We are part of it - San Miguel · 2020. 5. 13. · Normas OHSAS 18.000 SIZA BASC Kosher & Halal Sure Global Fair (SGF) Global GAP Complementary Business (Sales by business) Food quality

2019

We are part of it

Key milestones in our contribution to sustainable development

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Letter from the CEO

For over 60 years we have worked being inspired by the history of our predecessors and the challenges to meet ahead, in order to be able to feed families worldwide with our products.

We strongly believe that we create a positive impact through our business, as shown in our way of producing, in the quality of our products, in the relationship with our workers, customers, shareholders, suppliers and the communities in which we participate.

Today, I would like to share with you the sustainable development milestones that the company has achieved over 2019. This is a summarized report of the daily effort of over 8,000 people who turn our commitment into specific actions.

I wish to thank each and every one. Together, we are part of the nature and the lives of thousands of people.

Romain CorneilleSan Miguel CEO

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2019 SUSTAINABILITY MILESTONES

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And create opportunities for local communities

8,146Hectares planted

USD 226 MMIn global sales

8,000Collaborators

+2,000Fruit suppliers and

producers USD 145 MM In purchases +100

Consumer products contain our processed food

9%Market share of counter

seasonal fresh lemon

13%Of global lemon

processing

5 Packing plants

3 Processing plants

85 Managed farms

We contribute to global challenges

The 17 UN Sustainable D e v e l o p m e n t G o a l s define global priorities and aspirations for 2030

to put an end to extreme poverty, to protect our planet and to secure peace and prosperity to all the people.

Being aware of the above, at San Miguel we are committed to such goals from their very launch. That is why, we have reviewed the goals being contributed to and defined the priority objectives where to focus our efforts on, in order to create value and reduce impacts from our business.

Meeting such challenges requires united efforts from everyone, including States, companies, organizations and the society as a whole.

Priority

Direct Contribution Indirect Contribution

We are aware of our role in the world. That is why we make a positive contribution to social, economic and environmental development.

ZeroHunger

NoPoverty

QualityEducation

Clean Waterand Sanitation Reduced

Inequalities

ClimateAction

GenderEquality

Peace, Justice and Strong Institutions

Partnerships for the Goals

Life On Land

Sustainable Cities and Communities

Good Health andWell-Being

Affordable andClean Energy

Responsible Consumption and ProductionDecent Work and

Economic Growth

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1 We Are San Miguel

Our Origins

Argentina

Uruguay

Peru

South Africa

35,000Tons of production13% strategic producers

14,000Tons of exported fresh fruit

21,000Tons of processing

50,000Tons of grinding capacity (Novacore)

2Plants1 packing plant1 industrial plant

+200Employees

1,700Jobs at peak harvest season

+1,200Hectares in production

100,000 Plants per year

8Associated local strategic growers



100,000Tons of grinding capacity (Venco)

2Plants1 packing plant1 industrial plant

+200Employees

+1,000Jobs at peak harvest season


500,000Trees planted


39,000Tons of production


1Packing plant

+2,500Employees

2,100Jobs at peak harvest season




300,000Tons of grindingcapacity

3Plants2 packing plants 1 industrial plant

+700Employees*

3,000Jobs at peak harvest season**

5,340Hectares in production

80,000 Plants per year


We create value from nature, producing food to reach thousands of people around the world.

*It includes own, permanent and temporary employees. **It includes own and temporary jobs at peak harvest season.

