
665kg CO2/ton cementitious materials.<br />
Million Tons CO2<br />
Absolute Gross & Net Direct CO2 Emissions<br />
500,000<br />
400,000<br />
300,000<br />
200,000<br />
100,000<br />
0<br />
2000<br />
2001 2002 2003 2004 2005 2006<br />
Absolute Gross Emissions<br />
Absolute Net Emissions<br />
Thermal Energy Mix for 2006<br />
Specific Gross & Net Direct CO2 Emissions<br />
13.5%<br />
1,000<br />
2.2%<br />
800<br />
84.4%<br />
Coal / Petcoke<br />
Fuel Oils<br />
Alternative Fuels<br />
kg CO2/Ton<br />
Cementitious Product<br />
600<br />
400<br />
200<br />
0<br />
2000<br />
2001 2002 2003 2004 2005 2006<br />
Specific Gross Emissions<br />
Specific Net Emissions<br />
44
Other Atmospheric Emissions<br />
We also aim to reduce global average specific nitrogen dioxide (NOx), sulphur dioxide (SO2)<br />
and dust emissions (all in g pollutant/ton of cement) by 20% leading up to 2010, from the<br />
percentage posted in 2004 on an initiative launched in 2006. This will continue next year as<br />
well.<br />
To improve availability and accuracy, the Continuous Emission Monitoring System was<br />
calibrated last year from a certified test house party. The New Environmental Quality from<br />
Australia tested our kiln and cooler stack emissions including heavy metals emission and<br />
Dioxin and Furan emissions.<br />
Average <strong>Annual</strong> Emissions vs. Our Environmental Protection License Requirement 2006<br />
Parameter<br />
Emissions Unit Average Emission 2006<br />
NOx (as NO2) mg/Nm3 1020<br />
SO2 mg/Nm3 2<br />
Dust mg/Nm3 38<br />
VOC mg/Nm3 23<br />
Mercury microgram/Nm3 0.0032<br />
Dioxins / Furans I-TEQ ng/Sm3 0.018<br />
HLL Average Emissions<br />
(<strong>Annual</strong> Spot<br />
Measurements<br />
mg/Nm 3 (dry, 10% O2)<br />
Permissible<br />
Levels<br />
mg/Nm 3 (dry,<br />
10% O2)<br />
Standards<br />
NOx as NO2 969 2050 Environmental Protection<br />
License<br />
SO2 2 1708 Environmental Protection<br />
License<br />
Dust 38 50 <strong>Holcim</strong> Group Guidelines<br />
Waste Management<br />
Co-processing the answer!<br />
Using by-products of other industries as alternative fuels and raw material is a sustainability<br />
approach generally adopted by modern industries, including the cement industry worldwide.<br />
Co-processing, as it is commonly known involves two processes in our industry, namely<br />
cement making which is the primary process and industrial waste destruction which is the<br />
secondary process. On one hand, cement co-processing prevents industrial by-products being<br />
discarded as waste, while on the other hand, it reduces the industry’s consumption of natural<br />
resources as raw material and energy. However, waste industrial by-products require special<br />
preparation before being used as alternative fuels or raw material in cement kiln processing.<br />
Waste Types Used as Alternative Fuels 2006<br />
11.04%<br />
31.10%<br />
4.98% 0.03%<br />
5.35%<br />
47.50%<br />
Rice Husk<br />
Saw Dust<br />
Waste Oil<br />
Shredded Garments<br />
(Prepared Solid<br />
Substitution Fuel)<br />
Pharmaceutical Waste<br />
(Other Liquid Waste)<br />
Scheduled Waste<br />
Also, our Puttalam Cement Works kilns were proved to co-process Polychlorinated Biphenyls<br />
(PCBs) contaminated waste, demonstrating destruction removal efficiency of 99.99999999%.<br />
PCB is known as the worst scenario of scheduled waste. This result shows that all elements<br />
in the organic waste studied are destroyed in an irreversible and environmentally effective<br />
manner.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 45
Biomass Collection for Co-processing<br />
In 2006, our Thermal Substitution Ratio was 13.48%.<br />
% Thermal Energy from<br />
Alternative Fuels<br />
Thermal Substitution Rate by Alternative Fuels<br />
16<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 2006<br />
In strictly adhering to global and Group standards, <strong>Holcim</strong> Lanka’s co-processing operation<br />
was further upgraded this year at the PCW with three projects being launched :<br />
In broadening our biomass collection initiatives, a new biomass collection centre in<br />
Kurunegala and distribution of bags among biomass suppliers has been implemented this<br />
year. The biomass collection centre collects rice husk and sawdust waste from the North<br />
Western province to be used as alternative fuel for cement production, which in turn creates a<br />
sustainable platform for both the supplier and us, impressing a win-win situation.<br />
Unsafe disposal of rice husk and sawdust have been growing environmental problems for the<br />
communities in this province, contributing to serious respiratory illnesses and blockage of<br />
drainage systems which lead to floods during the rainy season.<br />
The Biomass Collection Initiative is in response to a request made by the Provincial<br />
Environmental Authority where we have now provided the facilities of our kilns for the safe<br />
disposal of biomass through cement kiln co-processing.<br />
In order to encourage rice husk and sawdust suppliers to dispose of their waste sensibly even<br />
from adjacent areas like Anuradhapura, Kandy and Moratuwa, we distributed 3,000 bags for<br />
biomass collection among biomass generators.<br />
• Upgrading the front-end solid feeding system<br />
• Installing the front-end liquid feeding system<br />
• Setting up the shredder and shredder hall<br />
Benefits: While conforming to our EMS guidelines, the projects also increase the plant’s<br />
thermal substitution rate.<br />
Project Status: Completed in February 2006<br />
Providing bags for the collection of biomass products for safe disposal in the cement co-processing kilns<br />
46
Solution to Waste Generated from Oil Spill<br />
An oil spill from a crippled Bangladeshi cargo vessel, which sank off Koggala in the south of Sri<br />
Lanka left a trail of oil 14km long, resulting in significant ecological damage to birds, marine<br />
and terrestrial wildlife last year.<br />
While the clean up operations were spearheaded by the Marine Pollution Prevention Authority<br />
(MPPA) and the Disaster Management Center together with international and local NGOs,<br />
private organizations, state authorities and the general public, utilizing our extensive global<br />
experience in managing ecodisasters, <strong>Holcim</strong> Lanka volunteered services to rehabilitate<br />
the affected ecosystem and implement good waste management practices. The oil spill<br />
had contaminated the sand, vegetation and sea water and the problem of proper disposal<br />
of contaminated material was critical. <strong>Holcim</strong> Lanka suggested using its cement kiln coprocessing<br />
technology as an option for the recovery and irreversible destruction of the entire<br />
stock of contaminated material.<br />
After careful analysis, Ecolcim, <strong>Holcim</strong> Lanka’s specialized unit was given clearance by the MPPA and<br />
the Central Environmental Authority to handle, transport and conduct recovery and destruction of<br />
the hazardous waste. The entire operation was implemented adhering to environment regulations<br />
prevalent in Sri Lanka under close supervision of the CEA, the Provincial Environmental Authority<br />
(PEA) of the Northwestern province and the MPPA. The materials stored in Boossa were safely<br />
transported to PCW and were co-processed at the plant.<br />
In recognition of the services provided by <strong>Holcim</strong> Lanka, the Minister for Environment paid<br />
tribute to those involved at a reception held in Colombo.<br />
Solid Waste Segregation at Puttalam<br />
The solid waste management programme with emphasis in waste segregation is now fully<br />
operational at our PCW. Solid waste collected in green, yellow and red bins will be recycled and<br />
reused for several purposes including the making of compost and to generate alternative fuel.<br />
The AFR team supports the initiative by shredding and co-processing the waste collected in<br />
the yellow bins as alternative fuel. The programme has also added further tangible benefits<br />
including cleaner premises, resolving safety issues, proper non-hazardous disposal of waste<br />
decreasing pollution and avoidance of open dumping.<br />
Project Status:<br />
Clinker Dust Management<br />
Completed but on a continuous improvement cycle<br />
Fugitive dust emission at Puttalam, which has worsened after the installation of the chloride bypass<br />
has been resolved with a cost-effective solution of reducing the dust in the clinker conveyor area. The<br />
alternative proposed the rehabilitation of the existing bag filters by way of relevant modifications in<br />
the dedusting line and the bag filters.<br />
Performance checks have revealed a cost saving of LKR 7.2 million and a process evaluation which<br />
was deemed successful.<br />
Project Status: Completed in 2006<br />
Cost Saving: LKR 7.2 million<br />
Oil spill clean-up. <strong>Holcim</strong> Lanka volunteered services to rehabilitate the affected ecosystem and implement good waste management<br />
practices.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 47
Wastewater for Gardening<br />
The Canteen Wastewater Project, an identified project under ISO 14001:EMS is now fully operational,<br />
complying with Discharge Water Quality requirements as laid down by the Environmental<br />
Regulatory bodies. A biological aerated filter has been installed and the treated wastewater is used<br />
for gardening purposes in future. The discharged water complies with the Environmental Regulatory<br />
legislations and requirements.<br />
Project Status: Completed in June 2006<br />
Alternative Materials for Shred & Feed<br />
With the installation of a shredder and a granulator for the pre-processing stage in order to facilitate<br />
front-end feeding of solid material in lump form which is more desirable due to the burner being<br />
located closer to the kiln’s front-end. Alternative materials in lump form can be fed either through<br />
the kiln’s front or back-end but back-end feeding can sometimes cause carbon monoxide due to<br />
inadequate availability of oxygen, which paves the way for disturbances to the cement manufacturing<br />
operation. The shredder now shreds textiles, plastics, polythene, cardboard and wood while the<br />
granulator shreds three dimensional material in 5mm bits.<br />
Benefits: The front-end feeding is also increasing the daily feeding rates to about 40 tons<br />
which is a significant improvement when compared to the earlier 3 tons and assists<br />
in excellent waste management. Operational flexibility and consistency in feeding<br />
has also been improved.<br />
Project Status: Completed in May 2006<br />
Routine quality checks on treated water<br />
Front-end feeding in process<br />
Out with Polythene & Nicotine<br />
Continuing the various green initiatives implemented in our Ruhunu facility, the plant banned the<br />
use of polythene wrappings in lunches to eliminate polythene pollution with all meals being served<br />
in reusable food containers or lotus and banana leaves. Smoking too has been banned within the<br />
premises to reduce air pollution at the plant and to contribute towards a healthy environment.<br />
48
Waste Management Policy for Ruhunu<br />
Several workshops and parallel activities<br />
have been the precursor to a comprehensive<br />
waste management policy being drawn up<br />
for the Ruhunu Plant. Waste identification,<br />
shortcomings in the current system,<br />
improvement and solutions, disposal,<br />
recycling and reusable methods and<br />
gaining the participation of stakeholders to<br />
the exercise have been discussed at these<br />
events.<br />
Project Status: Waste Management Policy<br />
will be published in January<br />
2007<br />
Case in Point – The Quarry Management & Rehabilitation Plan<br />
<strong>Holcim</strong> Lanka’s quarry site is located at Aruwakkalu 35 km north of Puttalam. We follow<br />
Quarry Rehabilitation Guidelines developed by <strong>Holcim</strong> Global, which in turn meets<br />
international guidelines for conservation. Mined quarries are filled with the overburdened<br />
soil and a variety of trees endemic to the sites are planted under the recommendation of<br />
the Biodiversity Assessment performed by senior academic professionals from national<br />
universities of Sri Lanka. Thus, by rehabilitating the biological, geophysical and hydrological<br />
aspects, the environmental impact is minimized.<br />
<strong>Holcim</strong> plans its raw materials extraction according to the Quarry Management and<br />
Rehabilitation Plan. Meeting the required targets in 2006, the mined area was 40,000 m 2 ,<br />
while <strong>Holcim</strong> Lanka rehabilitated 25,000 m 2 . This is fully compliant with the Biodiversity<br />
Report issued by a team of senior academic personnel.<br />
We also remain committed to managing all natural resources, especially water. In this context,<br />
we have ensured that waste segregation is a mandatory requirement on both sites.<br />
Recycling of re usable waste by turning them into Compost<br />
Re-planting project of excavation sites at Aruwakkalu<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustainability Report 2006 49
Thirst for solutions<br />
Water is life. <strong>Holcim</strong> salutes the Gin Ganga project which builds a salinity barrier to keep the river’s fresh water separate from<br />
the seeping sea ensuring that farmers continue to cultivate and the nation continues to enjoy fresh drinking water.
