60733es Holcim Annual Review 2006.indb

Annual Review & Sustainability Report 2006

Safety First 

Responsibility and accountability begin with safety. Holcim is proud of maintaining its zero-hazard 

policy towards employees, families, the community and the environment.

Why Water, Earth and Life? 

Water, earth and life are elements that are inextricably linked – elements that form an 

axis to the continuance of life on this planet. We are an integral part of that cycle of 

survival and its continuance and the business we are in must be responsible to maintain 

that cycle. Just as much as we use resources for economic benefits, we must in turn, 

plough back resources to ensure that a sustainable milieu will be assured for the future 

generations to live, thrive and enjoy. 

At Holcim Lanka, water, earth and life are the three platforms that constitute our 

wholehearted attention for sustainable development. It is this reason that prompted us 

to base the Holcim Lanka Awards to recognize outstanding sustainable community and 

national development projects that have contributed in uplifting the living standards 

of the communities they serve. Cement plays a key role in society and reflects Holcim’s 

vision of building foundations for society’s future. 

We are committed to ensuring continued sustainability of life by proactively preserving, 

conserving and creating awareness among our stakeholders of the importance of 

maintaining a planet that will sustain the future. 

This report is a detailed review of the year 2006. It gives within these pages, a 

comprehensive Annual Review, key facts and figures and a Sustainability Review that 

highlights local initiatives across the triple bottom line. Holcim Lanka is not a quoted 

company and is therefore not required to present in-depth financial reporting. However, 

with transparency and accountability being fundamental premises upon which we 

have grown our business, we have striven to present all information in this report as 

comprehensively and accurately as possible, so that you our stakeholders will be clearly 

appraised of your company’s operations, workings and impact of its actions on the varied 

stakeholder segments. 

Annual Review & Sustainability Report 2006 

1

School and Pre-school built by the Holcim Fund at Kosgoda 

Our most treasured contribution is ultimately the enormous end-benefit that our efforts deliver to the roots of human 

future - the children - who are given a horizon to look forward to with security. 

Contents 

2

Contents 

Introduction 

Global Outlook, Local Feel 5 

Scope of this Annual Review & Sustainability Report 6 

Annual Review 2006 

CEO’s Review of Operations 9 

Sri Lankan Economic Indicators 2006 11 

The Cement Industry in Sri Lanka 13 

The Cement Market in 2006 13 

The Cement Market Beyond 2006 13 

Holcim Leads the Industry 14 

Sustainability Report 2006 

Preamble 17 

Background & Strategy 18 

Why is a Sustainability Review Important to Holcim Lanka? 18 

Our Sustainabillty Platforms 18 

The Business Principles that Drive Sustainability 19 

Who Drives Sustainability? 19 

Sustainable Development Principles & Applications 22 

Project SMS 24 

Corporate Governance & Management Systems 24 

Economic Impact 27 

10 Years of Investments 27 

Value Addition to the Economy 27 

For Our Shareholders, For Our Valued Business Partners 28 

Our Plants on a Continuous Growth Cycle 30 

Holcim in the Market 33 

Environmental Impact 41 

Project Selection & Methodology 41 

Climate & Energy 43 

Waste Management 45 

Social Impact 51 

Multi-Stakeholder Engagement 52 

For Our People 53 

Health & Safety 58 

Housing & Infrastructure 61 

Livelihood Support 64 

Education 66 

Progress Towards Targets 67 

Special Report 68 

Helping Them Stand Undefeated - Tsunami Work 

Concluded 68 

And Our Journey Continues... 

Our Sustainable Journey at Global Level 72 

A Sustainable National Contribution for 2007 & Beyond 73 

Holcim Lanka Partners IUCN Sri Lanka in Biodiversity 

Conservation 74 

Annexures 

Organizational Structure 75 

Our Compliance Tracked Against the Global Reporting 

Initiative - Standard Disclosures 76 

Abbreviations 85 


3

The Holcim Group is 

the largest cement 

company in Sri Lanka 

VISION 

To be the leading and preferred supplier of cement and related building materials to build foundations for Sri Lanka’s future. 

MISSION 

To be Sri Lanka’s most respected and attractive company - creating value for all our stakeholders

Global Outlook, Local Feel 

Holcim is a worldwide leading supplier of cement and aggregates as well as downstream activities 

such as ready-mix concrete and asphalt and related services. The Group is present in more 

than 70 countries on all continents with a strong focus on emerging markets. Holcim recently 

acquired two large companies in India, the Associated Cement Companies and Gujarat Ambuja 

Cements, which reinforces the ambition to participate in the opportunities offered by growing 

economies around the globe. Holcim employs more than 60,000 people worldwide. 

Holcim Lanka is a member of the global Holcim Group and is Sri Lanka’s preferred supplier of cement. 

Being the market leader in the cement industry, the company focuses on economic, social 

and environmental performance along the triple bottom line of sustainable development. The 

company currently operates the only fully integrated cement plant in Sri Lanka, which is in Puttalam, 

while also operating a grinding plant in Galle and warehouses in Kurunegala, Peliyagoda 

and Anuradhapura. A new grinding plant is planned for Trincomalee for better customer focus 

and coverage. 

Holcim Lanka at a glance 

• Sales of 1.2 million tons of cement per annum 

• Operates a fully integrated cement plant and a grinding unit located in different areas 

of the country 

• Covers all nine regions of Sri Lanka with cement and related services 

• Offers application-based cements with the main brands being Holcim Supiri for 

concrete, Holcim Pedereru for masonry applications, Holcim Seegra for precast 

products and several other application-based cements for specific construction 

requirements. Holcim Lanka also provides a host of technical services as construction 

solutions to its customers 

• Employs approximately 1000 (own employees as well as third party contractors) 

• Generated annual revenues of approximately LKR 11 billion (USD 102 million) in 2006 

Spanning all continents. Enriched with people from all over. Drawing ideas and inspiration from all corners for a better tomorrow. 

Our parent company Holcim Limited’s Annual Report 2005 featured Holcim Lanka very 

prominently. It highlighted Holcim Lanka’s contribution to the Group’s performance and 

commended the achievements of the Holcim Fund for Reconstruction in Sri Lanka. We 

are extremely proud of our Holcim family who have unitedly worked hard to conquer new 

heights and this recognition is certainly worthy of their hard work. The publication is the 

global flagship for Holcim and is a ‘must read’ for shareholders and other key stakeholders. 

It also plays a key role for the Group at stock exchanges around the world. 


Introduction 5

Scope of this Annual Review & Sustainability Report 

This report details and reviews activities and data related to Holcim Lanka’s operations 

in Sri Lanka and, wherever applicable, to any overseas concerns pertaining to the year 

2006, ending 31 st December, across the triple bottom line vis-à-vis economic, social and 

environmental performance. The Sustainability Report provides information on the practices 

and processes involved in our sustainability endeavours and includes a special report of the 

tsunami reconstruction efforts completed this year. Each chapter includes progress reports, 

performance data and case studies of local initiatives. 

In developing this report, we have striven to embed the guidelines laid down by the Global 

Reporting Initiative (GRI), which offers a comprehensive framework for reporting a company’s 

activities and impact. We believe that the GRI is a core tool for sustainability reporting and 

utilize the recommendations to present an inclusive approach of our interactions with our 

stakeholder groups. We have also taken on board the guidelines issued by the Association of 

Chartered Certified Accountants whose global initiative in pioneering sustainability reporting 

has set benchmarks for reporting standards. 

Apart from a strong focus on operational results, Holcim is committed to social responsibility 

and environmental performance. Being a part of a global network, our local performances 

are measured against global targets and processes, and we remain firmly ingrained on the 

standards and best practices stipulated by our parent company, which permeates through the 

entire Group. Thus, Holcim Lanka has the ability to benchmark itself regularly and improve a 

number of parameters including plant performance, environment performance, health and 

safety measures and internal audit. 

Target Audience 

Our intended target audience for this report in the immediate forum includes, but is 

not limited, to our core stakeholder groups – customers, employees, valued business 

partners, shareholders and the community, and in the broader context, potential investors, 

regulatory authorities, parliamentarians, decision-makers, academics, non-governmental 

organizations(NGOs), multinational companies, advocacy groups, industry leaders, chambers 

of commerce, social leaders, environmental bodies and individuals who would be interested 

in Holcim Lanka for varied reasons. 

Holcim holds membership in global organizations that practice and set standards for industry 

and for sustainability. 

Holcim 

• Is a co-founder of the World Business Council for Sustainable Development’s 

Cement Sustainability Initiative which supports the UN Global Compact. The UN 

sponsored Global Compact is a voluntary international citizenship initiative under the 

aegis of the Secretary General which calls for commitment to universal principles in human 

rights, labour standards and environmental sustainability. 

• Has a strategic alliance with the German Technical Co-operation to introduce, promote 

and support the co-processing of waste in cement kilns worldwide. The joint initiative 

is called the ‘Drafting and Model Application in Selected Countries of Internationally 

Recognized Guidelines Governing the Co-processing of Waste Materials in Cement 

Production’. 

• Is the acknowledged ‘leader of the industry’ in the Dow Jones Sustainability Index 2006. 

The Dow Jones Sustainability Indices are the pioneering global indices tracking financial 

performance of the leading sustainability-driven companies worldwide, providing reliable 

and objective benchmarks to manage sustainability portfolios. 

• Has been repeatedly included in the FTSE4Good, which has been designed to measure 

the performance of companies that meet globally recognized CSR standards. 

• Is a member of the Ethibel Sustainability Index, which provides a comprehensive 

perspective on the financial performance of the world’s leading companies in terms of 

sustainability. 

All disclosures in this report have been truthfully documented. The intention is to share our 

information in a systematic and standardized format that would give our stakeholders a true 

and fair picture of our efforts during the year. However, given that this is our first effort in 

formatting a sustainability report, there will be shortcomings in our efforts which we intend 

to rectify as the process matures year after year. 

6

Annual Review 2006

A firm foundation 

Rapidly declining third-party contractor accidents, substantial increase in sales and operating profits, 

employee satisfaction and community recognition of sustainable development policies - Holcim 

continues its unflagging impressive performance.

CEO’s Review of Operations 

Holcim Lanka continued to show an impressive performance. In 2006, we have not 

experienced any lost time incidents to our own workers, while accidents involving thirdparty 

contractors are rapidly reducing. Sales and operating profits are up substantially again. 

Net income is firmly in line with our capital cost, rendering Sri Lanka competitive within the 

Holcim Group for investments. Add employee satisfaction and feedback from the public to 

get a full testimony of our solid and sustainable performance. 

In 2006, the Sri Lankan economy did remarkably well, driven predominantly by continued 

healthy levels of domestic consumption caused by favourable global markets and remittances 

from Sri Lankans working overseas. Unfortunately, war-like hostilities have increased and the 

Ceasefire Agreement established in 2002 is now defunct. The construction industry kept up 

reasonably well. Despite a virtual standstill in tsunami reconstruction efforts, investments 

in fixed assets – from large-scale condominiums to small extensions to rural houses drove 

the industry’s growth. 

Manilal Fernando 

Chairman 

Peter Spirig 

MD/CEO 

Paul Hugentobler 

Deputy Chairman 

Our top-line grew by 20% to LKR 10.4 billion on account of a 10% volume increase and better 

price realizations. Our operating profits rose to LKR 1.706 billion with net income for the 

first time in eight years matching with our cost of capital. On the flip side, the government 

decided to subject cement to price control again as of November 2006 (after having it 

rescinded in January 2006), sending a strong signal of arbitrariness and uncertainty to 

prospective new investors that contemplate Sri Lanka for their investments. 

While keeping our market share steady at 30%, we continued to promote the concept 

of application-based cements. Supiri continues to be the mainstay product for general 

construction purposes and Pedereru finds increasing acceptance as the perfect solution for 

wall-building and plastering. In 2006, a full 7% of our entire sales were Pedereru sales and 

the figure is rising. 

Holcim Lanka’s environmental and social initiatives and related performance are detailed 

within the Sustainability Report found in this report. It must be mentioned here that the 

Holcim Fund for Reconstruction which was initiated to rebuild lives through the construction 

of homes and schools for the tsunami victims, was terminated. Having met our targets of 

building 670 homes and reconstructing seven schools in seven districts around the affected 

coastline, together with our partners, we bade a final farewell to all those we had assisted 

during the two years since the disaster. I am truly appreciative of the employees of Holcim 

Lanka who formed the nucleus of the Fund, establishing the vital base for our Group and 

allied partners to build upon. A Special Report within the Sustainability Report will highlight 

the efforts of the Fund. 

Again and again, our company serves our customers and stakeholders at large alike along 

the principles of the triple bottom line pertaining to sustainable development, both now 

and in the future. 


Annual Review 2006 9

Building on the past, cementing the future 

From creating application-based cement and maintaining market leadership to educating 

customers and building powerful stakeholder-value across the board, Holcim Lanka continues 

to pave the way to becoming the most admired cement company in Sri Lanka.

Sri Lankan Economic Indicators 2006 

The economy continued its growth momentum from 2005. International oil prices continued to 

be adverse throughout the first nine months of 2006 and security concerns also had an effect in 

the later part of the year. According to the Central Bank of Sri Lanka , the economy grew in 2006 

(official figures for 2006 have not yet been published by the Central Bank), which is slightly 

higher than the upper margin of the historical average growth rate. 

Exports have increased by 8.8%, while imports grew by a staggering 17.4% (as at end September 

2006) which led to an increase in the balance of trade by 38.4% (January - September 2006) to 

USD 2,597 million. Overseas worker remittances increased to USD 1,726 million for the first nine 

months, which had a positive impact on the external trade balance. 

Key Growth Indicators 

10.0% 

9.0% 

8.0% 

7.0% 

6.0% 

5.0% 

The Central Bank credit to government alone jumped from 61.9 billion in March to 108.3 billion in 

October, as the monetary authority did not raise interest rates sufficiently to draw savings from 

the public into the treasury. However, the Central Bank credit to government would be limited 

to 11.5 billion in 2007 as the Central Bank is obliged by law to print and advance up to 10% of 

the government’s revenue at the beginning of each year, despite it being contrary to one of the 

Bank’s main objective of achieving price and economic stability. The revision in electricity tariffs 

yet again had a significant impact on local manufacturing companies. This had an impact on 

manufacturers and exporters as their products were found to be less competitive due to higher 

production costs. Holcim Lanka too felt the impact since energy costs account for a major 

portion of the variable costs of the company. 

4.0% 

3.0% 

2.0% 

1.0% 

0.0% 

-1.0% 

-2.0% 

2001 2002 

2003 2004 2005 2006 

With increased economic activity unemployment has decreased. As per the Statistics 

Department of the Central Bank, the labour force grew by approximately 1% to 8.1 million in 

2005 and is expected to increase further to 8.2 million in the full year of 2006. 

Source: Central Bank of Sri Lanka, Projected Data 

GDP Growth Construction Growth Cement Market Growth 

The Sri Lankan Rupee (LKR) devaluated significantly during 2006, sliding from LKR 102 per USD at 

the beginning of 2006 to LKR 109 which is a 6-7% devaluation during the period. The Sri Lankan 

Government had spent around USD 380 million in order to reduce the effect of the devaluation 

against USD for the year 2006. 



Sri Lanka’s inflation began spiralling from March 2006 as the fiscal side buckled due to an 

intensifying conflict. This forced the treasury to turn to the Central Bank to finance its cash 

deficit, boosting inflation which was until that point lingering around 6.4%. At the end of 

2006, inflation stood at 10% throughout the country. However, this position eased due to 

some physical measures adopted by the Central Bank including the 50% cash requirement on 

a selected number of import goods and the increase of interest rates by 125 basis points during 

the year to 11.5%. 

The economy is poised to grow by 7.5% in 2007 with the growth being broad-based. All three 

sectors are expected to grow at healthy rates. To further facilitate sustainable growth, it is 

essential to continue with critical infrastructure projects already identified in the areas of ports 

and power, in order to spur the growth of the entire economy. The government has planned 

several highway projects such as the Southern Highway, the Colombo–Kandy Expressway and 

the Colombo–Katunayake Expressway as well as development of the Trincomalee, Galle and 

Hambantota ports. Further, the Government has pledged to begin the development of the 

second international airport in Weerawila. The realisation of the above stated infrastructure 

projects however remains highly dependent upon the availability of foreign funding to the 

Government. 

12

The Cement Industry in Sri Lanka 

The Cement Market in 2006 

The construction industry performed well with a growth of 6.8%. As a result, the overall cement 

market also gathered momentum and it hit 3.8 million tons in 2006. This was an increase 

of 6.7% compared to 2005. In the Western Province around Colombo, many condominium 

apartment building projects sprang to life, while it was the house builder segment that 

spearheaded growth in other parts of the country. 

However, the shortage of sand remained a thorny issue due to government prohibition of 

river sand mining in some crucial areas which have been catering to the main economic nerve 

points of the country. 

The depreciation of the LKR against the USD caused pressure on the cost of our (predominantly 

foreign currency denominated) supplies which had a cascading effect on all cement 

importers, as about 65-75% of their costs are dependent upon exchange rates. Local cement 

manufacturers also fell victim to the revision of electricity tariffs, which had a considerable 

negative effect on production costs. 

The Cement Market Beyond 2006 

The Government with its latest budget proposal has focused on the improvement and 

development of infrastructure facilities in the country; if this momentum continues, it would 

clearly drive economic growth and hence would have a considerable effect on the construction 

industry. However, these projects are highly dependent upon the Government’s ability to 

convince donor agencies to fund such projects. While the industry awaits the initiation of 

these infrastructure projects, we believe that the major drive for the construction industry 

is expected to come from healthy levels of general demand fuelled by an average Gross 

Domestic Product growth of 6%. But two major concerns that continue to fuel uncertainty in 

the development agenda are the volatility of Government policies and the future of the peace 

process in the country. 

Volumes in Metric Tonnes (MT) 

Sri Lankan Cement Market (Volumes) 

4,000,000 

7% 

9% 

3,500,000 

7% 

9% 

3,000,000 

5% 1% 

2,500,000 

2,000,000 

1,500,000 

30% 30% 

34% 31% 27% 30% 

9% 

10% 

-4% 

1,000,000 

-9% 

14% 

-3% 

500,000 

0 

2001 2002 2003 2004 2005 2006 

YOY Growth 

Total Market 

Holcim Lanka Market Share 

Holcim Lanka Dispatch 

On the supply side, most parts of the Middle East, South Asia and SouthEast Asia are 

experiencing an increase in cement demand due to booming internal construction growth. 

This will continue to restrict the cement and clinker net exports from various countries 

adjacent to Sri Lanka. 



Holcim Leads the Industry 

Uplifting the industry through the value chain 

In 2006, Holcim Lanka yet again sold more 

than one million tons of cement. Application-based 

cements, namely Holcim Supiri, 

Holcim Pedereru and Holcim Seegra, helped 

in building strong brand equity. Market 

leadership was maintained with a 30% 

market share, the highest brand equity and 

the highest net realization per ton. 

Holcim Lanka’s initiative of converting a 

typical general purpose cement market 

into an application-based cement market 

has permeated higher benefits to the end 

customer. Consequently, on this platform, 

Pedereru (masonry cement) sales increased 

rapidly, while a successful WebSALES online 

system was also launched in 2006, with the 

primary focus of providing enhanced customer 

service, especially for the bulk customer 

segment. 

Holcim Lanka with is customer-focused 

thinking initiated the Mahagedara Retail 

Chain concept in mid 2006. The Mahagedara 

Retail Chain, which provides services 

and construction solutions to house builders, 

opened three franchise stores in the 

country. The retail stores have shown great 

potential in attracting customers by paving 

the way for a one-stop-shop solution, housing 

leading quality building materials. The 

concept, which has already attracted support 

from leading brands speaks positively 

for the success of this initiative. 

