SGS 2013 Annual Report Business Review

VAST & accurate

BUSINESS REVIEW 2013

SGS IS THE WORLD’S LEADING INSPECTION, VERIFICATION, TESTING AND CERTIFICATION COMPANY. SGS IS RECOGNISED AS THE GLOBAL BENCHMARK FOR QUALITY AND INTEGRITY. WITH MORE THAN 80 000 EMPLOYEES, SGS OPERATES A NETWORK OF OVER 1 650 OFFICES AND LABORATORIES AROUND THE WORLD. WE ARE CONTINUALLY PUSHING OURSELVES TO CREATE NEW SERVICES THAT DELIVER LIMITLESS BUSINESS OPPORTUNITY FOR OUR CUSTOMERS.Innovative technologies and integrated thinking keep SGS as the best-in-class provider of solutions for overcoming today’s market challenges. From establishing trust across the grain trading routes of Europe, to developing cutting-edge technologies for the oil and gas industry, we strive to provide independent, sustainable and valued services that go beyond our customers’ expectations.

INTRODUCTION

OUR VISION

We aim to be the most

competitive and the

most productive service

organisation in the world.

Our core competencies in

inspection, verification, testing

and certification are being

continuously improved to be

best in class. They are at the

heart of what we are. Our

chosen markets will be solely

determined by our ability

to be the most competitive

and to consistently deliver

unequalled service to our

customers all over the world.

OUR VALUES

We seek to be epitomised

by our passion, integrity,

entrepreneurship and our

innovative spirit, as we

continually strive to fulfil our

vision. These values guide

us in all that we do and are

the bedrock upon which our

organisation is built.

>80 000employees

>1 650offices and laboratories

1global network

SGS spans the globe and this report highlights the openness and

willingness between our geographies to share information and turn

regional challenges into global opportunities.

Successfully navigating the challenges of today’s rapidly globalising

marketplace led us to once again redefine the line between service

partner, technological innovator and solution provider. I pushed each

of our 10 operational regions, comprising a multitude of countries,

industries and businesses, to seek out and deliver an impressive array of

new services in 2013. The vision has helped SGS remain at the forefront

of developing cross-industry synergies: unique offerings that ease the

increasing pressures on businesses.

Throughout the year our 80 000 employees and 1 650 offices and

laboratories around the world continued to exceed the expectations of

our customers, and kept SGS known as the industry ‘best in class’.

Read on and discover for yourself the imagination, drive and

determination of SGS and how we remained as the world’s leading

inspection, verification, testing and certification company during 2013.

CHRISTOPHER KIRKChief Executive Officer

AN OPPORTUNITY IN EVERY CHALLENGE

INTRODUCTION

Christopher Kirk Chief Executive Officer

10 REGIONAL CHALLENGES & 10 unique opportunities

BENEFITS & industries

COMPLEXITY & expertise

CHINA AND HONG KONG

58

REGIONALITY & transparency

AFRICA

36

SYNERGY & realisation

SOUTH AMERICA

52

DIVERSITY & connectivity

SOUTH EASTERN ASIA AND PACIFIC

70

CONTINUITY & expansion

EASTERN EUROPE AND MIDDLE EAST

14

FLEXIBILITY & collaboration

SOUTHERN CENTRAL EUROPE

22

ECONOMICS & creativity

WESTERN EUROPE

28

COMPETITION & differentiation

EASTERN ASIA

64

STABILITY & technology

NORTHERN AND CENTRAL EUROPE

06

EVOLUTION & innovation

NORTH AMERICA

44

SGS OVERVIEW

78

4

5

STABILITY & technology


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DIRK HELLEMANSChief Operating Officer, Northern and Central Europe

INFORMATION GIVES DIRECTIONtechnologies for growth

AS NORTHERN AND CENTRAL EUROPE CONTINUES TO TRY AND FIND THE STABILITY IT SO DESPERATELY NEEDS FOR ECONOMIC RECOVERY, DIRK HELLEMANS, COO OF SGS NORTHERN AND CENTRAL EUROPE, KNOWS INCREASING OPERATIONAL EXCELLENCE REMAINS AN ATTRACTIVE PROPOSITION IN THE EUROZONE. He has worked closely with customers in the region to deliver new technologies that improve efficiency and productivity.

HOPE ON HORIZON

“The eurozone is slowly recovering, or at least stabilising to some degree, but the region is still a long way from returning to any significant growth,” begins Dirk, commenting on the persisting economic outlook in Northern and Central Europe.

We have looked to build on our ability to innovate new technologies for customers

“Considering this market environment, we have been focusing on building new technologies for customers. In upstream, our investment in SGS Horizon has increased revenues significantly, which gives us great hope for the future especially as there is plenty of scope for expansion.”

TECHNOLOGIES MEETING POINT

“Taking technologies and adapting them for cross-business purposes is our approach with SGS Horizon,” explains Dirk, “which gives us the potential to introduce new technologies to other customers within the Group. For instance, in unconventional hydrocarbons like shale oil and gas, we are combining SGS’ analytical capabilities such as QEMSCAN analyses (SGS ARQS), with CT-scan (SGS Institut Fresenius) and micro-mechanical properties testing (SGS Intron), and adding these to SGS Horizon’s expertise in geoscience and reservoir engineering. Our collaborative view of how best to use technologies from around the SGS network gives us the opportunity to investigate and provide unique value propositions for companies investing in shale plays here in Europe, the US and in other parts of the world.”

MAKING SENSE IS NO MYTH

It is not just in the oil, gas and chemicals industry that Dirk’s team has innovated in technologies. “In the consumer testing side of our business, we have developed a new cutting-edge IT solution, ARIADNE. In the same way the Greek myth of ‘Ariadne’s Thread’ uses an elegant solution to logically record and retrace every step to escape the confusion of the labyrinth, we have created a way to more efficiently track, navigate and make sense of the maze of data generated by one customer. In difficult economic times, the better you understand what is happening in and around your business, the more productive and profitable you can be, and this is exactly what our team has provided with ARIADNE: a standalone IT service that offers a fully customisable and operable system, which requires nothing more than a web-enabled device. ARIADNE’s simplicity is its selling point. And what began as a project for one customer in Benelux has quickly attracted the attention of other customers, and other businesses, in the SGS network.”

The better you understand what is happening in your business, the more productive you can be

ENTREPRENEURIAL SPIRIT

“Here in Northern and Central Europe the economic landscape is slowly recovering and building new stimulus,” concludes Dirk, “and we have continued to strengthen SGS' position through harnessing our entrepreneurial spirit and innovative use of technologies. I’m sure that as a degree of stability is felt more strongly by more stakeholders here in Europe, the economic fortunes of the region will soon be on the rise again.”

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400proficiency tests performed since

1995 by the Institute for Interlaboratory Studies

>100 000customer results

statistically analysed

ONE TEST F TS LLGLOBAL PROVING GROUND

Since 1995, the Institute for Interlaboratory Studies (iis) has conducted interlaboratory proficiency testing for SGS and third-party laboratories. Originally set up as a means of quality checking the analysis provided by SGS’ oil, gas and chemicals laboratories, iis now provides proficiency tests across a wide range of fuels, petroleum, chemical, consumer and food products. In the last year, iis organised 55 proficiency tests (PTs) with more than 1 100 laboratories from 100 countries participating in the investigation of 70 different samples.

Proficiency tests (PTs) offer laboratories a way to anonymously benchmark performance and identify systematic errors and/or random errors in routine analysis procedures, against similar laboratories in the industry. PTs are not something in which laboratories try and do their ‘best’ analysis; instead they give laboratories the chance to check normal day-to-day practices are providing the quality of results customers expect.

Unique PTs for samples containing substances not commonly available for testing, such as iis’ recent chromium 6+ test for leather, are why laboratories find the ‘round robin’ (as PTs are informally known) testing so beneficial for their continual improvement: demonstrated by a recent PTs offer for chromium 6+ receiving 77 responses from laboratories around the world within the first week of it being made available.

SEISMIC SHIFTNORTHERN AND CENTRAL EUROPE

FOCUS ON ADDED VALUE

In close cooperation with an independent processing company, SGS Horizon quickly established a new service for advanced seismic processing which several customers have rapidly adopted. With operations in nearly every major oil and gas region of the world, the company has successfully initiated a series of cross-business services which harness the best of SGS’ thinking and technologies. Analytical capabilities from SGS ARQS, SGS Institut Fresenius and SGS Intron have combined to create a powerful understanding of how to link QEMSCAN analyses, CT-scan and micro-mechanical properties testing with SGS Horizon’s geoscience and reservoir engineering capabilities. This innovation has enabled SGS Horizon to take to market a new workflow process related to unconventional hydrocarbons development.

TRENDS, THINKING AND TECHNOLOGIES

Always staying at the forefront of IT and best practice is key for SGS Horizon and SGS knows investment in acquiring the most up-to-date hardware and software is essential. Staying on top of current market trends and thinking ensure customers receive access to the very latest technologies, including all the main interpretative software packages in exploration and production, and allows SGS Horizon to pass on the benefits these systems bring to customers’ upstream operations.

LONG-TERM RELATIONS

The success of SGS Horizon in offering leading upstream subsurface consultancy has also helped expand its customer base from mainly short-term projects for small and medium size companies, which are often financially backed by banks or investors and hence at risk in economic downturn, towards longer-term relationships with larger and more diversified clients: a trend set to continue as SGS Horizon looks to further consolidate its position through building closer links with national oil companies and larger operators.

SGS HORIZON PROVIDES UPSTREAM CUSTOMERS WITH SERVICES IN EXPLORATION GEOSCIENCE, PETROLEUM DEVELOPMENT, AND WELL DESIGN AND EXECUTION. Since 2008, the subsurface consultancy company SGS Horizon has focused on developing services that add value by combining technologies for upstream exploration, development and production life span, in particular, advanced seismic processing and cross-business collaborations.

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LIFESPAN SOLUTIONS

• Fully integrated subsurface

solutions

• Geophysics

• Geology

• Seismic interpretation

• Log interpretation

• Reservoir engineering

• Production technology

• Drilling and completion

engineering

• Exploration, development

and production

AREAS OF OPERATION

• North Sea

• Gulf of Guinea

• Asia

• Middle East

• Russian Federation

• North America

• South America

• Australasia

OIL AND GAS UPSTREAM TALENT

SGS' subsurface consultancy

team in cooperation with SGS

Technical Staffing Services

initiated a recruiting drive

to source and acquire the

best talent in the upstream

oil and gas industry. Access

to experienced technical

staff is key for customers

in upstream, and due to the

initiative SGS has seen its

global upstream capabilities

and footprint expand, and

SGS Horizon's team of

subsurface experts increase

by more than 40 percent.

SEISMIC SHIFT

9

10

ARIADNETHREADSL GIC INTITARIADNE, an information technology solution developed by SGS Benelux, has been one of the standout successes of 2013 for SGS Northern and Central Europe. The system gives customers the capability to customise their reporting, recording and tracking of numerous inspection fields via web-enabled mobile devices. This makes it easy to navigate the maze of information generated by SGS inspections, leading to quicker, more efficient and more user-friendly results.