Social Impact<br />
Social Impact Highlights 2006<br />
• The <strong>Holcim</strong> Lanka Awards recognizing sustainable community-driven development<br />
projects themed on ‘Water, Earth and Life’<br />
• <strong>Holcim</strong> Lanka featured in Business for Development published by the WBCSD for its<br />
House for Life Project<br />
• Three components in reed industry, coir and cadjan industries developed<br />
• Women entrepreneurs nurtured<br />
• Collaboration with the Asian Development Bank in Puttalam Water Supply Project<br />
• <strong>Holcim</strong> Fund for Reconstruction projects completed<br />
• Merit Award at the National Safety Awards 2006<br />
<strong>Holcim</strong> Lanka’s community investments are completely stakeholder driven and owned. We do<br />
not believe that any social or community project can work in isolation to the company or to<br />
any individual or organization, but rather has to be an inclusive proactive owner driven project<br />
that is built on a sustainable platform of development. While we do engage in a number<br />
of philanthropic contributions, a major part of our community investment is in sustainable<br />
ventures, those that will make a difference to the communities we touch, assist them in<br />
creating better livelihoods and living standards and build better foundations for the future.<br />
‘Water, Earth and Life’ therefore become our broad focus and into this we infuse our four<br />
platforms of Health & Safety, Education, Housing & Infrastructure and Livelihood Support. All<br />
four platforms build on developing the ethos of sustainability and we have addressed issues<br />
that are priorities in those communities, issues that would make a difference in their lives.<br />
Social Expenditure 2006<br />
23%<br />
(USD 34,580.00 )<br />
11%<br />
(USD 16,680.00)<br />
Safety & Health<br />
Education<br />
Livelihood<br />
Housing &<br />
Infrastructure<br />
This section of the report will highlight the primary projects under these three umbrellas and<br />
also a special report on the <strong>Holcim</strong> Fund for Reconstruction which completed its mandate<br />
this year. We also reproduce a report that was published in the WBCSD publication, Business<br />
for Development, which highlighted <strong>Holcim</strong> Lanka’s efforts in community sustainability<br />
among other global initiatives. This amply demonstrates that our community efforts have<br />
been recognized by global sustainability organizations and that we have, in the eyes of the<br />
international community, made a difference to the communities around us.<br />
3%<br />
(USD 4,476.00)<br />
63%<br />
(USD 96,870.40)<br />
We have striven to measure our community programmes by the impact our actions have<br />
on the community and the difference we make to them. Therefore, each year, our focus has<br />
been sharper, where assessment of the needs have been more perceptive, where stakeholder<br />
groups are engaged in dialogue and comprehensive participation, where communities are<br />
made fully aware of the impact of the project and where the company will continue to be<br />
proactive in the project’s implementation and follow-up if any.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 51
Multi-Stakeholder Engagement<br />
As mentioned before, our stakeholder engagement process is an open one, where opinions,<br />
ideas, feedback and responses are encouraged. We believe that the effectiveness of our<br />
social impact can only be gauged if the benefits and advantages, and also shortcomings are<br />
articulated by the stakeholders themselves. Our engagement with civil society, community<br />
leaders, government and area decision-makers, NGOs and other corporate partners have given<br />
us fresh insight into issues and viewpoints, allowing us to use collective efforts for responses<br />
and solutions.<br />
We initiated the concept of Community Advisory Panels for our local community initiatives<br />
which gives us an in-depth insight into the needs of the community. A needs assessment is<br />
performed and all issues taken on board before a final implementation plan is drawn up. We<br />
are probably the only corporate in the country that uses this approach of multi-stakeholder<br />
engagement but we do believe it remains a strong foundation in our community efforts.<br />
However, we do recognize that the dialogue process must continue to grow and the<br />
feedback loop become more open to ensure accurate flow-back of opinions from our external<br />
stakeholders and in strengthening relationships.<br />
The flow chart depicting the Stakeholder Engagement Cycle and our Multi-Stakeholder<br />
Groups are listed on page 21 of this report.<br />
Engaging in dialogue with stakeholders<br />
52
For Our People<br />
Ours is a passionate team - a team that thrives in the face of challenge and competition. It is a team<br />
that is innovative and thinks out of the box, is constantly on the lookout for different dimensions and<br />
new paradigms. Ours is a team of ordinary people doing extraordinary things, where dynamism,<br />
zest, motivation and creativity spur their passion to reach broader and bigger horizons.<br />
We in turn create a working environment that encourages personal and professional development,<br />
a knowledge-gaining culture that thrives on mutual respect, rewards performance and<br />
entrepreneurial spirit, where leadership and teamwork play an integral role in their behaviour and,<br />
in the end, are amply showcased in the commendable performance of the company.<br />
Our Human Resources (HR) mission therefore is to attract, retain and develop the best team in the<br />
corporate sphere, imbuing principles, ethics and values into their personal and professional lives,<br />
ensuring their career goals and aspirations are aligned with those of the company and creating<br />
an enabling, empowering and rewarding learning culture built on equality and meritocracy, for<br />
individuals to thrive and teams to grow!<br />
The <strong>Holcim</strong> Values<br />
Strength. Performance. Passion.<br />
Adherence to International & Local Standards<br />
Our HR policies are compliant with Sri Lankan labour regulations and internationally<br />
recognized labour practices. We take pride in developing our people and treating them fairly<br />
and equitably.<br />
Recruitment Process<br />
We are an equal opportunity provider in recruitment. We attract the best possible talent in<br />
the market who we find are compatible with our organizational values and whom can be<br />
developed for future growth of the organization.<br />
Individuals thrive to expand their horizons<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 53
Employee Statistics<br />
Turnover<br />
Type of Turnover 2003 2004 2005 2006<br />
Resignation 10 5 7 10<br />
Retirement 20 16 4 14<br />
Death in Service 0 1 3 2<br />
Redundancies 0 0 0 0<br />
Dismissals 1 0 0 0<br />
Average Number of Staff 761 583 589 619<br />
Voluntary Turnover 212 37 0 7<br />
Total Turnover 243 59 14 33<br />
Length of Service<br />
Service (by year-end) 2003 2004 2005 2006<br />
% % % %<br />
Less than 1 Year 1.58 6.50 13.90 6.97<br />
1-4 Years 8.16 10.77 9.04 17.51<br />
5-9 Years 16.05 18.29 13.57 13.29<br />
10-14 Years 10.53 10.09 12.44 12.80<br />
15-19 Years 13.42 14.53 12.44 11.02<br />
20-24 Years 34.74 22.05 12.44 9.56<br />
25-29 Years 8.16 12.14 20.85 24.31<br />
30-34 Years 5.79 2.74 1.29 0.65<br />
35-39 Years 1.58 2.91 4.03 3.08<br />
40 Years Plus 0.00 0.00 0.00 0.81<br />
Total Employees 760.00 585.00 619.00 617.00<br />
Age of Employees<br />
Age Band 2003 2004 2005 2006<br />
% % % %<br />
15-19 Years 0.00 0.00 0.16 0.00<br />
20-29 Years 4.34 11.62 14.22 13.29<br />
30-39 Years 24.47 24.96 22.46 21.23<br />
40-49 Years 50.13 46.67 42.16 41.66<br />
50-59 Years 20.66 15.90 18.26 20.42<br />
60 Years Plus 0.39 0.85 2.74 3.40<br />
Age Unknown 0.00 0.00 0.00 0.00<br />
Total Employees 760.00 585.00 619.00 617.00<br />
SAP HR Helps Transformation<br />
Probably one of the most significant features on the HR calendar this year is the completion<br />
of implementation of all the sub-modules under the scope for SAP HR implementation<br />
which is a regional process. The advantages of integration and collaboration at local and<br />
regional levels help HR to focus its efforts more on transformational activities. being more<br />
efficient in the tranactional activities, SAP, as a common information platform helps <strong>Holcim</strong><br />
Lanka to be more competitive in the market.<br />
SAP HR integrates with the rest of the SAP modules implemented in the company from<br />
2002.<br />
A refresher training program was conducted by consultants from <strong>Holcim</strong> Services (Asia) for<br />
the SAP HR super users in March and April this year.<br />
Training & Development<br />
We are very conscious of the need to imbibe our team into a knowledge-oriented culture,<br />
to ensure they remain on top of an evolving skills and knowledge base. Training and<br />
development therefore forms an integral link in the progressive culture we have instilled<br />
into our people. Training and development programmes, workshops, seminars, conferences<br />
and outward bound programmes are mapped out to the Terms of References of various<br />
job descriptions, individual capabilities and abilities, and in line with the company’s future<br />
progress.<br />
While technical and specialized training is continuous, the development of soft skills also<br />
remains a vital aspect in our Training and Development calendar.<br />
On average, each employee underwent training to the value of 2.68% of working hours<br />
throughout the year. While most of our Training and Development is conducted internally<br />
by our specialized HR department using expert internal and external resource persons, we<br />
also identify imperative external programmes, either in Sri Lanka or abroad, those deemed<br />
useful in honing skills and knowledge for our team.<br />
54
In 2006, the following training programmes and workshops were conducted at <strong>Holcim</strong><br />
Lanka:<br />
• Functional Training Programmes (e.g. Manufacturing Workforce Training and SAP<br />
Training)<br />
• Cross Functional Training Programmes (e.g. Local Cement Course, Finance for Non-<br />
Finance Customer Service)<br />
• Leadership Training (e.g. Leadership Development Programme)<br />
Apart from this, English Language Programmes were also held.<br />
Training & Development Programmes for 2006<br />
Learning with joy<br />
Improving the HR Skills of Line Managers<br />
‘People Manager’ is a new initiative of <strong>Holcim</strong> Lanka designed to enhance the participation of<br />
Line Managers in employee processes. We deem this a vital link in enhancing our team culture<br />
where Line Managers become proactively engaged in managing and developing employees.<br />
Over 50 <strong>Holcim</strong> Line Managers from all sites participated in batches of three groups in a series<br />
of training workshops.<br />
5% 4% Sustanability Report 2006<br />
91%<br />
Functional Training<br />
Cross Functional Training<br />
Leadership Training<br />
<strong>Holcim</strong> Lanka Cement Course<br />
Comprehensively covering almost everything there is to know about cement including cement<br />
chemistry, production, products, applications and sustainability, the <strong>Holcim</strong> Lanka Cement<br />
Course aims to create a passion for cement among the employees. Launched in March, the<br />
course is meant to permeate all levels of employees with PCW piloting the course with six<br />
workshops during the year.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
55
Rewards & Remuneration<br />
<strong>Holcim</strong> Lanka believes in rewarding its people in fair and equitable manner with financial and<br />
non-financial rewards. Having evolved from a state owned enterprise to the forward thinking<br />
global company we are today, management created a streamlined remuneration system that<br />
would be performance and results oriented, working on the platforms of meritocracy and<br />
equality.<br />
Felicitating Long Service Employees<br />
Sixty employees who have loyally served the company for over 25 years were presented with<br />
gold sovereigns. Their steadfast service and dedicated commitment to serving the company<br />
was rewarded at a gala ceremony held in September.<br />
The Hay Job evaluation system was implemented in 2004 heralding a more comprehensive<br />
and uncomplicated salary structure. In December 2006, the SAP Compensation Management<br />
Module was implemented and based on the company remuneration policies allows<br />
automation in significant aspects. While these tangibly present employees with financial<br />
rewards, <strong>Holcim</strong> Lanka employees always have numerous opportunities of career furtherance<br />
in a safe and secure environment. International exposure in a knowledge-oriented culture<br />
that rewards individual and team performance and recognition of leadership initiatives and<br />
extracurricular accomplishments all form the cycle of meeting individual career aspirations<br />
and mapping future prospects.<br />
2006 was a significant year for our employee relations. We signed a single Collective Labour<br />
agreement for a period of three years with five major trade unions addressing major concerns<br />
of our employees.<br />
Start Local – Go Global<br />
The career paths at <strong>Holcim</strong> are numerous and varied, rewarding and exciting. Every individual<br />
becomes an integral part of building the foundation for a company that acts global but is<br />