Holcim Lanka also concentrated significantly 

on Alternative Fuel Resources (AFR) 

to reduce the dependency on coal, which is 

an expensive component in our production 

process. Housed in a fully-fledged AFR Lab 

comprising modern analytical equipment 

that would maintain stringent quality 

standards, Holcim Lanka has installed new 

weight feeders, and new shredding and 

granulating units. The company also significantly 

invested in safety, which remains 

a fundamental tenet in stakeholder safeguard, 

ensuring that Holcim Lanka benchmarks 

and maintains global best practices 

and standards in safety. 

Holcim Lanka is only involved on the cementitious 

materials aspects. As the Holcim 

Value Chain itself shows we consider all our 

valued stakeholders within the complete 

value chain in order to identify and cater to 

new needs of our valued customers. 

Holcim Lanka Value Chain 

Supply 

Basic Materials 

Processing 

Cementitious 

Materials 

(cement, 

mineral 

components) 

Aggregates 

(sand, gravel, 

stone, recycled 

aggregates) 

Channels 

Transactional Transformational* 

Direct Sales 

Distributors 

Retailers 

Direct Sales 

Ready - mix 

Concrete 

Concrete 

Products 

Mortars 

Asphalt 

* Concrete products to be considered as "end-users" for application purposes only 

End-users 

General 

Contractors 

Self-builders 

Masons 

Civil 

Engineering 

Demand 

Applications and 

Construction Fields 

A 

p 

p 

l 

i 

c 

a 

t 

i 

o 

n 

s 

Housing 

Commercial/ 

Industrial 

Building 

Infrastructure 

14

Sustainability Report 2006

Preamble 

This review will document Holcim Lanka’s continued commitment towards sustainable 

development in Sri Lanka and in that process the world-class best practices, standards and 

methodologies that have been imbued into creating a sustainable milieu for our stakeholders. 

Our attitude to sustainable development has challenged us to take a hard look at our business 

model, understand the implications and impact of our actions and make a concerted effort to 

make a change to as many stakeholder segments as we possibly can. 

The sustainability ethos at Holcim Lanka is an inclusive proactive approach that is driven by the 

Managing Director and into which our employees, business partners and other stakeholder 

segments buy in and participate wholeheartedly. This has therefore seen a culture of ownership 

and accountability become established in each initiative that has been implemented, where 

the impact of our collective actions has been tangibly seen in a background of understanding, 

tolerance, equality and empowerment. 

The theme of this review is ‘Water, Earth and Life’ where Holcim Lanka has been broadly 

involved in projects based on these trusses – trusses that make up the very core of 

sustainability. Whether it’s the manufacturing process, raw material sources, health, safety, 

human resources, the community or the environment, water, earth and life are integral links 

to the chain of continuance, of survival and of sustainability of life. We are very conscious that 

as an industry leader, we are tasked with the responsibility of leading by example, to walk the 

talk and to create an environment that will ensure all stakeholders are assured of the right to 

a safe, secure and healthy life. While our focus is on creating a sustainable business model, 

we also know that in achieving that goal, there are impacts on society and the environment. 

Over the years, we have worked to minimize these effects and in some instances led global 

initiatives that would make a difference in the lives we interact with daily. 

Each year, we try to map a more comprehensive footprint that will help us to work towards a 

cohesive vision steeped in good fundamentals, where we will live our values and where the 

sincerity of our actions, transparency of our deeds and accountability to all stakeholders will 

be paramount in everything we do. We believe that a strong corporate responsibility ethic 

will help us deliver value to our core stakeholder groups comprising customers, shareholders, 

valued business partners, employees and our community. 

Creating a sustainable milieu for Sri Lanka through ‘Water, Earth and Life’ 


Sustainability Report 2006 17

Background & Strategy 

(OH&S), product and service development, 

people development, livelihood support 

for local communities, natural resources 

efficiency, emissions control and waste 

management. 

Our Sustainability Platforms 

Economic 

Why is a Sustainability 

Review Important to 

Holcim Lanka? 

Our core business is fundamental in helping 

people gain access to basic human needs, 

ranging from shelter to drinking water. 

Extending beyond this service to society, 

we, as a sustainability-driven company 

are committed to helping people and the 

environment to grow with us, paving the 

way for a sustainable future for us all. At 

Holcim Lanka, in addition to our focus 

on the sustainability of the business, we 

are strongly committed to continuously 

delivering value to our core stakeholder 

groups comprising customers, shareholders, 

business partners, employees and the 

communities around our operations. We 

demonstrate this commitment by engaging 

in a wide range of sustainability platforms 

including Occupational Health & Safety 

This is our first comprehensive Sustainability 

Review, wherein we have striven to 

streamline our reporting process, which is 

still in a fledgling state. However, the process 

has been a learning curve for us all and 

has pointed us towards making the reporting 

process more streamlined for the future. 

The Sustainability Review is of paramount 

importance to our company as sustainability 

forms the basis of our performance 

that falls in line with the triple bottom line 

concept. This year’s theme, namely ‘Water, 

Earth and Life’, accurately reflects our direction 

because, together, these elements form 

the very core of sustainability. 

In this report we highlight our sustainability 

efforts during the year. The report has 

also helped us identify the gaps that exist 

within the sustainability platforms we 

work on, enabling us to initiate plans and 

processes to bridge those gaps. It is now 

up to us to make these plans and processes 

to continuously improve our sustainability 

performance a reality in 2007. 

Peter Spirig 

Social 

Health & Safety 

Education 

Housing & Infrastructure 

Livelihood Support 

National Impact 

Industry Impact 

Business Sustainability 

Our 

Sustainability 

Platforms 

Responsibility 

Climate & Energy 

Waste Management 

Period of Reporting 

This report covers a reporting cycle from 1 st January to 31 st December 2006. 

Environment 

18

The Business Principles that Drive Sustainability 

Working on the precept of mutual benefit, our business principles are driven to deliver value to our 

core stakeholder groups, identifying future risks and opportunities while calculating the return on 

our social and environmental investments. 

• For our customers, we will strive to deliver world-class products that are innovative and are 

value for money 

• For our people, we will create a knowledge enhancing culture that empowers them to be 

dynamic, creative, united and to engage in entrepreneurial excellence aligned with career goals 

embedded in values and ethics 

• For our valued business partners, we will permeate best practices and global standards that 

would uplift the entire industry 

• For our environment, we will ensure that our manufacturing and production processes will not 

knowingly harm people or resources, and will minimize the negative impacts our business will 

have on human life and the environment at large 

• For our communities, we will harness meaningful social relationships to ensure that a 

sustainable milieu is created for mutual development 

Who Drives Sustainability? 

Sustainable Development Group Structure 

Managing 

Director/ 

CEO 

Head of 

Sustainable 

Development 

Sustainable 

Management 

System (SMS) 

Coordinator 

Environmental 

Manager 

Organization 


(OH&S) Manager 

Quality 

Assurance 

Manager 

Corporate Social 


(CSR) & 

Communication 

Manager 

OH&S Officer 

Road Transportation 

(as of Q2 2007) 

OH&S Officer 

Puttalam Cement 

Works 

OH&S Officer 

Ruhunu Cement 

Works 

CSR Officer 

Puttalam Cement 

Works 

CSR Officer 

Ruhunu Cement 

Works 



Roles & Responsibilities 

Environmental Manager 

• Consolidating and analyzing monitoring and measurement parameters related to the 

environmental performance of the company 

• Reporting on the performance of the Environmental Management System (EMS) and 

needs and recommendations for improvement 

• Liaising with external parties on matters relating to the EMS 

• Ensuring that EMS requirements in the Ruhunu and Puttalam Plants are implemented and 

maintained in accordance with ISO 14001:2004 

• Coordinating with environmental authorities, and maintaining and updating the legal 

register 

• Coordinating management review meetings 

• Ensuring that corrective and preventive action is taken for environment-related 

nonconformities in the plant 

• Initiating and strengthening external communication with regard to environmental 

promotion, awareness and complaint handling 

• Initiating internal communication with regard to environmental promotion and internal 

environmental complaints 

• Developing environmental programs 

Sustainable Management System (SMS) Coordinator 

• Reporting Internal Audit activities and follow up status to the Management Review 

Committee 

• Ensuring that all processes required for Sustainable Management System (SMS) 

requirements are established, implemented and maintained according to the ISO 

9001:2000, ISO 14001:2004 and OHSAS 18001:1999 certification standards 

• Reporting to top management on the performance of the SMS and any need for 

improvement 

• Promoting awareness of customer requirements throughout the organization 

• Liaising with external parties on matters relating to the SMS 

Organization Health & Safety (OH&S) Manager 

• Looks into the welfare and safety of employees, service contractors and visitors, as well as the 

safety of machinery and equipment of the plants and warehouses 

• Develops hazard control designs, methods, procedures and programs; implements, 

administers and advises line management on hazard controls and hazard control programs 

• Measures, audits and evaluates the effectiveness of hazard controls and hazard control 

programs and anticipates, identifies and evaluates hazardous conditions and practices 

• Formulates, recommends and provides investigation report for an effective insurance claim 

to damages of plant equipment and facilities including that of cement terminals and the 

effective management of industrial risks focusing on preventing these from turning into 

accidents 

Corporate Social Responsibility & Communication Manager 

• Developing Holcim Lanka’s CSR strategy and integrating it to the company’s business 

plan 

• Ensuring Community Advisory Panels are set up and needs assessments are conducted as 

required at each manufacturing site 

• Reviewing/evaluating Holcim Lanka’s social responsibility initiatives with the relevant 

stakeholders; identifying partners and projects along the lines of the company’s CSR 

strategy 

• Planning and producing the quarterly publication of the company’s internal and external 

magazines, thus enhancing the corporate identity of Holcim Lanka 

• Publishing Holcim Lanka’s Annual Review and Sustainability Report 

20

Stakeholder Engagement Cycle Stakeholder Group Frequency of Dialogue Form of Engagement 

Identify the stakeholders 

What are the needs of our stakeholders 

(Needs Assessment) 

What impact do we/they have on/from our 

operations (Impact Assessment) 

Appointment of 

Community Advisory 

Panel 

Assess the viable CSR 

project to fulfil needs 

of stakeholders 

Integrate into Business Plan 

Implementation of the projects 

Measure performance 

Feedback & re-evalutions 

Economic Performance 

Board of Directors Quarterly Meeting 

Executive Committee Monthly Meeting 

Central Safety Committee Bi-monthly Meeting 

Management Coordination (Relevant 

Divisional and departmental heads) Monthly Meeting 

Leaders’ Group (Senior Management team) Half yearly Workshop 

Company Development Council Bi-monthly Meeting 

Distributors Daily/Weekly Discussions, Meetings 

Cement Dealers Weekly, Annually Conferences 

Industrial Customers Daily, Weekly, (Based on Requirement) Discussions, Meetings, Conferences 

Masons (influences a purchase) Annually Training, Demonstrations 

Employees Daily Multiple 

Trade Unions Daily Multiple 

Environmental Performance 

EIA Technical Assessment Committee Monthly Meeting 

Designated National Authority for CDM Projects Regularly, reporting Annually Discussion 

Provincial Environmental Authority Monthly, Bi-annually Discussions, Meetings, Site Visit 

Ministry of Environment Based on Requirement Discussions, Meetings 

Central Environmental Authority Monthly/Bi-monthly, Annually Discussions, Conference 

Community Around the Plants Quarterly Discussions, Meetings 

Geological and Mine Survey Bureau Yearly Site Visit, Discussion 

Social Performance 

Community Advisory Panels Annually/Bi-annually Review Meeting 

Community Emergency Response teams Bi-monthly Training & Review Meetings 

Reviews to Local Community Quarterly Presentations, Discussions 

Recipients of Livelihood Support Project-based Discussions 

Educational Institutions in Local Areas Quarterly Discussions, Meetings 

Religious Groups in Local Areas Bi-monthly Discussions 

School Children in Local Community Bi-monthly Presentations 

Masons Annually Demonstrations, Training 

Farmers of Local Community Project-based Discussions 

Local NGOs Project-based Discussions, Meetings 



Sustainable Development Principles & Applications 

Safety 

Environment 

Safety 

Governance 

and Compliance 

Quality 

Vision: With You in Mind, we assume responsibility and accountability to assure a safe work 

environment with Zero Harm to our employees, our families, the community and the 

environment 

Holcim Cardinal Rules 

• Do not override or interfere with any safety provision 

• Personal Protective Equipment rules applicable to a given task must be adhered to at all 

times 

• Isolation and Lock Out Procedures must always be followed 

• No person may work if under the influence of alcohol or drugs 

• All injuries and incidents must be reported 

Principles 

Application 

All occupational injuries can be prevented 

Management safety observation tours and associated interventions are a 

must 

Employee involvement is essential 

Without exception, all operations must be performed safely and with minimal 

environmental impact 

All personnel have the right and responsibility to stop any work they feel may 

be unsafe; they must immediately inform their supervisor if they think the 

work they are about to commence is unsafe or becomes unsafe at any time 

during their job 

Working and following Holcim’s OH&S policies and procedures as well as the 

Cardinal Rules are conditions of employment 

We will promote off-the-job safety for our employees and other stakeholders 

Develop and maintain a safe work environment through attitude and systems 

of work practices within the scope of legislative provisions 

Provide necessary guidelines and training on principles of industrial safety, 

ergonomics and industrial hygiene 

Provide adequate personal protective equipment to protect employees, 

contractors and visitors from hazards that cannot be otherwise eliminated 

or controlled 

Ensure that employees are fit for purpose; monitor fitness for purpose 

regularly, ensure that safety/medical emergency procedures are disseminated 

to employees and maintain adequate clinic and first aid facilities 

Conduct safety tours and audits to monitor effectiveness of existing policies/ 

procedures, identify work practices/conditions that are potentially harmful to 

employees and actively take corrective measures as reasonably practicable 

22

Environment 

Principles 

We want to continuously improve our environmental performance and 

provide positive contributions to the community as well as to our business 

Governance and Compliance 

Principles 

Our organizational structure and procedures aim at protecting the legitimate 

interests of our stakeholders in an appropriate and effective way 

Application 

Quality 

Principles 

Application 

Understand our customer requirements and seek to satisfy their needs 

and expectations consistently 

Set and review periodically our quality objectives and targets, and provide 

adequate resources and controls to ensure effective implementation 

Investigate and introduce new products and services that meet evolving 

customer expectations 

Provide our employees appropriate training and support thereby 

maintaining a competent workforce that is quality conscious 

Periodically review all our processes to maintain customer orientation and 

quality of products and services 

Communicate our quality efforts to all our stakeholders, including our 

employees, the public and relevant authorities 

In producing and delivering cement, we commit to consistent levels of 

quality that meet locally and internationally accepted standards as well 

as customer expectations 

Understand our customer requirements and seek to satisfy their needs 

and expectations consistently 

Set and review periodically our quality objectives and targets, and provide 

adequate resources and controls to ensure effective implementation 

Investigate and introduce new products and services that meet evolving 

customer expectations 

Provide our employees appropriate training and support thereby 

maintaining a competent workforce that is quality conscious 

Periodically review all our processes to maintain customer orientation and 

quality of products and services 

Communicate our quality efforts to all our stakeholders, including our 

employees, the public and relevant authorities 

Application 

All business transactions are recorded in a true, fair and timely fashion 

In accordance with established procedures, appropriate accounting 

systems, controls and audits, we ensure the reliability and accuracy of our 

accounts, records and reports 

Respect the principles and rules of fair competition prohibiting anticompetitive 

behaviours and the abuse of a dominant market position 

We will not offer or provide, either directly or indirectly, any undue pecuniary 

or other advantage for the purpose of obtaining, retaining, directing, or 

securing any improper business advantage 

We are expected to adhere to these Sustainable Development Principles in both letter and 

spirit. Violations against these principles and policies will not be tolerated. Non-compliance 

may be subject to disciplinary sanctions including termination of employment. 



Project SMS 

Formally launched in December 2006, Project SMS (Sustainable Management System) is 

aimed at integrating the three separate management systems within the company, namely 

the Quality Management System certified to ISO 9001:2000, Environmental Management 

System (EMS) certified to ISO 14001:2004 and Occupational Health & Safety (OH&S) System 

certified under OHSAS 18001:1999. The integration is expected to deliver a host of benefits to 

stakeholders and the company. 

The purpose of the integration is to ensure that the systems adhere to certification 

requirements and complies with the following specifications: 

• Alignment with Holcim Lanka’s Sustainable Development Principles 

• Compliance with Holcim Group standards 

• Inclusion of procedures of staff functions 

• Availability to users in most convenient and accessible format 

Project SMS is designed and documented to promote a mindset for continuous improvement 

of the system, a Plan-Do-Check-Act cycle within the organization and develop an organizational 

structure comprising trained personnel who will maintain and continually improve the SMS. 

Holcim Lanka firmly believes that Project SMS is a totally inclusive project that involves every 

single employee, and therefore a credible and informative message is cascaded to everyone 

to avoid ambiguity. 

Corporate Governance & Management Systems 

The Organizational Regulations, in line with the Company’s Articles of Association, clearly set 

out the organization structure of the Board of Directors and the Executive Committee, and 

governs the tasks and powers conferred on the company’s corporate bodies. In addition, a 

Legal & Compliance function has been put in place to assist the board and the management 

in complying with applicable laws, regulations and processes of Holcim Lanka according to its 

policy manual and standards of the Holcim Group such as accounting rules. 

The Internal Audit (IA) function is an independent review and consulting function that 

provides assurance to the corporate bodies so that process integrity is meintained, measures 

and reporting are accurate and reliable, and polices and regulations are complied with. 

Holcim Reporting Standards 

Built on the Holcim Information Platform (HIP), a common and uniform performance 

measurement system based on standardized information platforms was initiated by the 

Group. Holcim Lanka received HIP certification in September 2005 and March 2006 for the 

sixth release. 

HIP is a set of standard management reports produced using IT tools such as SAP BW (Systems 

Applications Processors Business Information Warehouse) with advantages that include 

focusing on the real issues of our business, clarity and transparency regarding targets and a 

common basis for an aligned performance management for all personnel. The HIP Business 

Manual contains standard definitions of performance indicators. 

Governance & Compliance 

As a value-oriented enterprise, Holcim Lanka recognizes the significance of effective corporate 

governance in order to promote corporate fairness, transparency and accountability to 

all stakeholders. The Board of Directors comprises seven directors who are responsible for 

implementing effective governance in order to discharge its duties towards stakeholders, 

manage business risks and uphold the company’s reputation. The Executive Committee, 

consisting of the CEO and six Vice Presidents, reports to the Board of Directors. This includes 

key findings of risk analysis and the mitigating measures taken. 

24

Holcim Accounting & Reporting Principles 

Conscious of the obligation to provide accurate and factual financial information to all 

stakeholders, Holcim Lanka follows the Group’s overarching accounting and reporting 

principles under the banner of Holcim Accounting & Reporting Principles, which is aimed 

at presenting internationally accepted consolidated financial statements, adopting uniform 

accounting and reporting principles that provide a true, fair and comparable picture of the 

performance of the Group companies vis-à-vis the Group. Each local Chief Financial Officer 

or other Financial Officers are responsible to enforce HARP and to ensure that the financial 

statements and management reporting complies with HARP. In addition, Corporate Controlling 

conducts HARP Sustainability Reviews periodically to ensure that all functions and processes 

are fully HARP compliant. 

Internal & External Audit Standards 

As a tenet of good corporate governance, the financial statements are audited by professional 

service firms or External Auditors (EA). The Group EA expresses opinion in accordance with 

International Auditing Standards and reports that the Financial Reporting Packages and 

Treasury Information Management Packages are in accordance with International Financial 

Reporting Standards and HARP. 

The shareholders of Holcim Lanka approve the appointment of the EA during the AGM. In 

addition, Holcim Lanka practices Good Practice IA process methodology as laid down by 

the Institute of Internal Auditors headquartered in Florida, considered the most influential 

standards setting body in professional internal auditing. 