WEB BASED APPLICATION NOT DEPENDENT ON EXTERNAL IT RESOURCES

COMPATIBLE WITH NEARLY ANY WEB BROWSER ENABLED DEVICE

DATA STORED IN A CENTRAL DATABASE MEANING NO SYNCHRONISATION IS REQUIRED

IMMEDIATE ACCESS TO DATA ONCE ENTERED INTO SYSTEM

AUDIT TRAIL TRACKS ALL DATA MODIFICATIONS

EASY TO UPLOAD DOCUMENTS AND IMAGES


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CUSTOMISABLE USER SETUP AND MAINTENANCE

FLEXIBLE FUNCTIONALITIES FOR CREATING FILL-IN FORMS OR INSPECTION REPORTS

ONLINE CALCULATIONS

VALIDATION OF INPUT

MULTILINGUAL USER INTERFACE

DYNAMIC VISUALISATION OF DATA

HIGHLY SCALABLE SECURITY DOWN TO FIELD LEVEL FOR EDIT, VIEW AND DELETE FUNCTIONS

INTUITIVE INTERFACE DESIGN

WORKFLOW BASED ON STATUS OF INSPECTIONS

PDF REPORT GENERATION

STATISTICS AND REPORTS ONLINE

SECURE LOGIN REQUIRED

DEMONSTRATIONS OF ARIADNE AROUND THE

SGS NETWORK HAVE LEAD TO A MULTITUDE OF REQUESTS

FROM CUSTOMERS FOR MORE DETAILS ON HOW THE SYSTEM CAN BE ADAPTED

TO THEIR NEEDS

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CONTINUITY & expansion


13

14


TEYMUR ABASOVChief Operating Officer, Eastern Europe and Middle East

EXPANDING VISIONstrength of character

SGS IS ALREADY RELIED ON FOR TESTING, INSPECTION AND CERTIFICATION SERVICES BY CUSTOMERS IN 26 COUNTRIES THROUGHOUT EASTERN EUROPE AND THE MIDDLE EAST – BUT THAT IS JUST THE BEGINNING. Teymur Abasov, COO of SGS Eastern Europe and the Middle East, is helping customers and SGS expand into new geographies and emerging markets.

A LEADING INVESTMENT

“There certainly is a great deal of potential for SGS in Eastern Europe and the Middle East,” confirms Teymur on the question of expansion in the region. “Even during periods of economic slowdown, the turnover of goods flowing around the region remains substantial, and investment continues to flow into Eastern Europe and the Middle East. The economic situation in 2013 has not been favourable for SGS, particularly in agriculture with Russia and to some extent Ukraine lacking grain export volumes; and minerals suffering a slow down in the geochemical market, but overall we were still able to deliver growth due to the expansion of SGS’ geographical footprint and our service portfolio in the region.

SGS is a special company with a dedicated recruitment team and a structured approach to helping new employees gain the skills needed for the job

“Our focus on continuous expansion efforts,” continues Teymur, “resulted in a further strengthening of our positions for oil and gas in Russia, growth for our consumer testing business in Turkey, increased market share for our product conformity assessment programmes in the Middle East, and solid contract wins for our industrial division in Qatar and Saudi Arabia.”

SETTING THE BAR HIGH

“The difficulty in always delivering to such a high benchmark,” Teymur explains, “is continually attracting the high calibre of people you need. The testing, inspection and certification industry is very competitive, and so there is a lot of competition for the best talent. Luckily, SGS is a special company with a dedicated recruitment team, an in-depth training programme, and a structured approach to helping new employees gain the skills needed for the job. And we know which industries or areas are in demand for these skills because we have a very detailed approach to understanding our customers’ needs. We aim to provide a complete package – the people, the technologies and the customer care.”

COMPLETE PACKAGE

The ‘complete package’ as Teymur puts it has indeed given SGS plenty of opportunities within Eastern Europe and the Middle East. With SGS’ expansion into the coal business in Russia, upstream in the Middle East and consumer testing in Turkey, Teymur sums up why SGS remains the global leader, “Our persistence and strength of character to always look for new business are the qualities that make SGS a special company here in the region, and around the world.”

Our persistence and strength of character to always look for new business are the qualities that make SGS a special company here in the region, and around the world

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1 UNLOCKING POTENTIAL

Identifying upstream as an area of significant potential for SGS goes back to 2008. In Eastern Europe and the Middle East an initial review demonstrated an opportunity for additional service providers.

4 TAKING THE LEAD

Acquiring new business means meeting vendor approvals. With people, assets and technologies in place, SGS initiated registration and vendor prequalifications with various regional operators and national and international oil companies.

2 PEOPLE FIRST

Successfully entering new markets needs an expert team. SGS hired the region’s best-in-class talent, people who really understood how to provide solutions for the needs and challenges of customers.

5 REPLICATION OF SUCCESS

Growing upstream business in Eastern Europe and the Middle East relies on continuity and expansion. As strategic deployment of equipment continued, the ability of SGS to deliver best-in-class services for customers led to rapid expansion into multiple countries in the region.

7 ABILITY TO FOCUS

With so many competing players in the oil and gas industry, any rapidly expanding business must remain customer-focused. SGS demonstrated to customers its ability to combine responsive and flexible solutions, while ensuring competitive pricing and the adherence to the highest levels of QHSE requirements at all times.

3 STATE-OF-THE-ART

Gaining new customers in the oil and gas business requires companies to offer something unique. SGS already had a full suite of proprietary solutions, developed by the SGS Applied Technology and Innovation Center, such as the FluidPro PAL™, GasPro™, MiniPVT™, AutoGOR™, Rapid Deployment Kit™, GC/GOR™, and others.

6 ENHANCED CAPABILITIES

Careful management and continual enhancement of services expand business growth. SGS expanded its upstream capabilities by constructing a reservoir fluids laboratory in Dubai, which provided well site services and strengthened SGS' hydrocarbon metering and allocation solutions.

ASSET MANAGEMENT

CENTREserves as the hub for services

to customers worldwide

8 STEP STRATEGY FOR

1

A1.0079

ACTION

5

E10.811

EVALUATION

13

M26.982

MODELISATION

16

P32.065

PRODUCTION

18

R37.948

RECOGNITION

19

S39.098

SOLUTION

20

T40.078

TRANSFORMATION

21

UUTILISATION

44.956

8 MAINTAINING MOMENTUM

From 2008 to 2013, maintaining momentum has been key in helping SGS benefit its customers' upstream businesses. SGS has been successful in delivering services for the upstream sector that locate, analyse and extract oil and natural gas from onshore and offshore fields. From exploration, appraisal and development to production and logistics, SGS continues to innovate and deliver advantage through a variety of services and solutions which cover the entire upstream sector.

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WEAVING ADDED VALUEEXPANSION OF SGS’ CONSUMER TESTING SERVICES HAS PROVIDED A WORLD-CLASS LABORATORY IN THE HEART OF THE GLOBAL GATEWAY FOR CLOTHING MANUFACTURE AND EXPORT – ISTANBUL. Hakan Sebükcebe, Managing Director of SGS Turkey, explains the importance of SGS' capabilities to keep pace with technological advancements and customer expectations.

GATEWAY TO GARMENT MANUFACTURE

“Turkey is uniquely placed in terms of its geography for any company wishing to manufacture, source or export textiles and clothing worldwide,” Hakan offers as the reason why the country lies sixth in the table of worldwide clothing suppliers, and second in suppliers to the EU. “China is the only country supplying the EU with more clothing than Turkey,” he continues,

“but opportunities lie not just with the EU. Turkey’s location offers speed to market for US companies and Asia is becoming a growing market too; all in all it adds up to make Turkey very attractive. Of course, companies worldwide need to be sure of the quality of the product, and that is why we opened our laboratory back in 2004. Back then we had a team of 20 people and a floor space of 500 m2. Today, we occupy a space of 6 000 m2 and have 500 employees. If you were to compare what we started with in 2004 to our laboratory now in 2013 it is like night and day, and this represents a significant advantage in the services we can deliver to our global customers locally here in Turkey.”

NETWORK KNOWLEDGE

Defining a clear strategy for expansion, identifying the key players in need of solutions, and most importantly, delivering on customer expectations, have elevated SGS Turkey to the number two revenue earner for SGS in Eastern Europe and the Middle East. “We have experienced fantastic results here in Turkey with consumer testing, but it is as much about the strength of the SGS network as our individual work here in Istanbul,” Hakan points out when reflecting on the success of the laboratory service over the last decade. “For instance, we drew on SGS’ knowledge and expertise of the textile and clothing industries from our colleagues in Spain and Asia, and we received strategic input from SGS

headquarters in Geneva. Combining our understanding of the market with what the customer requires today, and will require in the near future and beyond, is part of how we manage our expansion and continuity. Our insight means we can become a real partner to businesses for the long term. We do not just offer them services, we proactively provide them with solutions.”

RENEWING TECHNOLOGIES

Investment in the latest technology advancements for physical and chemical textile testing such as gas chromatographs and liquid chromatographs has given SGS Turkey world-class facilities. “Most of the tests we undertake for customers require sophisticated techniques and cutting-edge equipment, and because of this we paid close attention to outfit our laboratory with the most up-to-date and recent versions,” reveals Hakan.

“We continuously monitor how the technologies develop so that when significant changes offering customers an advantage come to market we renew and upgrade our laboratory accordingly. This means we can always offer the most reliable results and cost and time effective sampling. And we ensure accurate recording and tracking of samples and results by taking equal care to keep our IT and back office operations working around the clock so customers know their requirements will be met whenever a need arises.”

A FINELY TAILORED REPUTATION FOR EXCELLENCE

The success of SGS’ laboratory expansion has further enhanced its reputation in Turkey for innovation, adaptation and excellence. Looking towards the next decade perhaps the biggest test for Hakan’s team is whether the 6 000 m2 of floor space will be enough to accommodate the many local and international customers already choosing SGS as their partner in the global textile hub of Istanbul.

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24/7flexible, responsive and customer-focused operations

500laboratory employees

6 000 m2

of laboratory floor space

GC & LCgas and liquid chromatography, along with other high-tech testing capabilities

GLOBAL MARKET ACCREDITATIONSfrom TURKAK (TR), UKAS (UK), DAKS (DE) and IAS (US)

CERTIFICATIONSfor customers against ISO, BS, DIN, AATCC, ASTM, and an array of other international standards

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HOT TOPIC

Coal production in Russia is heating up once again. Russia’s Ministry of Energy has outlined plans for the long-term redevelopment of the coal industry, highlighting a renewed investment in the rail and sea transportation infrastructure, and a targeted doubling of coal exports to Asia by 2030. SGS already has a strong coal customer base in Russia for quantity and quality testing, but with the market shift toward new exploration, SGS has increased its analytical capabilities at facilities in Novokuznetsk and Chernogorsk. Improvements in sample handling capacity with faster turnaround times, testing in accordance to the JORC Code and ensuring best-in-class service mean existing, and new, customers continue to benefit from SGS solutions for coal exploration and expansion.

Operating from Moscow, SGS offers quantity and quality inspection services of imports and exports, conducted in cooperation with the USSR’s Chamber of Commerce and Industry

SGS and Soyuzexpertiza, a member of the USSR’s Chamber of Commerce and Industry (CCI), form a Soviet-Swiss Joint Venture – Sojex

The first major inspection project by Sojex is undertaken for the control of goods via the European Commission food aid programme

Expansion of Sojex office network to include the Soviet Union’s major sea ports

Sojex becomes the new legal entity SGS Vostok Limited, a wholly owned subsidiary of SGS SA

SGS in Russia continues to expand and evolve services which increase operational excellence for customers in the Russian Federation

1994–PRESENT 1993 1991–1992 19901981

largest coal producer globally

largest holder of recoverable coal reserves

coal producing basins

short tons produced in 2012

short tons of recoverable coal reserves

5TH 2ND 20389 Mio173 Bio

FROM RUSSIAWITH COAL

17 Mio km2

makes Russia the largest country in the world

50cities covered by a network of 50 offices

MOBILElaboratories

offering onsite expertise

37laboratory facilities

6regional hubs

>3 600employees

MOSCOWhead office

location

Samara, St Petersburg, Novorossiysk, Novokuznetsk, Chita and Nakhodka

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21

FLEXIBILITY & collaboration


22


LADISLAV PAPIKChief Operating Officer, Southern Central Europe

STRENGTH IN NUMBERS teamwork for business advantage

AS IN OTHER REGIONS WITHIN THE EUROZONE, LADISLAV PAPIK, COO OF SGS SOUTHERN CENTRAL EUROPE, IS FACED WITH THE TOUGH CHALLENGE OF A HESITANT ECONOMY.