local in feel. As in most global groups, <strong>Holcim</strong>’s professionals have the opportunity to reach<br />
beyond our shores. We present opportunities for talented highly motivated individuals to map<br />
out progress on an international career path. While a <strong>Holcim</strong> career begins in the country of<br />
origin, based on performance, international assignments are an important step towards an<br />
international career.<br />
It is implicitly understood that our business is built on trust, teamwork, honesty and mutual<br />
respect. This is further embedded in our recruitment, rewards and performance processes,<br />
which are transparent and works on the principles of meritocracy and equal opportunity for all.<br />
Felicitating loyalty with Gold<br />
Enhancing Employee Communication<br />
We have always prided ourselves on our open communication policy. Employees are encouraged<br />
into dialogue and discussion, cross-functional teams and target groups communicate issues<br />
and resolutions with management and senior management provide equal opportunities to<br />
all employees, through their representative groups to communicate on issues pertaining to<br />
their careers, workplace, progress and problems.<br />
We also saw rejuvenation of communication channel between the top management and the<br />
employees in general through Company Development Council. Employees at various levels<br />
get an opportunity to meet with the top management and discuss various company and<br />
employee-related issues and opportunities during this bi-monthly forum.<br />
56
Taking the communication process into the IT realm, this year we launched Yathra, the<br />
company intranet. Using the full potential of the web, Yathra also provides a home for iDEA<br />
Bank, a cache of innovative ideas submitted by our employees.<br />
Extracurricular Highlights<br />
We consider extracurricular activities central to building teamwork and competitive spirit. We<br />
have always encouraged our employees to participate in extracurricular activities, which not<br />
only allow them to excel in their passions and maintain healthy minds and bodies, but also<br />
gives <strong>Holcim</strong> Lanka the opportunity to create an enabling environment for them to excel.<br />
• 2 nd <strong>Holcim</strong> Lanka Badminton Championships<br />
• <strong>Holcim</strong> Cricket Championships held at the Ruhuna Plant<br />
• Table Tennis, Volleyball and Netball Championships at the Puttalam Plant<br />
• Swimming and badminton facilities at the St. Joseph’s College Sports Complex<br />
• Gym facilities at Fitness Kingdom for employees in Colombo includes aerobics and yoga<br />
• The plants have their own sports complexes and gyms<br />
An innovative approach was launched this year with the HR team holding an HR Clinic at the<br />
remote location of Aruwakkaru - a moral booster for our quarry team, with part of its meeting<br />
being held on the train, crossing bridges and landmarks that have been constructed using<br />
<strong>Holcim</strong> cement. The HR Clinic dealt with HR-related issues and was a good forum for open<br />
dialogue. HR Clinics are held every month in one of the four main sites of <strong>Holcim</strong> Lanka.<br />
<strong>Holcim</strong> cricket championship<br />
Apart from this, we involve Opinion Leaders in various communication programmes including<br />
leadership forums that constitute the managers and also in the Company Development<br />
Council, creating an open free environment for them to contribute towards the development<br />
of the organization through concrete development proposals. We conduct two Leaders<br />
Workshops involving Opinion Leaders twice a year, focusing on a current leadership issue or<br />
opportunity.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 57
Health & Safety<br />
Case in Point – <strong>Holcim</strong> Lanka Wins at National Safety Awards 2006<br />
The company was very encouraged when we were recognized for our safety efforts in<br />
winning a Merit Award at the National Safety Awards held in October 2006. The awards<br />
organized by Eagle Insurance Company in collaboration with the Department of Labour<br />
and the Employees Trust Fund are considered a benchmark in the country for safety at<br />
the workplace. The judges who visited the company, focused primarily on the premises<br />
and housekeeping, mechanical, electrical and personal safeguarding, fire prevention and<br />
protection, safety organization and reporting especially on investigation of incidents.<br />
Beyond OHS Green Pyramid – Fatality Prevention Elements<br />
Implementation<br />
<strong>Holcim</strong> Lanka has achieved an all-green pyramid status – the <strong>Holcim</strong> Safety Pyramid with<br />
19 elements, under the OH&S Management System. In 2006, the <strong>Holcim</strong> ASEAN region<br />
undertook a further initiative to face the challenge of eliminating potential fatal incidents<br />
from its operations and developing a culture committed to eradicate fatalities.<br />
Fatality Prevention Elements (FPEs) is not a separate OH&S program but is designed to provide<br />
additional guidance in order to successfully achieve the requirements of the safety pyramid<br />
block - hazardous work activities. <strong>Holcim</strong> Lanka implemented three of the FPEs.<br />
We also comply with all environmental conditions and are guided by separate Environmental<br />
Protection Licenses for Quarry, PCW and RCW.<br />
Given the emphasis on following global best practices on occupation, health and safety in<br />
our workplace, 121 programmes on safety were conducted during the year for 1670 employees,<br />
including third party service providers.<br />
<strong>Holcim</strong> Lanka Safety Pyramid<br />
Health &<br />
Wellness Issues<br />
Occupational<br />
Rehabilitation<br />
Purchasing<br />
Management<br />
of Changes<br />
Safe Working<br />
Procedures<br />
Inspection<br />
& Testing<br />
Design<br />
Safety<br />
Audit &<br />
System<br />
improvement<br />
Induction<br />
& Training<br />
Incident<br />
Investigation &<br />
Corrective Action<br />
Industrial<br />
Hygiene &<br />
Monitoring<br />
Employee<br />
& Stakeholder<br />
Communication<br />
& Involvement<br />
Information<br />
& Reporting<br />
Roles<br />
Responsibilities<br />
&<br />
Accountabilities<br />
Hazardous Work<br />
Activities<br />
Hazard<br />
Identification<br />
& Risk<br />
Assessment<br />
Planned<br />
Inspections<br />
Legal<br />
Obligations<br />
Management<br />
Commitment<br />
& Planning<br />
A team of <strong>Holcim</strong> employees dedicated towards safety<br />
58
Below are some of the issues that have been highlighted throughout the year by the Environment<br />
Health & Safety team and resolved to ensure a safe working environment for our employees:<br />
• On a hazard identification visit conducted to PCW, the team identified the following safety<br />
hazards which were quickly resolved:<br />
• An oil spill around the lathe machine leading to environmental impacts and accidental<br />
slips – resolved by the closure of leaks<br />
• Lack of earthwire in the supply cord to the water cooler which could lead to electrocution<br />
– resolved by the connection of an earth wire<br />
• Failure to display operation instructions on overhead crane which can cause serious<br />
accidents – resolved by the display of instructions<br />
• Opened a new two-storey changing room serving about 110 employees and 50 contractors<br />
at RCW as a lasting solution to a longstanding safety problem, where employees were earlier<br />
compelled to walk about the premises without personal protective equipment due to the lack<br />
of a changing room located near the gates.<br />
• Implementation of FPEs at all plants where 10 fatality areas have been identified following a<br />
comprehensive analysis of past accidents and near misses. The first three elements, working at<br />
heights, working in isolation and lockout and working in confined spaces were introduced this<br />
year.<br />
• Rehabilitating the main road leading to PCW to ensure that the heavily loaded vehicles do not<br />
overturn and will enjoy safe passage<br />
• On an innovative drive at <strong>Holcim</strong>, the first ever Housekeeping Awards were conducted this year,<br />
where employees were allowed the initiative of finding their own solutions to housekeeping<br />
problems, using innovative approaches to ultimately enhance the plants’ safety.<br />
• Housekeeping was on top of the agenda at PCW this year as the external environment makes<br />
housekeeping a challenge at the plant as it is situated in the dry zone and our area of business<br />
is cement. Housekeeping owners were appointed to initiate improvements which included a<br />
central washing area for contractors, a comprehensive waste disposal system, landscaping and<br />
removal of outphased and unwanted buildings. All initiatives are reviewed weekly.<br />
• National Safety Week was observed at PCW with a comprehensive safety awareness<br />
programme<br />
• Process improvement at the Ruhuna Pack House through the expansion of the rubber belt and<br />
extension of belt conveyor preventing bag breakages and not requiring employees having to<br />
physically ‘throw’ bags onto the belt which used to cause undesirable health problems<br />
During the year 2006 <strong>Holcim</strong> Lanka continued its focus on creating a culture of Zero Harm. The<br />
safety statistics show that we have achieved zero lost time injuries with our own employees.<br />
Achieving Zero Harm, requires each employee, from top to bottom, to be committed and active,<br />
displaying leadership in the initiative and encouraging safe behaviour while discouraging unsafe<br />
acts, operational risk taking or following dangerous shortcuts.<br />
Safety training and development is also absolutely crucial in order to minimize and finally eliminate<br />
Zero Harm due to accidents and for the awareness created among our employees on the importance<br />
of being constantly conscious and responsive to health and safety processes in the workplace.<br />
Safety Statistics<br />
LTI / FR<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001<br />
A lost Time Injury (LTI) is counted if<br />
the employee is unable to resume<br />
work on his or her next shift<br />
2002 2003 2004 2005 2006<br />
The Frequency Rate (FR) of incidents<br />
is the number of LTIs per million<br />
hours worked<br />
Implementation of Cardinal Rules<br />
Cardinal Rules are life saving rules. They will help to reduce injuries and fatalities in our<br />
company. They are based on analysis of accidents that have occurred in <strong>Holcim</strong> Group over<br />
recent years. Therefore, to communicate the cardinal rules to everybody working for <strong>Holcim</strong><br />
Lanka - whether own employee or third party contractor-the corporate video has been dubbed<br />
in Sinhala and communicated among concerned parties.<br />
SR<br />
170<br />
160<br />
150<br />
40<br />
30<br />
20<br />
10<br />
The Severity Rate (SR) of incidents is<br />
the number of days lost per 1000<br />
hours worked<br />
0<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 59
Spreading the Word Among Multi-Stakeholders<br />
Being highly conscious of our role to permeate best practices among our stakeholder groups, the<br />
Safety First campaign and Environmental initiatives are being cascaded. We have begun targeted<br />
programmes to spread our knowledge on environment best practices and safety culture among<br />
various stakeholder groups who we feel will benefit from being aware of the rudiments of a safe<br />
environment and being involved in environmental preservation and conservation for a sustainable<br />
future. We also assist various stakeholder groups with our technical expertise and knowledge in<br />
environmental matters voluntarily whenever there is a need.<br />
Medical Camps for Community & Employee Families<br />
Date held Areas Addressed at the Clinic No. of Doctors No. of<br />
Patients<br />
09-03-2006 Dental Clinic 2 Specialist doctors; 3 staff<br />
members<br />
26-04-2006 Eye Clinic 1 Doctor; 2 technicians 50<br />
26-04-2006 Spectacle Donation 1 Doctor; 2 technicians 70<br />
26-06-2006 Ayurvedic Medical Camp 4 Doctors; 4 assistants 100<br />
26-06-2006 Seminar on Ayurvedic treatments 2 Doctors; 8 officials 100<br />
03-06-2006 Eye/Dental/Respiratory 4 Doctors; 8 officials 150<br />
60<br />
A Few Examples of Our Multi-Stakeholder Initiatives<br />
Stakeholder Group Where Project<br />
Marine Prevention Authority,<br />
Armed Forces,<br />
Environmental Groups,<br />
Community<br />
Coast of Koggala<br />
Assisted an accidental oil spill from a Bangladeshi<br />
Ship<br />
Community Puttalam Established Emergency Response Teams to respond<br />
to natural disasters and other emergencies<br />
Students<br />
~50 Schools in<br />
Puttalam<br />
Awareness sessions on safety and environment,<br />
facility improvements, donations, amongst others<br />
Students ~5 Schools in Galle Awareness sessions on safety and environment,<br />
facility improvements and donations<br />
Women<br />
Women’s movements<br />
in Puttalam<br />
Livelihood support and employment for women<br />
Community<br />
Rural development<br />
societies &<br />
SANASA<br />
Water and power supplies, cleaner Puttalam<br />
environmental project and road development<br />
Outsourced Drivers All plants Defensive driving for both light and heavy vehicles<br />
and redefining skills and driving techniques<br />