Hub of plenty 

Akin to our sustainable practices in using raw materials from our own soil, the Dambulla 

Economic Centre now helps growers harvest the fruit of their labours by facilitating a 24/7 

hub for the distribution of fresh produce to the nation.

Economic Impact 

Economic Impact Highlights 2006 

• Sustainable financial results for 2006 - cost of capital recovered, thus enabling further 

investments 

• The Annual Holcim Distributor Awards recognizes entrepreneur excellence and the 

development of prevalent standards within the industry 

• The Holcim webSALES online system launched to enhance customer service 

imperatives 

15 people working for him. This would yet again create another 3,000 approximate employment 

opportunities around the country. In total, over 16,000 direct and indirect job opportunities overall 

have been created through our presence in Sri Lanka. 

The company intends to further invest approximately USD 10 million for a grinding station and 

clinker terminal in Trincomalee, which would create around 100 direct employment opportunities 

and about another 500 indirect employment opportunities in the local community, while 

constructing a strong foundation for economic growth in the Eastern Province. 

10 Years of Investments 

Holcim Lanka is among the top two companies in the industry during the past 10 years to have 

made significant investments in Sri Lanka. Since 1996, Holcim Lanka has invested an estimated 

USD 110 million in Sri Lanka including major investments in: 

Purchase of controlling stake in Puttalam Cement Company Ltd 

Further share purchase in Puttalam Cement Company Ltd 

Equity injections 

Voluntary Retirement Scheme 

Purchase of Ruhunu Cement Company Ltd 

Investments in Lanka Quarries Ltd 

Set-up of Galle Cement Company Ltd 

Various capacity extensions at Palavi and Ruhunu Cement Works 

New cement grinding mill line at Palavi Cement Works and upgrading of 

existing cement grinding mill lines in Palavi and Ruhunu Cement Works 

New filter systems at Palavi Cement Works 

USD 26 million 


USD 7 million 

USD 3 million 


USD 5 million 

USD 3 million 



USD 2 million 

Currently, over 850 direct employment opportunities have been created through the operations of 

Holcim Lanka, while over 1200 dealers and 54 distributors are engaged in the distribution of the 

products to the market. Under company regulations, each distributor should have over 10 lorries 

and each dealer at least two lorries working under them. As a practice, two shifts are being operated 

and hence, for a single lorry at least four staff would be engaged in carrying out duties. Therefore, 

in logistics alone, we have created around 12,000 indirect employment opportunities. Meanwhile, 

each dealer would have at least two workers in the shop while a distributor would at least have 

Working, living and caring. The triple bottom line offers untold benefits 

Value Addition to the Economy 

In order to describe the cement Industry in Sri Lanka, participating companies are categorized 

according to the amount of local value creation performed in bringing a bag of cement to the Sri 

Lankan market. The basic steps in bringing a bag of cement to the market are: 

• production of clinker from limestone; 

• grinding of (locally produced or imported) clinker and gypsum to produce cement and 

• bagging (locally ground or imported) cement. 



The categories are: 

• Local Manufacturers (fully integrated plants) 

• Companies that produce own clinker in order to grind cement, bag it and bring the product 

to market 

• Value addition in Sri Lanka: > 80% 

• Number of companies: 1 - (Holcim Lanka) 

• Local Clinker Grinders 

• Companies that import clinker in order to grind cement, bag it and bring the product to 

market 

• Value addition in Sri Lanka: ~33% 

• Number of companies: 2 – (Holcim Lanka, Tokyo Cement Company (Lanka) Ltd) 

For Our Shareholders, For Our Valued Business Partners 

In line with the domestic cement market’s year-on-year growth, Holcim Lanka saw its sales 

portfolio grow by 10% in 2006 compared to 2005. During the same period, net revenue grew 

by 25% and is showcased at LKR 10.4 billion on account of better price realizations, despite the 

government imposed price control on cement in November 2006. These price control measures 

hampered the recovery of increasing costs, especially due to an increase in electricity tariffs by 

approximately 30%. Operating profits increased by 33% and net income grew by 55% net of 

unusual expenses. 

Net Sales 

10.00 

9.00 

• Bulk Cement Importers 

• Companies that import bulk cement in order to bag it in Sri Lanka and bring the product to 

market 

• Value addition in Sri Lanka: < 10% 

• Number of companies: 5 – (Tokyo Cement Company (Lanka) Ltd, Lafarge Mahaweli 

Marine Ltd, Ceylon Ambuja Cements Ltd, Ceylinco Ultratech (Pvt) Ltd, International 

Cement Traders Ltd) 

LKR billion 

8.00 

7.00 

6.00 

5.00 

4.00 

2001 2002 2003 2004 2005 2006 

• Bag Cement Importers 

• Companies that import bagged cement into Sri Lanka 

• Value addition in Sri Lanka: Negligible 

• Number of companies: 10, (including Lanka Cement Ltd which is a government venture) 

EBIT (Earnings before interest and taxes, net of unusual items) 

1.80 

1.60 

1.40 

1.20 

About 50% of Sri Lanka’s cement demand is met through local clinker grinding (with both locally 

produced and imported clinker), while the balance is imported in bulk or bags with little value 

addition in Sri Lanka. Hence, it is apparent that local manufacturers are a vital cog in the economy, 

due to the very high value addition to the industry coupled with higher employment opportunities 

to the local community, making it a crucial facet in economic development. 

LKR billion 

1.00 

0.80 

0.60 

0.40 

0.20 

0.00 

2001 2002 2003 2004 2005 2006 

28

Allocation of Total Revenue 

Payments to 

Suppliers 

Gypsum 

Clinker 

Other Purchases 

for Goods and 

Services 

Electricity 

Fuels 

6% 

3% 

12% 

9% 

Payments to 

Employees 

& Distributors 

Rebates to 

Distributors 

Payments to 

Employees 

4% 

6% 

8% 

2% 

7% 

Payments to 

Capital Providers & 

Provision for Depreciation 

& Amortisation 

Depreciation and 

Amortisation 

Finance Cost for 

third party borrowing 

• Payments to employees and distributors are at approximately 13% of revenue. 

• Payments to suppliers account for 58% of our total revenue allocation. This includes 

payments for clinker and gypsum imports, for fuel and electricity as well as for general 

goods and services purchased for production and sales requirements. 

• Payments to the government account for 12% of our total revenue allocation. 

• Payments to shareholders as dividends and third party capital providers amount to 14% 

of our total revenue. 

20% 

23% 

Payments to 

Government 

VAT & Other 

Taxes 

Net profit 

Net profit 

Assets & Liabilities 

LKR billion 

10.000 

9.000 

8.000 

7.000 

6.000 

5.000 

4.000 

3.000 

2.000 

1.000 

0 

721% 

420% 1448% 

90% 

107% 84% 

2001 2002 2003 2004 2005 2006 

Gearing (Net Financial 

debt divided by 

Shareholders' Funds 

at year end) 

Assets less Cash Equivalents 

Operating Liabilities 

Net Financial Debt 

Shareholders' Funds 

In 2006, our asset base increased only marginally. Improved working capital management largely 

offset capacity increases, the most important being: 

• Increasing the capacity of pre-processed waste to be used in clinker production (AFR 

Materials) 

• Capital expenditure to maintain production capacity 

Capital expenditure was thus entirely funded through internally generated cash flows. Improved 

cash flows have reduced our debt levels with gearing at the end of 2006 at 84% which is a 21% 

improvement compared to 2005 and well within the Holcim Group’s target for its operating 

companies. 



Our Plants on a Continuous Growth Cycle 

Ruhunu Cement Works 

There has been a critical need for Holcim to have cover storage for limestone and buffer stock 

of clinker at the Ruhunu Cement Works (RCW), a need that has been exacerbated with Supiri 

becoming the main flagship brand within the Holcim Lanka product portfolio and thus 

increasing sales. Until now, a portion of the imported clinker was stored in an open yard with 

quality being affected during the rainy season. This problem is now resolved with the completion 

of a storage facility catering for the storage of 12,000 tons of clinker and 4, 000 tons of limestone, 

guaranteeing cost efficiency as well as the maintenance of environmental and safety standards. 

The LKR 42 million storage facility is an archetypal model of Holcim Lanka’s strict adherence to 

safety and environmental guidelines as stipulated in our Project Management Approach. The 

facility will also be the first step towards automating raw material operations, a process that will 

be implemented in the future. The negative impact from emissions have also been addressed 

at design stage and appropriate measures have been implemented to eliminate the negatives 

associated, thus creating further inroads into our proactive measures employed towards 

sustainable development. 

Puttalam Cement Works 

Having been encumbered with numerous production halts due to cyclone blockages and meal pipe 

clogging in the Palavi kilns, the company decided to install air blasters to ensure smooth operation 

for high production. The manual cleaning process also resulted in burning hazards. Worked as 

an AFR Capex (Capital Expenditure) project, both kilns have been successfully installed with 

40 air blasters and specially selected nozzles that maximize activation area and intensity of the 

compressed air blast. 

Plant Management also successfully completed an outstanding engineering feat by replacing 

the middle tyre and 7.5m length shell in kiln No. 1, which was in an alarming state after 36 years 

in operation. The project was completed under budget and in a record time of nine days and 

involved technical input from Holcim Group Support in Switzerland, the original equipment 

supplier KHD of Germany and a team of expert engineers and technicians. 

Housekeeping at Puttalam Cement Works (PCW) was also brought to the fore this year as 

housekeeping tended to be a challenge to the plant both in an environmental sense and a 

behavioural sense. Ownership and attitudinal change was driven by a specially constituted 

housekeeping team in tandem with numerous initiatives which included a comprehensive waste 

collection and disposal system, landscaping, construction of a central washing area and removal 

of outphased and unwanted buildings. Housekeeping is reviewed weekly and improvements 

constantly implemented. 

The archetypal storage facility designed to strict environmental guidelines not only helps preserve the quality of limestone but is 

the future of automation in raw material processing 

Continuous rehabilitation of existing facilities in terms of waste collection and disposal, landscaping and phased out removal of 

unwanted buildings has brought about further benefits to the surrounding locality as well as the environment 

30

Net Working Capital Optimization 

Project 

The Net Working Capital Optimization 

Project was completed in May 2006 at the 

PCW achieving certification and delivery of 

expected benefits. The five areas where the 

programme had to achieve optimum levels 

of the company’s working capital were the 

warehouse, maintenance, procurement, 

payables and production. 

The most significant improvements were 

implemented in the warehouse optimizing 

operational processes with a self-service area 

for high rotation/low value items, which has 

reduced employee workload by 42%, a new 

barcode system for goods issuing which frees 

employee time and keeps accurate records 

and inventory counting. 

Discussions are under way for the replication 

of this barcode solution at other Holcim 

Group companies in the Asia Pacific region. 

Locally Driven Automation 

Given the challenges faced in operations due 

to the stand alone front-end solid feeding 

system at the PCW, the solution called for 

the integration of the solid feeding system 

to the Process Control System of the plant. 

We are very proud that an in-house team set 

about identifying the hardware requirement, 

programmed the Programmable Logic 

Controller (PLC) and commissioned and 

tested the entire system, making the entire 

automation a totally internally conducted 

project. The addition of the PLC to the system 

was a complicated and expensive task and 

never before done locally, but the dynamic 

team took on the challenge and successfully 

completed it, thus saving LKR 5 million to the 

company, which would otherwise have been 

expended on foreign consultants. 

The upgrading of the AFR feeding system 

increases the plant’s thermal substitution 

rate and the automation has enhanced the 

feeding accuracy and operational flexibility, 

making operators jobs easier and faultfinding 

and troubleshooting more accurate 

and timely. 

Replacing the Middle Tyre of Kilns 

Rotary kilns, the heart of the cement plant, are 

generally run for nine months continuously 

between two major shutdowns. Operation 

of kilns need very high technical and 

managerial skills. The life expectancy of shell 

in high temperature zones is around 15 years 

and for tyre around 30 years, and considered 

a very special maintenance task and a great 

challenge for plant management. In Palavi, 

the middle tyre of kiln No. 1 proved to be in 

bad shape after operating for 36 years. 

Realising the importance of replacement 

at this crucial point, plant management 

planned for a major shutdown in August 

2006 with preparation for this beginning 

in January 2006. This included, erection 

of supporting steel structures, removal of 

obstructive concrete structures, purchase 

of required equipments, selection of lifting 

cranes, pre-assembling, welding and nondestructive 

testing. During the re-preparation 

phase, technical support was given by the 

Holcim Group Support based in Switzerland 

and original equipment supplier, KHD of 

Germany. 

The middle tyre and 7.5m length shell in the 

mid kiln was replaced. The project was carried 

out by a cross-functional team comprising 

the project management team, expert 

from Holcim Group, local engineers and 

technicians. 

Challenge: Completion of task in 10 days 

below the budgeted LKR 15 million. 

Result: Project completed within nine days 

with a total expenditure of LKR 13.6 million 

Contracting and Contracting 

Management Issues 

Several key processes and procedures govern 

contracting and contract management 

including the purchase requisition approval 

process, contractor selection process, 

preparation and signing contract documents 

and monitoring compliance to terms and 

conditions. This year, a ‘Contracts Sign 

Off’ procedures was communicated to all 

company personnel with templates created 

for tendering awarding and terminating 

contracts. 

However, with not all personnel 

understanding the established procedures, 

loopholes were discovered and it was found 

that not all contracts were implemented 

in accordance with the ‘Contracts Sign Off’ 

procedures. 

The following issues were of concern: 

• Employees’ failure to realize the 

importance and responsibilities over 

contracts and contract management 

• Employees’ failure to apply the established 

company procedures, i.e. ‘Contracts Sign 

Off’ 

• The ‘Contracts Sign Off’ procedure did 

not fully define certain requirements, 

and were also too complicated and 

cumbersome 

Completed middle tyre replacement in 10 days 



Management identified these issues and speedily responded to resolve them by recommunicating 

the importance and responsibilities over contracts and contract management 

to employees. However, being a behavioural issue, its rectification will be achieved over time and 

the progress is closely monitored. 

Air Blasters for Palavi 

To eliminate production stoppage due to cyclone blockages and meal pipe clogging in the Palavi 

kilns, which also resulted in unwanted deposits inside the pre-heater, frequent manual cleaning 

using compressed air and hammers to clear build-ups inside the pre-heater to avoid blockages, 

burning hazards for personnel engaged in cleaning and mandatory daily intense cleaning of preheater 

cyclones and meal pipes all resulting in low production, and 40 air blasters from VSR Gmbh 

Germany (on an AFR Capex project) were installed in both kilns. At a certain frequency and sequence, 

the air blasters compressed air and caused the effect of cannons to break the build-ups. According 

to the geometry and the location, the nozzles of the blasters were selected from a range of nozzle 

shapes to maximize the activation area and the intensity of the compressed air blast. 

Project Status: Completed in December 2006 

Project Result: Reduction in frequency of manual cleaning, elimination of burning hazards. 

Production has improved significantly 

Executing Capex Projects 

The Company’s Capex project is simply a project that adds value to increase the asset base of 

our company. However, the projects are not based on profits alone but rather fall in line with our 

sustainable development strategy, working on a win-win situation on a sustainability platform. 

While maintaining an economic focus, Capex projects must contribute towards society and 

environmental performance. 

All projects must be over the value of LKR 2 million; in 2006, the company completed 46 projects 

and is continuing an additional 20 into 2007, while having invested a total of LKR 931 million. 

LKR 939 million has been earmarked for investment in 2007. 

The projects are: 

• Strictly carried out in accordance to the ProMAP (Project Management Procedure) 

• Clearly identifies stakeholder requirements and KPIs (Key Performance Indicators) 

• Defines timelines and responsibilities 

• Delivers projects on time within budget 

• Divided into six main types - expansion and diversification, rationalisation, replacement, quality 

improvement, social and safety, and the environment 

Highlights of main projects in quality improvement which essentially deals with producing 

a sustainable product, safety and the environment are detailed below. Projects in the other 

categories have been dealt with in the previous pages of this report, while the social projects will 

be detailed in the Social Impact section. 

Quality Improvement 

• Installation of the XRF Spectrometer project at RCW facilitating speedy provision of accurate 

chemical results on cement samples and close monitoring of product parameters to ensure high 

product quality. It can also be used as a backup in the event of a failure of the XRF at PCW too. 

Safety 

• Two projects dealing with plant safety improvement - the rehabilitation of handrails, walkways 

and overhead bridge and construction of a changing complex for contractors adhering to the 

requirements of the Fatality Prevention Elements (FPEs) Programme and the stringent Holcim 

Safety Standards. 

• Equipping the Aruwakkaru quarry with a new hydraulic drilling machine for better efficiency 

and a safer and more environmental friendly quarry operation 

Environment 

• The Oil Unloading Bay Project launched to improve the conditions of the waste oil handling 

operation for a safer environmentally friendly operation. The previous unloading bay and storage 

tanks used for alternative fuel waste oil did not have secondary containment to retain oil in case 

of a spill or a leak and tended to be very unsafe. The first phase of this project has a new pump 

house with state of the art facilities for oil handling with new pumps and accessories, a new 

concrete secondary containment and oil water separation facility to drain water. 

32

Holcim in the Market 

Our Products 

Year 2006 was one of the most challenging yet rewarding years in Holcim Lanka’s history with the 

launch of the initial introductory cycle of the application-based cements concept, while striving 

to retain the price premium and market leadership in a highly competitive market. 

The leap forward strategy of diversifying the cement offering by introducing the “right cement 

for the right application” - Holcim Supiri for concrete works, Holcim Pedereru for wall building 

and plastering and Holcim Seegra for precast purposes - continued its journey with remarkable 

success. 

The application-based cements concept itself posed varied challenges for different stakeholders 

including house builders, masons, dealers, distributors and employees as the profile and interest 

diversity in these stakeholder segments made the concept even more challenging. 

In the cement retail business, the house builder (end-customer) and the value of the brand play a 

vital role for success. This was equally important and relevant for the success of application-based 

cements concept, since the customer acceptance of the offering and demand created is what is 

desired by the brand. This proved to be a relatively difficult task due to several factors including 

a low level of knowledge and interest on technical aspects of cement as well as non-routine 

and comparatively low product association with fast moving consumer goods, as exampled in 

personal care products. 

Proven and trusted practices and the apparent simplicity of using Ordinary Portland Cement for 

all applications remained a massive constraint in convincing on-site masons of the advantages in 

using Holcim’s application-based cements as preconceived perceptions of cement and associated 

usages were strong. The situation was no different to the universal norm that “perception is the 

reality in consumer marketing”, thus making the task even more difficult. 

Our Channel Partners 

Continuing to build solid business relationships with our dealers, Holcim Lanka held dealer 

conventions with almost 5,000 dealerships across the country. We strongly believe that these 

relationships have contributed positively towards increasing market penetration, augmenting 

the Holcim cement portfolio and significantly contributing towards the success of our flagship 

brand in the application-based cements concept portfolio, Pedereru. 

As the market leader in the cement industry, our efforts in education and awareness have 

seen fruition and we have seen our competitors following our leadership strategy, offering and 

promoting the world-renowned application-based cements concept. We have always believed 

that by presenting customers suitable options and educating them on the positives, effects and 

impacts of these options, customers now are more knowledgeable on the proper applications 

and usages of the products on the market and can make informed decisions for domestic, local 

or national infrastructure projects. 

Continuing to infuse global best practices and protocols in all processes including manufacture 

and standardization, our unparalleled product is ably supported by an efficient distribution 

system which ensures availability and accessibility to the products we offer. These are buoyed 

effectively by a comprehensive and integrated communication strategy which has enabled Brand 

Holcim to command a premium price in a highly competitive market, leading to significant value 

additions for our stakeholders while we retain and grow our market leadership position. 

However, Holcim worked on the single-minded focus of simple creative concepts built on 

the foundation of ‘cut through the clutter’, fully integrating above the line and below the line 

communication initiatives, which ultimately enabled Holcim Lanka to showcase growth well 

above market average, with Holcim Pedereru recording an outstanding 400% growth in portfolio 

share since its re-launch in mid 2005. 