His answer? Collaboration. Ladislav knows for SGS to prosper each SGS affiliate must be ready to play their part in the region’s recovery.

TRANSPARENT THINKING

“Collaboration among the countries of Southern Central Europe is key to ensuring the best service for SGS customers. In the past it has not been as strong as maybe it should have been,” begins Ladislav on the challenge of bringing the affiliates together,

“but what we have now in 2013 is a transparent and structured process of communication which gives us the flexibility to respond faster to customer requests. From collaboration comes many more opportunities to cross-sell our knowledge and capabilities around the region. At the heart of it is teamwork. Because our region is small you would think we would be closer together in terms of teamwork, but that hasn’t been the case historically. To change that we created new information technology systems and altered management structures.

We have a transparent and structured process of communication

“This approach really has made a big difference, not only for the collaboration between countries but in our sense of ‘team’ here in Southern Central Europe. And the benefit is that we are all now involved in trying to achieve the best outcome for customers not just in one country but across the entire region. We are all pushing in the same direction and helping each other see where opportunities exist and how our capabilities in one country can be replicated in another. This change in thinking has happened in a short space of time, and very dramatically given us a renewed impetus to make a bigger impact, not only here but around the SGS network.”

FLEXIBLE SOLUTIONS

“Restructuring is another area of collaboration we have focused on in 2013, specifically the restructuring of our laboratory services in the region,” Ladislav continues. “Customers expect testing to be performed by the most up-to-date technologies and what we have done here is look at how our facilities can come together in order to create a more flexible and productive solution. For instance, we had two laboratories in Hungary, one for food and the other for agriculture, with the latter offering greater access to new technologies and service offerings. So naturally after realising this, we combined and merged the strengths of both laboratories into one multilaboratory. This new facility has given us the ability to provide a faster, more efficient solution for customers. The multilaboratory in Hungary is fully accredited and offers customers leading services in consumer product testing and agricultural testing. Our goal is to keep pushing forward in the region and continue to expand our business, deliver higher levels of service to customers, and work with all our affiliates such as Slovakia and Croatia on a blueprint for how to replicate best-in-class facilities and services in their countries.”

COMMITMENT TO TEAMWORK

Ladislav knows where SGS needs to improve in the region and how to get change implemented. “We are succeeding here in Southern Central Europe and committed to teamwork and collaboration across affiliates, which is giving customers easier access to the services they need to make their businesses more profitable and productive.”

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Getting cost-effective efficiencies out of laboratory services is a top priority for SGS in Southern Central Europe. Identifying optimal laboratory structures, processes, mergers and alignments, both within countries and across the region, allow SGS to continually improve quality and turnaround time for customers. Any change in laboratory structure or process relies on the collaboration of the entire SGS team, as demonstrated recently in two laboratory merger projects, the first in Bulgaria, and the second in Hungary.

A TALE OF TWO LABORATORIES

Located in Varna, Bulgaria

Opened approximately

15 YEARS AGO

Previously only

agricultural inspection analyses

Now, also environmental and food testing

PROVIDES COMPLEX ANALYSES for a wide range of customers

Supports labs across the

complete region, not just in Bulgaria

Utilises expertise and equipment efficiently

Located in Nyiregyhaza, Hungary

Provides

agricultural and food analyses

Previously separate laboratories for each area

Now a

MULTILAB APPROACH

Mainly serves

Hungarian trader, retailer and manufacturer customers

Optimal use of SGS CAPABILITIES

High-tech equipment and experts in

one location

SGS VARNA

LABORATORY

SGS NYIREGYHAZA LABORATORY

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The Czech Republic is considered to be the crossroads of Southern Central Europe. With motorways of trans-european importance connecting industrial cities both within the country and neighbouring regions, its dense road network spans more than 750 km of motorways. The D1 motorway, originally built more than 40 years ago, is currently undergoing a full-scale reconstruction, in which SGS is playing a major part.

Known for being made out of slabs of concrete, the D1 motorway shakes drivers and passengers on a bumpy ride across the country. The quality of the D1 surface has deteriorated badly over the years, so much so it is now rutted and pot holed at best, loose across entire slabs at worst.

The Road and Motorway Directorate of the Czech Republic (RSD CR) founded by the Ministry of Transport and Communications is responsible for the construction and upkeep of the road infrastructure. It has embarked on a huge reconstruction project with the aim of modernising the D1 to the safety standards expected today. The rebuilding is planned over a number of years, section-by-section, with the expense of motorway construction in the Czech Republic on par with some of the more costly road construction across the rest of Europe. Because of this, the RSD CR has employed strict monitoring throughout every stage of the project, to be conducted by an independent third party. In the case of Section 5 of the D1 motorway from Šternov to Psáře, that third party is SGS.

485the number of vehicles

per 1 000 people in the Czech Republic

>750 kmtotal length of motorways

in the Czech Republic

19.4 Miois the total reconstruction cost

for D1 Section 5 (in EUR)

160 kmsection of D1 being modernised

22SGS construction experts

on the D1 project

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are all met throughout the construction process. SGS also provides support for the contractor and gives reassurances to the RSD CR that best practice is being followed at every step of the project. Should a serious incident occur, the RSD CR knows it can rely on the onsite presence of SGS for the collection of any relevant information or analyses, as needed.

END OF THE ROAD

As with any construction supervision project, the precise service performed during the D1 motorway project is tailored to the exact requirements of the RSD CR, with the goal of completing the project in the most efficient, productive and safe manner possible. Operating as an independent third party, SGS is able to work with the contractors to reduce technical risks and prevent construction errors through a process of continuous supervision. As part of this supervisory role, SGS also completes and issues all the necessary final documentation, certificates and declarations between the contractors and the RSD CR at the end of the project.

CONSTRUCTING A TEAM ADVANTAGE

Construction projects within

the industrial sector represent

an area where SGS cross-

border and cross-function

teams combine their skills to

deploy the best possible SGS

experts for a given project. The

D1 Section 5 reconstruction

project is just one example.

Similar capabilities from SGS in

Southern Central Europe have

seen talent pooled for projects

in support of the development

of electricity infrastructure

across the Czech Republic,

Romania and Bulgaria for

the Czech energy company,

ČEZ Group. By partnering

with SGS, companies in the

region optimise costs and

maintain schedules for their

respective projects.

ŠTERNOV TO PSÁRE

Before any work began on Section 5, the Construction Supervision Services (CSS) of SGS evaluated the planning documents, choice of building materials and subcontractor capabilities. SGS CSS is keeping a close watch on the Šternov to Psáře section of the D1 project to ensure the RSD CR maintains control over the budget and meets pre-agreed targets. Specialist engineers in road construction, geotechnics and bridge structures, along with health and safety experts, surveyors and a range of other highly skilled professionals complete a team of onsite SGS personnel for Section 5.

During the project, SGS CSS has worked closely with the construction company to perform key evaluations and confirm the effective completion of assigned construction activities. This involves checking the quality of work and the adherence to prescribed technological procedures, labour safety and project design documentation, as well as overseeing that the terms and conditions of the contract, the building permit, current legislation and decrees

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ECONOMICS & creativity

WESTERN EUROPE

28

WESTERN EUROPE

UNCERTAINTY STILL UNDERPINS NEW ECONOMIC GROWTH IN WESTERN EUROPE. SGS IS CREATIVELY ADDING VALUE FOR CUSTOMERS THROUGH ACQUISITION, INTEGRATION AND MANAGEMENT OF BUSINESSES IN THE REGION. Pauline Earl, COO of SGS Western Europe, knows the challenge is to think differently and continue to seek out new opportunities for growth.

PAULINE EARLChief Operating Officer, Western Europe

NEW THINKING excellence in mind

CASTING THE NET WIDE

The testing, inspection and certification industry in Western Europe has continued to experience difficult times in 2013. With the depressed economy of the eurozone and supply chains shifting to emerging markets, investment in areas requiring the skills of a company like SGS has slowed.

“We have had to think wider, as far as casting the net, and really look at our structures and services to ensure they are aligned with the changing marketplace,” begins Pauline, “because that reflects the economy and the opportunities to identify potential areas for acquisition. But it is important not to forget that acquiring new companies in a complex economy is just the start of the journey. Here at SGS we take a very detailed and responsible approach to the integration process that follows. For SGS to remain as the world’s leading provider in the sector, we need any acquisition, and the unique value it brings to our customers, to find its place in our network as quickly as possible. That requires our people to be creative in how best to manage, how best to integrate, and how best to bring to market the new services, and the new people and cultures which come with acquisitions.”

BIG IDEAS

Spain is one country where the effects of the economic downturn have been well recorded. This is also a country where SGS has initiated and completed its biggest acquisition to date: the Euro 180 Mio deal for the vehicle inspection business of General de Servicios Inspección Técnica de Vehículos (ITV) SA, a subsidiary of Fomento de Construcciones y Contratas (FCC) SA. “Spain has had its own specific challenges regarding integration and to tackle them we put together a multidiscipline team to handle that phase of the acquisition,” continues

Pauline, “and they did a fantastic job on many different levels in consolidating all of the testing stations. Acquiring ITV meant taking on 43 vehicle inspection centres spread across six parts of Spain, which employed 660 employees. We now operate in seven areas in Spain and perform over 1.6 million inspections per year. The process of integrating a company of that size has given us an amazing insight into how to creatively get the best out of acquisitions, not just in Spain but other countries in the region.”

NEW ENTHUSIASM

Encouraging and motivating employees to bring new ideas and look at new ways to tackle challenges for growth and added customer value is not an easy task when the economic reality limits what can feasibly be achieved.

We have really looked at our structures and services to ensure they are aligned with the changing marketplace

“You have to keep them motivated and not dampen their enthusiasm,” reassures Pauline on how SGS retains the creative spark that makes the difference in a downturn economy.

“We always talk about a funnel process, where you simply generate more ideas than you need for new services, and then over time you return and refine them and the ideas naturally narrow down to a few that are going to be very successful. That is what SGS does well here in Western Europe – pinpointing what services customers are going to need and finding the right acquisition to increase our capabilities in those areas.”

2929

With three UK laboratories, MIS

Testing, acquired in September

2013, has been integrated as

SGS MIS Testing and continues

to offer leading mechanical

testing and machine services

such as tensile testing at room

and elevated temperatures,

impact testing from room

temperature to -196°C, izod

testing, hardness testing and

visual weld inspection, as well

as non-destructive testing

(radiography, magnetic particle,

ultrasonic). The acquisition

increases SGS’ understanding

in the sector and brings 55

new employees with a wealth

of knowledge into SGS UK,

supporting the global vision of

building SGS Industrial Services

throughout the network.

The acquisition of County

Durham based MIS

Environmental in September

2013 enables SGS to offer a

more comprehensive package

of Environmental Services

in the UK, where customers

were already looking for

extensive environmental

analyses on specific projects:

consultancy services,

asbestos management, and

environmental, health and

safety testing. The integration

of SGS MIS Environmental, as

it is now known, with existing

chemical testing and climate

change programmes gives

Environmental Services in SGS

UK a full value chain solution

for customers.

ENVIRONMENTALLY DRIVEN EXPANSION

INDUSTRIAL BUILT VISION

30

WESTERN EUROPE

31

ON THE

In Spain, as in many other

countries, the government

requires all car owners to put

their vehicles through annual or

bi-annual vehicle testing to ensure

that they conform to regulations

for safety and emissions.

The acquisition of General de

Servicios Inspección Técnica

de Vehículos (ITV) SA began an

extensive integration period for

ITV operations and employees

into SGS Western Europe.