Contractor Employees Ruhunu Plant Working at heights under the FPEs, with special<br />
focus on company safety objectives and prevention<br />
of fatalities<br />
Puttalam Plant<br />
Housing Scheme<br />
Community<br />
Masons<br />
Plant Housekeeping<br />
Scheme<br />
Polonnaruwa &<br />
Dambulla<br />
Benefits of good housekeeping and safety culture<br />
launched awareness and awards scheme<br />
with two cycles carried out during the year and<br />
awards given to a total of six families resident in<br />
the scheme.<br />
Spreading the message of ‘Safety First’, workshop<br />
on best practices, correct application and permeating<br />
a professional culture among the masons<br />
60
Housing & Infrastructure<br />
Cement lays the foundation for society – for its development, for its livelihood and to build<br />
its future. Infrastructure plays a fundamental role in providing basic needs for communities,<br />
whether it is in the primary area of shelter or on a macro scale of the development agenda<br />
in roads, transportation, academic institutions or hospitals. To us, therefore, infrastructure<br />
remains a key ingredient in sustainable development and with cement being our core business,<br />
it is just and fitting that <strong>Holcim</strong> Lanka leads and contributes towards this sustainable effort.<br />
‘Water, Earth and Life’ at <strong>Holcim</strong> Lanka Awards<br />
Recognising sustainable construction efforts that have impacted communities and national<br />
development, <strong>Holcim</strong> Lanka annually felicitates those who have made a difference. The<br />
awards have since been known as the benchmark for the construction industry, not only in<br />
Sri Lanka but has transcended into the global construction industry’s calendar on an award<br />
scheme conducted by the <strong>Holcim</strong> Group.<br />
Salinity Barrier Gives Drinking Water to 200,000 People<br />
At the <strong>Holcim</strong> Lanka awards this year, the coveted best project award was presented for the<br />
construction of a salinity barrier across the Gin Ganga under the Greater Galle Water Supply<br />
Project, giving access to clean drinking water to 200,000 people in that district. The two<br />
bridges also provided safe passage for the local communities. The recipients of the award were<br />
CML Edwards Construction Ltd, Ceywater Consultants (Pvt) Ltd and the National Water Supply<br />
and Drainage Board for their role in construction, consultancy and design, respectively.<br />
The five projects that received merit awards:<br />
• Transwater Engineering (Pvt) Ltd for solving the drinking water problem of the communities<br />
in Anuradhapura<br />
• Jetwing Hotels Engineering Department and Architect Sunela Jayawardena for innovative<br />
use of <strong>Holcim</strong> Pedereru cement for construction of VILUYANA Hotel, Sigiriya<br />
• ELS Construction (Pvt) Ltd for innovative application of precast products for development<br />
activities<br />
• International Construction Consortium Ltd for construction of the production centre of<br />
Durra Building Systems.<br />
• Taisei Corporation for improvement of the water supply system in Matara District<br />
Award-winning projects<br />
A novel feature this year was the recognition of four outstanding university student projects<br />
with potential for community and national development, encouraging these young minds<br />
to further develop on their ideas. This also highlights the other social impact platform we<br />
espouse, the fact that a responsive education is a dire need for national development and in<br />
building a foundation for the future.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 61
Housing, Roads & Electricity for<br />
Maduragama & Attawilluwa<br />
Eight new houses were built in Maduragama<br />
for underprivileged families in July this year<br />
with materials and components from several<br />
demolished old structures reused in the<br />
construction process as a measure of cost<br />
reduction and for the benefiting families<br />
to be aware of sustainable construction<br />
principles and resource efficiency. <strong>Holcim</strong><br />
Lanka also made contributions towards<br />
road development in Maduragama.<br />
The Puttalam plant funded electricity<br />
connections for 15 families in Attawilluwa.<br />
Having seen the makeshift housing, lack of<br />
basic needs like food, water and electricity<br />
among the thousands of families living<br />
around the Puttalam plant, the plant is now<br />
in dialogue with the Community Advisory<br />
panel (CAP) to explore avenues of improving<br />
the standard of life among the families<br />
around the locality of the plant.<br />
Project Impact: Eight new houses for<br />
underprivileged families, awareness created<br />
on sustainable construction principles<br />
and resource efficiency, road developed in<br />
Maduragama, 15 families get electricity.<br />
Housing Project at Maduragama<br />
Puttalam Water Supply Project<br />
Following a needs assessment survey<br />
carried out among the local community of<br />
our Puttalam plant in 2004, drinking water<br />
was ranked second after employment. Such<br />
a desperate need for water was no surprise<br />
as pipe-borne water is not available for the<br />
nearby communities. Access to clean water<br />
therefore became a priority.<br />
Towards the end of the year 2004, the<br />
Asian Development Bank launched four<br />
water supply projects, covering four villages<br />
around our plant – Palavi, Attawilluwa,<br />
Wanathawilluwa and Kal Adiya. However,<br />
the projects adopted an approach where<br />
the prospective users had to make a<br />
contribution and the underprivileged<br />
communities found it difficult to afford<br />
the expected contribution. Furthermore,<br />
they feared losing the opportunity to gain<br />
access to clean water. As a responsible<br />
member in the community, our plant<br />
volunteered to assist the community by<br />
forming a partnership with them for the<br />
project, contributing via material supplies<br />
and transport services.<br />
As the communities live in a dry and arid<br />
area, access to clean water required drilling<br />
deep wells called boreholes in order to tap<br />
water. Pumps are used in turn to pump<br />
water in the wells into water tanks located<br />
on tall water towers. From water tanks, a<br />
gravity flow pipeline system delivers water<br />
to homes.<br />
Project Impact: Water supply to over 3,000<br />
families who have for decades suffered<br />
immense hardship due to lack of access to<br />
clean water.<br />
Water Supply tank at Palavi<br />
House for Life Programme<br />
In partnership with Ceylinco Grameen, <strong>Holcim</strong><br />
Lanka pioneered the House for Life programme<br />
that encourages micro entrepreneurs to<br />
build shop-houses that has the two-pronged<br />
advantage of building infrastructure within<br />
the community and enabling a sustainable<br />
livelihood support system. This project was<br />
highlighted in Business for Development<br />
published by the WBCSD under the title,<br />
‘Creating Sustainable Livelihoods and Lifestyles’.<br />
It also specified that <strong>Holcim</strong> Lanka has directly<br />
met four Millennium Development Goals<br />
(MDGs) - that of education, gender equality,<br />
housing and sanitation and technology<br />
transfer and is indirectly influencing the MDGs<br />
of youth employment and income generation.<br />
<strong>Holcim</strong> Lanka recently decided to boost the<br />
revolving fund by USD 30,000.<br />
We have reproduced the two-page article as it<br />
appeared in the WBCSD report.<br />
One of the shop houses in operation<br />
62
<strong>Holcim</strong><br />
Offering low-cost housing solutions • Sri Lanka<br />
An extract from Business for Development by the World<br />
Business Council for Sustainable Development<br />
The challenge<br />
In Sri Lanka, almost 23% of people live below<br />
the poverty line. The challenge is to provide<br />
well-constructed affordable housing for the<br />
very poorest. Some 12.5% of the population<br />
still live in wattle and daub huts with few, if<br />
any, facilities.<br />
The business contribution<br />
<strong>Holcim</strong> is a major world supplier of cement,<br />
aggregates and building-related services.<br />
As the leading provider of cement to the Sri<br />
Lankan market, <strong>Holcim</strong> Lanka is also looking<br />
to address the housing needs of this country’s<br />
very poorest. Launched in 2005, ‘House-for-<br />
Life’ is a new partnership initiative between<br />
<strong>Holcim</strong> Lanka and microfinance provider,<br />
Ceylinco Grameen. Through this project, local<br />
micro-entrepreneurs borrow money to buy<br />
a house. This custom-built home has been<br />
specially designed as a shophouse, providing<br />
each family with the premises to run a small<br />
business. <strong>Holcim</strong> Lanka provides the initial<br />
funds and technical skills behind ‘Housefor-Life.’<br />
Ceylinco Grameen administers the<br />
loans and maintains a close relationship with<br />
borrowers.<br />
The innovation<br />
This innovative partnership project combines<br />
microcredits with <strong>Holcim</strong>’s low-cost housing<br />
concept. Loans follow the successful Grameen<br />
Bank model (from Bangladesh), with a few<br />
local adaptations. In Sri Lanka, some 90% of<br />
Ceylinco Grameen’s borrowers are women<br />
micro-entrepreneurs. Those qualifying for<br />
10% per annum a ‘House-for-Life’ loans are<br />
existing customers who have already proven<br />
their creditworthiness and built up a strong<br />
relationship with the bank. Ceylinco Grameen<br />
provides intensive support for these fledgling<br />
businesses. Women learn accounting and other<br />
management skills and receive direct assistance<br />
with marketing and distribution. Should<br />
borrowers fail to meet their weekly repayments<br />
two weeks’ running, a follow-up home visit<br />
helps them deal with any problems. In late<br />
2004, <strong>Holcim</strong> Lanka set up a revolving fund of<br />
$50,000 to be replenished through loan and<br />
interest repayments. An initial seed fund was<br />
invested in the Grameen housing loan scheme,<br />
an additional sum financed the development<br />
of the model shop-house and the construction<br />
of the initial ten houses. Families have already<br />
settled into the first of these. To strengthen<br />
resources in the local community, the first few<br />
houses were constructed at Palavi Puttalam, an<br />
inland rural area, north east of Colombo close by<br />
<strong>Holcim</strong>’s plant. A further five have been built in<br />
rural hinterland south of the capital, upgrading<br />
slum dwellings to decent housing.<br />
The benefits<br />
Previously, these families lived in rickety huts<br />
where they were unable to operate a business<br />
on the premises. Mostly, families already owned<br />
their plot of land, if not through official land title<br />
then through long-term occupancy rights. These<br />
new well-constructed homes accommodate an<br />
average family of four or five. All have modern<br />
sanitation and are served by water and electricity.<br />
Here families can carry out their businesses,<br />
such as sewing or mechanical repairs in the<br />
ground floor shop unit; they live on the upper<br />
floor. Thus families have both boosted their<br />
income levels and improved their quality of<br />
life. As 90% of the Ceylinco Grameen business<br />
owners are women, this ‘House-for-Life’ scheme<br />
also enhances the status of women in the local<br />
community. To ensure these shop-houses provide<br />
the best quality and most cost-effective solution,<br />
with close attention also paid to environmental<br />
factors, <strong>Holcim</strong> is collaborating with the National<br />
Building Research Organization. Houses are built<br />
with cement locally produced by <strong>Holcim</strong> and other<br />
locally sourced building materials (roofing tiles,<br />
clay bricks and steel), providing new commercial<br />
opportunities for local producers and distributors.<br />
Through this project, <strong>Holcim</strong> aims to broaden its<br />
portfolio of housing solutions, strengthen its<br />
reputation as a socially-responsible company and<br />
embrace new business opportunities with lowincome<br />
communities.<br />
Obstacles<br />
So far however, the self-build input to home<br />
construction envisaged has been much lower<br />
than anticipated. <strong>Holcim</strong> Lanka is considering<br />
training local people in supervised selfconstruction<br />
so as to keep building costs<br />
down or to encourage them to work with local<br />
masons who have already benefited from<br />
<strong>Holcim</strong>’s training program. In addition, the<br />
model house may not easily be transferable<br />
to urban slums, as construction will need to<br />
be adapted to specific local lots and this may<br />
push costs up significantly. For <strong>Holcim</strong> Lanka<br />
making these houses affordable for lowincome<br />
families remains paramount.<br />
Way forward<br />
<strong>Holcim</strong> Lanka’s ‘House-for-Life’ project is set to<br />
expand tenfold within the next year. <strong>Holcim</strong><br />
Lanka has recently decided to boost the<br />
revolving fund by $30,000. The key challenges<br />
of this project are to scale it up and ensure<br />
sustainability. Therefore once the results of<br />
the initial pilot scheme have been assessed,<br />