Paving the way for application-based cement 



The Holcim Distributor Awards 2006 

We continued our annual Holcim Distributor Awards this year, recognizing the invaluable 

partnership they have rendered in the success of our business. These awards celebrate entrepreneur 

excellence and encourage the development of prevalent standards within the industry. In addition 

to five coveted trophies, distributors were also financially rewarded in proportion to their sales 

volume. 

Holcim Dealer Convention 2006 

On an initiative of one our business partners, Dealer Awards 2006 was organized for Holcim 

Dealers, further strengthening the relationships between Holcim Dealers. 

The Holcim Dealer is a key business partner and the company strives to reinforce these partnerships 

and create a win-win environment for both the dealer and the company. Holcim Voice is a quarterly 

magazine for the dealer community and gives dealers a platform to share their achievements, 

milestones and skills and Holcim also prompts regular visits from our area managers, giving them 

advice and support. 

However, the most important event in the dealer calendar is the Holcim Dealer Convention. This 

year over 4,000 dealers participated at 19 Dealer Conventions held around the country, which while 

consolidating the concept of application-based cements, appreciated the Dealers’ entrepreneurial 

success and their contribution to the business. 

Building value and strengthening partnerships through recognition for excellence 

34

The Mahagedara Retail Chain 

Constantly striving to present innovative solutions to our customers, Holcim Lanka decided to 

expand the Mahagedara Retail Chain, which brings construction services and solutions under 

one roof. This one-stop-shop concept is a milestone in the industry as it brings together the 

synergies of not only the Holcim brand, but works on a neutral brand concept where leading 

manufacturers and suppliers of construction-related products and services provide solutions 

to customers in one location. 

We expanded our presence with two franchise shops in Panadura and Embilipitiya enabling 

customers in those areas to avail themselves of numerous benefits pertaining to constructionrelated 

products and services, including: 

• The availability of high quality leading brands 

• Free delivery service 

• Technical support 

• Free housing plans and Bill of Quantity 

• Contacts for related professional and support service personnel like masons, painters and 

electricians 

• Information on housing loans 

• Convenience in placing orders through the Mahagedara Link software system 

Innovating uncharterd retail terrain 



Customers & Projects 

Forming an integral part of our stakeholder profile, our customers remain the key to our success. 

The support and co-operation we have perceived in our customers has been rewarding. The 

innovative sometimes unconventional initiatives we have introduced to the market have 

been accepted by our customers as initiatives that are aimed at constantly developing the 

product and thereby the end result. This has resulted in considerable mindset change but has 

in tandem, forged and strengthened the relationships we have fostered with our customers 

over the years. 

1 2 

It remains crucial therefore that Holcim Lanka continues to maintain and fortify a sustainable 

platform of continuous innovation, manufacturing quality products to world-class standards 

assuring our customers that the product they finally use is made by an ethical, quality-oriented 

global company, based on very high principles, values and standards. 

The Holcim Awards 

In 2000, Holcim Lanka launched the world’s first ever awards for sustainable construction under 

the banner name of Sanstha Awards. It was meant to encourage our industry customers to focus 

on projects that contribute towards community upliftment and national development. Having 

seen the success of the awards in Sri Lanka, the Holcim Fund for Sustainable Construction, a Holcim 

Group inititiave which was established in December 2003, took the concept of the awards globally 

and today, the Global Holcim Awards for Sustainable Construction is one of the most important 

events in the global industry’s calendar. 

4 

At the Holcim Awards this year, among a gathering of 700 guests from 50 countries, Venezuela and 

Germany won gold awards, while projects from Italy and Canada were silver and bronze medalists, 

collectively winning a total of USD 1 million in prize money at a gala ceremony held in Thailand. The 

winning entries were chosen from 1,500 projects sent in from 118 countries. The criteria included 

quantum change and transferability, ethical standards and social equity, ecological quality and 

energy conservation, economic performance and compatibility and contextual response and 

aesthetic impact. 

We are proud that Sri Lanka too submitted six entries for these globally acknowledged awards for 

3 5 

sustainable construction, which had its roots in Sri Lanka but has now impacted every continent 

in the world. 

1. Research & Application of Compressed Earth Blocks 2. Ambuluwawa Biodiversity Conservation 

3. Cyclone-Resistant and Thermally Comfortable Roof Slabs 4. Multi-purpose Auditorium at University of Moratuwa 

5. Structural Properties of Rammed Earth 

36

Sales Goes Hi-Tech 

From July 2006, yet another example of infusing global best practices into the local domain 

was when the Holcim ‘WebSALES system’ went live, enabling select customers to order cement 

online, further enhancing our customer service imperatives and helping us to streamline 

our sale processes. The initiative is in response to customer requests for an online real time 

ordering process available 24/7. It is a secure web-based transaction system, currently also 

being used in Thailand, Vietnam and Indonesia and is in line with Holcim’s IT strategy of 

implementing Smart Solutions to encourage maximized utilization of existing tools within 

the Group. The project is supported by Holcim Services Asia and fully complies with Holcim’s 

Project Management Approach metholodogy. 

Our customer service philosophy revolves on the belief that our service levels must be timely, 

above the norm, efficient, speedy, qualitative and uninterrupted. In the event of the total 

failure of the SAP system, in the past, sales and distribution may have come to a temporary 

standstill – but not anymore. In November 2006, the Sales & Distribution Standby System was 

put to the test and successfully achieved the target of excelling in an uninterrupted service 

milieu. Continuity of business is crucial at Holcim Lanka and the Sales & Distribution Standby 

System falls in line with the broader part of the Business Continuity Plan that encompasses 

all departments. While it does not fully replace SAP, it temporarily provides support for 

continuing business uninterrupted. 

CCI Exhibition 

As a strategic partner to the Chamber of 

Construction Industry (CCI), Holcim Lanka 

continued its endeavours of improving 

the standards of the construction industry, 

assisting the Chamber in its most important 

event, the CCI Exhibtion, which was held 

this year under the theme, ‘Exposition for 

the Construction Industry’. 

Customer Satisfaction Survey 

Independent Survey carried out by TNS Lanka Limited 

Holcim Lanka decided to invest on research to glean customer satisfaction Levels among 

stakeholders, namely house owners, masons, dealers and industrial customers as a part of 

our continuous business development process. This also leads to a comprehensive SWOT 

(Strengths Weaknesses Opportunities & Threats) analysis which would detail weaknesses, 

problems, areas for improvements and solutions to be found. 

An external research agency TNS Lanka Limited was contracted and using their proprietary 

‘Trim Index’ model carried out the survey. Trim Index is a single number that conveys the 

standing in terms of customer satisfaction on a scale of 0-120. 

Findings: 

Average Trim Index (In similar working climate in the Indian subcontinent) 70 

Holcim Trim Index 93 

Result: 

The company’s Trim Index findings convey superior customer satisfaction levels in 

comparison to the industry in the Indian subcontinent. This is considered a strong bond 

that drives customer loyalty and confidence in products and services. 

Commissioned annually, the research findings now declare that Holcim must maintain, 

strengthen and improve on the high rating further. 

Setting Industry Standards, CCI Exhibition 



Significant Contributions Made in Infrastructure Projects 

Current projects include: 

• Southern Highway (biggest contribution) 

• Weheragala Irrigation Project 

• Kakiriobada Irrigation Project 

Past projects include: 

• Balangoda Road Projects 

• Kukulegama Project 

• Mauara Irrigation Project 

• Kalu Ganga Water Supply Project 

Foundations for the future 

Mauara Irrigation Project 

38

Case in Point to Drive Customer Satisfaction: Minimizing Bag Breakages 

A Quality Circle has been established to look into minimizing bag breakages, which 

though manufactured in compliance to international standards to withstand rough 

handling conditions, has to be continuously monitored with waste being minimized. 

The team comprising personnel from Logistics & Imports, Procurement and Marketing 

& Sales regularly visit the bag manufacturing facility and monitor quality control and 

are available for advice and consultation. The team is also responsible for a quarterly 

review upon which preventive or corrective action is taken. 

Some of the problems encountered previously include damage during transport 

of new bags to packing plant due to damaged truck beds and wet weather. A third 

party auditor monthly audits the systems and processes of the bag manufacture and 

provides recommendations for improvement. 

The following is also done at the Holcim Lanka plants to ensure the final objective of 

minimizing bag breakages: 

• Additional curing of 2-3 weeks in addition to the curing of three weeks by the 

manufacturer 

• The roller press project has reduced cement temperature by 30% lowering bag 

breakage causes due to thermal reasons 

• Adopting the First-In-First-Out method 

• Belt conveyor and rotating mechanical devices modified 

• Bag storage area at PCW renovated and enlarged 

• Dropping height from spout to the first conveyor reduced at PCW 

• Mouth of the bag optimized at RCW 

• Stacking limited to a maximum of 10 bags at warehouse 

• Continuous skill development of loaders 

Improving the package 

Project Status: Completed but on a continuous improvement cycle 



Building on nature 

Sri Lanka is a natural paradise. That is why Holcim Lanka is continuously developing products 

that will contribute towards the preservation and enhancement of nature’s resources - we 

recognized Vil Uyana Tourist Hotel as a project built on the ethos of sustainable tourism.

Environmental Impact 

Environmental Impact Highlights 2006 

• Eliminating dust emissions from our operations by installing a Bag Filter system for 

safe management of clinker dust 

• The Oil Unloading Bay Project launched to improve the conditions of the waste oil 

handling operation 

• Implementing an internationally recognized Environmental Management System 

(EMS) within our plants 

• Safe disposal of rice husk and sawdust found in the community through cement kiln 

co-processing through our Biomass Collection Initiative 

After water, concrete is the second most used resource in the world and there is no practical 

substitute that would match the versatility and durability of this product. The chief ingredient 

in concrete is cement, the manufacture of which is a resource and energy intensive process. 

Our environmental sustainability goal therefore is to continuously pursue strategies that 

would build on the premise of manufacturing more cement but using fewer resources and 

eliminating waste and pollution. This we believe will have a cascading impact on better 

performance while increasing our understanding on meeting the challenges that pertain to 

environmental sustainability. 

Project Selection & Methodology 

Environmental impacts are a challenge for any company, especially a manufacturing one 

where resources are utilized for profit making and waste is imminent. At every stage of the 

product life cycle, we are faced with environmental challenges from sourcing raw materials to 

disposal of goods and it is therefore imperative that we learn more about the macro picture 

of the environment and the impact our actions have on it and work on a better footprint that 

will fall in line with our values. 

Our one goal therefore has been to create innovative sustainable products that are ecologically 

friendly. We have tried to instill a business-relevant integrated approach that will help us 

achieving our long-term goals of eliminating waste, utilizing resources and energy judiciously 

and permeating our best practices to our multi-stakeholders. 

Each year, we identify areas that challenge us – areas that our business influences are not very 

positive and have an effect on the environment. In the past, we have worked on: 

• Installing a Bag House Filter by replacing old Electro Static Precipitators, which reduced 

dust emission up to 10 mg/Nm 3 ; this is comparable to the European Union guidelines 

which permit up to 50 mg/Nm 3 . 

• Installing new Jet Pulse Bag Filters to Blending Silos 3 & 4 to reduce fugitive dust emission 

• Continuing the quarry rehabilitation process covering more than 2.5ha annually 

• Installing the Continuous Emission Monitoring System that monitors gaseous emission 

around the clock over 365 days 

• The Canteen Waste Water Treatment plant 

• Grassing and vegetation projects with annual improvements 

• Demonstrating the destruction removal efficiency of our kilns for Polychlorinated Byphenyls 

contaminated oil 

Our EMS is a continuously evolving one where goals are constantly refined and strategies 

refocused towards the final goal of sustainable product innovation. Projects are chosen by 

intently looking at the effect our business has on the environment due to these negative 

areas, prioritizing them, analyzing the methodology and process improvements that would 

have to be incorporated in order to implement it and the investment involved. 



Case in Point – Providing Access to a Responsible Solution 

Issue 

The current practice of burning biomass in fields release harmful fumes to the 

environment and lack of appropriate methods for the treatment of industrial waste 

in Sri Lanka is causing significant socio-economic and ecological problems. Such 

environmental pollution can be eliminated if it is burnt in a cement kiln. 

Response 

Being the country’s only fully integrated cement manufacturing plant, Holcim Lanka 

has begun offering the services of its cement kilns to develop a sustainable industrial 

waste management solution employing a proven and globally accepted technology 

called cement kiln co-processing. In 2006, we helped manage more than 20,000 metric 

tons of waste through our kiln systems which would otherwise have caused detrimental 

socio-ecological impact to the community. 

Sustainable Platform 

A recent independent study conducted and supervised by international and local 

experts from various bodies demonstrated that the Destruction and Removal Efficiency 

of our cement kilns was more than 99.999999%. This result shows that all elements in 

the organic waste studied are destroyed in an irreversible and environmentally effective 

manner. 

Therefore, in partnership with the environmental authorities of Sri Lanka, we gradually 

increased the range of wastes to be co-processed in our kilns and together we have 

begun to provide a sustainable industrial waste treatment solution that contributes to 

solving socio-economic and ecological concerns in Sri Lanka. 

The main technical leverage which enables the cement kilns to provide a sustainable 

solution for waste are the high temperatures of the cement manufacturing process 

and the relatively long retention time that gases spend in the kilns, presenting ideal 

conditions for the destruction and removal of organic components of difficult-to-dispose 

waste streams. It also contributes to the conservation of non-renewable resources such 

as fossil fuels. 

Cement kiln co-processing introduced in Sri Lanka by Holcim is a globally accepted technology for waste disposal management and 

provides immeasurable benefits to the environment and the conservation of non-renewable resources. 

42

Climate & Energy 

As the key element in concrete, cement is a key requirement of modern society but its 

manufacture is a resource and energy intensive process, accounting for 5% of global manmade 

carbon dioxide (CO2) emissions. These result primarily from fossil fuels combustion 

(40%) and the calcination of limestone (50%). While CO2 emissions per unit of cement or 

concrete is comparatively low in the building materials sector, per unit of financial added value 

it is high. Meanwhile, CO2 is the primary greenhouse gas that drives global climate change. 

In recognition of this business risk and our commitment to sustainable development, climate 

and energy are hence the most important environmental issues we face. 

Our strategy to reduce CO2 emissions hinges on product development (including composite 

cements), thermal energy efficiency (improving process technology), optimization of fuel 

composition (including use of waste as fuel) and reduction/prevention of cement kiln dust. 

The Kyoto Protocol’s Clean Development Mechanism (CDM) is environmentally beneficial and 

can be financially attractive, providing a solid business imitative for early action. Holcim Lanka 

has currently designed the validation process of its Cleaner CDM project, which will support 

Certified Emission Reductions under the Kyoto Protocol. 

Mineral Components & the Clinker Factor 

Substituting clinker in cement with appropriate secondary materials reduces both the fuels 

and raw materials required per tonne of cement produced. Holcim Lanka’s Mineral Component 

Implementation project is expected to support the environment by saving 65,000 tons of CO2 

to the atmosphere. 

Average % of Clinker in 

Cement 

Clinker Factor 

95 

90 

85 

80 

75 

70 

2001 2002 2003 2004 2005 2006 



Holcim Lanka advocates co-processing of waste in clinker production. We are 

convinced of the sustainable development benefits of alternative fuels as we 

believe that it is one method of utilizing resources astutely with minimum harm 

to the environment. 

MJ/Ton Clinker 

Thermal Energy Efficiency of Clinker Production 

4050 

4000 

3950 

3900 

3850 

3800 

3750 

3700 

3650 

3600 

2001 2002 2003 2004 2005 2006 

Reporting CO2 Emissions 

We are on target to reduce our global average net specific CO2 emissions by 20% by 2010 

with 1990 as the based year, reported according to the World Business Council for Sustainable 

Development (WBCSD)/World Research Institute Cement CO2 Protocol. According to the latest 

report from Holcim Global independently assured by KPMG, CO2 emissions have reduced to 

665kg CO2/ton cementitious materials. 

Million Tons CO2 

Absolute Gross & Net Direct CO2 Emissions 

500,000 

400,000 

300,000 

200,000 

100,000 

0 

2000 

2001 2002 2003 2004 2005 2006 

Absolute Gross Emissions 

Absolute Net Emissions 

Thermal Energy Mix for 2006 

Specific Gross & Net Direct CO2 Emissions 

13.5% 

1,000 

2.2% 

800 

84.4% 

Coal / Petcoke 

Fuel Oils 

Alternative Fuels 

kg CO2/Ton 

Cementitious Product 

600 

400 

200 

0 

2000 

2001 2002 2003 2004 2005 2006 

Specific Gross Emissions 

Specific Net Emissions 

44

Other Atmospheric Emissions 

We also aim to reduce global average specific nitrogen dioxide (NOx), sulphur dioxide (SO2) 

and dust emissions (all in g pollutant/ton of cement) by 20% leading up to 2010, from the 

percentage posted in 2004 on an initiative launched in 2006. This will continue next year as 

well. 

To improve availability and accuracy, the Continuous Emission Monitoring System was 

calibrated last year from a certified test house party. The New Environmental Quality from 

Australia tested our kiln and cooler stack emissions including heavy metals emission and 

Dioxin and Furan emissions. 

Average Annual Emissions vs. Our Environmental Protection License Requirement 2006 

Parameter 

Emissions Unit Average Emission 2006 

NOx (as NO2) mg/Nm3 1020 

SO2 mg/Nm3 2 

Dust mg/Nm3 38 

VOC mg/Nm3 23 

Mercury microgram/Nm3 0.0032 

Dioxins / Furans I-TEQ ng/Sm3 0.018 

HLL Average Emissions 

(Annual Spot 

Measurements 

mg/Nm 3 (dry, 10% O2) 

Permissible 

Levels 

mg/Nm 3 (dry, 

10% O2) 

Standards 

NOx as NO2 969 2050 Environmental Protection 

License 

SO2 2 1708 Environmental Protection 

License 

Dust 38 50 Holcim Group Guidelines 

Waste Management 

Co-processing the answer! 

Using by-products of other industries as alternative fuels and raw material is a sustainability 

approach generally adopted by modern industries, including the cement industry worldwide. 

Co-processing, as it is commonly known involves two processes in our industry, namely 

cement making which is the primary process and industrial waste destruction which is the 

secondary process. On one hand, cement co-processing prevents industrial by-products being 

discarded as waste, while on the other hand, it reduces the industry’s consumption of natural 

resources as raw material and energy. However, waste industrial by-products require special 

preparation before being used as alternative fuels or raw material in cement kiln processing. 

Waste Types Used as Alternative Fuels 2006 

11.04% 

31.10% 

4.98% 0.03% 

5.35% 

47.50% 

Rice Husk 

Saw Dust 

Waste Oil 

Shredded Garments 

(Prepared Solid 

Substitution Fuel) 

Pharmaceutical Waste 

(Other Liquid Waste) 

Scheduled Waste 

Also, our Puttalam Cement Works kilns were proved to co-process Polychlorinated Biphenyls 

(PCBs) contaminated waste, demonstrating destruction removal efficiency of 99.99999999%. 

PCB is known as the worst scenario of scheduled waste. This result shows that all elements 

in the organic waste studied are destroyed in an irreversible and environmentally effective 

manner. 



Biomass Collection for Co-processing 

In 2006, our Thermal Substitution Ratio was 13.48%. 

% Thermal Energy from 

Alternative Fuels 

Thermal Substitution Rate by Alternative Fuels 

16 

14 

12 

10 

8 

6 

4 

2 

0 

2001 2002 2003 2004 2005 2006 

In strictly adhering to global and Group standards, Holcim Lanka’s co-processing operation 

was further upgraded this year at the PCW with three projects being launched : 

In broadening our biomass collection initiatives, a new biomass collection centre in 

Kurunegala and distribution of bags among biomass suppliers has been implemented this 

year. The biomass collection centre collects rice husk and sawdust waste from the North 

Western province to be used as alternative fuel for cement production, which in turn creates a 

sustainable platform for both the supplier and us, impressing a win-win situation. 