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1 We Are San Miguel

Economic Performance (In million Argentine pesos)

Income Tax

-347

301

-223

2017 2018 2019

Direct Taxes

4536

73.6

2017 2018 2019

Retained Economic Value

-5,286

-8,758

-1,100.3

2017 2018 2019

Taxes, Levies and Contributions

76

92

4.3

2017 2018 2019

Payment to Suppliers

4,053

5,201

3,604

2017 2018 2019

Salaries, Wages and Social Security Contributions

2,539

1,985

962.4

2017 2018 2019

Payment to Capital Providers (*)

7,987

10,074

121.8

2017 2018 2019

Investment in Property, Plant and Equipment and Other Assets

2,289

1,186

490.6

2017 2018 2019

Investment in the Community

11

16

5.2

2017 2018 2019

In million Argentine pesos. (*) It considers the payments made for interest to our funding organizations (Banks and ON) and the dividends paid (deriving from the Statement of Source and Application of Funds - SSAF). For more information, refer to the annual report and balance sheet available on http://sanmiguelglobal.com/ estados-contables-y-documentos-publicos

Economic Value Distributed

Taxes

Economic Value Distributed

16,65318,891

5,038.9

2017 2018 2019

11,36710,133

3,938.6

2017 2018 2019

Direct Economic Value Generated

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2 Corporate Governance

We build our future on solid ground

Board Members Ethics, Transparency and Integrity

San Miguel has a Code of Ethics which establishes the required guidelines to contribute to the business objectives and goals based on transparency and integrity principles and standards. It is applicable to all collaborators in all the countries, at all hierarchical levels and it includes services, providers, suppliers, and customers.

Gonzalo TanoiraVice-Chairman

Isela Costantini

Arturo Tomás Acevedo

Santiago Ibarzabal Murphy

Our ambition is to build a sustainable, scalable growth.

Growth through geographic expansion and scale, profitability improvement and volatility reduction are the strategic pillars that we work on to reach maximum potential and increase our organizational effectiveness.

Luis Roque Otero Monsegur

Agustín Otero Monsegur

Cristián López Saubidet

Alejandro Anchorena

Martín Otero MonsegurChairman

For anonymous reporting

[email protected]

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Human Rights

As an organization, we undertake the responsibility for respecting and promoting human rights all across our value chain and with all our stakeholders, acknowledging both their significance and universality. Based on the integration of international principles, our commitment is met through a wide variety of programs in each of the countries where we operate.

This is our Commitment

2 Corporate Governance

Risk Management

Our risk management and tracking global model enables to optimize processes and to prepare ourselves for potential challenges and incidentals in the different dimensions of our business. We track and monitor the Risk Map through a digital platform (Risk Management) and carry out policies, procedures, crisis action planning and business continuity planning.

We say No to child labor .1

We promote the freedom to choose a decent job.

2

We ensure freedom of association .

3

We promote diversity and respect for differences.

4

We encourage access to education.

5

We care for health.6

We promote access to decent housing.

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We preserve the environment.8

Mulching

Organic, eco, synthetic and plastic.Reduces root-zone temperature as a result of direct radiation.Conserves soil moisture, making the use of water for irrigation more efficient.

Netting

Reduces wind and sun effect.Reduces thermal stress.

Shadow

+20% For heat

-6°C For cold

+3°C

Management Strategies in the face of Climate Change

Short-term and long-term fluctuations of weather patterns may have extreme effects on agricultural production, dramatically impacting on crop yield and our business sustainability. To prevent and mitigate their impact, we carry out the following:

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3 Value Chain and Supplier Network

OIL

4b

5 Logistics

ProcessedFruitOperators discard fruits in poor conditions and remove stones or other objects that may alter the final product.

Citrus fruits are washed with water at high pressure and then separated according to their different size.

Then the fruit is sent to the grating machines to extract its oil.

Using the extractors and conducting the necessary associated processes, citrus juice, pulp and peel are obtained, so as to meet the needs of each customer.

JUICEPULP

PEEL

4a Fresh Fruit PackingAt this point, the fruit undergoes the treatments necessary to ensure it is kept in good storage conditions until it reaches its final destination.

Then it is packed in boxes for different presentations.

The fruit is washed, cleaned with brushes and then classified by color, size and quality.1

2

NurseryThis is the place where plants are grown before being taken to the farms. Here, plants are given different types of care: grafting, genetic selection, irrigation.