<strong>Holcim</strong> hopes to partner with patient capital<br />
providers (such as international aid agencies)<br />
to facilitate this expansion. The partnership<br />
is also considering broadening their reach<br />
through splitting funding into loans for<br />
home construction and loans for home<br />
improvements.<br />
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Sustanability Report 2006 63
Livelihood Support<br />
In developing the quality of life among our communities, a sustainable platform that we<br />
have brought into focus has been livelihood support. It is imperative that communities<br />
have the ability to sustain themselves and opportunities are found and created for them<br />
to either venture into sustainable livelihood ventures or to improve on what they already<br />
have. Our livelihood support initiatives have also extended to technical advice, support<br />
and safety features being permeated to our stakeholder segments as we believe that as a<br />
company which is global in stature but local in feel, we are able to share our best practices<br />
while creating an empowering environment for our communities to live and prosper.<br />
Paddy-boiling Vessels for Farmer Families<br />
10 underprivileged farmer families from Manaveriya, a village adjacent to our Puttalam<br />
plant, were presented with paddy-boiling vessels which are crucial towards the paddy<br />
to rice transformation process. Paddy cultivation is the main source of livelihood for<br />
many communities in and around Puttalam and the cost of paddy-boiling vessels can be<br />
prohibitive for these farmers to make the most of their produce. Our partner in this project<br />
was the Bank of Ceylon which assisted in providing reasonable funding to these families.<br />
Project Impact: 10 underprivileged farmer families<br />
Women Entrepreneurs Developed<br />
The local reed industry around the Puttalam area was given a boost with a livelihood<br />
support programme being extended for women with focus on three local industries,<br />
namely reed products, cadjan weaving and coir manufacturing. Working through the<br />
Perakum Women’s Rural Development society, 35 women are now engaged in this lucrative<br />
self-employment venture.<br />
We also donated a reed-flattening roller to enhance production efficiency while extending<br />
a marketing opportunity where these entrepreneurs can sell their products to the<br />
employees of the Puttalam plant.<br />
A soft-toy and fancy goods training programme for employees’ wives and daughters as<br />
well as women in the local community was conducted, opening opportunities for selfemployment<br />
ventures.<br />
Project Impact: Three industries developed, 35 women entrepreneurs nurtured, seventy<br />
families’ lifestyles improved, self-employment opportunities opened.<br />
Farmer families of Manaveriya<br />
Women entrepreneurs in the reed industry<br />
64
Coir & Cadjan Industries<br />
Developed<br />
Three water tanks were constructed to<br />
assist families in the Attawilluwa village<br />
whose major form of income generation is<br />
cadjan weaving. The Puttalam plant also<br />
funded the Kal Adiya Samurdhi Society to<br />
purchase coir preparation machinery in<br />
order to develop the local coir industry,<br />
while also conducting a coir manufacture<br />
training programme for a group of women<br />
from the local communities.<br />
Project Impact: 15 families’ cadjan weaving<br />
prospects improved, twenty families benefit<br />
from upliftment of coir industry.<br />
Life Back on Track for Tsunami-<br />
Affected Families<br />
In the aftermath of the tsunami, the<br />
need for livelihood support was identified<br />
by the Ruhunu plant as a community<br />
impact initiative. Setting up Community<br />
Advisory Panels, and in partnership with<br />
SEEDS under the aegis of Sarvodaya to<br />
administer the programme, the plant<br />
launched a micro-financing programme<br />
to restart businesses in that area, which<br />
include grocery shops, vegetable stalls<br />
and tailoring establishments.<br />
Project Impact: 50 families restart<br />
businesses.<br />
“Thanks to this loan I have increased my business from one<br />
machine to five and now have two outlets. <strong>Holcim</strong> Lanka’s<br />
micro-finance programme gave a whole new meaning to<br />
life.”<br />
E. K. Karunadasa<br />
New Supun Tailors<br />
Devata, Galle.<br />
“A mission that I started on my own has now bloomed into<br />
job opportunities and bright smiles to young lives, thanks to<br />
<strong>Holcim</strong> Lanka’s micro-financing for livelihood programme loan<br />
project.”<br />
M. H. M. Fariz<br />
Akuressa Road<br />
Devata, Galle.<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 65
Education<br />
Education is fundamental to building<br />
a sustainable future and is a requisite<br />
feature in meeting the MDGs. However,<br />
education must be holistic and not simply<br />
academic, if it is to contribute effectively<br />
in society. While we acknowledge that<br />
taking on the challenges of the entire<br />
gamut of education to fall in line with<br />
the holistic aspect is difficult, <strong>Holcim</strong><br />
Lanka decided to focus on one area of<br />
the holistic equation to ensure that the<br />
concept of education is taken to the next<br />
realm – that of ‘Safety First’.<br />
Kosgoda pre-school<br />
Campaigns with the Community<br />
To do this, we engaged our Community<br />
Advisory Panel and conducted a needs<br />
assessment around the Yatalgala,<br />
Uswetakeiyawa, Devata and Roomassala<br />
areas adjacent to RCW. Together with<br />
the plant’s CSR team, the Community<br />
Advisory Panel and the local community<br />
discussed the most crucial issues that<br />
surround the community. From this point,<br />
having gathered the support of school<br />
principals, community and religious<br />
leaders, the company embarked on a<br />
focused campaign of instilling a ‘Safety<br />
First’ culture in schools.<br />
Bonavista College in Roomassala<br />
The following projects were thus<br />
implemented upon needs assessments<br />
conducted:<br />
• A First Aid Centre at Sudharma College<br />
with a qualified nurse to run the centre<br />
and equipped with the necessary<br />
equipment to handle emergencies until<br />
hospitalization. The plant will bear the<br />
operational and medical costs. Plans<br />
are under way to extend the concept to<br />
other schools. There was also a request<br />
from the principals to make the services<br />
of a dentist available periodically.<br />
• A school that has among its alumni,<br />
literary great Martin Wickremasinghe<br />
and civil society leader Dr A T Ariyaratne,<br />
Bonavista College in Roomassala was<br />
in abandon. To make a difference, RCW<br />
first conducted a comprehensive safety<br />
campaign which included the provision<br />
of bins for garbage and recycling<br />
initiatives to help the students be more<br />
aware of the need for safety around<br />
them.<br />
Grade Five Scholarship Tuition<br />
Programme<br />
With the Grade Five Scholarship being<br />
the only avenue for good students to<br />
gain entrance into the more popular<br />
schools in the country, especially if they<br />
are in remote areas, most students have<br />
no access to additional information<br />
or knowledge on the curriculum of<br />
the scholarship examination as it is<br />
considered an added knowledge gaining<br />
exercise. Most would opt for private<br />
tuition but to those families that have<br />
no wherewithal or access to this, it could<br />
be that students with immense potential<br />
are left behind. PCW organised a Grade<br />
Five Scholarship Tuition programme for<br />
children sitting the examination within<br />
the community, which was conducted by<br />
a qualified teacher.<br />
66
Progress Towards Targets<br />
Area Target Year Status 2006 Page<br />
Environmental Performance<br />
Environmental Performance Indicator Achieve 77% at PCW by 2007 2001 75%<br />
Achieve 89% at RCW by 2007 2004 77%<br />
Management Systems Develop and implement ISO 14001-certifed management systems at PCW 2004 Ongoing<br />
Develop and implement ISO 14001-certifed management systems at RCW 2005 Ongoing<br />
CO2 and Resources Utilization Reduce specific net CO2 emissions to 637 kg CO2/ton cementitious materials by 2007 2006 Ongoing 44<br />
Environmental Impacts Emission reduction targets for NO2, SO2, and dust 2010 New 45<br />
Integrate into global CONNECT AFR Project a waste management initiative which espouses 2007 New<br />
resource recovery by 2007<br />
Publish the Waste Management Policy for the Ruhunu Plant by 2007 2007 New 49<br />
Three projects to further upgrade cement co-processing operations at PCW 2006 Ongoing<br />
Biomass Collection Centre in Kurunegala 2006 Achieved<br />
Canteen Wastewater Project at PCW 2005 Achieved<br />
Social Performance<br />
General Integrate our corporate social responsibility approach into business plans 2004 Ongoing<br />
Occupational Health & Safety (OH&S) Ensure OH&S management systems comply with Group standard 2005 Ongoing 58<br />
Projects Community Advisory Panel meetings held 2006 Achieved 52<br />
Successful completion of the <strong>Holcim</strong> Fund for Reconstruction and release of its final report 2006 Achieved 68<br />
Sustainability Commitments<br />
Integrate sustainable development programs into existing management systems – Sustainable<br />
Management System (SMS)<br />
2006 Ongoing 24<br />
Execute Capex Projects that contribute towards economic, social, environmental performance 2006 Ongoing 32<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 67
Special Report<br />
Helping them stand Undefeated - Tsunami work Concluded<br />
It all began with massive crashing waves - then, lost lives, mangled families and a desecration<br />
of the social fabric of the country. But it was also a time when a country stood together<br />
united, to help fellow human beings.<br />
<strong>Holcim</strong> Lanka’s relief efforts began when the managers and employees from the various sites<br />
rallied around the devastated Ruhunu plant. The two challenges that confronted the <strong>Holcim</strong><br />
team was in getting immediate relief to the affected employees and local communities and<br />
secondly, to get the plant back on track. A relief centre was set up complete with a medical<br />
camp. In tandem with these relief efforts, we managed to get the plant operational and back<br />
to work in just two weeks.<br />
Having witnessed the devastation and mental trauma first hand, with the donation of a week’s<br />
salary by all employees on 31 st December 2004, the <strong>Holcim</strong> Fund for Reconstruction in Sri Lanka<br />
was launched. The Fund quickly swelled with the <strong>Holcim</strong> Group contributing CHF 1 million and<br />
several other well-wishers of the company pitching in. The Fund was officially launched on 5 th<br />
January 2005 endowed with LKR 125 million. Based on the vision of ‘Rebuilding foundations<br />
for tsunami victims to regain their homes, hopes and lives’, <strong>Holcim</strong> Lanka speedily teamed<br />
up with local community leaders, government bodies and NGOs to begin work. Sarvodaya,<br />
a reputed local NGO was selected as our main partner and <strong>Holcim</strong> Lanka appointed a Fund<br />
Management Team to ensure that all activities will uphold the principles of transparency and<br />
accountability as well as equality for all ethnic groups.<br />
In collaboration with community leaders and organisations, the Fund helped rebuild 670<br />
houses and several affected schools in all affected areas in the Northern, Eastern, Southern<br />
and Western Provinces. Below is a synopsis of the Fund’s efforts.<br />
The support extended by <strong>Holcim</strong> Lanka was in two genres:<br />
• Complete support covering everything from construction cost to technical support<br />
• Partial support ranging from cement donation to technical support for a number of other<br />
projects initiated by community leaders and institutions including NGOs<br />
Helping the tsunami afflicted to rebuild their lives by rebuilding their homes<br />
68
The <strong>Holcim</strong> Lanka Effort<br />
Housing Projects Supported by <strong>Holcim</strong> Fund<br />
Full Construction Support<br />
Support<br />
Type<br />
Project<br />
Location<br />
No. of<br />
Houses<br />
Part Construction Support<br />
Full Support Sarvodaya project - South Galle 37<br />
Matara 39<br />
Ceylinco Grameen<br />
Sarvodaya<br />
Jaffna<br />
13 Houses - Rs 3.9 Mn<br />
Sarvodaya project - North & East Ampara 50<br />
Swiss Agency for Development and<br />
Cooperation (SDC)<br />
Kilinochchi<br />
Mullativ<br />
Batticaloa 26<br />
Trincomalee 37<br />
Mannar<br />
Vavunia<br />
Jaffna 13<br />
Trincomalee<br />
37 Houses - Rs 11.1 Mn<br />
<strong>Holcim</strong> Niwasa Project Kalutara 25<br />
Anuradhapura<br />
Total 227<br />
Puttalam<br />
Kurunegala<br />
Matale<br />
Polonnaruwa<br />
Batticaloa<br />
26 Houses - Rs 6.6 Mn<br />
Partial<br />
Support<br />
Ven Tissa Thero & UNESCO Project Kosgoda 50<br />
Meth Sevana/Sri Bodhiraja Foundation Southern province 80<br />
Meth Sevana/Leicester Tiger Rugby Club Southern province 10<br />
<strong>Holcim</strong> Niwasa - 25 Houses - Rs 10 Mn<br />
Gampaha<br />
Colombo<br />
Kegalle<br />
Kandy<br />
Nuwara Eliya<br />
Badulla<br />
Monaragala<br />
Ampara<br />
50 Houses - Rs 15 Mn<br />
CECB/Sabaragamuwa PC/Sri Subodha<br />
Foundation<br />
Hambantota 65<br />
Alutlanka project Galle 30<br />
Livelihood - Rs 3 Mn<br />