Unsafe disposal of rice husk and sawdust have been growing environmental problems for the 

communities in this province, contributing to serious respiratory illnesses and blockage of 

drainage systems which lead to floods during the rainy season. 

The Biomass Collection Initiative is in response to a request made by the Provincial 

Environmental Authority where we have now provided the facilities of our kilns for the safe 

disposal of biomass through cement kiln co-processing. 

In order to encourage rice husk and sawdust suppliers to dispose of their waste sensibly even 

from adjacent areas like Anuradhapura, Kandy and Moratuwa, we distributed 3,000 bags for 

biomass collection among biomass generators. 

• Upgrading the front-end solid feeding system 

• Installing the front-end liquid feeding system 

• Setting up the shredder and shredder hall 

Benefits: While conforming to our EMS guidelines, the projects also increase the plant’s 

thermal substitution rate. 

Project Status: Completed in February 2006 

Providing bags for the collection of biomass products for safe disposal in the cement co-processing kilns 

46

Solution to Waste Generated from Oil Spill 

An oil spill from a crippled Bangladeshi cargo vessel, which sank off Koggala in the south of Sri 

Lanka left a trail of oil 14km long, resulting in significant ecological damage to birds, marine 

and terrestrial wildlife last year. 

While the clean up operations were spearheaded by the Marine Pollution Prevention Authority 

(MPPA) and the Disaster Management Center together with international and local NGOs, 

private organizations, state authorities and the general public, utilizing our extensive global 

experience in managing ecodisasters, Holcim Lanka volunteered services to rehabilitate 

the affected ecosystem and implement good waste management practices. The oil spill 

had contaminated the sand, vegetation and sea water and the problem of proper disposal 

of contaminated material was critical. Holcim Lanka suggested using its cement kiln coprocessing 

technology as an option for the recovery and irreversible destruction of the entire 

stock of contaminated material. 

After careful analysis, Ecolcim, Holcim Lanka’s specialized unit was given clearance by the MPPA and 

the Central Environmental Authority to handle, transport and conduct recovery and destruction of 

the hazardous waste. The entire operation was implemented adhering to environment regulations 

prevalent in Sri Lanka under close supervision of the CEA, the Provincial Environmental Authority 

(PEA) of the Northwestern province and the MPPA. The materials stored in Boossa were safely 

transported to PCW and were co-processed at the plant. 

In recognition of the services provided by Holcim Lanka, the Minister for Environment paid 

tribute to those involved at a reception held in Colombo. 

Solid Waste Segregation at Puttalam 

The solid waste management programme with emphasis in waste segregation is now fully 

operational at our PCW. Solid waste collected in green, yellow and red bins will be recycled and 

reused for several purposes including the making of compost and to generate alternative fuel. 

The AFR team supports the initiative by shredding and co-processing the waste collected in 

the yellow bins as alternative fuel. The programme has also added further tangible benefits 

including cleaner premises, resolving safety issues, proper non-hazardous disposal of waste 

decreasing pollution and avoidance of open dumping. 

Project Status: 

Clinker Dust Management 

Completed but on a continuous improvement cycle 

Fugitive dust emission at Puttalam, which has worsened after the installation of the chloride bypass 

has been resolved with a cost-effective solution of reducing the dust in the clinker conveyor area. The 

alternative proposed the rehabilitation of the existing bag filters by way of relevant modifications in 

the dedusting line and the bag filters. 

Performance checks have revealed a cost saving of LKR 7.2 million and a process evaluation which 

was deemed successful. 

Project Status: Completed in 2006 

Cost Saving: LKR 7.2 million 

Oil spill clean-up. Holcim Lanka volunteered services to rehabilitate the affected ecosystem and implement good waste management 

practices. 



Wastewater for Gardening 

The Canteen Wastewater Project, an identified project under ISO 14001:EMS is now fully operational, 

complying with Discharge Water Quality requirements as laid down by the Environmental 

Regulatory bodies. A biological aerated filter has been installed and the treated wastewater is used 

for gardening purposes in future. The discharged water complies with the Environmental Regulatory 

legislations and requirements. 

Project Status: Completed in June 2006 

Alternative Materials for Shred & Feed 

With the installation of a shredder and a granulator for the pre-processing stage in order to facilitate 

front-end feeding of solid material in lump form which is more desirable due to the burner being 

located closer to the kiln’s front-end. Alternative materials in lump form can be fed either through 

the kiln’s front or back-end but back-end feeding can sometimes cause carbon monoxide due to 

inadequate availability of oxygen, which paves the way for disturbances to the cement manufacturing 

operation. The shredder now shreds textiles, plastics, polythene, cardboard and wood while the 

granulator shreds three dimensional material in 5mm bits. 

Benefits: The front-end feeding is also increasing the daily feeding rates to about 40 tons 

which is a significant improvement when compared to the earlier 3 tons and assists 

in excellent waste management. Operational flexibility and consistency in feeding 

has also been improved. 

Project Status: Completed in May 2006 

Routine quality checks on treated water 

Front-end feeding in process 

Out with Polythene & Nicotine 

Continuing the various green initiatives implemented in our Ruhunu facility, the plant banned the 

use of polythene wrappings in lunches to eliminate polythene pollution with all meals being served 

in reusable food containers or lotus and banana leaves. Smoking too has been banned within the 

premises to reduce air pollution at the plant and to contribute towards a healthy environment. 

48

Waste Management Policy for Ruhunu 

Several workshops and parallel activities 

have been the precursor to a comprehensive 

waste management policy being drawn up 

for the Ruhunu Plant. Waste identification, 

shortcomings in the current system, 

improvement and solutions, disposal, 

recycling and reusable methods and 

gaining the participation of stakeholders to 

the exercise have been discussed at these 

events. 

Project Status: Waste Management Policy 

will be published in January 

2007 

Case in Point – The Quarry Management & Rehabilitation Plan 

Holcim Lanka’s quarry site is located at Aruwakkalu 35 km north of Puttalam. We follow 

Quarry Rehabilitation Guidelines developed by Holcim Global, which in turn meets 

international guidelines for conservation. Mined quarries are filled with the overburdened 

soil and a variety of trees endemic to the sites are planted under the recommendation of 

the Biodiversity Assessment performed by senior academic professionals from national 

universities of Sri Lanka. Thus, by rehabilitating the biological, geophysical and hydrological 

aspects, the environmental impact is minimized. 

Holcim plans its raw materials extraction according to the Quarry Management and 

Rehabilitation Plan. Meeting the required targets in 2006, the mined area was 40,000 m 2 , 

while Holcim Lanka rehabilitated 25,000 m 2 . This is fully compliant with the Biodiversity 

Report issued by a team of senior academic personnel. 

We also remain committed to managing all natural resources, especially water. In this context, 

we have ensured that waste segregation is a mandatory requirement on both sites. 

Recycling of re usable waste by turning them into Compost 

Re-planting project of excavation sites at Aruwakkalu 



Thirst for solutions 

Water is life. Holcim salutes the Gin Ganga project which builds a salinity barrier to keep the river’s fresh water separate from 

the seeping sea ensuring that farmers continue to cultivate and the nation continues to enjoy fresh drinking water.

Social Impact 

Social Impact Highlights 2006 

• The Holcim Lanka Awards recognizing sustainable community-driven development 

projects themed on ‘Water, Earth and Life’ 

• Holcim Lanka featured in Business for Development published by the WBCSD for its 

House for Life Project 

• Three components in reed industry, coir and cadjan industries developed 

• Women entrepreneurs nurtured 

• Collaboration with the Asian Development Bank in Puttalam Water Supply Project 

• Holcim Fund for Reconstruction projects completed 

• Merit Award at the National Safety Awards 2006 

Holcim Lanka’s community investments are completely stakeholder driven and owned. We do 

not believe that any social or community project can work in isolation to the company or to 

any individual or organization, but rather has to be an inclusive proactive owner driven project 

that is built on a sustainable platform of development. While we do engage in a number 

of philanthropic contributions, a major part of our community investment is in sustainable 

ventures, those that will make a difference to the communities we touch, assist them in 

creating better livelihoods and living standards and build better foundations for the future. 

‘Water, Earth and Life’ therefore become our broad focus and into this we infuse our four 

platforms of Health & Safety, Education, Housing & Infrastructure and Livelihood Support. All 

four platforms build on developing the ethos of sustainability and we have addressed issues 

that are priorities in those communities, issues that would make a difference in their lives. 

Social Expenditure 2006 

23% 

(USD 34,580.00 ) 

11% 

(USD 16,680.00) 

Safety & Health 

Education 

Livelihood 

Housing & 

Infrastructure 

This section of the report will highlight the primary projects under these three umbrellas and 

also a special report on the Holcim Fund for Reconstruction which completed its mandate 

this year. We also reproduce a report that was published in the WBCSD publication, Business 

for Development, which highlighted Holcim Lanka’s efforts in community sustainability 

among other global initiatives. This amply demonstrates that our community efforts have 

been recognized by global sustainability organizations and that we have, in the eyes of the 

international community, made a difference to the communities around us. 

3% 

(USD 4,476.00) 

63% 

(USD 96,870.40) 

We have striven to measure our community programmes by the impact our actions have 

on the community and the difference we make to them. Therefore, each year, our focus has 

been sharper, where assessment of the needs have been more perceptive, where stakeholder 

groups are engaged in dialogue and comprehensive participation, where communities are 

made fully aware of the impact of the project and where the company will continue to be 

proactive in the project’s implementation and follow-up if any. 


Sustanability Report 2006 51

Multi-Stakeholder Engagement 

As mentioned before, our stakeholder engagement process is an open one, where opinions, 

ideas, feedback and responses are encouraged. We believe that the effectiveness of our 

social impact can only be gauged if the benefits and advantages, and also shortcomings are 

articulated by the stakeholders themselves. Our engagement with civil society, community 

leaders, government and area decision-makers, NGOs and other corporate partners have given 

us fresh insight into issues and viewpoints, allowing us to use collective efforts for responses 

and solutions. 

We initiated the concept of Community Advisory Panels for our local community initiatives 

which gives us an in-depth insight into the needs of the community. A needs assessment is 

performed and all issues taken on board before a final implementation plan is drawn up. We 

are probably the only corporate in the country that uses this approach of multi-stakeholder 

engagement but we do believe it remains a strong foundation in our community efforts. 

However, we do recognize that the dialogue process must continue to grow and the 

feedback loop become more open to ensure accurate flow-back of opinions from our external 

stakeholders and in strengthening relationships. 

The flow chart depicting the Stakeholder Engagement Cycle and our Multi-Stakeholder 

Groups are listed on page 21 of this report. 

Engaging in dialogue with stakeholders 

52

For Our People 

Ours is a passionate team - a team that thrives in the face of challenge and competition. It is a team 

that is innovative and thinks out of the box, is constantly on the lookout for different dimensions and 

new paradigms. Ours is a team of ordinary people doing extraordinary things, where dynamism, 

zest, motivation and creativity spur their passion to reach broader and bigger horizons. 

We in turn create a working environment that encourages personal and professional development, 

a knowledge-gaining culture that thrives on mutual respect, rewards performance and 

entrepreneurial spirit, where leadership and teamwork play an integral role in their behaviour and, 

in the end, are amply showcased in the commendable performance of the company. 

Our Human Resources (HR) mission therefore is to attract, retain and develop the best team in the 

corporate sphere, imbuing principles, ethics and values into their personal and professional lives, 

ensuring their career goals and aspirations are aligned with those of the company and creating 

an enabling, empowering and rewarding learning culture built on equality and meritocracy, for 

individuals to thrive and teams to grow! 

The Holcim Values 

Strength. Performance. Passion. 

Adherence to International & Local Standards 

Our HR policies are compliant with Sri Lankan labour regulations and internationally 

recognized labour practices. We take pride in developing our people and treating them fairly 

and equitably. 

Recruitment Process 

We are an equal opportunity provider in recruitment. We attract the best possible talent in 

the market who we find are compatible with our organizational values and whom can be 

developed for future growth of the organization. 

Individuals thrive to expand their horizons 



Employee Statistics 

Turnover 

Type of Turnover 2003 2004 2005 2006 

Resignation 10 5 7 10 

Retirement 20 16 4 14 

Death in Service 0 1 3 2 

Redundancies 0 0 0 0 

Dismissals 1 0 0 0 

Average Number of Staff 761 583 589 619 

Voluntary Turnover 212 37 0 7 

Total Turnover 243 59 14 33 

Length of Service 

Service (by year-end) 2003 2004 2005 2006 

% % % % 

Less than 1 Year 1.58 6.50 13.90 6.97 

1-4 Years 8.16 10.77 9.04 17.51 

5-9 Years 16.05 18.29 13.57 13.29 

10-14 Years 10.53 10.09 12.44 12.80 

15-19 Years 13.42 14.53 12.44 11.02 

20-24 Years 34.74 22.05 12.44 9.56 

25-29 Years 8.16 12.14 20.85 24.31 

30-34 Years 5.79 2.74 1.29 0.65 

35-39 Years 1.58 2.91 4.03 3.08 

40 Years Plus 0.00 0.00 0.00 0.81 

Total Employees 760.00 585.00 619.00 617.00 

Age of Employees 

Age Band 2003 2004 2005 2006 

% % % % 

15-19 Years 0.00 0.00 0.16 0.00 

20-29 Years 4.34 11.62 14.22 13.29 

30-39 Years 24.47 24.96 22.46 21.23 

40-49 Years 50.13 46.67 42.16 41.66 

50-59 Years 20.66 15.90 18.26 20.42 

60 Years Plus 0.39 0.85 2.74 3.40 

Age Unknown 0.00 0.00 0.00 0.00 

Total Employees 760.00 585.00 619.00 617.00 

SAP HR Helps Transformation 

Probably one of the most significant features on the HR calendar this year is the completion 

of implementation of all the sub-modules under the scope for SAP HR implementation 

which is a regional process. The advantages of integration and collaboration at local and 

regional levels help HR to focus its efforts more on transformational activities. being more 

efficient in the tranactional activities, SAP, as a common information platform helps Holcim 

Lanka to be more competitive in the market. 

SAP HR integrates with the rest of the SAP modules implemented in the company from 

2002. 

A refresher training program was conducted by consultants from Holcim Services (Asia) for 

the SAP HR super users in March and April this year. 

Training & Development 

We are very conscious of the need to imbibe our team into a knowledge-oriented culture, 

to ensure they remain on top of an evolving skills and knowledge base. Training and 

development therefore forms an integral link in the progressive culture we have instilled 

into our people. Training and development programmes, workshops, seminars, conferences 

and outward bound programmes are mapped out to the Terms of References of various 

job descriptions, individual capabilities and abilities, and in line with the company’s future 

progress. 

While technical and specialized training is continuous, the development of soft skills also 

remains a vital aspect in our Training and Development calendar. 

On average, each employee underwent training to the value of 2.68% of working hours 

throughout the year. While most of our Training and Development is conducted internally 

by our specialized HR department using expert internal and external resource persons, we 

also identify imperative external programmes, either in Sri Lanka or abroad, those deemed 

useful in honing skills and knowledge for our team. 

54

In 2006, the following training programmes and workshops were conducted at Holcim 

Lanka: 

• Functional Training Programmes (e.g. Manufacturing Workforce Training and SAP 

Training) 

• Cross Functional Training Programmes (e.g. Local Cement Course, Finance for Non- 

Finance Customer Service) 

• Leadership Training (e.g. Leadership Development Programme) 

Apart from this, English Language Programmes were also held. 

Training & Development Programmes for 2006 

Learning with joy 

Improving the HR Skills of Line Managers 

‘People Manager’ is a new initiative of Holcim Lanka designed to enhance the participation of 

Line Managers in employee processes. We deem this a vital link in enhancing our team culture 

where Line Managers become proactively engaged in managing and developing employees. 

Over 50 Holcim Line Managers from all sites participated in batches of three groups in a series 

of training workshops. 

5% 4% Sustanability Report 2006 

91% 

Functional Training 

Cross Functional Training 

Leadership Training 

Holcim Lanka Cement Course 

Comprehensively covering almost everything there is to know about cement including cement 

chemistry, production, products, applications and sustainability, the Holcim Lanka Cement 

Course aims to create a passion for cement among the employees. Launched in March, the 

course is meant to permeate all levels of employees with PCW piloting the course with six 

workshops during the year. 


55

Rewards & Remuneration 

Holcim Lanka believes in rewarding its people in fair and equitable manner with financial and 

non-financial rewards. Having evolved from a state owned enterprise to the forward thinking 

global company we are today, management created a streamlined remuneration system that 

would be performance and results oriented, working on the platforms of meritocracy and 

equality. 

Felicitating Long Service Employees 

Sixty employees who have loyally served the company for over 25 years were presented with 

gold sovereigns. Their steadfast service and dedicated commitment to serving the company 

was rewarded at a gala ceremony held in September. 

The Hay Job evaluation system was implemented in 2004 heralding a more comprehensive 

and uncomplicated salary structure. In December 2006, the SAP Compensation Management 

Module was implemented and based on the company remuneration policies allows 

automation in significant aspects. While these tangibly present employees with financial 

rewards, Holcim Lanka employees always have numerous opportunities of career furtherance 

in a safe and secure environment. International exposure in a knowledge-oriented culture 

that rewards individual and team performance and recognition of leadership initiatives and 

extracurricular accomplishments all form the cycle of meeting individual career aspirations 

and mapping future prospects. 

2006 was a significant year for our employee relations. We signed a single Collective Labour 

agreement for a period of three years with five major trade unions addressing major concerns 

of our employees. 

Start Local – Go Global 

The career paths at Holcim are numerous and varied, rewarding and exciting. Every individual 

becomes an integral part of building the foundation for a company that acts global but is 

local in feel. As in most global groups, Holcim’s professionals have the opportunity to reach 

beyond our shores. We present opportunities for talented highly motivated individuals to map 

out progress on an international career path. While a Holcim career begins in the country of 

origin, based on performance, international assignments are an important step towards an 

international career. 

It is implicitly understood that our business is built on trust, teamwork, honesty and mutual 

respect. This is further embedded in our recruitment, rewards and performance processes, 

which are transparent and works on the principles of meritocracy and equal opportunity for all. 

Felicitating loyalty with Gold 

Enhancing Employee Communication 

We have always prided ourselves on our open communication policy. Employees are encouraged 

into dialogue and discussion, cross-functional teams and target groups communicate issues 

and resolutions with management and senior management provide equal opportunities to 

all employees, through their representative groups to communicate on issues pertaining to 

their careers, workplace, progress and problems. 

We also saw rejuvenation of communication channel between the top management and the 

employees in general through Company Development Council. Employees at various levels 

get an opportunity to meet with the top management and discuss various company and 

employee-related issues and opportunities during this bi-monthly forum. 

56

Taking the communication process into the IT realm, this year we launched Yathra, the 

company intranet. Using the full potential of the web, Yathra also provides a home for iDEA 

Bank, a cache of innovative ideas submitted by our employees. 

Extracurricular Highlights 

We consider extracurricular activities central to building teamwork and competitive spirit. We 

have always encouraged our employees to participate in extracurricular activities, which not 

only allow them to excel in their passions and maintain healthy minds and bodies, but also 

gives Holcim Lanka the opportunity to create an enabling environment for them to excel. 

• 2 nd Holcim Lanka Badminton Championships 

• Holcim Cricket Championships held at the Ruhuna Plant 

• Table Tennis, Volleyball and Netball Championships at the Puttalam Plant 

• Swimming and badminton facilities at the St. Joseph’s College Sports Complex 

• Gym facilities at Fitness Kingdom for employees in Colombo includes aerobics and yoga 

• The plants have their own sports complexes and gyms 

An innovative approach was launched this year with the HR team holding an HR Clinic at the 

remote location of Aruwakkaru - a moral booster for our quarry team, with part of its meeting 

being held on the train, crossing bridges and landmarks that have been constructed using 

Holcim cement. The HR Clinic dealt with HR-related issues and was a good forum for open 

dialogue. HR Clinics are held every month in one of the four main sites of Holcim Lanka. 