FarmsAfter carrying out an adequate soil preparation, planting is performed. At the farms, plants undergo the phytosanitary treatment, the pruning, irrigation and nutrition, controlling that their management is sustainable at all times, until the fruit is ready for harvesting.

3 HarvestingEach stage complies with the safety processes required to keep fruit quality. There are two different harvesting methods:

b) By hand: When fruits are to be processed, they are harvested by hand, using no tools, and transported both in bulk and in bins.

a) With clippers: When citrus fruits are to be packed as fresh fruit, they are taken from the tree using clippers and transported in bins.

Multi-originPallets are prepared according to the particular requirements of each customer.

San Miguel's products are sent to 200 customers in 50 countries.

We look after every step of the process in order to ensure food quality and safety.

Our Production Process

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3 Value Chain and Supplier Network

+96% Purchases from Local Suppliers. We support the growth of small-sized local companies by facilitating business opportunist and providing them with initiatives and innovative schemes to contribute with their development.

91 Producers are part of our network of associated growers, with whom we establish a relationship of strategical partners based on mutual trust.

Supplier Network

Number of suppliers

Number of strategic growers

US MM purchases

Total: 1.890

567

328

186

809

Total: 91

60

5

26

0

Total: US$ 142.676.056

35,1

8,5

47,9

30,5

Savia

SAVIA is a system that we put in place in 2019 to standardize, to seek for improvements and, hence, to achieve efficiencies in our operations. By means of a method, processes and tools, we strive to improve the company’s performance and reach our maximum potential. With a 5-year global implementation plan and a method that guarantees its sustainability, the system is based on two fundamental pillars which work together involve every level and role of our organization (from executive to operative positions: harvesters, packers, etc.). The MANAGEMENT pillar contains the processes and tools that we use to manage the company’s areas. The PEOPLE pillar contains the process and tools through which we manage our people.

IntegraINTEGRA is an initiative that started a few years ago in the Agriculture area and that was officially launched in 2019 as a part of SAVIA. Its mission is to share, standardize and manage the company’s technical knowledge at every stage of the agro-industrial process, assuring best practices in all the countries in which we operate. The ultimate purpose is to reach maximum potential, reduce the risks deriving from the farming and industrial activity and guarantee our business sustainability.

To such purpose, a global interdisciplinary team works on 7 core areas:

Nursery and Varieties.1

Agronomic Phytosanitary Management.

2

Irrigation and Nutrition.3

Estimates and Harvest4

Huanglongbing.5

Post-harvest and Packing.6

Industry. 7

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4 Our customers

We reach all 5 continents with our citrus fruit and natural ingredients derived products.

Food Safety System Certification-ISO 22000:2005-FSSC 22000

Argentine Food a Natural Choice

GRASP

Normas OHSAS 18.000

BASCSIZA

Kosher & Halal

Sure Global Fair (SGF)

Global GAP

Complementary Business (Sales by business)

Food quality and safety

Fresh Fruit

63%

Natural Ingredients

37%

Distribution by Product

According to Sales

Distribution byProduct

According to Volume

Lemon Oil

Grape Others

Sweet Citrus Juice

Avocado

49% 38%

Developing, producing and delivering safe, reliable products to our customers from any production source is a priority. To such end, we have a food safety policy in compliance with the national and international laws and regulations. To ensure the safety and quality of our products and production processes, the company’s multidisciplinary teams put in place our Quality Management System all across the value chain, in line with stringent international standards.

HACCP

SMETABritish Retail Consortium (BRC)

225,8 MM in Sales

300 Customers

62 Countries

Research and Development

Driven by a permanent search for value for our customers and the citrus activity, our sales team, quality assurance team and research and development team work jointly to strengthen the farming operation, by focusing on bringing innovative and sustainable answers to constantly changing markets.