FROM ONE TO SEVEN REGIONS

The acquisition of ITV vastly changed the scale and complexity of SGS’ operations for vehicle testing in Spain. ITV added 43 inspection testing centres, and 660 new employees to what had been previously a small SGS offering in the region. “SGS had been working in the statutory inspection testing business in Spain for 20 years at the time of the acquisition,” explains Alejandro González, SGS Spain Automotive Sector Manager. “However, at the time we were only operating one small concession in one part of Spain, so we were looking at ways to develop our automotive business. The acquisition of ITV brought with it a very rapid expansion, with at least six contracts almost immediately added to our customer base.” ITV allowed SGS to service customers in Aragon, the Canary Islands, Madrid, Valencia, Castile-La Mancha, and the Balearic Islands. “Throughout the whole integration process our focus was on providing customers with a consistent service,” continues Alejandro, “and nothing in ITV changed drastically. Instead, we monitored performance and service delivery. Once we were through the initial phase of the integration it gave us a chance to really start offering a more beneficial service

to the public. With expertise from ITV integrated into the culture of SGS and our best in class thinking, we were able to provide a truly world-class service and begin developing new ideas.”

DAILY SAFETY CHECKS

SGS testing stations in Spain perform mandatory safety and emissions inspections on a daily basis. Tests cover tyres, brakes, direction alignment, lights, exhaust emissions, noises and odours. Up-to-date facilities and the latest technical equipment allow precise measurements to be recorded such as tyre tread depth, brake effectiveness, and emissions residues. As there is little room for human intervention the data generated is always reliable and guarantees vehicles remain in accordance with government regulations and within technical specifications.

A REPUTATION FOR QUALITY

“Demand is growing,” Alejandro explains, “and we have just recently opened two new testing centres as a result. In Madrid, where we previously operated as a government granted concession, as is the case in many other areas of Spain, we are now looking at an open market scenario. This gives SGS the opportunity to expand market share by attracting new customers because of our reputation for quality and integrity. Customers, by that I mean vehicle owners, can go now to any testing centre in Madrid but we are really promoting our reputation so that they know the service from SGS is the best in terms of ease of testing, wait times, accurate results, and so on. Our new facility in Madrid gives us more capacity, increasing it by 40 thousand inspections per year in addition to the 200 000 inspections we already carry out there, and an ability to target a more highly populated geographical area of the city. We also have a second new centre in Zaragoza, where testing centres still operate on a concession

basis. And here too, we have a great potential to grow. More and more vehicles owners need our service, and as a result we are increasing our service capabilities.”

DRIVING SATISFACTION

“Over the past three years, we have moved ITV through a full integration process,” concludes Alejandro. “What this means in practice is that now each employee, across the board, realises that the SGS culture is at the heart of everything we do. Being a part of SGS has continued to build ITV’s capabilities and customer service levels. We now have an extremely robust network of vehicle testing centres delivering excellence on a day-to-day basis across Spain.”

1.6 Mioinspections per year performed by SGS

7areas of Spain have SGS

testing centres

ROAD

32

WESTERN EUROPE

STREETSMART

F R LIFEThe statistics for deaths and

injuries on Irish roads have been

improving every year since the

government set a target of no

more than 252 per annum by

2012 – a figure it achieved three

years ahead of schedule in 2009.

The Road Safety Authority (RSA)

in Ireland is the government

agency responsible for making

Irish roads safer than they have

been for many years. RSA’s next

challenge? Reducing the reported

statistics 30 percent further.

CREATIVELY EDUCATING ON ROAD SAFETY

Education is seen as an essential component of safety by the RSA. It is developing and implementing information and education campaigns targeting groups as diverse as young males, truck drivers, farmers, and children. As a creative way to educate the latter on a very serious topic, SGS brings road safety to life for young Irish school children through an engaging initiative called ‘StreetSmart’.

SMARTER KIDS, SAFER STREETS

Aimed at three age groups – four and five-years old, five to eight-years old, and the eight to twelve-years old group – the StreetSmart programme delivers a specific series of interactive, and memorable, activities and role-plays. The central prop for the four to eight-years old group is a ‘Streetscape’ map, which laid out on the floor measures 9 metres by 10 metres. The Streetscape has all the typical, but in miniature, street scenes one would expect including traffic lights, pedestrian crossings and buildings. In addition to the Streetscape, the older age group is shown a series of real-world scenarios filmed on actual city streets, and then asked what constitutes safe and unsafe pedestrian behaviour.

Working together with the teachers, SGS’ education team actively engages the children in real-life road safety scenarios via the Streetscape in school halls or playgrounds, throughout the course of an action-packed day.

33

STREETSCAPE CHARACTERS

SGS educators involve children in the Streetscape by assigning each child a role: pedestrian, cyclist, or motorist; and getting them to carry out everyday tasks in order to learn from their own experiences and those of their classmates

DRIVING, CYCLING AND WALKING

There are ‘walking cars’, ‘stand-up bikes’ and ‘costumes’ such as nurses, doctors, fire officers, or ambulance drivers; and by interacting within the Streetscape children gain an understanding of how vehicles and people must stay aware of one another to lessen the danger of being on the road

UNDERSTANDING TRAFFIC

Sitting children behind the wheel of a toy car helps them learn to understand the traffic conditions from the perspective of a driver, and begin to understand how difficult it can be sometimes to see pedestrians and other road users

THE RULES OF THE ROAD

The fun-filled educational programme leaves children with a thorough grasp of road safety, cycle safety and how to travel in a safe manner in a car or bus; and all the rules of the road they learned can be immediately applied in real world situations

LOOK LEFT, OR RIGHT?

Children are quizzed on a range of common road safety issues, allowing the SGS educators to guide them through the right way of doing things

STORY TIME

Children are encouraged to discuss road safety topics related to a series of short stories which the SGS team use to help prompt the children’s thinking

‘PERSONALISED SAFETY LICENCE’ AWARD

After children have successfully completed the road safety activities each one is given a reward, and reminder, in the form of a ‘personalised safety license’ award

TEACHER SUPPORT

SGS has developed a teachers’ handbook as a guide to each part of the educational programme which includes all the background information needed to educate children on safe road behaviour

34

REGIONALITY & transparency

AFRICA

35

3636

AFRICA

CONTINENT OF COMPLIANCEchanging expectations

MIDDLE WAY THINKING

“If you look at the region it has an ambitious and hard working middle-class, and an entrepreneurial style of government thinking which encourages new services from the private sector," elaborates Fred, on the middle-class and governments of Africa. "These add up to a region that is demanding higher quality consumer goods, safer transport infrastructure and monitoring, and more efficient government services. For SGS, the new middle-class and proactive governments are great news, because they directly impact testing, inspection and certification.

We see a chance to really diversify our offerings and partner with customers across Africa

“When the quality of consumer products or the service in the hospitality industry affect tourism and trade, or the amount of revenues generated by government come into question, the only way to answer these is through solutions which offer transparency. And in Africa, where each country is its own entity, we offer our customers, the consumers, manufacturers or the governments, the chance to shine a spotlight on what is happening and create a trust between all the stakeholders.”

TECHNOLOGIES FOR TOMORROW

“We are presently in more than 35 countries,” Fred continues, “and of course we are still very much involved in basic commodities and the like, but on the other hand we see a chance to really diversify our offerings and partner with customers across Africa and provide services and solutions in manufacturing, the hospitality industry, government institutions, and many more industries. This diversification drastically evolves SGS’ traditional inspection based services towards a much broader range of solutions supported by state-of-the-art technologies. By focusing our efforts in this way, we are better placed to respond to our customers in the industrial, mineral or agricultural sectors who need to make best use of any recent technological development that gives a competitive edge. We are finding that customers are incorporating SGS services into their operations and this is helping us expand our footprint across the continent. Local entrepreneurs and enterprises are often the most stimulating and demanding customers, and in 2013 rarely a day has gone by without someone approaching us to discuss a novel idea or service. People may still think of Africa as a ‘developing’ region, but already the technology infrastructure exists to pay employees via mobile phones, taxes on the internet and more. Africa is one of the continents where ideas for SGS services of tomorrow receive the fastest and most enthusiastic response from around the network.”

In 2013 rarely a day has gone by without someone approaching us to discuss a novel idea or service

THE AFRICAN CONTINENT, THE SECOND LARGEST IN THE WORLD COVERING OVER 20 PERCENT OF THE GLOBE AND WITH AN ESTIMATED POPULATION OF OVER ONE BILLION PEOPLE, IS A REGION SET FOR MAJOR CHANGE IN THE DECADES TO COME. In the emerging economies of Africa, each having distinct regional rules and regulations, Fred Herren, COO of SGS Africa, is reducing risk and increasing consumer confidence through services which make compliance an accepted part of everyday life.

FRED HERRENChief Operating Officer, Africa

37

BALANCING THE HEAVY COST OF GOODS TRANSPORT IN KENYAThe upkeep and maintenance

of road infrastructure is a

significant burden on any

government’s finances.

In Kenya, where road

construction costs nearly

CHF 1 Mio per kilometre,

the National Highway

Authority has taken steps to

minimise the damage caused

by overloaded trucks by

introducing new weighbridge

technologies, which speed up

the process and reduce the

risk of corruption.

For the last three years, SGS

has worked with the National

Highway Authority. In 2013,

SGS now operates a network

as the sole provider in Kenya

for the service, with 11 fixed

weighbridge stations in 9

locations, and a further 6

mobile weighbridges as and

where needed.

800trucks fined

per month for overloading

150 000trucks weighed

per month

OVERLOADINGTrucks have been detected carrying up to 125 tonnes, compared to the limit of 52 tonnes – equivalent to the road damage of 6 or 7 lorries

AVOIDING RESTRICTIONSSome transporters illegally unload additional cargo and reload it on leaving weighbridges via an accompanying vehicle

DRIVE-BY WEIGHING Weighing technologies placed into truck lanes preassess traffic on the roads, giving authorities a chance to detect overweight vehicles

MOBILE WEIGHBRIDGESMoveable checkpoints placed near to existing stationary weighbridges help catch trucks opting for ‘escape routes’ or illegal unloading/reloading practices

AUTOMATIC NUMBER PLATE RECOGNITION

Loops and loggers capture trucks and all other traffic using the highway for a more accurate census count, with automatic number plate recognition, infrared and CCTV cameras assisting the tracking of vehicles around Kenya

37

LEGAL ROADS

“Vehicle and road safety is another area where SGS has been very successful in helping governments bring transparency into action. In the Ivory Coast every driver now has to come to an SGS testing station, and we test their vehicle for road worthiness before they can purchase a road tax

‘vignette’ which demonstrates their vehicle is road legal. We provide this same service in other countries such as Algeria, Morocco, Argentina, and Chile and what is interesting is how many vehicles actually comply with the requirement: in Chile it is 100 percent, in Switzerland around 96 percent, and in the Ivory Coast it started at around 20 percent but is now nearly 50 percent compliance. Most people want to know their car is safe, and we offer that trust and transparency to them.”

Most people want to know their car is safe, and we offer that trust and transparency to them

AFRICA'S ‘CAN DO’ ATTITUDE

“In Africa,” Fred concludes, “SGS is matching the continent’s ‘can do’ attitude and is enabling more opportunities for customers in the region to demonstrate their commitment to making compliance a change for good.”

37

3838

AFRICA

THE STANDARD OF PARADISE

Mauritius, famed as one of the world’s top luxury tourist destinations, offers a paradise of lush forest, wild waterfalls, unique flora and fauna, rocky mountains, and white sandy beaches that stretch as far as the eye can see. However, as the country feels the pinch of the global recession and the competition of less expensive destinations, the local hospitality industry has to align itself to the highest international standards of service expected by guests and tour operators. As in any high-end destination, industry needs to ensure that every review is outstanding and no guest leaves feeling unsatisfied, which is where SGS has made the difference in the Mauritian tourism sector.