Holcim cricket championship 

Apart from this, we involve Opinion Leaders in various communication programmes including 

leadership forums that constitute the managers and also in the Company Development 

Council, creating an open free environment for them to contribute towards the development 

of the organization through concrete development proposals. We conduct two Leaders 

Workshops involving Opinion Leaders twice a year, focusing on a current leadership issue or 

opportunity. 




Case in Point – Holcim Lanka Wins at National Safety Awards 2006 

The company was very encouraged when we were recognized for our safety efforts in 

winning a Merit Award at the National Safety Awards held in October 2006. The awards 

organized by Eagle Insurance Company in collaboration with the Department of Labour 

and the Employees Trust Fund are considered a benchmark in the country for safety at 

the workplace. The judges who visited the company, focused primarily on the premises 

and housekeeping, mechanical, electrical and personal safeguarding, fire prevention and 

protection, safety organization and reporting especially on investigation of incidents. 

Beyond OHS Green Pyramid – Fatality Prevention Elements 

Implementation 

Holcim Lanka has achieved an all-green pyramid status – the Holcim Safety Pyramid with 

19 elements, under the OH&S Management System. In 2006, the Holcim ASEAN region 

undertook a further initiative to face the challenge of eliminating potential fatal incidents 

from its operations and developing a culture committed to eradicate fatalities. 

Fatality Prevention Elements (FPEs) is not a separate OH&S program but is designed to provide 

additional guidance in order to successfully achieve the requirements of the safety pyramid 

block - hazardous work activities. Holcim Lanka implemented three of the FPEs. 

We also comply with all environmental conditions and are guided by separate Environmental 

Protection Licenses for Quarry, PCW and RCW. 

Given the emphasis on following global best practices on occupation, health and safety in 

our workplace, 121 programmes on safety were conducted during the year for 1670 employees, 

including third party service providers. 

Holcim Lanka Safety Pyramid 

Health & 

Wellness Issues 

Occupational 

Rehabilitation 

Purchasing 

Management 

of Changes 

Safe Working 

Procedures 

Inspection 

& Testing 

Design 

Safety 

Audit & 

System 

improvement 

Induction 

& Training 

Incident 

Investigation & 

Corrective Action 

Industrial 

Hygiene & 

Monitoring 

Employee 

& Stakeholder 

Communication 

& Involvement 

Information 

& Reporting 

Roles 

Responsibilities 

& 

Accountabilities 

Hazardous Work 

Activities 

Hazard 

Identification 

& Risk 

Assessment 

Planned 

Inspections 

Legal 

Obligations 

Management 

Commitment 

& Planning 

A team of Holcim employees dedicated towards safety 

58

Below are some of the issues that have been highlighted throughout the year by the Environment 

Health & Safety team and resolved to ensure a safe working environment for our employees: 

• On a hazard identification visit conducted to PCW, the team identified the following safety 

hazards which were quickly resolved: 

• An oil spill around the lathe machine leading to environmental impacts and accidental 

slips – resolved by the closure of leaks 

• Lack of earthwire in the supply cord to the water cooler which could lead to electrocution 

– resolved by the connection of an earth wire 

• Failure to display operation instructions on overhead crane which can cause serious 

accidents – resolved by the display of instructions 

• Opened a new two-storey changing room serving about 110 employees and 50 contractors 

at RCW as a lasting solution to a longstanding safety problem, where employees were earlier 

compelled to walk about the premises without personal protective equipment due to the lack 

of a changing room located near the gates. 

• Implementation of FPEs at all plants where 10 fatality areas have been identified following a 

comprehensive analysis of past accidents and near misses. The first three elements, working at 

heights, working in isolation and lockout and working in confined spaces were introduced this 

year. 

• Rehabilitating the main road leading to PCW to ensure that the heavily loaded vehicles do not 

overturn and will enjoy safe passage 

• On an innovative drive at Holcim, the first ever Housekeeping Awards were conducted this year, 

where employees were allowed the initiative of finding their own solutions to housekeeping 

problems, using innovative approaches to ultimately enhance the plants’ safety. 

• Housekeeping was on top of the agenda at PCW this year as the external environment makes 

housekeeping a challenge at the plant as it is situated in the dry zone and our area of business 

is cement. Housekeeping owners were appointed to initiate improvements which included a 

central washing area for contractors, a comprehensive waste disposal system, landscaping and 

removal of outphased and unwanted buildings. All initiatives are reviewed weekly. 

• National Safety Week was observed at PCW with a comprehensive safety awareness 

programme 

• Process improvement at the Ruhuna Pack House through the expansion of the rubber belt and 

extension of belt conveyor preventing bag breakages and not requiring employees having to 

physically ‘throw’ bags onto the belt which used to cause undesirable health problems 

During the year 2006 Holcim Lanka continued its focus on creating a culture of Zero Harm. The 

safety statistics show that we have achieved zero lost time injuries with our own employees. 

Achieving Zero Harm, requires each employee, from top to bottom, to be committed and active, 

displaying leadership in the initiative and encouraging safe behaviour while discouraging unsafe 

acts, operational risk taking or following dangerous shortcuts. 

Safety training and development is also absolutely crucial in order to minimize and finally eliminate 

Zero Harm due to accidents and for the awareness created among our employees on the importance 

of being constantly conscious and responsive to health and safety processes in the workplace. 

Safety Statistics 

LTI / FR 

14 

12 

10 

8 

6 

4 

2 

0 

2001 

A lost Time Injury (LTI) is counted if 

the employee is unable to resume 

work on his or her next shift 

2002 2003 2004 2005 2006 

The Frequency Rate (FR) of incidents 

is the number of LTIs per million 

hours worked 

Implementation of Cardinal Rules 

Cardinal Rules are life saving rules. They will help to reduce injuries and fatalities in our 

company. They are based on analysis of accidents that have occurred in Holcim Group over 

recent years. Therefore, to communicate the cardinal rules to everybody working for Holcim 

Lanka - whether own employee or third party contractor-the corporate video has been dubbed 

in Sinhala and communicated among concerned parties. 

SR 

170 

160 

150 

40 

30 

20 

10 

The Severity Rate (SR) of incidents is 

the number of days lost per 1000 

hours worked 

0 



Spreading the Word Among Multi-Stakeholders 

Being highly conscious of our role to permeate best practices among our stakeholder groups, the 

Safety First campaign and Environmental initiatives are being cascaded. We have begun targeted 

programmes to spread our knowledge on environment best practices and safety culture among 

various stakeholder groups who we feel will benefit from being aware of the rudiments of a safe 

environment and being involved in environmental preservation and conservation for a sustainable 

future. We also assist various stakeholder groups with our technical expertise and knowledge in 

environmental matters voluntarily whenever there is a need. 

Medical Camps for Community & Employee Families 

Date held Areas Addressed at the Clinic No. of Doctors No. of 

Patients 

09-03-2006 Dental Clinic 2 Specialist doctors; 3 staff 

members 

26-04-2006 Eye Clinic 1 Doctor; 2 technicians 50 

26-04-2006 Spectacle Donation 1 Doctor; 2 technicians 70 

26-06-2006 Ayurvedic Medical Camp 4 Doctors; 4 assistants 100 

26-06-2006 Seminar on Ayurvedic treatments 2 Doctors; 8 officials 100 

03-06-2006 Eye/Dental/Respiratory 4 Doctors; 8 officials 150 

60 

A Few Examples of Our Multi-Stakeholder Initiatives 

Stakeholder Group Where Project 

Marine Prevention Authority, 

Armed Forces, 

Environmental Groups, 

Community 

Coast of Koggala 

Assisted an accidental oil spill from a Bangladeshi 

Ship 

Community Puttalam Established Emergency Response Teams to respond 

to natural disasters and other emergencies 

Students 

~50 Schools in 

Puttalam 

Awareness sessions on safety and environment, 

facility improvements, donations, amongst others 

Students ~5 Schools in Galle Awareness sessions on safety and environment, 

facility improvements and donations 

Women 

Women’s movements 

in Puttalam 

Livelihood support and employment for women 

Community 

Rural development 

societies & 

SANASA 

Water and power supplies, cleaner Puttalam 

environmental project and road development 

Outsourced Drivers All plants Defensive driving for both light and heavy vehicles 

and redefining skills and driving techniques 

Contractor Employees Ruhunu Plant Working at heights under the FPEs, with special 

focus on company safety objectives and prevention 

of fatalities 

Puttalam Plant 

Housing Scheme 

Community 

Masons 

Plant Housekeeping 

Scheme 

Polonnaruwa & 

Dambulla 

Benefits of good housekeeping and safety culture 

launched awareness and awards scheme 

with two cycles carried out during the year and 

awards given to a total of six families resident in 

the scheme. 

Spreading the message of ‘Safety First’, workshop 

on best practices, correct application and permeating 

a professional culture among the masons 

60

Housing & Infrastructure 

Cement lays the foundation for society – for its development, for its livelihood and to build 

its future. Infrastructure plays a fundamental role in providing basic needs for communities, 

whether it is in the primary area of shelter or on a macro scale of the development agenda 

in roads, transportation, academic institutions or hospitals. To us, therefore, infrastructure 

remains a key ingredient in sustainable development and with cement being our core business, 

it is just and fitting that Holcim Lanka leads and contributes towards this sustainable effort. 

‘Water, Earth and Life’ at Holcim Lanka Awards 

Recognising sustainable construction efforts that have impacted communities and national 

development, Holcim Lanka annually felicitates those who have made a difference. The 

awards have since been known as the benchmark for the construction industry, not only in 

Sri Lanka but has transcended into the global construction industry’s calendar on an award 

scheme conducted by the Holcim Group. 

Salinity Barrier Gives Drinking Water to 200,000 People 

At the Holcim Lanka awards this year, the coveted best project award was presented for the 

construction of a salinity barrier across the Gin Ganga under the Greater Galle Water Supply 

Project, giving access to clean drinking water to 200,000 people in that district. The two 

bridges also provided safe passage for the local communities. The recipients of the award were 

CML Edwards Construction Ltd, Ceywater Consultants (Pvt) Ltd and the National Water Supply 

and Drainage Board for their role in construction, consultancy and design, respectively. 

The five projects that received merit awards: 

• Transwater Engineering (Pvt) Ltd for solving the drinking water problem of the communities 

in Anuradhapura 

• Jetwing Hotels Engineering Department and Architect Sunela Jayawardena for innovative 

use of Holcim Pedereru cement for construction of VILUYANA Hotel, Sigiriya 

• ELS Construction (Pvt) Ltd for innovative application of precast products for development 

activities 

• International Construction Consortium Ltd for construction of the production centre of 

Durra Building Systems. 

• Taisei Corporation for improvement of the water supply system in Matara District 

Award-winning projects 

A novel feature this year was the recognition of four outstanding university student projects 

with potential for community and national development, encouraging these young minds 

to further develop on their ideas. This also highlights the other social impact platform we 

espouse, the fact that a responsive education is a dire need for national development and in 

building a foundation for the future. 



Housing, Roads & Electricity for 

Maduragama & Attawilluwa 

Eight new houses were built in Maduragama 

for underprivileged families in July this year 

with materials and components from several 

demolished old structures reused in the 

construction process as a measure of cost 

reduction and for the benefiting families 

to be aware of sustainable construction 

principles and resource efficiency. Holcim 

Lanka also made contributions towards 

road development in Maduragama. 

The Puttalam plant funded electricity 

connections for 15 families in Attawilluwa. 

Having seen the makeshift housing, lack of 

basic needs like food, water and electricity 

among the thousands of families living 

around the Puttalam plant, the plant is now 

in dialogue with the Community Advisory 

panel (CAP) to explore avenues of improving 

the standard of life among the families 

around the locality of the plant. 

Project Impact: Eight new houses for 

underprivileged families, awareness created 

on sustainable construction principles 

and resource efficiency, road developed in 

Maduragama, 15 families get electricity. 

Housing Project at Maduragama 

Puttalam Water Supply Project 

Following a needs assessment survey 

carried out among the local community of 

our Puttalam plant in 2004, drinking water 

was ranked second after employment. Such 

a desperate need for water was no surprise 

as pipe-borne water is not available for the 

nearby communities. Access to clean water 

therefore became a priority. 

Towards the end of the year 2004, the 

Asian Development Bank launched four 

water supply projects, covering four villages 

around our plant – Palavi, Attawilluwa, 

Wanathawilluwa and Kal Adiya. However, 

the projects adopted an approach where 

the prospective users had to make a 

contribution and the underprivileged 

communities found it difficult to afford 

the expected contribution. Furthermore, 

they feared losing the opportunity to gain 

access to clean water. As a responsible 

member in the community, our plant 

volunteered to assist the community by 

forming a partnership with them for the 

project, contributing via material supplies 

and transport services. 

As the communities live in a dry and arid 

area, access to clean water required drilling 

deep wells called boreholes in order to tap 

water. Pumps are used in turn to pump 

water in the wells into water tanks located 

on tall water towers. From water tanks, a 

gravity flow pipeline system delivers water 

to homes. 

Project Impact: Water supply to over 3,000 

families who have for decades suffered 

immense hardship due to lack of access to 

clean water. 

Water Supply tank at Palavi 

House for Life Programme 

In partnership with Ceylinco Grameen, Holcim 

Lanka pioneered the House for Life programme 

that encourages micro entrepreneurs to 

build shop-houses that has the two-pronged 

advantage of building infrastructure within 

the community and enabling a sustainable 

livelihood support system. This project was 

highlighted in Business for Development 

published by the WBCSD under the title, 

‘Creating Sustainable Livelihoods and Lifestyles’. 

It also specified that Holcim Lanka has directly 

met four Millennium Development Goals 

(MDGs) - that of education, gender equality, 

housing and sanitation and technology 

transfer and is indirectly influencing the MDGs 

of youth employment and income generation. 

Holcim Lanka recently decided to boost the 

revolving fund by USD 30,000. 

We have reproduced the two-page article as it 

appeared in the WBCSD report. 

One of the shop houses in operation 

62

Holcim 

Offering low-cost housing solutions • Sri Lanka 

An extract from Business for Development by the World 

Business Council for Sustainable Development 

The challenge 

In Sri Lanka, almost 23% of people live below 

the poverty line. The challenge is to provide 

well-constructed affordable housing for the 

very poorest. Some 12.5% of the population 

still live in wattle and daub huts with few, if 

any, facilities. 

The business contribution 

Holcim is a major world supplier of cement, 

aggregates and building-related services. 

As the leading provider of cement to the Sri 

Lankan market, Holcim Lanka is also looking 

to address the housing needs of this country’s 

very poorest. Launched in 2005, ‘House-for- 

Life’ is a new partnership initiative between 

Holcim Lanka and microfinance provider, 

Ceylinco Grameen. Through this project, local 

micro-entrepreneurs borrow money to buy 

a house. This custom-built home has been 

specially designed as a shophouse, providing 

each family with the premises to run a small 

business. Holcim Lanka provides the initial 

funds and technical skills behind ‘Housefor-Life.’ 

Ceylinco Grameen administers the 

loans and maintains a close relationship with 

borrowers. 

The innovation 

This innovative partnership project combines 

microcredits with Holcim’s low-cost housing 

concept. Loans follow the successful Grameen 

Bank model (from Bangladesh), with a few 

local adaptations. In Sri Lanka, some 90% of 

Ceylinco Grameen’s borrowers are women 

micro-entrepreneurs. Those qualifying for 

10% per annum a ‘House-for-Life’ loans are 

existing customers who have already proven 

their creditworthiness and built up a strong 

relationship with the bank. Ceylinco Grameen 

provides intensive support for these fledgling 

businesses. Women learn accounting and other 

management skills and receive direct assistance 

with marketing and distribution. Should 

borrowers fail to meet their weekly repayments 

two weeks’ running, a follow-up home visit 

helps them deal with any problems. In late 

2004, Holcim Lanka set up a revolving fund of 

$50,000 to be replenished through loan and 

interest repayments. An initial seed fund was 

invested in the Grameen housing loan scheme, 

an additional sum financed the development 

of the model shop-house and the construction 

of the initial ten houses. Families have already 

settled into the first of these. To strengthen 

resources in the local community, the first few 

houses were constructed at Palavi Puttalam, an 

inland rural area, north east of Colombo close by 

Holcim’s plant. A further five have been built in 

rural hinterland south of the capital, upgrading 

slum dwellings to decent housing. 

The benefits 

Previously, these families lived in rickety huts 

where they were unable to operate a business 

on the premises. Mostly, families already owned 

their plot of land, if not through official land title 

then through long-term occupancy rights. These 

new well-constructed homes accommodate an 

average family of four or five. All have modern 

sanitation and are served by water and electricity. 

Here families can carry out their businesses, 

such as sewing or mechanical repairs in the 

ground floor shop unit; they live on the upper 

floor. Thus families have both boosted their 

income levels and improved their quality of 

life. As 90% of the Ceylinco Grameen business 

owners are women, this ‘House-for-Life’ scheme 

also enhances the status of women in the local 

community. To ensure these shop-houses provide 

the best quality and most cost-effective solution, 

with close attention also paid to environmental 

factors, Holcim is collaborating with the National 

Building Research Organization. Houses are built 

with cement locally produced by Holcim and other 

locally sourced building materials (roofing tiles, 

clay bricks and steel), providing new commercial 

opportunities for local producers and distributors. 

Through this project, Holcim aims to broaden its 

portfolio of housing solutions, strengthen its 

reputation as a socially-responsible company and 

embrace new business opportunities with lowincome 

communities. 

Obstacles 

So far however, the self-build input to home 

construction envisaged has been much lower 

than anticipated. Holcim Lanka is considering 

training local people in supervised selfconstruction 

so as to keep building costs 

down or to encourage them to work with local 

masons who have already benefited from 

Holcim’s training program. In addition, the 

model house may not easily be transferable 

to urban slums, as construction will need to 

be adapted to specific local lots and this may 

push costs up significantly. For Holcim Lanka 

making these houses affordable for lowincome 

families remains paramount. 

Way forward 

Holcim Lanka’s ‘House-for-Life’ project is set to 

expand tenfold within the next year. Holcim 

Lanka has recently decided to boost the 

revolving fund by $30,000. The key challenges 

of this project are to scale it up and ensure 

sustainability. Therefore once the results of 

the initial pilot scheme have been assessed, 

Holcim hopes to partner with patient capital 

providers (such as international aid agencies) 

to facilitate this expansion. The partnership 

is also considering broadening their reach 

through splitting funding into loans for 

home construction and loans for home 

improvements. 



Livelihood Support 

In developing the quality of life among our communities, a sustainable platform that we 

have brought into focus has been livelihood support. It is imperative that communities 

have the ability to sustain themselves and opportunities are found and created for them 

to either venture into sustainable livelihood ventures or to improve on what they already 

have. Our livelihood support initiatives have also extended to technical advice, support 

and safety features being permeated to our stakeholder segments as we believe that as a 

company which is global in stature but local in feel, we are able to share our best practices 

while creating an empowering environment for our communities to live and prosper. 

Paddy-boiling Vessels for Farmer Families 

10 underprivileged farmer families from Manaveriya, a village adjacent to our Puttalam 

plant, were presented with paddy-boiling vessels which are crucial towards the paddy 

to rice transformation process. Paddy cultivation is the main source of livelihood for 

many communities in and around Puttalam and the cost of paddy-boiling vessels can be 

prohibitive for these farmers to make the most of their produce. Our partner in this project 

was the Bank of Ceylon which assisted in providing reasonable funding to these families. 

Project Impact: 10 underprivileged farmer families 

Women Entrepreneurs Developed 

The local reed industry around the Puttalam area was given a boost with a livelihood 

support programme being extended for women with focus on three local industries, 

namely reed products, cadjan weaving and coir manufacturing. Working through the 

Perakum Women’s Rural Development society, 35 women are now engaged in this lucrative 

self-employment venture. 