At San Miguel, the knowledge innovation and management include the control of pests and diseases, the HLB prevention and trials to diminish the number of applications or wastes on the product and on post-harvest activities in the field of Phytopathology and Biotechnology, as well as the creation of new products considering the market trends. One example of this is the development of a low sedimentation lemon juice for radler beers, which enables to achieve the required perfect turbidity level and the right quality for the consumer taste.

13%

33% 41%

17% 9%

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5 Develompent of our colleagues

Health and Safety Commitees

We have Joint Health and Safety Committees in all our operations, a space for workers to be able to consult and participate on whatever they consider as affecting workplace health and safety. The purpose of the Committees is to:

2019 Achievements

These are some of 2019 achievements we are particularly proud of:

Keep a record of statistics on work-related accidents and illnesses and analyze them.

5Reduction of accidents with time lost.

Assess new risks deriving from technology innovation or new tasks.3

Accident of self-employed contractors.

Accident of personnel under permanent contract .

Promote and cooperate in planning the training courses for occupational risk prevention.

4

Reduction of monthly accident frequency rate every 1,000 workers exposed.

Provide diagnosis tools for continuous risk assessment.2

Improvement in accidents in itinere.

Reduction of accidents with time lost.

Health and Safet

Caring for the safety and health of our people is absolutely our priority. To such end, in 2019 we consolidated the Global Environment, Health and Safety Management structure to cover all San Miguel operations, and we defined the objectives and goals for continuous improvement.

In addition, we developed programs for health promotion and illness prevention of our collaborators, their families and neighbors. Therefore, we conducted several programs including addition prevention, gender-based violence, health surveillance at all our origins, and also treatment of HIV and tuberculosis in South Africa.

Total directEmployees

Direct employeesby gender

34% 66%

Women Men

New Hiresby gender

Jobs addedduring Harvest Season

50% 50%

Women Men

+100New Permanent Hires in 2019. With transparency and efficiency we attract and choose talented profiles with technical expertise.

+USD 600.000 Invested in training

Prevent occupational risks from source or origin.1

We believe in the transformative capacity of individuals. We are a team.

Total: 8.063

3.123

1.700

2.172

1.068

Total: 3.772

728

205 23291

2.516

47%

92%

50%

0

0

81%

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Water

We incorporated the irrigation management

As part of the Blue Certification process, we measured the Water Footprint of our crops.

97% recyclability in our industrial production, sustained by the organic

Wastes We set up central warehouses for

We work in nature, and we undertake the responsibility for carrying out our activities within a sustainability framework, permanently pursuing a harmonious integration of production and biodiversity preservation.

Biodiversity protection

The responsible resource management and the care for the environment are recorded in the Company’s DNA. At all our sites, we endeavor to conducting a responsible, sustainable management of water, energy, supplies, raw materials, wastes and effluents.

Efficient use of resources

We conducted training and chats concerning flora and

-17% water consumption in Argentina

7,5% improving consumptionmilled ton

4,4% water used in South Africa compared to 2018

fraction, analyzing the inorganic fraction and conducting a regular monitoring of waste and

by-products segregation in all of the areas.

solid wastes and by-products to improve classification and

10species of large and medium-sized mammals were recorded.

21sampling stations on Farms.

We studied the quality of the aquatic environment

and its biodiversity. Water flows showed good to excellent eco

quality, hosting a high diversity of macroinvertebrates (54 taxa).

We updated the environmental units on the estates:

13.577 hatotal area

62%in natural areas and the balance in areas destined for agricultural and forest production.

The third audit of the PRODUTOYUNGAS certification was made, and validation was

obtained on compliance with the certification principles at the different stages of the

production activity and of the progress of the continued improvement process on Farms and the Industrial Plant.

We carried out a Flora and Fauna Search and Rescue

Program, in accordance with the Relocation Plans.

Within this framework, we started up by searching on foot, reptiles,

invertebrates, amphibians and mammals, led by a professional team of specialists inside each habitat.

Additionally, we identified and relocated plants to

the protected area which is adjacent to the site.

fauna care and protection.