CONFIDENCE IN EXCELLENCE

“There are a number of different players in the tourism industry,” explains Geraldine, “and each has to be sure of the exacting standards of the end product. Tour operators buying packages to be sold on to other operators, or directly to consumers, need to be confident in the products they are buying and selling. They need to know that the product agreed during a purchasing visit remains consistent with what is delivered throughout the contract period. It is important too for insurance companies to be assured that all necessary health and safety measures are in place. Because

of these factors, operations teams in resorts are under pressure to prove due diligence, service levels and standards to all stakeholders: within their own international organisations, the tour operators, and the insurance companies to name just a few. SGS provides that link to transparency needed to demonstrate compliance.”

PROTECTING EVERYONE

Many safety requirements in the hospitality industry have been driven out of a need to protect both guests and employees. Above all, guests want a safe place to stay. Legionella and other water-borne illnesses, alongside the risks associated with faulty gas boilers, are a constant cause of concern for hoteliers, wherever they are in the world. Similarly, the worry of a food-related contamination is a major fear as an event can ruin the reputation of even the most established organisation. “Our services fall into three main categories,” Geraldine continues, “safety, sustainability and service. When it comes to safety, we conduct Performance Assessment Audits, where we become the eyes and ears on the ground for the operations teams within large organisations. Our experts arrive at resorts unannounced to the local management, and proceed to audit and undertake tests in order to verify the correct standards are being met. Samples are sent to our laboratories and analysed for 100 percent accuracy in

our findings. For sustainability practices, hotels place a great deal of importance on environmental issues, as they use a lot of water and energy. We help them find ways to operate more efficiently and implement more effective Environmental Management Systems. These systems allow our customers to have measurable targets and environmental commitments, which they can use to gauge operational excellence. In service, we quality assess resort operations and support the delivery of a consistently high-level of service by providing expert training of employees via our SGS Academy courses, as an example.”

VALUED EXPERTISE

With services spanning many sectors in the hospitality industry, SGS has assembled a best-in-class team of experts to consult and train customers in how to operate to the highest benchmarks for excellence. “We have great relationships with our customers as they’ve seen the value of SGS expertise for their operations,” Geraldine concludes. ”As well as helping them meet an ongoing need for assurance, we continually communicate to them our reviews of regulations and best industry practices. Our service for customers adapts and develops in accordance with how the hospitality sector as a whole improves the quality of its service to the tourism industry.”

Taking a market-by-market approach led the SGS team in Mauritius

to identify a huge local opportunity for SGS expertise: hospitality. As

one of the main economic pillars for the country, Geraldine Koenig,

SGS Systems and Services Certification Corporate Project Manager

(Hospitality), recognised just how perfectly placed SGS is to support the

high-end resorts and hotels that need to consistently exceed consumer

quality and service expectations, while ensuring risks are mitigated.

MAURIT USSGS

39

STAY HAPPY – BEACHCOMBER HOTELSRecognised as a pioneering hotel group at the forefront of the Mauritian luxury tourism sector, Beachcomber Hotels has partnered with SGS for a number of years. Initially, SGS only provided food safety assessments in one hotel. But, in an attempt to implement best practices to satisfy tour operator requirements, this eight-strong hotel group called on SGS for more and more monitoring of its safety, sustainability and service levels; in order to ensure the same high standards across all locations. With some of the finest resorts in Mauritius owned and operated by the Beachcomber Group, and over 2 000 rooms for guests, the relationship with SGS is essential in maintaining and reassuring the tourism sector that guests stay happy.

2 000 rooms operated by the

Beachcomber Group

FOOD SAFETY

• Hospitality Excellence Programme

• Compliance Training

• Management Standards Training

WATER SAFETY

• Legionella Risk Assessment

• Legionella Testing

• Water Monitoring

HOUSEKEEPING

• Good Spa Practices Audit

SAFETY

ENVIRONMENT

• Good Environmental Practices Audit

• ISO 14001 Certification and Gap Analysis

• Training on ISO 14001 and ISO 15001

• Carbon Footprint Assessment

SUSTAINABILITY

QUALITY

• ISO 9001 Certification and Gap Analysis

• ISO 9001 Training

SERVICE

40

AFRICA

48 Miopopulation of Tanzania (45% are

under 15 years old)

27 Miosubscriptions to fixed (0.6%) and

mobile networks (99.4%) in Tanzania (June 2013)

363%increase in telecoms subscriptions

from 2006 to 2013

DIALLING IN REVENUES

Based on license agreements telecoms operators pay tax at a set rate related to income, but without accurate telecoms traffic information it is impossible for operators and governments to be sure payments and revenues are accurate.

The Tanzania Communications Regulatory Authority (TCRA) relied in the past on operators to submit accounts of their revenues. In theory these numbers should be correct, however a number of factors meant operators and the government of Tanzania were not earning the full quota from calls on the network. Monitoring and supporting roaming calls require a significant investment in technologies and upgrades to network infrastructure. In addition, implementing sophisticated network management

systems needs a team of highly trained technical staff, another factor that telecoms operators do not always have. Without the transparency given by technologies and expert staff, telecoms fraud can easily go unnoticed at a major cost to all stakeholders through lost earnings and network disruption.

LEADER IN TANZANIA

Following SGS’ already successful maintenance project on the International Gateway Traffic Monitoring System in Rwanda, SGS launched an even more comprehensive project in Tanzania: the SGS Telecom Services Project.

As a first-of-its-kind service in Tanzania, SGS partnered with a leading technology provider, and completed phase one of the implementation on 1 October 2013 when

call monitoring went live. The full scope of the service covers multiple areas:

• International Gateway Monitoring

• National Interconnect Monitoring between Operators

• Anti-fraud Services

• Automatic Device Detection and Central Equipment Information Register

• Mobile Monitoring Services

At the heart of the telecoms infrastructure created by SGS and its partner is the ‘Network Operating Center’ and ‘Transmission System’. This enables the Tanzania Communications Regulatory Authority to generate reports and invoices for government taxes and vastly improves the interconnection infrastructure for international telecoms.

TRA

FFIC

REP

ORT

40

TANZANIA HAS SEEN PHENOMENAL GROWTH IN THE TELECOMS INDUSTRY OVER THE LAST 10 YEARS. WHILE THE FIXED NETWORK IS LIMITED, MOBILE SERVICES HAVE RAPIDLY EXPANDED. THE TELECOMS INDUSTRY MAY HAVE KEPT PACE WITH DEMAND BUT THE GOVERNMENT HAS NOT ALWAYS BEEN ABLE TO REAP THE FULL REWARDS OF INCREASED TRAFFIC.

41

In South Africa, unemployment

is estimated at 25 percent but

the mining, energy, engineering

and construction industries still

struggle to fill vacant positions

with skilled employees. The

SGS Academy partners with

organisations to develop the skills

of their employees. Drawing on

knowledge of worldwide industry

best practice from across the

network, the SGS Academy

empowers individuals and

formalises knowledge through

51 different courses, the majority

of which focus on health,

safety, environmental and quality

risk management.

ACTIONS MEET WORDS

Behaviour-based safety programmes apply the science of behavioural change to real world problems. The SGS Academy Behavioural Based Safety Zero Harm Observation and Coaching Training course gives attendees the ability to observe the behaviour of others, and trains them in the interpersonal and coaching skills to be able to deal with addressing any issues. For safety training, this is an increasingly popular approach as it monitors individuals in the workplace, with follow up training used to encourage and develop consistent, safe behaviour. Recognised as particularly effective in the mining industry, where operations are largely people based, behavioural safety programmes have helped the industry rethink risk and not view it purely from a technical or engineering standpoint, but from the wider perspective. In South Africa, this course has become one of SGS Academy’s most popular.

HEALTHY EATINGThe Foundation for Food Safety Certification (FSSC) developed the FSSC 22000 for food supply chain manufacturers, and SGS Academy teaches participants the importance and implementation of food safety management systems for organisations.

PREVENTION FACTORSLearning how to prevent major incidents by understanding the root causes of previous accidents is the goal of the Root Cause Analysis Method (RCAM) course which develops industry-specific risk assessment techniques.

TAKING RESPONSIBILITYISO 26000 guides organisations in ways to operate an ethical, transparent and socially responsible business. SGS Academy’s ISO 26000 courses explain the internal audit process and how to implement socially responsible systems.

CONTINUAL LEARNINGThe SGS Academy continually updates courses by listening to feedback from businesses and participants on what future trainings are required to further excellence in their organisations.

41

EMPOWERING KNOWLEDGE

42

43

EVOLUTION & innovation

NORTH AMERICA

44

NORTH AMERICA

AN UNCONVENTIONAL PATHenergising the future

IN THE LAST FIVE YEARS NORTH AMERICA HAS SEEN AN UNPRECEDENTED EVOLUTION IN THE OIL AND GAS INDUSTRY: A SHIFT IN FOCUS, AND FORTUNES, TO UNCONVENTIONAL RESERVES. Jeffrey McDonald, COO of SGS North America, has evolved SGS services in parallel with the ‘unconventional boom’ and is helping to position SGS as a technology innovator and end-to-end value chain partner for the oil and gas industry.

JEFFREY McDONALDChief Operating Officer, North America

EVOLUTION IS REALITY

While experts continue to debate whether the shale oil and gas revolution in North America can really deliver on production estimates, the reality remains that the energy market in the region is certainly evolving towards self-sufficiency, if not outright global dominance. For SGS, active in North America for nearly a century, it means change has been inevitable. “I think one of the key things we are aiming to do in the oil, gas and chemicals market is to reinvent ourselves,” begins Jeffrey on how SGS has responded to the energy revolution. “With the advent of shale oil and gas, the amount of imports coming into the US over the past five years has been in decline. The problem for SGS is, with our oil and gas business originally set up to provide verification and validation of imports, now they are declining, and likely to continue doing so, we need to rethink SGS' approach to our traditional service offerings. Unconventional reserves have a much wider requirement for oil and gas, industrial and environmental services. In order to help customers gain a competitive advantage in this unconventional energy revolution, we are tapping into the entrepreneurial spirit SGS is known for and planning new services, some of which will be at the cutting edge of the industry. SGS’ Applied Technology and Innovation Center in Houston is already helping us achieve this and providing innovative services for upstream exploration, which in turn are helping the oil and gas industry look at SGS services in a different, more value-added, way. Energy companies now come to us for state-of-the-art equipped mobile laboratories which can operate anywhere, and sophisticated portable calibration devices which are bringing new flexibility to services.”

PARTNER WITH INTEGRITY

Exploration ultimately leads to production and the need to transport oil and gas is another area where SGS is hoping to attract new customers.

“In North America, midstream pipeline and processing infrastructure is not as advanced as it should be,” explains Jeffrey, “and this means customers are not fully realising potential returns. Some estimates in North America put the figure required in midstream investment at USD 200 billion over the next twenty years. Because the exploration and production of oil and gas now takes place in non-traditional locations there are no pipelines to service the industry, meaning you have a very real infrastructure challenge in getting oil and gas to a refinery, or a storage facility. Added to that, the pipeline infrastructure that is in place is now deteriorating because of its age. Our investments in acquisitions are building SGS' pipeline integrity expertise so that in the future we can offer more services in this segment.

In North America, SGS is a true partner to business throughout the entire hydrocarbon cycle, conventional or unconventional

“We already have some of the most advanced and innovative services to support pipeline operations including materials testing for fabrication and assembly, and asset integrity solutions for failure analysis or decommissioning. And when the product does make it to the refineries, like the ones of vast scale on the Gulf Coast, we have plant

45

and terminal operations for barge loading/unloading and railcar switching which create further opportunities to increase productivity for customers. In North America, SGS is becoming known for technological innovation, which further adds to our reputation for a commitment to quality and excellence, and our deep understanding of the global market.”