We also donated a reed-flattening roller to enhance production efficiency while extending 

a marketing opportunity where these entrepreneurs can sell their products to the 

employees of the Puttalam plant. 

A soft-toy and fancy goods training programme for employees’ wives and daughters as 

well as women in the local community was conducted, opening opportunities for selfemployment 

ventures. 

Project Impact: Three industries developed, 35 women entrepreneurs nurtured, seventy 

families’ lifestyles improved, self-employment opportunities opened. 

Farmer families of Manaveriya 

Women entrepreneurs in the reed industry 

64

Coir & Cadjan Industries 

Developed 

Three water tanks were constructed to 

assist families in the Attawilluwa village 

whose major form of income generation is 

cadjan weaving. The Puttalam plant also 

funded the Kal Adiya Samurdhi Society to 

purchase coir preparation machinery in 

order to develop the local coir industry, 

while also conducting a coir manufacture 

training programme for a group of women 

from the local communities. 

Project Impact: 15 families’ cadjan weaving 

prospects improved, twenty families benefit 

from upliftment of coir industry. 

Life Back on Track for Tsunami- 

Affected Families 

In the aftermath of the tsunami, the 

need for livelihood support was identified 

by the Ruhunu plant as a community 

impact initiative. Setting up Community 

Advisory Panels, and in partnership with 

SEEDS under the aegis of Sarvodaya to 

administer the programme, the plant 

launched a micro-financing programme 

to restart businesses in that area, which 

include grocery shops, vegetable stalls 

and tailoring establishments. 

Project Impact: 50 families restart 

businesses. 

“Thanks to this loan I have increased my business from one 

machine to five and now have two outlets. Holcim Lanka’s 

micro-finance programme gave a whole new meaning to 

life.” 

E. K. Karunadasa 

New Supun Tailors 

Devata, Galle. 

“A mission that I started on my own has now bloomed into 

job opportunities and bright smiles to young lives, thanks to 

Holcim Lanka’s micro-financing for livelihood programme loan 

project.” 

M. H. M. Fariz 

Akuressa Road 

Devata, Galle. 



Education 

Education is fundamental to building 

a sustainable future and is a requisite 

feature in meeting the MDGs. However, 

education must be holistic and not simply 

academic, if it is to contribute effectively 

in society. While we acknowledge that 

taking on the challenges of the entire 

gamut of education to fall in line with 

the holistic aspect is difficult, Holcim 

Lanka decided to focus on one area of 

the holistic equation to ensure that the 

concept of education is taken to the next 

realm – that of ‘Safety First’. 

Kosgoda pre-school 

Campaigns with the Community 

To do this, we engaged our Community 

Advisory Panel and conducted a needs 

assessment around the Yatalgala, 

Uswetakeiyawa, Devata and Roomassala 

areas adjacent to RCW. Together with 

the plant’s CSR team, the Community 

Advisory Panel and the local community 

discussed the most crucial issues that 

surround the community. From this point, 

having gathered the support of school 

principals, community and religious 

leaders, the company embarked on a 

focused campaign of instilling a ‘Safety 

First’ culture in schools. 

Bonavista College in Roomassala 

The following projects were thus 

implemented upon needs assessments 

conducted: 

• A First Aid Centre at Sudharma College 

with a qualified nurse to run the centre 

and equipped with the necessary 

equipment to handle emergencies until 

hospitalization. The plant will bear the 

operational and medical costs. Plans 

are under way to extend the concept to 

other schools. There was also a request 

from the principals to make the services 

of a dentist available periodically. 

• A school that has among its alumni, 

literary great Martin Wickremasinghe 

and civil society leader Dr A T Ariyaratne, 

Bonavista College in Roomassala was 

in abandon. To make a difference, RCW 

first conducted a comprehensive safety 

campaign which included the provision 

of bins for garbage and recycling 

initiatives to help the students be more 

aware of the need for safety around 

them. 

Grade Five Scholarship Tuition 

Programme 

With the Grade Five Scholarship being 

the only avenue for good students to 

gain entrance into the more popular 

schools in the country, especially if they 

are in remote areas, most students have 

no access to additional information 

or knowledge on the curriculum of 

the scholarship examination as it is 

considered an added knowledge gaining 

exercise. Most would opt for private 

tuition but to those families that have 

no wherewithal or access to this, it could 

be that students with immense potential 

are left behind. PCW organised a Grade 

Five Scholarship Tuition programme for 

children sitting the examination within 

the community, which was conducted by 

a qualified teacher. 

66

Progress Towards Targets 

Area Target Year Status 2006 Page 

Environmental Performance 

Environmental Performance Indicator Achieve 77% at PCW by 2007 2001 75% 

Achieve 89% at RCW by 2007 2004 77% 

Management Systems Develop and implement ISO 14001-certifed management systems at PCW 2004 Ongoing 

Develop and implement ISO 14001-certifed management systems at RCW 2005 Ongoing 

CO2 and Resources Utilization Reduce specific net CO2 emissions to 637 kg CO2/ton cementitious materials by 2007 2006 Ongoing 44 

Environmental Impacts Emission reduction targets for NO2, SO2, and dust 2010 New 45 

Integrate into global CONNECT AFR Project a waste management initiative which espouses 2007 New 

resource recovery by 2007 

Publish the Waste Management Policy for the Ruhunu Plant by 2007 2007 New 49 

Three projects to further upgrade cement co-processing operations at PCW 2006 Ongoing 

Biomass Collection Centre in Kurunegala 2006 Achieved 

Canteen Wastewater Project at PCW 2005 Achieved 

Social Performance 

General Integrate our corporate social responsibility approach into business plans 2004 Ongoing 

Occupational Health & Safety (OH&S) Ensure OH&S management systems comply with Group standard 2005 Ongoing 58 

Projects Community Advisory Panel meetings held 2006 Achieved 52 

Successful completion of the Holcim Fund for Reconstruction and release of its final report 2006 Achieved 68 

Sustainability Commitments 

Integrate sustainable development programs into existing management systems – Sustainable 

Management System (SMS) 

2006 Ongoing 24 

Execute Capex Projects that contribute towards economic, social, environmental performance 2006 Ongoing 32 



Special Report 

Helping them stand Undefeated - Tsunami work Concluded 

It all began with massive crashing waves - then, lost lives, mangled families and a desecration 

of the social fabric of the country. But it was also a time when a country stood together 

united, to help fellow human beings. 

Holcim Lanka’s relief efforts began when the managers and employees from the various sites 

rallied around the devastated Ruhunu plant. The two challenges that confronted the Holcim 

team was in getting immediate relief to the affected employees and local communities and 

secondly, to get the plant back on track. A relief centre was set up complete with a medical 

camp. In tandem with these relief efforts, we managed to get the plant operational and back 

to work in just two weeks. 

Having witnessed the devastation and mental trauma first hand, with the donation of a week’s 

salary by all employees on 31 st December 2004, the Holcim Fund for Reconstruction in Sri Lanka 

was launched. The Fund quickly swelled with the Holcim Group contributing CHF 1 million and 

several other well-wishers of the company pitching in. The Fund was officially launched on 5 th 

January 2005 endowed with LKR 125 million. Based on the vision of ‘Rebuilding foundations 

for tsunami victims to regain their homes, hopes and lives’, Holcim Lanka speedily teamed 

up with local community leaders, government bodies and NGOs to begin work. Sarvodaya, 

a reputed local NGO was selected as our main partner and Holcim Lanka appointed a Fund 

Management Team to ensure that all activities will uphold the principles of transparency and 

accountability as well as equality for all ethnic groups. 

In collaboration with community leaders and organisations, the Fund helped rebuild 670 

houses and several affected schools in all affected areas in the Northern, Eastern, Southern 

and Western Provinces. Below is a synopsis of the Fund’s efforts. 

The support extended by Holcim Lanka was in two genres: 

• Complete support covering everything from construction cost to technical support 

• Partial support ranging from cement donation to technical support for a number of other 

projects initiated by community leaders and institutions including NGOs 

Helping the tsunami afflicted to rebuild their lives by rebuilding their homes 

68

The Holcim Lanka Effort 

Housing Projects Supported by Holcim Fund 

Full Construction Support 

Support 

Type 

Project 

Location 

No. of 

Houses 

Part Construction Support 

Full Support Sarvodaya project - South Galle 37 

Matara 39 

Ceylinco Grameen 

Sarvodaya 

Jaffna 

13 Houses - Rs 3.9 Mn 

Sarvodaya project - North & East Ampara 50 

Swiss Agency for Development and 

Cooperation (SDC) 

Kilinochchi 

Mullativ 

Batticaloa 26 

Trincomalee 37 

Mannar 

Vavunia 

Jaffna 13 

Trincomalee 


Holcim Niwasa Project Kalutara 25 

Anuradhapura 

Total 227 

Puttalam 

Kurunegala 

Matale 

Polonnaruwa 

Batticaloa 


Partial 

Support 

Ven Tissa Thero & UNESCO Project Kosgoda 50 

Meth Sevana/Sri Bodhiraja Foundation Southern province 80 

Meth Sevana/Leicester Tiger Rugby Club Southern province 10 

Holcim Niwasa - 25 Houses - Rs 10 Mn 

Gampaha 

Colombo 

Kegalle 

Kandy 

Nuwara Eliya 

Badulla 

Monaragala 

Ampara 

50 Houses - Rs 15 Mn 

CECB/Sabaragamuwa PC/Sri Subodha 

Foundation 

Hambantota 65 

Alutlanka project Galle 30 

Livelihood - Rs 3 Mn 

Kalutara 

Ratnapura 

Reconstruire et Vivre Project Habaraduwa 25 

Livelihood - Rs 6 Mn 

Galle 

Matara 

Hambantota 

Colombo West Rotary Club Habaraduwa 35 

Swiss donors La Solidarite de la Broye Payagala 25 


Other Miscellanous Projects All affected areas 120 


7 Schools - Rs 4 Mn 

All over the island 

partly support (cement donation+ technical assistance) 

443 Houses - Rs. 25 Mn 

Total ~440 

Grand total ~670 



Getting Lives Back on Track 

However, sustainability lies key to healing in times of disaster. Thousands of livelihoods were 

lost and we decided to assist local communities with getting their lives back on track, giving 

them opportunities and avenues to restart businesses they had so catastrophically lost. 

• Micro loan schemes for self-employment business in collaboration with two reputed 

micro-financing institutions, Sarvodaya (SEEDS) and Ceylinco Grameen contributing LKR 9 

million from the fund 

• Motivational support and tool kits for affected masons 

• Support for construction of two vocational training centres 

• Support for livelihood projects initiated by the Postgraduate Institute of Management of 

the University of Sri Jayawardenepura 

• Support for skills development programme of the Organization of Professional Associations 

and Department of Technical Education and Training 

School Reconstruction 

With education also being one of our social impact platforms, we strove to create normalcy to 

the students who had been devastated due to the tsunami. Getting back to school proved to be 

therapeutic and healing. We made a conscious decision to actively participate in contributing 

towards the process of constructing schools with the donation of cement. 

Foundations built for a new future 

Some of the construction work we supported: 

• A school building of BTS College in Dadalla under a project by people from Burghausen City 

in Germany and Aluthlanka NGO 

• A pre-school building in Habaraduwa under a project by Reconstruire et Vivre NGO 

• A school, a pre-school and a playground in Kosgoda under a project by Ven Ahungalle 

Wimaladhammatissa Thero and UNESCO 

• Several school buildings in Matara under a project by Swiss Development Agency 

• A school building in Tangalle under a project by an American NGO Architects Without 

Borders 

70

Concessionary Cement Purchase 

Rates 

Holcim Lanka also contributed to the 

national development effort with 

concessionary purchase rates for cement 

through a Memorandum of Understanding 

between the Ministry of Housing and 

Reconstruction Industry, Eastern Province 

Education and Irrigation Development and 

Holcim Lanka. 

In the immediate aftermath of the tsunami, 

it must also be noted that there were no 

shortages in cement indicating that the 

supply was sufficient to cater to the rising 

demand. 

After having completed our mandate, 

the Fund was successfully closed in 

January 2006 with a final report titled, 

‘Undefeated’. 

List of Multi-Stakeholder Partnerships 

Partnering NGO/ Entity Location No. of Houses /Type of Project Nature of Project 

Sarvodaya Batticaloa 26 Housing 

Sarvodaya Ampara 50 Housing 

Sarvodaya Trincomalee 37 Housing 

Sarvodaya Jaffna 13 Housing 

Aluthlanka Unawatuna 30 Housing 

Aluthlanka Galle 600 Schools 

UNESCO & Ahungalle Wimaladharma Thero Kosgoda 50 Housing 

UNESCO & Ahungalle Wimaladharma Thero Kosgoda 400 School 

Holcim Niwasa Kalutara 25 Housing 

Swiss Development Agency Matara School Buildings Schools 

National Heroes Foundation Down South 10 Housing 

Madushka Association Ampara 12 Housing 

Reconstruire et Vivre Habaraduwa 25 Housing 

CECB & Sabaragamuwa PC & Sri Bodhiraja Foundation Hambantota 65 Housing 

Model House at UDA Colombo 5 Housing 

Miscellaneous Minor cement Donations All island 70 Housing 

Distributors/Dealers/Masons Hikkaduwa 10 Housing 

Sri Bodhiraja Foundation Meth Sevana Payagala 80 Housing 

Leicester Tigers Rugby Club, Meth Sevana & Sri Bodhiraja Foundation Matara 10 Housing 

Swiss Donors - La Solidarite de la Broye Payagala 25 Housing 

Rotary Club of Colombo West Habaraduwa 35 Housing 

Ministry of Sports Moratuwa 25 Housing 

Srilak Sahana Seva Padanama Payagala Technical Training Institute (300 youth) Livelihood Support 

Samadhi Community Development Foundation Matara Skills Training Schools (400 youth) Livelihood Support 

Holcim Employees Galle Immediate Relief Immediate Relief 

Construction Skills Training All Affected areas Livelihood Support Livelihood Support 

Youth Project - Block Making Trincomalee Cement Blocks Livelihood Support 

Block Making Machine - PIM Galle Cement Blocks Livelihood Support 

Kiln for Pottery - PIM Galle Pottery Livelihood Support 

Mushroom Project - PIM Galle Livelihood Support Livelihood Support 

Development of Recycle Paper Product - PIM Hikkaduwa Livelihood Support Livelihood Support 

Ceylinco Grameen Kalutara Livelihood Support Livelihood Support 

Seeds Galle Livelihood Support Livelihood Support 

Livelihood Support - Drama, Puppet Show Matara Livelihood Support Livelihood Support 



And Our Journey Continues…. 

to build foundations for the future 

On the next page are some of the projects that have targeted timelines for next year. We 

sincerely hope to deliver on time and to the satisfaction of our stakeholders all that we have 

undertaken. We also make a fervent promise to continue our endeavours to fashion, form and 

build a sustainable future for the generations of this country. 

Our Sustainable Journey at Global Level 

Our parent company Holcim Lanka released in July 2006 the Corporate Sustainable 

Development for the year 2004/2005. While being well on track in achieving its existing 

sustainability targets, the Group has set further targets for emissions and occupational 

health and safety. 

The priorities of Holcim in the area of sustainable development are occupational health and 

safety, environment, climate and energy, community involvement, stakeholder engagement 

and sustainable construction. 

The Group is well on track to meeting its sustainability targets. For example, net CO2 emissions 

per ton of cement have been reduced by 14.7% since 1990. The voluntary target of a 20% 

eduction by 2010 is therefore within reach. 

Sustaining a journey for future generations 

What you have just read in this report is a true and accurate account of our work in 

sustainable development. It may not be ideal but it is a start, and we believe that the purview 

of sustainable development is far-reaching and extensive. We have already begun projects 

and programmes that we feel sets the stage for sustainable development. Some of these 

have been completed and some ongoing. We also have mapped out some strategies that will 

take us into next year. 

We hope to lead by example so that as an industry highly integrated into economic, social and 

environmental issues, we will uncover new ways of doing business, where we can connect 

more effectively with all our stakeholders. Given the scope of our industry, we know that we 

have immense potential in playing a lead role in making a difference to each of our stakeholder 

segments and that we can build foundations for a sustainable future. 

The additional targets are in the two important areas of occupational, health and safety and 

environment. The frequency of accident-related absences is to be reduced by 30% annually over 

the next three years. In order to achieve a Group-wide reduction in its atmospheric emissions, 

Holcim is to lower the output of NOx, SO2 and dust per ton of cement by 20% by 2010. Thus, 

Holcim will be honouring all voluntary commitments made within the scope of the Cement 

Sustainability Initiative of the World Business Council for Sustainable Development. 

Holcim’s efforts in the field of sustainability are increasingly being recognized by the outside 

world. The company achieved recognition as ‘Leader of the Industry’ in the Dow Jones 

Sustainability Index 2006 in the building materials sector. Holcim Lanka was recognized with 

this prestigious award in the year 2005, too. 

72

A Sustainable National Contribution for 2007 & Beyond 

Since commencement of operations here in Sri Lanka, Holcim has invested over USD 110 

million in Sri Lanka. We are serious in living up to our global vision of “building foundations for 

society’s future”, sustaining environmental performance. 

As a serious, committed, long-term player in this country, it is vital that we plan well ahead in 

a pragmatic and action-oriented manner. There is a need to assure that the expected growth 

process has the necessary cost-effective supply of construction materials, as well as the 

innovation and end-user orientation to allow for sustainable growth of the nation. 

The increasing need of the government to develop the North and East would be highly 

assisted as Holcim Lanka has stated in the vision: “We are the leading and preferred supplier 

of cement and related building materials to build foundations for Sri Lanka’s future”. The 

proposed development is in line with the Government’s concept of re-developing Trincomalee 

as a Metropolitan Growth centre for the North and East of Sri Lanka in order to strengthen the 

economic and resource base in that area, which will also see a renaissance of the construction 

industry in this area. 

Furthermore, Holcim will be a competitive player in the North and East cement market, 

(at present, Tokyo Cement is the only cement supplier for the North and East market), with 

consumers being assured of quality at competitive pricing. Many other industries will also be 

positively influenced by the proposed development, with indirect entrepreneur opportunities 

in transport, packing material supply et al. being possibilities. Tourism could also see a boom 

with Trincomalee being a tourist hot spot and featured globally for its beaches and rich marine 

resources. 

• The revenue to the Government vis-à-vis taxation is approximately LKR 186-250 million 

each year. This will differ as the imports of clinker and cement changes in periods 

• The VAT charges itself will additionally account to around LKR 197 million 

• Over 100 direct and indirect employment opportunities will emerge during the construction 

and initial implementation stage (phase 1) of the project, rapidly rising to around 200 when 

the cement mill and the associated plant starts off during the end of 2007 

• Around 40% of the projected money will move into the local economy 

The Holcim promise of a better future 


And Our Journey Continues... 73

Holcim Lanka Partners IUCN Sri Lanka in Biodiversity Conservation 

Holcim Lanka will sign an MOU with IUCN Sri Lanka in February 2007 to spearhead a five year 

programme to be completed in 2011 with an investment of USD 1 million. The main projects 

earmarked are: 

Biodiversity Conservation at Holcim Lanka’s Limestone Quarry: 

The project aims to further accelerate the restoration of biodiversity and landscape values 

already being implemented by the company, to an optimum pace in the rehabilitated areas 

where the limestone has been extracted. 

Rehabilitation of mined corals: 

Coral reefs have been long exploited for lime production used for masonry construction and 

the resulting destruction of the reef foundations has eliminated coral re-growth. As a pilot 

project, artificial reefs will be established to pave the way for coral growth and long-term 

livelihood support for local fishermen. 