We installed flora and fauna protection signs at strategic

spots located on our Fundos (farms).

Energy

We signed an agree-ment on purchase of Renewable Electric Power, to start the

-11% natural gasconsumptionto 2018.

-1,2% decrease per milled ton of fruit.

-11% electric power consumption

5% improving the consumption per milled ton of fruit.

transformation of the energy matrix of our industry as from 2020.

-68% energy used in packing at Chincha against 2018,

-802.397 Kw/h

We made improvements to the Effluent Treatment

Effluen

We put in place a program on wastewater caused

We developed a Monitoring Plan for effluents caused by the Packing Plant in

Plant, and achieved efficiency values above those historically

from our Packing plant, and requested permits for the disposal and/or

reuse of wastewater from other processes.

Chincha, and set up bio digesters for the treatment of effluents coming from

the sanitary facilities at Chincha’s Fundos (farms).

reached.

segregation.

6 Environment Management. We care for our environment

with Phytomonitoring and we use the Water

Balance calculation to optimize irrigation.

We checked and updated all the irrigation systems.

We implemented roof rainwater collection to reuse water.

Following diagnosis, some projects were drawn up to reduce the water footprint in order to avoid loss of water by evaporation

and make irrigation more efficient. In addition, we considered some changes to the monitoring and checking of ground water wells.

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7 Our link with the Communities

Economic

32

65%

50

+

current undertakings

a

Families

of graduates got their first job

beneficiaries

2.100

Primary health care| We attend to the sick, who are at home with no chance of attending a public hospital, with 3 social workers who go through the Valencia

Health

90 50Patients attended throughout the year or referred

Families

+beneficiaries

1.200

Education

180 80People in the football clinic

Beneficiaries at Ladies Tea

260 16Students from 4 rural schools

Trained teachers

400 2Pupils Schools

+150Pupils

community, an informal settlement in South Africa on a permanent basis, in alliance with the NGO Sisters of Mercy.

Nutrition | We encourage healthy eating habits in families in Argentina, Peru & Uruguay, including the grant for food boxes, workshops

for parents and feeding centers, and training for mothers on proper development of early childhood.

Medical campaigns: | Dental and hand-washing campaigns for

students of institutions bordering the farms in Peru.

Tuti-Frutti | We encourage healthy habits inside primary schools as an education reinforcement. In

addition, we take advantage of the beneficial new technologies for pupils, teachers and families.

Living a Winning Life | Recreation activities to train in values and social-emotional skills

for collaborators and neighbors in Sunday River Valley-South Africa.

Teen Education | We promote Integral Health Counseling at “Monte Grande” and “Estación Padilla” high schools in Famaillá,

in the framework of the “National Unintended Adolescent Pregnancy Prevention Plan”.

SamiTour and Compromiso Joven. | Initiatives for bringing young people in our community

closer to the job market and promoting their growth:

Germinar | We promoted the development of Enterprising Rural Women from their own capacities and the support of their business, to help

them consolidate an additional inco-me for their families as well as their personal growth.

Access to Water | We built initiatives concerning running water connection and indoor connection to neighbors of localities bordering our operations in

Argentina, and we ensure the supply of water tanks to employees in South Africa to guarantee regular supply.

Work 4aLiving | We trained youth to become economically active in the job

market in Kirkwood-South Africa.

Infrastructure | We performed the renovation of the houses of intra-farm collaborators in Uruguay and Argentina.

In addition, in Argentina we started a process for property and land donation for over 100 families.

Infrastructure | We renovated the recreation play area of the Centro Poblado Hoja Redonda and

we improved the houses of the collaborators who excelled in the season for each crop, in Peru.

We seek to make a difference in the communities we relate with day by day. This is why we endeavor to supporting their development and leaving installed capacity for them, so that they may grow by own means in a sustainable manner. In 2019, we strengthened our social investment strategy, focused on health, education and economic development.