FAILURE PREVENTI NSGS conducted root-cause analysis of two major accidents, which occurred in Pemex facilities during 2013. From around the network, SGS assembled a leading team of fire and explosion engineers, safety experts, geologists, and structural engineers, all with solid experience in the investigation of similar events in the oil and gas industry. The expert team reviewed onsite damage, interviewed witnesses, looked into policies and procedures in place at the time of the accidents, and undertook a full mechanical integrity review including the collection of materials samples. Normally a preventive process to warn of the potential of failure and possible danger, this time around the SGS team needed to simulate how the explosions happened and what their impact had been using specialised software. By drawing on their leading knowledge in materials testing the team were finally able to determine how and why failures occurred. Based on the findings, Pemex is implementing an action plan that consists of more than 40 separate follow-up actions, and requested SGS to conduct operational and mechanical integrity studies at other Pemex installations.

1918SGS established in New York

>1 930 employees in Canada

>205 employees in

Central America

>5 200

employees in the US

>480 employees in Mexico

46

NORTH AMERICA

UNCONVENTIONAL AND CONVENTIONAL CAPABILITIES

SGS is innovating every day

so that it can deliver state-of-the-

art and best-in-class solutions

for upstream and midstream

unconventional and conventional

oil and gas assets. From water

testing to wellhead inspection for

shale plays, to pipeline integrity

and plant and terminal operations,

SGS continues to develop a

portfolio of services which go

beyond customers’ expectations.

WA

TER

TEST

ING

SERV

ICES

AT

TH

E W

ELLH

EAD

SGS provides aqueous testing for the oil and gas industry to demonstrate the quality and integrity of flow-back and produced waters in order to help customers minimise their environmental impact during operations and maximise the longevity of assets.

• Prevents corrosion and scaling build up issues

• Creates historical data trail for monitoring and reviewing trends

• Reduces chemicals usage and costs

• Detects environmentally sensitive and unsafe contaminants

• Monitors microbial contamination to prevent asset degradation

SGS offers asset integrity inspections of wellhead equipment to verify upstream assets meet the American Petroleum Institute’s standards. In addition, SGS provides other specialist services such as the introduction of guided wave non-destructive testing and tablet based inspection data capture systems for upstream applications.

46

2011SGS initiates a shale flow-back

fluid project

10x growth in aqueous testing during

the last two years

4 shale plays covered by SGS services in aqueous testing

47

TRA

ININ

G

FACI

LITY

REFI

NER

Y

PIPE

PLIN

E IN

TEG

RITY

FIELD SERVICES

meter calibration, service, installation, sample procurement

(crude oil, condensate, natural gas), monitoring

LABORATORY SERVICES

full range of hydrocarbon analysis (crude oil, condensate,

natural gas), water analysis

TECHNICAL SERVICES

hydrocarbon production allocations, process flow analysis, facility

assessments

SGS works with several owners of pipeline transportation infrastructure in the US, Canada and Mexico.

• SGS has introduced laser scanning to measure external corrosion and dents

• SGS performs radiography examinations and state-of-the-art NDT testing

• SGS qualifies welders for increased access to skilled employees

• SGS combines pipeline inspection with data management which is a value-added service for customers

SGS acquired Petroleum Service Corporation (PSC), a private plant and terminal operations services company founded in the US in 1952. Plant and terminal operations services are unique within the SGS network as, rather than being traditional testing, inspection and verification, plant and terminal operations services provide personnel who conduct product handling operations at oil refineries, chemical plants, and terminals, and for major barge lines.

• SGS PSC is the oldest and largest barge tankerman service in the US

• SGS PSC operates one of the largest crude-by-rail terminals in the US

SGS is committed to training new employees and has established a custom-built facility in Oklahoma, which ensures capable, knowledgeable and qualified technicians who can deliver or recommend a wide range of advanced inspection techniques as per customer requirements.

47

48

NORTH AMERICA

BA

RGE

TO

REFI

NER

Y

SGS

PSC

TRA

ININ

G

ACA

DEM

Y

500 000railcars estimated loaded and

unloaded per year

38 000 barges loaded and unloaded per year

APPROVED by the United States Coast Guard

for the training and licensing of ‘tankermen’

SGS PSC operates marine docks, loads and unloads barges and ships, and manages other site logistics activities for a large number of leading companies. Many operations have been in place continuously for more than 20 years. SGS PSC employees are an integral part of customers’ daily operations.

• 2 400 employees across more than 60 sites

SGS PSC runs one of the only schools approved by the United States Coast Guard for the training and licensing of ‘tankermen’ – the SGS PSC Tankerman Career Academy – which is helping to meet the growing needs of the domestic tank barge industry for skilled and qualified personnel in the safe transfer of hazardous materials on and off of tank barges.

• Liquid chemicals

• Refined products

• Liquefied gases

SGS PSC is responsible for all types of product handling services, including loading and unloading railcars and trucks, switching (‘shunting’) railcars inside facilities, marine dock (‘jetty’) operations, operating tank farms, warehouse operations, and other site logistics activities at more than 75 marine dock facilities in North America.

48

RAIL

TO

RE

FIN

ERY

4949

MA

IN U

S SH

ALE

PL

AY

LOCA

TIO

NS

EAGLE FORD SHALE

South Texas

BAKKEN SHALE North Dakota

PERMIAN BASIN

West Texas

HAYNESVILLE SHALE North

Louisiana

MARCELLUS SHALE

North/Central Pennsylvania

50

51

SYNERGY & realisation

SOUTH AMERICA

52

SOUTH AMERICA

ALEJANDRO GOMEZ DE LA TORREChief Operating Officer, South America

CULTURE, CHANGE AND CHALLENGEmeeting potential

SGS IS RAPIDLY EXPANDING IN SOUTH AMERICA. Instilling SGS’ culture of excellence into every service has allowed Alejandro Gomez de la Torre, COO of SGS South America, to offer better synergies and better solutions for businesses in the region.

CHALLENGING CULTURES

“In the last two years in South America, SGS has increased revenues and employee numbers by 50 percent, and made three significant acquisitions in Brazil,” begins Alejandro. “So, in South America when we talk of opportunities, we are thinking about the potential cross-business and cross-regional synergy still to be realised. In 2013, we integrated six companies. The interaction between SGS management from different countries allowed us to expand our understanding of our business and potential opportunities across the region. Of course, this undertaking has presented several challenges. Some of the companies we acquired significantly increased the size of SGS in South America. For instance, in Chile we integrated 2 000 new employees to the Group. Integrating companies poses a challenge not only because of the potential large scale of the acquisition, but also due to the fact that each company has a completely different culture from SGS. We addressed this with the help of SGS Human Resources.

We know our process works because we stay in close contact with customers and listen to what they need

“For example, our integrity training is a key factor in any acquisition, as it communicates the culture of SGS to the acquired companies. Trainings, work sessions and communication efforts are all implemented to ensure operational managers understand our expectations and culture. We also make the effort to learn from the acquired companies, as this helps us expand our competencies and can unveil business opportunities, or recognise potential synergies that

may not be obvious at first. All of this helps improve efficiencies and aids productivity, both in our own processes and those of our customers. And we know our process works because we stay in close contact with customers and listen to what they need from SGS, and how well we are meeting their expectations. We have made many new connections in the region and these have opened up new services and solutions in areas ranging from industrial to environmental, to oil, gas and chemicals.”

MILESTONE EXPANSION

“One example of where we have realised a new business opportunity in the region is the acquisition of Enger Engenharia SA (Enger), a leading engineering consultancy company, based in Sao Paulo, Brazil. Incorporating what Enger does into the SGS network allows our portfolio to cover project supervision and management, as well as technical consultancy for infrastructure, building and industrial projects in the following phases: feasibility, construction and operation. This represents a milestone for SGS South America's industrial service offerings and really gives us a strong foothold to leverage our skills in hydraulic plants and oil and gas facilities and in the transport and infrastructure sectors. So that is a very real instance of how successfully integrating one part into the network has a massive effect on realising a much bigger growth potential.”

ROOTED IN TRADITION

Alejandro adds, explaining how SGS has been mindful of traditional services while it continues to look for new growth opportunities, “Our matrix is changing as far as the services we provide in the region but we have been careful not to neglect our customers in SGS’ traditional business lines. In inspection services for automotive and vehicle testing we are in the process of finishing three large statutory inspection

50%increase in revenues for

SGS South America during the last two years

17lanes of vehicle testing – the biggest SGS statutory

inspection station anywhere in the world

stations, one of which is the biggest project of its kind for SGS anywhere in the world, with 17 lanes of testing. Similarly in agricultural services, we have managed to expand our traditional business through a new project for field trials in Brazil, a service that simply did not exist in the country before we introduced it this year. These projects are the result of researching the SGS network, and identifying investment coming into South America specifically, and finding solutions that really offer something unique to the industries of the international and local customer.”

SGS is finding solutions that really offer something unique

RESPONSIBILE FOR BETTER

“With the scale of expansion and growth here in South America, SGS has a responsibility in terms of our commitment to the new employees brought into our Group,” Alejandro says of what SGS must keep at the forefront of any expansion. “We know it takes time to get used to a new working culture, and accept and integrate the SGS way of doing things into daily routines. But in return, SGS offers employees a place where there are many benefits: career development and personal development in skills and leadership abilities, opportunities to gain international experience, training in different areas of expertise such as integrity, health, safety, plus the chance to become a leader, manager and more. SGS opens doors for people, as you would expect from a company that is best in class and a world leader. The better we can be at realising the potential from each employee, and the more we can create synergies between management and services, the higher we can continue to set the bar for success in South America.”

The state of Sao Paulo has the largest slum population in South America. Life in a slum (known as a ‘favela’ locally) is hazardous, unhealthy and often provides only limited access to basic services such as sanitation. SGS, in collaboration with the Housing and Urban Development Company of the state of Sao Paulo (CDHU), is providing construction supervision, project management and associated services for CDHU’s large-scale housing project which aims to build 12 647 homes and give a better standard of living for the favela population.

The CDHU has housed over 2.2 million people to date, making it one of the world’s largest housing organisations. It has been a customer of SGS Enger Engenharia – acquired by SGS in May 2013 – for 29 years and benefits from the combined expertise of the entire SGS global network. SGS supports the CDHU in the management of the favela programme at each stage of its implementation: planning, management and feasibility studies during development, project management, tracking of construction inspections, permits, and compliance with all necessary regulations. Beyond the new construction, SGS offers the population affected by the relocation a comprehensive social care programme, which makes the sometimes challenging move from perhaps the only home people have known an empowering and positive experience. Change can be difficult and every person relocated is able to access training and other services that helps them adjust quicker to the new environment and social setting provided by SGS and CDHU.

>550 000homes built and sold by the CDHU

>2.2 Miopeople

housed by the CDHU

BUILDING A BETTER SAO PAULO

53

54

SOUTH AMERICA

Colombia’s average crude oil output for 2013 is estimated at 1 007 million barrels per day, up 7 percent on output in 2012. Considerable government investment is planned for oil explorations and production in 2014, and the growth in this sector means an increasing need for infrastructure (i.e. pipelines, terminals, storage and pumping stations) to transport, refine and export oil. SGS ETSA is part of the solution.

GROWTH TARGETS

As Latin America's fourth-largest oil producer, Colombia has been pushing to grow oil reserves and production. Over the past seven years, oil production has doubled as the government has provided the market with an improved tax and royalty rate structure, and found ways to tackle guerrilla attacks on pipelines, with support from the US, Colombia’s main export market.