Adding Value to the Development of Bio-fuel: 

Actively seeking to replace its non-renewable fossil-fuel energy resources by more sustainable 

ones, Holcim Lanka will initially develop fuel-wood plantations to supply its power plant project 

and will then take measures to eventually replace its kiln-fuel with bio-fuels. The main resources 

of bio-fuels under consideration are sawdust and fuel-wood from short rotation plantations. 

Improvement of the Puttalam Environment: 

Using the IUCNSL developed model which separates solid waste at the source into compostable 

and non-compostable fractions, Holcim Lanka will recover non-compostable waste generated 

in Puttalam by way of cement-kiln co-processing, a safe and environmentally sound waste 

treatment method recognized around the world. 

Future Projects: 

• Conservation management at Bar Reef Puttalam, to conserve marine biodiversity through 

protection of valuable bar reef sanctuary 

• Conservation management at Rumassala Reef Galle, to conserve marine biodiversity 

through protection of Rumassala marine sanctuary 

• Biodiversity conservation in Sri Lanka’s marine environment, to raise public awareness 

levels on marine ecosystems and their value 

Bar Reef, Puttalam 

74

Annexures 

Organizational Structure 

Regional Internal 

Auditor 

Chairman & 

Board of Directors 

Holcim Lanka Ltd. 

Internal 

Auditor 

Managing Director 

/CEO 

Sustainable 

Development 

Business Planning 

Risk Management 

Legal & 

Compliance 

OH&S Communication Quality 

Assurance 

Corporate 

Social 


Environmental 

Alternative Fuel 

Resources 

Manufacturing Marketing & Sales Logistics & Imports Finance & 

Controlling 

Human Resources 

AFR Operations 

Plant Manager 

Palavi 

One-Stop-Shops 

Logistics 

Operations 

Finance 

Organizational 

Development 

AFR Marketing & 

Communication 

Plant Manager 

Ruhuna 

Marketing 

Supply Chain 

Planning 

Procurement 

Personal 

Development 

AFR Commercial 

Sales 

IT 

Personal 

Administration 


Annexures 75

Our compliance tracked against the Global Reporting Initiative - Standard Disclosures* 

*Refer to Sustainability Reporting Guidelines, Global Reporting Initiative, 2006, pp 20-35 

Standard Disclosures Yes No Not 

Applicable 

Page 

Strategy & Analysis 

Statement from the most senior decision-maker of the organization (e.g. CEO, chair, or equivalent 

senior position) about the relevance of sustainability to the organization and its strategy 

√ 18 

Description of key impacts, risks, and opportunities √ 27-66 

Organizational Profile Name of the organization √ 5 

Primary brands, products, and/or services √ 5, 14, 

33-35 

Operational structure of the organization, including main divisions, operating companies, 

subsidiaries, and joint ventures 

√ 75 

Location of organization’s headquarters √ 5 

Number of countries where the organization operates, and names of countries with either major 

operations or that are specifically relevant to the sustainability issues covered in the report 

√ 5 

Nature of ownership and legal form √ 5 

Markets served (including geographic breakdown, sectors served, and types of customers/ 

beneficiaries) 

Scale of the reporting organization, including: 

• Number of employees; 

• Net sales (for private sector organizations) or net revenues (for public sector organizations); 

• Total capitalization broken down in terms of debt and equity (for private sector organizations); and 

• Quantity of products or services provided 

Significant changes during the reporting period regarding size, structure, or ownership including: 

• The location of, or changes in operations, including facility openings, closings, and 

expansions; and 

• Changes in the share capital structure and other capital formation, maintenance, and 

alteration operations (for private sector organizations) 

√ 33-39, 

51 

√ 13, 

27-29, 

54 

√ 27-29 

Awards received in the reporting period √ 58 

Report Parameters Reporting period (e.g. fiscal/calendar year) for information provided √ 6, 18 

Date of most recent previous report (if any) 

√ 

76


Applicable 

Page 

Report Parameters Reporting cycle (annual, biennial, etc.) √ 6 

Contact point for questions regarding the report or its contents √ 85 

Process for defining report content, including: 

• Determining materiality; 

• Prioritizing topics within the report; and 

• Identifying stakeholders the organization expects to use the report 

Boundary of the report (e.g. countries, divisions, subsidiaries, leased facilities, joint ventures, 

suppliers). See GRI Boundary Protocol for further guidance 

√ 6 

√ 6 

Governance, Commitments & Engagement 

State any specific limitations on the scope or boundary of the report √ 6 

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and 

other entities that can significantly affect comparability from period to period and/or between 

organizations 

Data measurement techniques and the bases of calculations, including assumptions and 

techniques underlying estimations applied to the compilation of the Indicators and other 

information in the report 

Explanation of the effect of any re-statements of information provided in earlier reports, and 

the reasons for such re-statement (e.g. mergers/acquisitions, change of base years/periods, 

nature of business, measurement methods) 

√ 1 

√ 43-46, 

59 

Significant changes from previous reporting periods in the scope, boundary, or measurement 

√ 

methods applied in the report 

Table identifying the location of the Standard Disclosures in the report √ 3 

Policy and current practice with regard to seeking external assurance for the report. If not 

√ 

included in the assurance report accompanying the sustainability report, explain the scope and 

basis of any external assurance provided. Also explain the relationship between the reporting 

organization and the assurance provider(s) 

Governance structure of the organization, including committees under the highest governance 

body responsible for specific tasks, such as setting strategy or organizational oversight 

Indicate whether the chair of the highest governance body is also an executive officer (and, if 

so, their function within the organization’s management and the reasons for this arrangement) 

√ 19-25 

√ 24 

√ 


Annexures 77


Applicable 

Page 

Governance, Commitments & Engagement 

Management 

Approach & 

Performance 

Indicators 

Economic 

Disclosure on 

Management 

Approach 

with reference 

to Economic 

Aspects 

Economic 

Performance 

Market 

Presence 

Indirect 

Economic 

Impacts 

For organizations that have a unitary board structure, state the number of members of the 

highest governance body that are independent and/or non-executive members 

Mechanisms for shareholders and employees to provide recommendations or direction to the 

highest governance body 

Linkage between compensation for members of the highest governance body, senior managers, 

and executives (including departure arrangements), and the organization’s performance 

(including social and environmental performance) 

√ 56 

√ 53-54 

Processes in place for the highest governance body to ensure conflicts of interest are avoided √ 24-25 

Process for determining the qualifications and expertise of the members of the highest 

√ 

governance body for guiding the organization’s strategy on economic, environmental, and social topics 

Goals and performance using organization-specific indicators (as needed) and GRI performance 

indicators 

√ 24, 27- 

39 

Policy that defines the organization’s overall commitment √ 18, 19 

Any additional contextual information (e.g. key successes and shortcomings, major 

√ 27-39 

organizational risks and opportunities) 

Direct economic value generated and distributed, including revenues, operating costs, 

employee compensation, donations and other community investments, retained earnings, and 

payments to capital providers and governments 

√ 27-39 

Financial implications and other risks and opportunities for the organization’s activities due to 

√ 

climate change 

Coverage of the organization’s defined benefit plan obligations √ 27-39 

Significant financial assistance received from government √ 27-39 

Range of ratios of standard entry level wage compared to local minimum wage at significant 

locations of operation. 

Policy, practices, and proportion of spending on locally-based suppliers at significant locations 

of operation 

Procedures for local hiring and proportion of senior management hired from the local 

community at locations of significant operation 

Development and impact of infrastructure investments and services provided primarily for 

public benefit through commercial, in-kind, or pro bono engagement 

√ 

√ 

√ 53 

√ 27-39, 

68-72 

Understanding and describing significant indirect economic impacts, including the extent of impacts √ 27-39 

√ 

78


Applicable 

Page 

Management 

Approach & 

Performance 

Indicators 

Environmental 

Disclosure on 

Management 

Approach with 

reference to 

Environmental 

Aspects 

Goals and performance using organization-specific indicators (as needed) and GRI performance 

indicators 

√ 41-49 

Policy that defines the organization’s overall commitment √ 23-25 

The most senior position with operational responsibility or explain how operational responsibility is √ 19-20 

divided at the senior level 

Procedures related to training and awareness 

√ 

Procedures related to monitoring and follow-up 

√ 

Any additional contextual information (e.g. key successes and shortcomings, major organizational 

risks and opportunities) 

√ 41-49 

Materials 

Indicators 

Materials used by weight or volume 

Percentage of materials used that are recycled input materials. √ 44, 45 

√ 

Energy 

Indicators 

Direct energy consumption by primary energy source 

Indirect energy consumption by primary source 

√ 

√ 

Energy saved due to conservation and efficiency improvements √ 44 

Initiatives to provide energy-efficient or renewable energy-based products and services, and 

reductions in energy requirements as a result of these initiatives 

√ 41-46 

Initiatives to reduce indirect energy consumption and reductions achieved √ 45 

Water 

Indicators 

Total water withdrawal by source 

Water sources significantly affected by withdrawal of water 

√ 

√ 

Percentage and total volume of water recycled and reused 

√ 

Biodiversity 

Indicators 

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of √ 49 

high biodiversity value outside protected areas 

Description of significant impacts of activities, products, and services on biodiversity in protected √ 49 

areas and areas of high biodiversity value outside protected areas 

Habitats protected or restored √ 47-49 

Strategies, current actions, and future plans for managing impacts on biodiversity √ 49 

Number of IUCN Red List species and national conservation list species with habitats in areas 

affected by operations, by level of extinction risk 

√ 74 


Annexures 79


Applicable 

Management 

Approach & 

Performance 

Indicators 

Environmental 

Emissions, 

Effluents 

& Waste 

Indicators 

Total direct and indirect greenhouse gas emissions by weight √ 43-45 

Other relevant indirect greenhouse gas emissions by weight √ 43-45 

Initiatives to reduce greenhouse gas emissions and reductions achieved √ 43-45 

Emissions of ozone-depleting substances by Weight 

NO, SO, and other significant air emissions by type and weight √ 45 

Total water discharge by quality and destination 

Total weight of waste by type and disposal method 

Total number and volume of significant spills √ 47 

√ 

√ 

√ 

Page 

Social – Labour 

Practices & 

Decent Work 

Products 

& Services 

Indicators 

Compliance 

Indicators 

Transport 

Indicators 

Overall 

Indicators 

Disclosure on 

Management 

Approach with 

reference to 

Labour Aspects 

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms 

of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped 

internationally 

Identity, size, protected status, and biodiversity value of water bodies and related habitats 

significantly affected by the reporting organization’s discharges of water and run-off 

Initiatives to mitigate environmental impacts of products and services, and extent of impact 

mitigation 

Percentage of products sold and their packaging materials that are reclaimed by category 

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance 

with environmental laws and regulations 

Significant environmental impacts of transporting products and other goods and materials used for 

the organization’s operations, and transporting members of the workforce 

Total environmental protection expenditures and investments by type 

Use organization-specific indicators (as needed) and GRI performance indicators to show 

results of performance against goals, and indicate linkage to internationally recognized 

universal standards (the ILO Tripartite Declaration Concerning Multinational Enterprises and 

Social Policy and the Organization for Economic Co-operation and Development Guidelines for 

Multinational Enterprises should be primary reference points) 

√ 41-49 

Policy that defines the organization’s overall commitment √ 22-23, 

53 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

80


Applicable 

Management 

Approach & 

Performance 

Indicators 

Social – Labour 

Practices & 

Decent Work 

Disclosure on 

Management 

Approach with 

reference to 

Labour Aspects 

The most senior position with operational responsibility or explain how operational 

√ 

responsibility is divided at the senior level 

Procedures related to training and awareness √ 54-57 


√ 



√ 53-57 

Employment Total workforce by employment type, employment contract, and region √ 

Total number and rate of employee turnover by age group, gender, and region √ 54 

Benefits provided to full-time employees that are not provided to temporary or part-time 

√ 56-57 

employees, by major operations 

Labour 

Percentage of employees covered by collective bargaining agreements 

√ 

Management Minimum notice period(s) regarding operational changes, including whether it is specified in 

√ 

Relations collective agreements 

Occupational 

Health & 

Safety 

Training & 

Education 

Diversity 

& Equal 

Opportunity 

Percentage of total workforce represented in formal joint management-worker health and 

safety committees that help monitor and advise on occupational health and safety programs 

Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related 

fatalities by region 

Education, training, counselling, prevention, and risk-control programs in place to assist 

workforce members, their families, or community members regarding serious diseases 

Health and safety topics covered in formal agreements with trade unions 

√ 

√ 59 

√ 58-60 

Average hours of training per year per employee by employee category √ 54 

Programs for skills management and lifelong learning that support the continued 

√ 54-57 

employability of employees and assist them in managing career endings 

Percentage of employees receiving regular performance and career development reviews 

√ 

Composition of governance bodies and breakdown of employees per category according to 

gender, age group, minority group membership, and other indicators of diversity 

Ratio of basic salary of men to women by employee category 

√ 

√ 

√ 

Page 


Annexures 81


Applicable 

Management 

Approach & 

Performance 

Indicators 

Social – Human 

Rights 

Disclosure on 

Management 

Approach with 

Reference to 

Human Rights 

Aspects 

Investment & 

Procurement 

Practices 

Nondiscrimination 

Freedom of 

Association 

& Collective 

Bargaining 

Child Labour 

Forced & 

Compulsory 

Labour 


results of performance against goals, and indicate linkage to internationally recognized 

universal standards (the ILO Tripartite Declaration Concerning Multinational Enterprises and 

Social Policy and the Organization for Economic Co-operation and Development Guidelines for 

Multinational Enterprises should be primary reference points) 

Policy that defines the organization’s overall commitment 







Percentage and total number of significant investment agreements that include human rights 

clauses or that have undergone human rights screening 

Percentage of significant suppliers and contractors that have undergone screening on human 

rights and actions taken 

Total hours of employee training on policies and procedures concerning aspects of human 

rights that are relevant to operations, including the percentage of employees trained 

Total number of incidents of discrimination and actions taken 

Operations identified in which the right to exercise freedom of association and collective 

bargaining may be at significant risk, and actions taken to support these rights 

Operations identified as having significant risk for incidents of child labour, and measures 

taken to contribute to the elimination of child labour 

Operations identified as having significant risk for incidents of forced or compulsory labour, and 

measures to contribute to the elimination of forced or compulsory labour 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

Page 

82


Applicable 

Management 

Approach & 

Performance 

Indicators 

Social – Human 

Rights 

Social – 

Society 

Security 

Practices 

Indigenous 

Rights 

Disclosure on 

Management 

Approach With 

Reference to 

Society Aspects 

Community 

Percentage of security personnel trained in the organization’s policies or procedures concerning 

aspects of human rights that are relevant to operations 

Total number of incidents of violations involving rights of indigenous people and actions taken 


√ 67 

results of performance against goals 

Policy that defines the organization’s overall commitment √ 22-23 


√ 19-21 



√ 

Procedures related to monitoring and follow-up √ 52 



Nature, scope, and effectiveness of any programs and practices that assess and manage the 

impacts of operations on communities, including entering, operating, and exiting 

Corruption Percentage and total number of business units analyzed for risks related to corruption √ 

Percentage of employees trained in organization’s anti-corruption policies and procedures 

√ 

Actions taken in response to incidents of corruption 

Public Policy Public policy positions and participation in public policy development and lobbying √ 

Total value of financial and in-kind contributions to political parties, politicians, and related 

institutions by country 

Anti- 

Competitive 

Behaviour 

Compliance 

Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly 

practices and their outcomes 

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance 

with laws and regulations 

Total number of incidents of non-compliance with regulations and voluntary codes concerning 

product and service information and labelling, by type of outcomes 

Practices related to customer satisfaction, including results of surveys measuring customer 

satisfaction 

√ 

√ 

Page 

√ 51, 

58-66, 

68-71 

√ 61-66, 

68-71 

√ 37 

√ 

√ 

√ 

√ 

√ 


Annexures 83


Applicable 

Management 

Performance 

Indicators 

Social – 

Society 

Social 

– Product 


Marketing 

Communications 

Customer Privacy 

Compliance 

Disclosure on 

Management 

Approach With 

Reference to 

Product Responsibility 

Aspects 

Customer 

Health & 

Safety 

Product service 

& labelling 

Programs for adherence to laws, standards, and voluntary codes related to marketing 

communications, including advertising, promotion, and sponsorship 


marketing communications, including advertising, promotion, and sponsorship by type of 

outcomes 

Total number of substantiated complaints regarding breaches of customer privacy and losses 

of customer data 

Monetary value of significant fines for non-compliance with laws and regulations concerning 

the provision and use of products and services 


results of performance against goals 

Policy that defines the organization’s overall commitment √ 23 


√ 



√ 

Procedures related to monitoring and follow-up √ 24-25 



√ 39 

Life cycle stages in which health and safety impacts of products and services are assessed for 

improvement, and percentage of significant products and services categories subject to such 

procedures 


health and safety impacts of products and services during their life cycle, by type of outcomes 

Type of product and service information required by procedures, and percentage of significant 

products and services subject to such information requirements 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

Page 

84

Abbreviations 

AFR Alternative Fuel Resources 

Capex Capital Expenditure 

CCI Chamber of Construction Industry 

CDM Clean Development Mechanism 

CO2 Carbon dioxide 

EA External Audit 

EMS Environmental Management Systems 

FPEs Fatality Prevention Elements 

GRI Global Reporting Initiative 

HARP Holim Accounting & Reporting Standards 

HIP Holcim Information Platform 

HR Human Resources 

IA Internal Audit 

LKR Sri Lankan Rupee 

MDGs Millennium Development Goals 

MPPA Marine Pollution Prevention Authority 

NGO Non-governmental organization 

NOx Nitrogen oxide 

OH&S Organizational Health & Safety 

PCW Puttalam Cement Works 

PLC Programmable Logic Controller 

RCW Ruhunu Cement Works 

SAP Systems Applications Processes 

SMS Sustainable Management Systems 

SO2 Sulphur dioxide 

USD United States Dollar 

WBCSD World Business Council for Sustainable Development 


Annexures 85

Executive Team 

From left to right: Francois Goulut (Vice President Manufacturing), 

George Nicole (Vice President Alternative Fuels and Raw Materials-AFR), 

Rodolfo Montero (Vice President Marketing and Sales), 

Nandana Ekanayake (Vice President Finance), Peter Spirig (MD and CEO), 

Mahanama Ralapanawa (Vice President Logistics and Imports), 

Chandana Wijenama (Vice President Human Resources)

Corporate Information 

(as of 28th February 2007) 

Board of Directors 

Manilal Fernando 

Chairman 

Attorney at Law 

Colombo, Sri Lanka 

Paul Hugentobler 

Deputy Chairman 

Civil Engineer (MSc), MBA 

Jona, Switzerland 

Peter Spirig 

Managing Director 

Civil Engineer (MSc), MBA 


Tim Mackay 

Director 

Master Mariner 

Jakarta, Indonesia 

Gamini Marapana 

Non-Executive Director 

Attorney at Law, 

President’s Counsel 


Mano Selvanathan 


Graduate of Commerce 


M C Ramakrishna 


Electrical Engineer (BEng) 

Bangalore, India 

Bankers 

Citibank 

Commercial Bank 

Deutsche Bank 

Hatton National Bank 

HSBC 

People‘s Bank 

Standard Chartered Bank 

Auditor 

Ernst & Young Chartered Accountants 

Company Secretaries 

F.J. & G. De Saram 

216, De Saram Place, 

Colombo 10 

Registered Office 

Holcim (Lanka) Ltd 

216, De Sarams Place, 

Colombo 10 

Head Office 

Holcim (Lanka) Ltd 

75, Braybrooke Place, 

Colombo 2 

Website: www.holcim.lk 

E-mail: info-LK@holcim.com 

Tel: +94 11 2310910 

Fax: +94 11 2300522 

For information on Sustainability reporting 

contact: 

Rathika de Silva 

Head of Sustainable Development 

Mobile: +94 77 7749527 

E-mail: rathika.desilva@holcim.com

www.holcim.lk

60733es Holcim Annual Review 2006.indb

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