Kalutara<br />
Ratnapura<br />
Reconstruire et Vivre Project Habaraduwa 25<br />
Livelihood - Rs 6 Mn<br />
Galle<br />
Matara<br />
Hambantota<br />
Colombo West Rotary Club Habaraduwa 35<br />
Swiss donors La Solidarite de la Broye Payagala 25<br />
37 Houses - Rs 11.7 Mn<br />
Other Miscellanous Projects All affected areas 120<br />
39 Houses - Rs 11.7 Mn<br />
7 Schools - Rs 4 Mn<br />
All over the island<br />
partly support (cement donation+ technical assistance)<br />
443 Houses - Rs. 25 Mn<br />
Total ~440<br />
Grand total ~670<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 69
Getting Lives Back on Track<br />
However, sustainability lies key to healing in times of disaster. Thousands of livelihoods were<br />
lost and we decided to assist local communities with getting their lives back on track, giving<br />
them opportunities and avenues to restart businesses they had so catastrophically lost.<br />
• Micro loan schemes for self-employment business in collaboration with two reputed<br />
micro-financing institutions, Sarvodaya (SEEDS) and Ceylinco Grameen contributing LKR 9<br />
million from the fund<br />
• Motivational support and tool kits for affected masons<br />
• Support for construction of two vocational training centres<br />
• Support for livelihood projects initiated by the Postgraduate Institute of Management of<br />
the University of Sri Jayawardenepura<br />
• Support for skills development programme of the Organization of Professional Associations<br />
and Department of Technical Education and Training<br />
School Reconstruction<br />
With education also being one of our social impact platforms, we strove to create normalcy to<br />
the students who had been devastated due to the tsunami. Getting back to school proved to be<br />
therapeutic and healing. We made a conscious decision to actively participate in contributing<br />
towards the process of constructing schools with the donation of cement.<br />
Foundations built for a new future<br />
Some of the construction work we supported:<br />
• A school building of BTS College in Dadalla under a project by people from Burghausen City<br />
in Germany and Aluthlanka NGO<br />
• A pre-school building in Habaraduwa under a project by Reconstruire et Vivre NGO<br />
• A school, a pre-school and a playground in Kosgoda under a project by Ven Ahungalle<br />
Wimaladhammatissa Thero and UNESCO<br />
• Several school buildings in Matara under a project by Swiss Development Agency<br />
• A school building in Tangalle under a project by an American NGO Architects Without<br />
Borders<br />
70
Concessionary Cement Purchase<br />
Rates<br />
<strong>Holcim</strong> Lanka also contributed to the<br />
national development effort with<br />
concessionary purchase rates for cement<br />
through a Memorandum of Understanding<br />
between the Ministry of Housing and<br />
Reconstruction Industry, Eastern Province<br />
Education and Irrigation Development and<br />
<strong>Holcim</strong> Lanka.<br />
In the immediate aftermath of the tsunami,<br />
it must also be noted that there were no<br />
shortages in cement indicating that the<br />
supply was sufficient to cater to the rising<br />
demand.<br />
After having completed our mandate,<br />
the Fund was successfully closed in<br />
January 2006 with a final report titled,<br />
‘Undefeated’.<br />
List of Multi-Stakeholder Partnerships<br />
Partnering NGO/ Entity Location No. of Houses /Type of Project Nature of Project<br />
Sarvodaya Batticaloa 26 Housing<br />
Sarvodaya Ampara 50 Housing<br />
Sarvodaya Trincomalee 37 Housing<br />
Sarvodaya Jaffna 13 Housing<br />
Aluthlanka Unawatuna 30 Housing<br />
Aluthlanka Galle 600 Schools<br />
UNESCO & Ahungalle Wimaladharma Thero Kosgoda 50 Housing<br />
UNESCO & Ahungalle Wimaladharma Thero Kosgoda 400 School<br />
<strong>Holcim</strong> Niwasa Kalutara 25 Housing<br />
Swiss Development Agency Matara School Buildings Schools<br />
National Heroes Foundation Down South 10 Housing<br />
Madushka Association Ampara 12 Housing<br />
Reconstruire et Vivre Habaraduwa 25 Housing<br />
CECB & Sabaragamuwa PC & Sri Bodhiraja Foundation Hambantota 65 Housing<br />
Model House at UDA Colombo 5 Housing<br />
Miscellaneous Minor cement Donations All island 70 Housing<br />
Distributors/Dealers/Masons Hikkaduwa 10 Housing<br />
Sri Bodhiraja Foundation Meth Sevana Payagala 80 Housing<br />
Leicester Tigers Rugby Club, Meth Sevana & Sri Bodhiraja Foundation Matara 10 Housing<br />
Swiss Donors - La Solidarite de la Broye Payagala 25 Housing<br />
Rotary Club of Colombo West Habaraduwa 35 Housing<br />
Ministry of Sports Moratuwa 25 Housing<br />
Srilak Sahana Seva Padanama Payagala Technical Training Institute (300 youth) Livelihood Support<br />
Samadhi Community Development Foundation Matara Skills Training Schools (400 youth) Livelihood Support<br />
<strong>Holcim</strong> Employees Galle Immediate Relief Immediate Relief<br />
Construction Skills Training All Affected areas Livelihood Support Livelihood Support<br />
Youth Project - Block Making Trincomalee Cement Blocks Livelihood Support<br />
Block Making Machine - PIM Galle Cement Blocks Livelihood Support<br />
Kiln for Pottery - PIM Galle Pottery Livelihood Support<br />
Mushroom Project - PIM Galle Livelihood Support Livelihood Support<br />
Development of Recycle Paper Product - PIM Hikkaduwa Livelihood Support Livelihood Support<br />
Ceylinco Grameen Kalutara Livelihood Support Livelihood Support<br />
Seeds Galle Livelihood Support Livelihood Support<br />
Livelihood Support - Drama, Puppet Show Matara Livelihood Support Livelihood Support<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Sustanability Report 2006 71
And Our Journey Continues….<br />
to build foundations for the future<br />
On the next page are some of the projects that have targeted timelines for next year. We<br />
sincerely hope to deliver on time and to the satisfaction of our stakeholders all that we have<br />
undertaken. We also make a fervent promise to continue our endeavours to fashion, form and<br />
build a sustainable future for the generations of this country.<br />
Our Sustainable Journey at Global Level<br />
Our parent company <strong>Holcim</strong> Lanka released in July 2006 the Corporate Sustainable<br />
Development for the year 2004/2005. While being well on track in achieving its existing<br />
sustainability targets, the Group has set further targets for emissions and occupational<br />
health and safety.<br />
The priorities of <strong>Holcim</strong> in the area of sustainable development are occupational health and<br />
safety, environment, climate and energy, community involvement, stakeholder engagement<br />
and sustainable construction.<br />
The Group is well on track to meeting its sustainability targets. For example, net CO2 emissions<br />
per ton of cement have been reduced by 14.7% since 1990. The voluntary target of a 20%<br />
eduction by 2010 is therefore within reach.<br />
Sustaining a journey for future generations<br />
What you have just read in this report is a true and accurate account of our work in<br />
sustainable development. It may not be ideal but it is a start, and we believe that the purview<br />
of sustainable development is far-reaching and extensive. We have already begun projects<br />
and programmes that we feel sets the stage for sustainable development. Some of these<br />
have been completed and some ongoing. We also have mapped out some strategies that will<br />
take us into next year.<br />
We hope to lead by example so that as an industry highly integrated into economic, social and<br />
environmental issues, we will uncover new ways of doing business, where we can connect<br />
more effectively with all our stakeholders. Given the scope of our industry, we know that we<br />
have immense potential in playing a lead role in making a difference to each of our stakeholder<br />
segments and that we can build foundations for a sustainable future.<br />
The additional targets are in the two important areas of occupational, health and safety and<br />
environment. The frequency of accident-related absences is to be reduced by 30% annually over<br />
the next three years. In order to achieve a Group-wide reduction in its atmospheric emissions,<br />
<strong>Holcim</strong> is to lower the output of NOx, SO2 and dust per ton of cement by 20% by 2010. Thus,<br />
<strong>Holcim</strong> will be honouring all voluntary commitments made within the scope of the Cement<br />
Sustainability Initiative of the World Business Council for Sustainable Development.<br />
<strong>Holcim</strong>’s efforts in the field of sustainability are increasingly being recognized by the outside<br />
world. The company achieved recognition as ‘Leader of the Industry’ in the Dow Jones<br />
Sustainability Index 2006 in the building materials sector. <strong>Holcim</strong> Lanka was recognized with<br />
this prestigious award in the year 2005, too.<br />
72
A Sustainable National Contribution for 2007 & Beyond<br />
Since commencement of operations here in Sri Lanka, <strong>Holcim</strong> has invested over USD 110<br />
million in Sri Lanka. We are serious in living up to our global vision of “building foundations for<br />
society’s future”, sustaining environmental performance.<br />
As a serious, committed, long-term player in this country, it is vital that we plan well ahead in<br />
a pragmatic and action-oriented manner. There is a need to assure that the expected growth<br />
process has the necessary cost-effective supply of construction materials, as well as the<br />
innovation and end-user orientation to allow for sustainable growth of the nation.<br />
The increasing need of the government to develop the North and East would be highly<br />
assisted as <strong>Holcim</strong> Lanka has stated in the vision: “We are the leading and preferred supplier<br />
of cement and related building materials to build foundations for Sri Lanka’s future”. The<br />
proposed development is in line with the Government’s concept of re-developing Trincomalee<br />
as a Metropolitan Growth centre for the North and East of Sri Lanka in order to strengthen the<br />
economic and resource base in that area, which will also see a renaissance of the construction<br />
industry in this area.<br />
Furthermore, <strong>Holcim</strong> will be a competitive player in the North and East cement market,<br />
(at present, Tokyo Cement is the only cement supplier for the North and East market), with<br />
consumers being assured of quality at competitive pricing. Many other industries will also be<br />
positively influenced by the proposed development, with indirect entrepreneur opportunities<br />
in transport, packing material supply et al. being possibilities. Tourism could also see a boom<br />
with Trincomalee being a tourist hot spot and featured globally for its beaches and rich marine<br />
resources.<br />
• The revenue to the Government vis-à-vis taxation is approximately LKR 186-250 million<br />
each year. This will differ as the imports of clinker and cement changes in periods<br />
• The VAT charges itself will additionally account to around LKR 197 million<br />
• Over 100 direct and indirect employment opportunities will emerge during the construction<br />
and initial implementation stage (phase 1) of the project, rapidly rising to around 200 when<br />
the cement mill and the associated plant starts off during the end of 2007<br />
• Around 40% of the projected money will move into the local economy<br />
The <strong>Holcim</strong> promise of a better future<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
And Our Journey Continues... 73
<strong>Holcim</strong> Lanka Partners IUCN Sri Lanka in Biodiversity Conservation<br />
<strong>Holcim</strong> Lanka will sign an MOU with IUCN Sri Lanka in February 2007 to spearhead a five year<br />
programme to be completed in 2011 with an investment of USD 1 million. The main projects<br />
earmarked are:<br />
Biodiversity Conservation at <strong>Holcim</strong> Lanka’s Limestone Quarry:<br />
The project aims to further accelerate the restoration of biodiversity and landscape values<br />
already being implemented by the company, to an optimum pace in the rehabilitated areas<br />
where the limestone has been extracted.<br />
Rehabilitation of mined corals:<br />
Coral reefs have been long exploited for lime production used for masonry construction and<br />
the resulting destruction of the reef foundations has eliminated coral re-growth. As a pilot<br />
project, artificial reefs will be established to pave the way for coral growth and long-term<br />
livelihood support for local fishermen.<br />
Adding Value to the Development of Bio-fuel:<br />
Actively seeking to replace its non-renewable fossil-fuel energy resources by more sustainable<br />
ones, <strong>Holcim</strong> Lanka will initially develop fuel-wood plantations to supply its power plant project<br />
and will then take measures to eventually replace its kiln-fuel with bio-fuels. The main resources<br />
of bio-fuels under consideration are sawdust and fuel-wood from short rotation plantations.<br />
Improvement of the Puttalam Environment:<br />
Using the IUCNSL developed model which separates solid waste at the source into compostable<br />
and non-compostable fractions, <strong>Holcim</strong> Lanka will recover non-compostable waste generated<br />
in Puttalam by way of cement-kiln co-processing, a safe and environmentally sound waste<br />
treatment method recognized around the world.<br />
Future Projects:<br />
• Conservation management at Bar Reef Puttalam, to conserve marine biodiversity through<br />