LOCAL EXPERTISE

There are six major oil pipelines crossing Colombia, which take oil from the inland fields to the coast. Four connect to the Port of Covenas, a Caribbean export terminal, one of which is the Ocensa pipeline. Ocensa runs 830 km from the Llanos Basin fields of Cusiana and Cupiagua to the Port of Covenas. The increasing need surrounding pipeline infrastructure prompted SGS to acquire Estudios Técnicos (ETSA) SA, a Colombian-based engineering project supervision and management company. ETSA served the energy, infrastructure, construction, and public

OIL FIELD TO OCENSA TO OCEAN

560 000barrels per day pipeline

capacity for Ocensa

830 kmtotal length of

the Ocensa pipeline

55

services sectors from its headquarters in Bogotá. With over 50 project offices throughout Colombia, SGS ETSA, as it is now known, allowed SGS to diversify its service offering in Colombia and meet the demand for construction expertise in oil and gas infrastructure. With the integration of an established and locally known company, SGS ETSA immediately entered the market able to give customers the advantage of local personnel who understood the challenges of construction in Colombia, but now with the full backing of the SGS network to improve efficiencies and maintain quality.

A PERFECT PARTNER FOR OCENSA

Enrique Chávez, Managing Director of SGS Colombia, knew that the sheer size of the Ocensa project fitted well with the approach of SGS ETSA. “With the acquisition of ETSA," Enrique explains,

"SGS Colombia had all the expertise, personnel, procedures, and know-how to provide a full range of engineering, construction supervision, project management and consulting. This is why SGS made the ideal choice for the

Ocensa project. The Ocensa pipeline has a capacity of 560 000 barrels per day and accounts for around 60 percent of total oil production in Colombia. SGS ensures the best standards are being continually met in all modification work being carried out at seven storage stations, pumping stations, and a maritime terminal for oil dispatch and reception. The project expands the existing pipeline capacity by 35 000 barrels per day.” Enrique continues,

“Our team of 30 inspectors, under the guidance of a project manager who has extensive experience on similar projects, gives Ocensa the supervision it needs over the next two years in the civil, mechanical, instrumentation, control and electrical infrastructure, and fire fighting protection segments. Our skilled team is on hand every day to make sure the Ocensa project meets all relevant regulations and quality standards, and realises an on time and on budget success story for construction in Colombia.”

PROJECT MANAGEMENT

Keeping the Ocensa project on schedule, while reducing technical risk and preventing construction errors requires continuous supervision: SGS ETSA ensures construction conforms to specified documentation and permits.

QUALITY ASSURANCE

Every aspect of the Ocensa infrastructure has to meet stringent regulations and requirements: SGS monitors construction against compliance with contractual agreements, quality standards and applicable laws and regulations.

NON-DESTRUCTIVE TESTING

The equipment and assets associated with the Ocensa infrastructure must operate safely and efficiently: SGS NDT inspectors perform examinations to detect possible failures and defects and assure standards are met at all times.

6major oil pipelines

cross Colombia

56

57

COMPLEXITY & expertise

CHINA AND HONG KONG

58

DURING THE LAST 20 YEARS, SGS HAS SUCCESSFULLY BUILT AN ESTABLISHED AND TRUSTED NETWORK IN CHINA. A focus on hiring the best of local talent, and supplementing regional expertise with SGS’ global understanding, has given Helmut Chik, COO of SGS China and Hong Kong, a unique ability to help customers navigate the complexities of doing business in the region.

CHINA AND HONG KONG

HELMUT CHIKChief Operating Officer, China and Hong Kong

FIRST IMPRESSIONS lasting relationships

ONE INTO MANY

“When our customers first begin to explore the possibilities of business in China and Hong Kong, they often think of the region as one single market,” explains Helmut of how the region is viewed, “and while there is overall communist party rule for regulations across the country, individual provinces might have very different interpretations of the same regulation and implementation guidelines.

To understand each province's local thinking, you need to have ‘guanxi’

“So, the complexity faced by our customers is how to understand each province's local thinking and interpretation of business practices. To do that here in the People’s Republic of China, you need to have ‘guanxi’, which is difficult to directly translate into English but can be thought of as the need to build relationships for business success. That is what SGS has focused on achieving over the last 20 years, and today we have the people and expertise to guide our customers through the local rules, the different local cultures, and introduce them to the local business community.”

LOCAL INVESTMENT

While the market in China is still not 100 percent open, Helmut knows SGS needs to keep building its network and investing in local talent. The inhouse 18-month ‘mini MBA’ programme, which selects and coaches the most promising employees, is now entering its ninth year. The programme is clearly working, demonstrating higher retention rates from graduates, and further consolidating SGS’ expertise and value-added potential to customers. In a region so reliant on relationships, SGS is certainly one for the long term.

TRADING PLACES

Insight and understanding have allowed Helmut and his team to successfully expand services and solutions away from China’s historical export focus towards newly emerging opportunities in the domestic market. “Four or five years ago, we were mainly the leading solution provider for trade-related services. Our customers relied on us for many solutions in export services. However, we decided that in order to sustain our leading position in China, we had to also penetrate the local domestic market. Rapid urbanisation and a growing disposable income have meant an increasing desire for consumerism.

103different offices and laboratories

operate in the SGS China and Hong Kong network

20years of success for SGS in China and Hong Kong

“For instance, the region has grown into the biggest automobile market in the world. We recognised the potential in this market and for a number of years we worked to build up our auto components laboratories and capabilities. Our forward thinking has given us the ability in 2013 to offer our customers the largest auto parts testing network here in China. In any major car manufacturing city or province, there is an SGS presence. In terms of market share, we are now the leader, with nearly all OEMs and manufacturers requiring our services. Why? Because we invested in technology, people and network coverage, but we were also careful not to forget and work with the local car manufacturing community.

Our forward thinking has given us the ability in 2013 to offer our customers the largest auto parts testing network

“Our automobile expertise in E-mobility, materials testing, electrical and electronics testing, and others prove a real advantage for our customers in the world outside and inside China.”

THE WHEEL OF TRUST Automotive companies typically source from a very large

and diverse number of suppliers, and SGS, as the biggest

independent laboratory network for automotive component

testing in China, has helped local suppliers meet the many

challenges of manufacturing components to domestic or

international regulations. SGS ensures the quality, safety and

reliability of locally sourced components, which can range

from plastics (i.e. dashboards, steering wheels) to metals

(i.e. doors, panels) to electronics (i.e. instrument panels, engine

management systems), so that components can meet local and

international standards and OEM-specific inhouse benchmarks.

SGS’ global relationships with major automotive companies

and local presence in all of China’s automotive manufacturing

provinces offer a trusted bridge for delivering excellence in

China’s automotive industry.

59

CHINA AND HONG KONG

Manufacturing in, distributing from, or importing into the People’s Republic of China is one of the most challenging and complex consumer testing and certification scenarios in the world. However, partnering with SGS’ multidisciplinary and extensive testing network opens a doorway to unparalleled value-added services.

60

61

SGS has one of the BIGGEST TOY TESTING LABORATORIES IN SHENZHEN offering chemical testing capabilities to

ensure the safety

of toys destined for the domestic and international market.

Collaboration between

SGS China and SGS North America has resulted in SGS’ laboratory in Shanghai becoming the first Chinese testing facility certified by the US Consumer Product Safety Commission (CPSC) for the

SAFETY TESTING OF CRIBS

destined for sale in North America.

Strenuous exercise in the outdoors means one thing –

HEAT. Getting hot air out into the open and away from the skin keeps the wearer dry and comfortable. Functional breathability claims need to LIVE UP TO CONSUMER EXPECTATIONS, which is why manufacturers rely on SGS testing of water vapour permeability of textiles.

Antibacterial treatments (including anti-odour systems) keep clothes fresh and functional, even during

the most demanding of workouts. SGS applies qualitative and quantitative testing methods of bacteriostatic value against international industry standards.

Ultraviolet (UV) protective fabrics are becoming more

POPULAR due to concerns about the dangers of excessive exposure to the sun. Originally a niche market for baby clothes and children’s swimwear, UV fabrics can now be found in entire adult UV protective clothing lines. SGS testing for UV fabrics IMPROVES QUALITY AND PERFORMANCE.

SGS ECOSECURE facilitates the implementation

of strict quality assurances for customers on incoming materials and chemicals used in the manufacturing process. The certification mark demonstrates products are ENVIRONMENTALLY

FRIENDLY and free from hazardous chemicals.

BRE

ATH

E EA

SY

STAY

FRE

SH

PL

AY

SAFE

LY

SAFE

SU

N WA

LK

G

REEN

CNASSGS is accredited by the China

National Accreditation Services for Conformity Assessment (CNAS)

CMASGS is accredited by the China Metrology Accreditation (CMA)

GB 18401SGS performs testing to China’s National General Safety Technical

Code for Textile Products

QU

IET

NIG

HTS

8 LOCA

TIO

NS

LABORATORY NETWORK

SHA

NG

HA

I

QIN

GD

AO

GU

AN

GZH

OU

CHA

NG

ZHO

U

HA

NG

ZHO

U

NA

NJI

NG

NIN

GB

O

XIA

MEN

62

63

COMPETITION & differentiation

EASTERN ASIA

64

EASTERN ASIA

FIRST-MOVER ON INDUSTRY CHALLENGES

“Eastern Asia is experiencing rising urbanisation and an increasing consumption of consumer goods and personal technologies. This has been helped by an expanding middle class,” reflects Dennis on the shift in population location and power.

“Industry is accommodating the new demand. Government incentives are encouraging technology firms to manufacture higher added-value goods. Infrastructure developments continue to expand. Exports are up. Growth is up.

We have to continue offering more solutions, more services, in more industries

“All in all, Eastern Asia has weathered the financial storm and its aftermath far better than western economies. Some countries, such as Japan, are now reawakening and reaffirming their position in the global economy. For SGS, with change comes competition. For us to remain the leading testing, inspection and certification company in the region we have to continue offering more solutions, more services, in more industries, and always look to be the first-mover on industry challenges.”

LONG-TERM INVESTMENT

Areas where SGS has already established a strong reputation for solutions that deliver competitive advantage to customers – wireless technologies, medical devices, food testing and materials testing – are examples of how Dennis’ leadership has continued to keep pushing SGS forwards. “If you look at construction materials testing,” Dennis continues,

“then it is easy to compare our growth in the region with Eastern Asia's economy. We began materials testing over 20 years ago. At first it contributed only a fraction to our revenues. Today, the service has gone from 2 employees to 800 employees. Our investment in providing solutions has matched the commitment of the governments to grow their respective country’s infrastructure. Because we have continually increased the scope of our services, we now have region-wide leading materials testing capabilities in serving industries ranging from construction, transport and marine, to oil and gas. We are not a new player in Eastern Asia. SGS is a byword for quality and safety in many countries in the region – which is a reflection of our long-term investment in delivering excellence.”

Because we have increased the scope of our services, we now have region-wide leading materials testing capabilities

DENNIS YANGChief Operating Officer, Eastern Asia

EASTERN ASIA IS RAPIDLY BECOMING A DRIVING FORCE IN THE GLOBAL ECONOMY. ‘The world’s workshop’, as the region is often referred to, needs now, more than ever, services that prove quality, safety and reliability for its goods, exports and manufacturing processes. Dennis Yang, COO of SGS Eastern Asia, is differentiating SGS from its competitors by striving to be first- to-market with solutions and services with high-growth potential.

REGION ON THE RISEhigh-growth potential

65

Demand in emerging markets

for medical devices is increasing

year-on-year, especially in

Taiwan where the population

by 2025 will be deemed

‘super-aged’ (i.e. more than

20 percent over the age of

65). SGS has closely followed

government schemes to

encourage local companies,

and new start-ups, to transform

themselves into high-tech and

high added-value medical device

manufacturing and R&D experts.

The result of the incentives

is 705 medical device-related

companies now in Taiwan and

revenues from medical devices

estimated at CHF 2.46 billion

a year. SGS, as one of the

few members of the ROC

Taiwan Technical Co-operation

Program (TCP), offers medical

device companies in the region

indepth knowledge of local and

international medical device

certifications in order to facilitate

speed to market and entry into

the global supply chain.