We boost development

For each of them we conducted a wide variety of programs in all the countries where we operate

Pillars on which our broad Social Investment program is developed

Thudana citrus | After creating this company under a shared-ownership scheme with employees, in 2019 we carried out a series of trainings and assessment meetings with the

benefiatiaries in order to provide them with tools for their new role: management and leadership skills, knowledges of the citrus industry, etc.

120workers have received a 30% stake in the company.

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Scope and guidelines of this Sustainability Report

Publication number: 8Period covered: 2019Scope: Argentina (S.A San Miguel A.G.I.C.I Y F), Uruguay (S.A. San Miguel Uruguay, San Miguel Internacional Investments S.A., Samifruit Uruguay S.A.), South Africa (San Miguel Fruits South Africa Limited)), Peru (Agrícola Hoja Redonda), The Netherlands (Coop. Fruit NL Coöperatief U.A).

Contact usWe appreciate to have your opinions, suggestions, enquiries or any comment related the management presented in this Report addressed to the following email: [email protected]

International guidelines used

• GRI Standards (Global Reporting Initiative) Core Option of the GRI Standards.

• ISO 26000 International Standard on Social Responsibility As a guide to integrate social responsibility into our values and practices..

• United Nations Global Compact Valid as annual presentation of Communication on Progress (COP).

• Sustainable Development Goals We apply the SDG Compass tool, developed jointly with Global Compact, GRI and WBCSD.

Committed to Sustainability

This document presents an abridged version of

the 2019 Sustainability Report.

The full version is available on www.

sanmiguelglobal.com

Prepared by San Miguel International Relations,

Quality and Sustainability area.

Outside facilitator: ReporteSocial

www.reportesocial.com

The Sustainability Commitments undertaken at San Miguel give rise to the Company’s Material Topics, i.e. the most relevant issues for business sustainability which show our most significant economic, environmental and social effects and/or those with impact on the assessments, decisions and opinions of our stakeholders on our performance. They are the crucial basis to guide our company’s sustainability strategy.

Education

Effluent treatment

Sustainable agriculture

Fair competition

HousingEnergy efficiency

Climate change & ecosystem preservationSoil sustainable managementTemporary staff management

Social responsibility promotion in the supply chainBiodiversity protection

Food safety

Customer Service

Work - Private life balanceTalent attraction, development & loyaltyWaste management

Respect for Huram Rights

Diversity & equal opportunitiesSupplier assessment & developmentFostering healthy life habits (fresh citrus fruit)

Nutrition

Efficient use of water

Fight against child laborOccupational health & safety

Long-term business strategyBusiness management ethics and transparency

Impact of the Business

Sta

keh

old

ers

´inte

rest

s

Ethics and transparency in business management

Contribute with our network of suppliers in the sustainable growth of their business

Develop people in their human and economic dimensions

Understand our customers’ needs and meet them with integrity Responsible use of natural Resources

Community development- In

tere

st+

Inte

rest

- Impact + Impact

Our Websitewww.sanmiguelglobal.com

/SanMiguelGlobal

HeadquartersCazadores de Coquimbo 2860, Torre 2 - Piso 1(1605) Vicente López - Buenos Aires - ArgentinaTel.: +54 11 4721 8300

ArgentinaLavalle 4001 (T4000BAC) San Miguel de Tucumán - TucumánTel.: +54 381 451 2600

UruguayColonia 950, Piso 9 (11100) MontevideoTel.: +59 82 903 1303

South AfricaGround 1, B Block, Walmer Park Office Suites16th Avenue Walmer. Port Elizabeth (6001)Tel.: +27 41 368 9015

PeruChinchón 1018, piso 5(15046) San Isidro, LimaTel: +511 706 2241

Documents

We are part of it - San Miguel · 2020. 5. 13. · Normas OHSAS 18.000 SIZA BASC Kosher & Halal Sure Global Fair (SGF) Global GAP Complementary Business (Sales by business) Food quality