protection of valuable bar reef sanctuary<br />
• Conservation management at Rumassala Reef Galle, to conserve marine biodiversity<br />
through protection of Rumassala marine sanctuary<br />
• Biodiversity conservation in Sri Lanka’s marine environment, to raise public awareness<br />
levels on marine ecosystems and their value<br />
Bar Reef, Puttalam<br />
74
Annexures<br />
Organizational Structure<br />
Regional Internal<br />
Auditor<br />
Chairman &<br />
Board of Directors<br />
<strong>Holcim</strong> Lanka Ltd.<br />
Internal<br />
Auditor<br />
Managing Director<br />
/CEO<br />
Sustainable<br />
Development<br />
Business Planning<br />
Risk Management<br />
Legal &<br />
Compliance<br />
OH&S Communication Quality<br />
Assurance<br />
Corporate<br />
Social<br />
Responsibility<br />
Environmental<br />
Alternative Fuel<br />
Resources<br />
Manufacturing Marketing & Sales Logistics & Imports Finance &<br />
Controlling<br />
Human Resources<br />
AFR Operations<br />
Plant Manager<br />
Palavi<br />
One-Stop-Shops<br />
Logistics<br />
Operations<br />
Finance<br />
Organizational<br />
Development<br />
AFR Marketing &<br />
Communication<br />
Plant Manager<br />
Ruhuna<br />
Marketing<br />
Supply Chain<br />
Planning<br />
Procurement<br />
Personal<br />
Development<br />
AFR Commercial<br />
Sales<br />
IT<br />
Personal<br />
Administration<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Annexures 75
Our compliance tracked against the Global Reporting Initiative - Standard Disclosures*<br />
*Refer to Sustainability Reporting Guidelines, Global Reporting Initiative, 2006, pp 20-35<br />
Standard Disclosures Yes No Not<br />
Applicable<br />
Page<br />
Strategy & Analysis<br />
Statement from the most senior decision-maker of the organization (e.g. CEO, chair, or equivalent<br />
senior position) about the relevance of sustainability to the organization and its strategy<br />
√ 18<br />
Description of key impacts, risks, and opportunities √ 27-66<br />
Organizational Profile Name of the organization √ 5<br />
Primary brands, products, and/or services √ 5, 14,<br />
33-35<br />
Operational structure of the organization, including main divisions, operating companies,<br />
subsidiaries, and joint ventures<br />
√ 75<br />
Location of organization’s headquarters √ 5<br />
Number of countries where the organization operates, and names of countries with either major<br />
operations or that are specifically relevant to the sustainability issues covered in the report<br />
√ 5<br />
Nature of ownership and legal form √ 5<br />
Markets served (including geographic breakdown, sectors served, and types of customers/<br />
beneficiaries)<br />
Scale of the reporting organization, including:<br />
• Number of employees;<br />
• Net sales (for private sector organizations) or net revenues (for public sector organizations);<br />
• Total capitalization broken down in terms of debt and equity (for private sector organizations); and<br />
• Quantity of products or services provided<br />
Significant changes during the reporting period regarding size, structure, or ownership including:<br />
• The location of, or changes in operations, including facility openings, closings, and<br />
expansions; and<br />
• Changes in the share capital structure and other capital formation, maintenance, and<br />
alteration operations (for private sector organizations)<br />
√ 33-39,<br />
51<br />
√ 13,<br />
27-29,<br />
54<br />
√ 27-29<br />
Awards received in the reporting period √ 58<br />
Report Parameters Reporting period (e.g. fiscal/calendar year) for information provided √ 6, 18<br />
Date of most recent previous report (if any)<br />
√<br />
76
Standard Disclosures Yes No Not<br />
Applicable<br />
Page<br />
Report Parameters Reporting cycle (annual, biennial, etc.) √ 6<br />
Contact point for questions regarding the report or its contents √ 85<br />
Process for defining report content, including:<br />
• Determining materiality;<br />
• Prioritizing topics within the report; and<br />
• Identifying stakeholders the organization expects to use the report<br />
Boundary of the report (e.g. countries, divisions, subsidiaries, leased facilities, joint ventures,<br />
suppliers). See GRI Boundary Protocol for further guidance<br />
√ 6<br />
√ 6<br />
Governance, Commitments & Engagement<br />
State any specific limitations on the scope or boundary of the report √ 6<br />
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and<br />
other entities that can significantly affect comparability from period to period and/or between<br />
organizations<br />
Data measurement techniques and the bases of calculations, including assumptions and<br />
techniques underlying estimations applied to the compilation of the Indicators and other<br />
information in the report<br />
Explanation of the effect of any re-statements of information provided in earlier reports, and<br />
the reasons for such re-statement (e.g. mergers/acquisitions, change of base years/periods,<br />
nature of business, measurement methods)<br />
√ 1<br />
√ 43-46,<br />
59<br />
Significant changes from previous reporting periods in the scope, boundary, or measurement<br />
√<br />
methods applied in the report<br />
Table identifying the location of the Standard Disclosures in the report √ 3<br />
Policy and current practice with regard to seeking external assurance for the report. If not<br />
√<br />
included in the assurance report accompanying the sustainability report, explain the scope and<br />
basis of any external assurance provided. Also explain the relationship between the reporting<br />
organization and the assurance provider(s)<br />
Governance structure of the organization, including committees under the highest governance<br />
body responsible for specific tasks, such as setting strategy or organizational oversight<br />
Indicate whether the chair of the highest governance body is also an executive officer (and, if<br />
so, their function within the organization’s management and the reasons for this arrangement)<br />
√ 19-25<br />
√ 24<br />
√<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Annexures 77
Standard Disclosures Yes No Not<br />
Applicable<br />
Page<br />
Governance, Commitments & Engagement<br />
Management<br />
Approach &<br />
Performance<br />
Indicators<br />
Economic<br />
Disclosure on<br />
Management<br />
Approach<br />
with reference<br />
to Economic<br />
Aspects<br />
Economic<br />
Performance<br />
Market<br />
Presence<br />
Indirect<br />
Economic<br />
Impacts<br />
For organizations that have a unitary board structure, state the number of members of the<br />
highest governance body that are independent and/or non-executive members<br />
Mechanisms for shareholders and employees to provide recommendations or direction to the<br />
highest governance body<br />
Linkage between compensation for members of the highest governance body, senior managers,<br />
and executives (including departure arrangements), and the organization’s performance<br />
(including social and environmental performance)<br />
√ 56<br />
√ 53-54<br />
Processes in place for the highest governance body to ensure conflicts of interest are avoided √ 24-25<br />
Process for determining the qualifications and expertise of the members of the highest<br />
√<br />
governance body for guiding the organization’s strategy on economic, environmental, and social topics<br />
Goals and performance using organization-specific indicators (as needed) and GRI performance<br />
indicators<br />
√ 24, 27-<br />
39<br />
Policy that defines the organization’s overall commitment √ 18, 19<br />
Any additional contextual information (e.g. key successes and shortcomings, major<br />
√ 27-39<br />
organizational risks and opportunities)<br />
Direct economic value generated and distributed, including revenues, operating costs,<br />
employee compensation, donations and other community investments, retained earnings, and<br />
payments to capital providers and governments<br />
√ 27-39<br />
Financial implications and other risks and opportunities for the organization’s activities due to<br />
√<br />
climate change<br />
Coverage of the organization’s defined benefit plan obligations √ 27-39<br />
Significant financial assistance received from government √ 27-39<br />
Range of ratios of standard entry level wage compared to local minimum wage at significant<br />
locations of operation.<br />
Policy, practices, and proportion of spending on locally-based suppliers at significant locations<br />
of operation<br />
Procedures for local hiring and proportion of senior management hired from the local<br />
community at locations of significant operation<br />
Development and impact of infrastructure investments and services provided primarily for<br />
public benefit through commercial, in-kind, or pro bono engagement<br />
√<br />
√<br />
√ 53<br />
√ 27-39,<br />
68-72<br />
Understanding and describing significant indirect economic impacts, including the extent of impacts √ 27-39<br />
√<br />
78
Standard Disclosures Yes No Not<br />
Applicable<br />
Page<br />
Management<br />
Approach &<br />
Performance<br />
Indicators<br />
Environmental<br />
Disclosure on<br />
Management<br />
Approach with<br />
reference to<br />
Environmental<br />
Aspects<br />
Goals and performance using organization-specific indicators (as needed) and GRI performance<br />
indicators<br />
√ 41-49<br />
Policy that defines the organization’s overall commitment √ 23-25<br />
The most senior position with operational responsibility or explain how operational responsibility is √ 19-20<br />
divided at the senior level<br />
Procedures related to training and awareness<br />
√<br />
Procedures related to monitoring and follow-up<br />
√<br />
Any additional contextual information (e.g. key successes and shortcomings, major organizational<br />
risks and opportunities)<br />
√ 41-49<br />
Materials<br />
Indicators<br />
Materials used by weight or volume<br />
Percentage of materials used that are recycled input materials. √ 44, 45<br />
√<br />
Energy<br />
Indicators<br />
Direct energy consumption by primary energy source<br />
Indirect energy consumption by primary source<br />
√<br />
√<br />
Energy saved due to conservation and efficiency improvements √ 44<br />
Initiatives to provide energy-efficient or renewable energy-based products and services, and<br />
reductions in energy requirements as a result of these initiatives<br />
√ 41-46<br />
Initiatives to reduce indirect energy consumption and reductions achieved √ 45<br />
Water<br />
Indicators<br />
Total water withdrawal by source<br />
Water sources significantly affected by withdrawal of water<br />
√<br />
√<br />
Percentage and total volume of water recycled and reused<br />
√<br />
Biodiversity<br />
Indicators<br />
Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of √ 49<br />
high biodiversity value outside protected areas<br />
Description of significant impacts of activities, products, and services on biodiversity in protected √ 49<br />
areas and areas of high biodiversity value outside protected areas<br />
Habitats protected or restored √ 47-49<br />
Strategies, current actions, and future plans for managing impacts on biodiversity √ 49<br />
Number of IUCN Red List species and national conservation list species with habitats in areas<br />
affected by operations, by level of extinction risk<br />
√ 74<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Annexures 79
Standard Disclosures Yes No Not<br />
Applicable<br />
Management<br />
Approach &<br />
Performance<br />
Indicators<br />
Environmental<br />
Emissions,<br />
Effluents<br />
& Waste<br />
Indicators<br />
Total direct and indirect greenhouse gas emissions by weight √ 43-45<br />
Other relevant indirect greenhouse gas emissions by weight √ 43-45<br />
Initiatives to reduce greenhouse gas emissions and reductions achieved √ 43-45<br />
Emissions of ozone-depleting substances by Weight<br />
NO, SO, and other significant air emissions by type and weight √ 45<br />
Total water discharge by quality and destination<br />
Total weight of waste by type and disposal method<br />
Total number and volume of significant spills √ 47<br />
√<br />
√<br />
√<br />
Page<br />
Social – Labour<br />
Practices &<br />
Decent Work<br />
Products<br />
& Services<br />
Indicators<br />
Compliance<br />
Indicators<br />
Transport<br />
Indicators<br />
Overall<br />
Indicators<br />
Disclosure on<br />
Management<br />
Approach with<br />
reference to<br />
Labour Aspects<br />
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms<br />
of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped<br />
internationally<br />
Identity, size, protected status, and biodiversity value of water bodies and related habitats<br />
significantly affected by the reporting organization’s discharges of water and run-off<br />
Initiatives to mitigate environmental impacts of products and services, and extent of impact<br />
mitigation<br />
Percentage of products sold and their packaging materials that are reclaimed by category<br />
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance<br />
with environmental laws and regulations<br />
Significant environmental impacts of transporting products and other goods and materials used for<br />
the organization’s operations, and transporting members of the workforce<br />
Total environmental protection expenditures and investments by type<br />
Use organization-specific indicators (as needed) and GRI performance indicators to show<br />
results of performance against goals, and indicate linkage to internationally recognized<br />
universal standards (the ILO Tripartite Declaration Concerning Multinational Enterprises and<br />
Social Policy and the Organization for Economic Co-operation and Development Guidelines for<br />
Multinational Enterprises should be primary reference points)<br />
√ 41-49<br />
Policy that defines the organization’s overall commitment √ 22-23,<br />
53<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
80
Standard Disclosures Yes No Not<br />
Applicable<br />
Management<br />
Approach &<br />
Performance<br />
Indicators<br />
Social – Labour<br />
Practices &<br />
Decent Work<br />
Disclosure on<br />
Management<br />
Approach with<br />
reference to<br />
Labour Aspects<br />
The most senior position with operational responsibility or explain how operational<br />
√<br />
responsibility is divided at the senior level<br />
Procedures related to training and awareness √ 54-57<br />
Procedures related to monitoring and follow-up<br />
√<br />
Any additional contextual information (e.g. key successes and shortcomings, major<br />
organizational risks and opportunities)<br />
√ 53-57<br />
Employment Total workforce by employment type, employment contract, and region √<br />
Total number and rate of employee turnover by age group, gender, and region √ 54<br />
Benefits provided to full-time employees that are not provided to temporary or part-time<br />
√ 56-57<br />
employees, by major operations<br />
Labour<br />
Percentage of employees covered by collective bargaining agreements<br />
√<br />
Management Minimum notice period(s) regarding operational changes, including whether it is specified in<br />
√<br />
Relations collective agreements<br />
Occupational<br />
Health &<br />
Safety<br />
Training &<br />
Education<br />
Diversity<br />
& Equal<br />
Opportunity<br />
Percentage of total workforce represented in formal joint management-worker health and<br />
safety committees that help monitor and advise on occupational health and safety programs<br />
Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related<br />
fatalities by region<br />
Education, training, counselling, prevention, and risk-control programs in place to assist<br />
workforce members, their families, or community members regarding serious diseases<br />
Health and safety topics covered in formal agreements with trade unions<br />
√<br />
√ 59<br />
√ 58-60<br />
Average hours of training per year per employee by employee category √ 54<br />
Programs for skills management and lifelong learning that support the continued<br />
√ 54-57<br />
employability of employees and assist them in managing career endings<br />
Percentage of employees receiving regular performance and career development reviews<br />
√<br />
Composition of governance bodies and breakdown of employees per category according to<br />
gender, age group, minority group membership, and other indicators of diversity<br />
Ratio of basic salary of men to women by employee category<br />
√<br />
√<br />
√<br />
Page<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Annexures 81
Standard Disclosures Yes No Not<br />
Applicable<br />
Management<br />
Approach &<br />
Performance<br />
Indicators<br />
Social – Human<br />
Rights<br />
Disclosure on<br />
Management<br />
Approach with<br />
Reference to<br />
Human Rights<br />
Aspects<br />
Investment &<br />
Procurement<br />
Practices<br />
Nondiscrimination<br />
Freedom of<br />
Association<br />
& Collective<br />
Bargaining<br />
Child Labour<br />
Forced &<br />
Compulsory<br />
Labour<br />
Use organization-specific indicators (as needed) and GRI performance indicators to show<br />
results of performance against goals, and indicate linkage to internationally recognized<br />
universal standards (the ILO Tripartite Declaration Concerning Multinational Enterprises and<br />
Social Policy and the Organization for Economic Co-operation and Development Guidelines for<br />
Multinational Enterprises should be primary reference points)<br />
Policy that defines the organization’s overall commitment<br />
The most senior position with operational responsibility or explain how operational<br />
responsibility is divided at the senior level<br />
Procedures related to training and awareness<br />
Procedures related to monitoring and follow-up<br />
Any additional contextual information (e.g. key successes and shortcomings, major<br />
organizational risks and opportunities)<br />
Percentage and total number of significant investment agreements that include human rights<br />
clauses or that have undergone human rights screening<br />
Percentage of significant suppliers and contractors that have undergone screening on human<br />
rights and actions taken<br />
Total hours of employee training on policies and procedures concerning aspects of human<br />
rights that are relevant to operations, including the percentage of employees trained<br />
Total number of incidents of discrimination and actions taken<br />
Operations identified in which the right to exercise freedom of association and collective<br />
bargaining may be at significant risk, and actions taken to support these rights<br />
Operations identified as having significant risk for incidents of child labour, and measures<br />
taken to contribute to the elimination of child labour<br />
Operations identified as having significant risk for incidents of forced or compulsory labour, and<br />
measures to contribute to the elimination of forced or compulsory labour<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
Page<br />
82
Standard Disclosures Yes No Not<br />
Applicable<br />
Management<br />
Approach &<br />
Performance<br />
Indicators<br />
Social – Human<br />
Rights<br />
Social –<br />
Society<br />
Security<br />
Practices<br />
Indigenous<br />
Rights<br />
Disclosure on<br />
Management<br />
Approach With<br />
Reference to<br />
Society Aspects<br />
Community<br />
Percentage of security personnel trained in the organization’s policies or procedures concerning<br />
aspects of human rights that are relevant to operations<br />
Total number of incidents of violations involving rights of indigenous people and actions taken<br />
Use organization-specific indicators (as needed) and GRI performance indicators to show<br />
√ 67<br />
results of performance against goals<br />
Policy that defines the organization’s overall commitment √ 22-23<br />
The most senior position with operational responsibility or explain how operational<br />
√ 19-21<br />
responsibility is divided at the senior level<br />
Procedures related to training and awareness<br />
√<br />
Procedures related to monitoring and follow-up √ 52<br />
Any additional contextual information (e.g. key successes and shortcomings, major<br />
organizational risks and opportunities)<br />
Nature, scope, and effectiveness of any programs and practices that assess and manage the<br />
impacts of operations on communities, including entering, operating, and exiting<br />
Corruption Percentage and total number of business units analyzed for risks related to corruption √<br />
Percentage of employees trained in organization’s anti-corruption policies and procedures<br />
√<br />
Actions taken in response to incidents of corruption<br />
Public Policy Public policy positions and participation in public policy development and lobbying √<br />
Total value of financial and in-kind contributions to political parties, politicians, and related<br />
institutions by country<br />
Anti-<br />
Competitive<br />
Behaviour<br />
Compliance<br />
Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly<br />
practices and their outcomes<br />
Monetary value of significant fines and total number of non-monetary sanctions for noncompliance<br />
with laws and regulations<br />
Total number of incidents of non-compliance with regulations and voluntary codes concerning<br />
product and service information and labelling, by type of outcomes<br />
Practices related to customer satisfaction, including results of surveys measuring customer<br />
satisfaction<br />
√<br />
√<br />
Page<br />
√ 51,<br />
58-66,<br />
68-71<br />
√ 61-66,<br />
68-71<br />
√ 37<br />
√<br />
√<br />
√<br />
√<br />
√<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Annexures 83
Standard Disclosures Yes No Not<br />
Applicable<br />
Management<br />
Performance<br />
Indicators<br />
Social –<br />
Society<br />
Social<br />
– Product<br />
Responsibility<br />
Marketing<br />
Communications<br />
Customer Privacy<br />
Compliance<br />
Disclosure on<br />
Management<br />
Approach With<br />
Reference to<br />
Product Responsibility<br />
Aspects<br />
Customer<br />
Health &<br />
Safety<br />
Product service<br />
& labelling<br />
Programs for adherence to laws, standards, and voluntary codes related to marketing<br />
communications, including advertising, promotion, and sponsorship<br />
Total number of incidents of non-compliance with regulations and voluntary codes concerning<br />
marketing communications, including advertising, promotion, and sponsorship by type of<br />
outcomes<br />
Total number of substantiated complaints regarding breaches of customer privacy and losses<br />
of customer data<br />
Monetary value of significant fines for non-compliance with laws and regulations concerning<br />
the provision and use of products and services<br />
Use organization-specific indicators (as needed) and GRI performance indicators to show<br />
results of performance against goals<br />
Policy that defines the organization’s overall commitment √ 23<br />
The most senior position with operational responsibility or explain how operational<br />
√<br />
responsibility is divided at the senior level<br />
Procedures related to training and awareness<br />
√<br />
Procedures related to monitoring and follow-up √ 24-25<br />
Any additional contextual information (e.g. key successes and shortcomings, major<br />
organizational risks and opportunities)<br />
√ 39<br />
Life cycle stages in which health and safety impacts of products and services are assessed for<br />
improvement, and percentage of significant products and services categories subject to such<br />
procedures<br />
Total number of incidents of non-compliance with regulations and voluntary codes concerning<br />
health and safety impacts of products and services during their life cycle, by type of outcomes<br />
Type of product and service information required by procedures, and percentage of significant<br />
products and services subject to such information requirements<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
√<br />
Page<br />
84
Abbreviations<br />
AFR Alternative Fuel Resources<br />
Capex Capital Expenditure<br />
CCI Chamber of Construction Industry<br />
CDM Clean Development Mechanism<br />
CO2 Carbon dioxide<br />
EA External Audit<br />
EMS Environmental Management Systems<br />
FPEs Fatality Prevention Elements<br />
GRI Global Reporting Initiative<br />
HARP Holim Accounting & Reporting Standards<br />
HIP <strong>Holcim</strong> Information Platform<br />
HR Human Resources<br />
IA Internal Audit<br />
LKR Sri Lankan Rupee<br />
MDGs Millennium Development Goals<br />
MPPA Marine Pollution Prevention Authority<br />
NGO Non-governmental organization<br />
NOx Nitrogen oxide<br />
OH&S Organizational Health & Safety<br />
PCW Puttalam Cement Works<br />
PLC Programmable Logic Controller<br />
RCW Ruhunu Cement Works<br />
SAP Systems Applications Processes<br />
SMS Sustainable Management Systems<br />
SO2 Sulphur dioxide<br />
USD United States Dollar<br />
WBCSD World Business Council for Sustainable Development<br />
<strong>Annual</strong> <strong>Review</strong> & Sustainability Report 2006<br />
Annexures 85
Executive Team<br />
From left to right: Francois Goulut (Vice President Manufacturing),<br />
George Nicole (Vice President Alternative Fuels and Raw Materials-AFR),<br />
Rodolfo Montero (Vice President Marketing and Sales),<br />
Nandana Ekanayake (Vice President Finance), Peter Spirig (MD and CEO),<br />
Mahanama Ralapanawa (Vice President Logistics and Imports),<br />
Chandana Wijenama (Vice President Human Resources)
Corporate Information<br />
(as of 28th February 2007)<br />
Board of Directors<br />
Manilal Fernando<br />
Chairman<br />
Attorney at Law<br />
Colombo, Sri Lanka<br />
Paul Hugentobler<br />
Deputy Chairman<br />
Civil Engineer (MSc), MBA<br />
Jona, Switzerland<br />
Peter Spirig<br />
Managing Director<br />
Civil Engineer (MSc), MBA<br />
Colombo, Sri Lanka<br />
Tim Mackay<br />
Director<br />
Master Mariner<br />
Jakarta, Indonesia<br />
Gamini Marapana<br />
Non-Executive Director<br />
Attorney at Law,<br />
President’s Counsel<br />
Colombo, Sri Lanka<br />
Mano Selvanathan<br />
Non-Executive Director<br />
Graduate of Commerce<br />
Colombo, Sri Lanka<br />
M C Ramakrishna<br />
Non-Executive Director<br />
Electrical Engineer (BEng)<br />
Bangalore, India<br />
Bankers<br />
Citibank<br />
Commercial Bank<br />
Deutsche Bank<br />
Hatton National Bank<br />
HSBC<br />
People‘s Bank<br />
Standard Chartered Bank<br />
Auditor<br />
Ernst & Young Chartered Accountants<br />
Company Secretaries<br />
F.J. & G. De Saram<br />
216, De Saram Place,<br />
Colombo 10<br />
Registered Office<br />
<strong>Holcim</strong> (Lanka) Ltd<br />
216, De Sarams Place,<br />
Colombo 10<br />
Head Office<br />
<strong>Holcim</strong> (Lanka) Ltd<br />
75, Braybrooke Place,<br />
Colombo 2<br />
Website: www.holcim.lk<br />
E-mail: info-LK@holcim.com<br />
Tel: +94 11 2310910<br />
Fax: +94 11 2300522<br />
For information on Sustainability reporting<br />
contact:<br />
Rathika de Silva<br />
Head of Sustainable Development<br />
Mobile: +94 77 7749527<br />
E-mail: rathika.desilva@holcim.com
www.holcim.lk