Flour, rice, ice cream and

cooking oil have all recently

hit the headlines in Eastern

Asia. Why? Food safety

concerns. SGS has made its

own headlines too, by playing

an important role in the quality

testing of local food products.

In the region, SGS is educating

consumers on food safety

via business-to-consumer

campaigns, working closely

with university programmes

to develop the food researchers

of the future, and creating

state-of-the-art automated

sampling systems for faster,

more accurate results.

FOOD TESTING

MEDICAL DEVICES

66

EASTERN ASIA

SGS is both a member and an Affiliated Test Facility (ATF) of the CDMA Certification Forum (CCF), an international non-profit partnership between CDMA operators and CDMA device vendors. SGS CDMA Certification provides Taiwan’s wireless industry with a uniformed and streamlined process that improves quality, demonstrates product conformance and essential performance to international standards, and allows speed to market for new devices.

SGS is accredited by the Special Interest Group (SIG) for Bluetooth testing and certification. Whether radio type approval, EMC certification or safety certification, SGS has the expertise and capabilities to ensure Bluetooth products comply with all relevant standards.

As an accredited testing partner of the Wi-Fi Alliance and The Wireless Association (CTIA) SGS provides state-of-the-art facilities and highly trained and qualified technical staff for RF performance evaluation of Wi-Fi Mobile Converged Devices and a comprehensive range of Wi-Fi tests.

M-Taiwan, a government-backed initiative aimed at providing 100% coverage for Wi-Fi access via worldwide interoperability for microwave access (WiMAX), has delivered on Taiwan’s ‘access for everyone’ thinking. Although WiMAX may have stumbled due to the popularity of long-term evolution (LTE) technologies, the fact remains Taiwan is responsible for the manufacturing or assembly of 90% of the world’s customer-premises equipment (CPE). This makes Taiwan the undisputed global gateway to the web and mobile-enhancing technologies.

GENERATIONM BILETHE

1.5 Mio subscribers were counted

in 1997 when Taiwan deregulated its mobile industry

CDMA SIG CTIA

67

35%of the total telecom service revenues

comes from 3G subscribers

17.53 MioInternet users in Taiwan

with nearly 80% of the population having access to the world

wide web

126.9%mobile subscription means one

mobile is not enough for the tech-savvy Taiwanese

1983First analog mobile phone

1989Mobile phones fit into a shirt pocket

1998Cell phone without an external antenna

1997The world's first phone with a colour screen

1999First mobile phone with a WAP browser

2001First Bluetooth capable phone

2004First dual mode UMST/ WCDMA phone

2011First 3D smartphone

2020-ONWARDSControl of critical infrastructure, electrical grids, traffic systems, e-health, smart-city management, remote video with zero latency, industrial safety systems and controls

2010First satellite smartphone

1983ANALOG CELLULAR NETWORKS

1990sDIGITAL CELLULAR NETWORKS

2001MOBILE BROADBAND DATA

2009NATIVE IP NETWORKS

2020WHAT'S NEXT

2G1G 3G

25.1 Mio subscribers in 2003


2G



2020 the year 5G makes its debut on the global telecom-munications stage and Taiwan aims to ensure Asia is the global hub for 5G technologies and R&D

3G 5G

CHF 3.658 Bio closed the bidding at the recent 4G sell off by Taiwan’s telecommunication and broadcasting regulator (NCC)

2.3 x HIGHER the minimum bids set by the NCC

5 x FASTER download speeds estimated by switching from 3G to 4G

CHF 618 Mio is the planned total government investment over the next three years to establish advanced wireless broadband technology and e-commerce via 4G

4G

4G 5G

FUTURE-PROOF TESTINGSGS Eastern

Asia and SGS

North America

partnered

to create a

first-of-its-kind

laboratory in

San Diego.

The laboratory

network offers

a one-stop

testing solution

for all cellular

technologies,

supporting

backwards

compatibility

testing for 2G

and 3G as the

industry further

develops 4G

and races

towards

releasing 5G.

68

69

DIVERSITY & connectivity


70


BOUNDARYLESS BUSINESS NETWORK

“We need to look beyond ‘our business’ and more towards our customers' businesses,” begins Anthony, offering his explanation of connectivity within SGS SEAP. “It is not enough for our people to deliver services and solutions solely for their business, their country, or even, their customer. We have the opportunity in SEAP to create a boundaryless network, one where we all work towards ‘our growth for our customers’, and I’m proud to say we are already delivering on this promise.” In principle, a boundaryless business network seems simple. Achieving it in arguably the most diverse cultural and economic region in the world, however, is far more difficult.

We need to look beyond ‘our business’ and more towards our customers' businesses

“Diversity,” Anthony explains, “is the very thing that enables opportunity. It allows you to explore new ways of thinking, and find new solutions for customers. We have always held the belief here in SEAP that our collective intellect is much stronger than our individual talents. But how do we leverage that for our customers? We create an environment where intellect can be shared and accessed, openly and willingly, so that opportunities become visible. Invariably our customers come to us with complex and challenging needs, and our goal is to always present the simplest solution, in terms of time and cost-effectiveness. How we arrive at that solution is by connecting with each together.”

ENCOURAGING CONNECTIVITY

Encouraging and engaging his team to connect and share their knowledge required a new structure, and new approach, from Anthony’s leadership.

The traditional focus on business line or regional growth, in isolation from the rest of the network, no longer fitted with the fluid and fast-paced SEAP economy. He elaborates: “We knew there existed ‘false boundaries’ within our network, barriers that we could eliminate by sharing our expertise. For example, what if our agricultural manager in Australia happens to be a trade expert but has no exposure to field trials? How can we expect that manager to bring the latter into conversation for our customers, even when there is a need? Bridging the knowledge gaps is the answer. And this has been achieved by creating an innovative business vice president structure here in SEAP. We encourage our vice presidents to follow a specific mandate of participation in the regional operational council – SEAP ROC - and closely link themselves with the managing directors of each country. As a result, our team is stronger because dialogue flows not just between business counterparts, but also across the entire SEAP network. We now more effectively cross-pollinate our ideas and arrive at new solutions that previously may have been missed. We leverage expertise from our more established affiliates, such as Australia and India, and bring these new capabilities into our smaller affiliates. So, the importance of the SEAP management structure is how it has made sure we can provide our customers with industry-leading services anywhere in SEAP.”

POWERFUL RESULTS

“Our emerging smaller affiliates now act with the power and strength of our large established bases in SEAP,” states Anthony. “Services and solutions that may have been overlooked are now transparent to management, and more importantly, to our customers. Our unique leadership structure gives us an incredible competitive advantage, one which we have successfully been able to pass onto the customer here in SEAP.”

ANTHONY HALLChief Operating Officer, South Eastern Asia and Pacific

SGS SOUTH EASTERN ASIA AND PACIFIC (SEAP) CONSISTS OF 10 TREMENDOUSLY DIVERSE AND DYNAMIC COUNTRIES. Rich in many different peoples, cultures and traditions, the region is one of the fastest growing economies in the world. Established business hubs in emerged markets are being recognised as the entry points for expansion into emerging markets. Developing interconnectedness between emerged and emerging is the new paradigm for success. Anthony Hall, Chief Operating Officer of SGS SEAP, has been embracing this way of thinking for over a decade. His transformational leadership has reframed diversity as the enabler of new opportunities and cross-border solutions for SGS customers.

EMERGED AND EMERGINGone network thinking

71

TEAMWORK

72

BUILDING SUSTAINABLE

With the many cultural differences and varying management approaches in the region, SGS provides a vital link to multinational customers seeking a ‘one-fits-all’ strategy for SEAP.

NAVIGATING DIVERSITY

When one of the world’s leading suppliers of cement and aggregates needed support for its sustainability requirements across SEAP, Paul House, Managing Director of SGS India, offered a solution to navigate the diversity of the region.

CULTURAL UNDERSTANDING

“Partnering with SGS helps to bridge the cultural understanding of how management within each country in SEAP integrates the expectations coming from a multinational’s global headquarters,” explains Paul on how SGS benefits customers in SEAP. “With this particular customer there were many similarities to SGS in the way they view their global network, which made us a good match in terms of understanding and delivering on their goals: strong commitment to sustainable value creation, awareness of the need for effective local management, engagement with the local community, and standardised and benchmarked

10SGS teams in 10 countries

across SEAP

72


73

163 new oil fields have

been discovered in Malaysia

216 gas fields have been

discovered in Malaysia

40%of Malaysia's total revenues

come from its oil and gas exploration fields

BROADER OUTLOOK FOR NEW

INSPECTIONSMalaysia ranks 28th in the world in terms of quantity of crude oil produced and 14th for natural gas. The country realises nearly 40 percent of its total revenues from the 615 100 km2 that constitute its oil and gas exploration fields. Government incentives have led to impressive growth in the industry and 163 new oil fields and 216 gas fields have been discovered. Where there is exploration, there is drilling. And for SGS in SEAP that created the opportunity to transfer the skills of its Australian drill equipment inspection (DEI) team into Malaysia. SGS experts from Australia travelled to Malaysia to discuss how the gap that exists in DEI operators in the country could be filled. Although SGS had no capabilities in Malaysia for DEI, the network in SEAP knew this could be quickly remedied, and soon a close working relationship began between the two affiliates. Customers in Malaysia had already enquired for help with DEI, and their trust in SGS’ global capacity to deliver solutions led to an initial short-term local tender. The timing could not have been better. The experts from Australia and Malaysia had already forged an excellent partnership and soon the partnership gained momentum. Transforming a conversation about potential business to a fully-fledged DEI service took SGS Malaysia less than 18 months, and now it brings in more than CHF 4.5 Mio in revenues – another example of how the broader outlook in SEAP provides a very focused and profitable outcome.

business practices overseen at Group-level. Our complementary perspectives on operating excellence created a close working partnership between the senior management of both our companies. It really helped us to understand their corporate policy and its aims and targets in SEAP. Discussions with key decision makers, both globally and locally, enabled us to work with them on arriving at an effective rollout strategy tailored for each country in the region.”

UNIQUE INSIGHT

“Every multinational wants to be successful at replicating best practice, wherever they operate,” continues Paul, “and SGS has teams in Malaysia, Thailand, Sri Lanka, and many other countries in SEAP, and each team gives a unique insight that translates into competitive advantage for customers. Our difference is that we know how the emerged and emerging markets in SEAP think and act. It means we can facilitate faster change and implementation of requirements for customers. In this instance, the customer already had in place very effective processes for establishing their strategy across multiple countries. Their sustainability stance demanded operations to be transparent and accountable. It is well documented that one of the biggest issues in cement production is the emissions generated via the cement plant. Some countries have more onerous laws governing emissions than others. Our experts worked in tandem with our customer's technical people and ensured they received the results needed to prove plants were meeting sustainability targets. This project has encouraged us to keep developing our ability to connect diversity across SEAP and provide a network for excellence to multinationals and other businesses entering the region.”

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Badan Pengawas Obat dan Makanan (BADAMPOM) is the National Agency of Drug and Food Control (NA-DFC) for Indonesia. The country has experienced rapid technological advances in the way pharmaceutical, traditional medicine, food, cosmetics, and medical device industries operate and market goods. Removal of restrictions on investment and manufacturing within Indonesia, together with ‘borderless’ entry to global trade, make the threat of substandard or even dangerous products entering the marketplace a real possibility.

A responsibility to protect consumers prompted NA-DFC to seek out a partner for a baseline assessment programme requiring analysis and testing of 23 000 individual products, from randomly sampled food, food supplements, herbal medicines, drugs, and cosmetics across nine provinces in Indonesia. The entire project needed to be completed in a timescale of less than three months. With the sheer volume of testing required by the project, a demanding timeframe, and the challenge of collating the samples, SGS created a unique solution.

SGS chemists and microbiologists from Singapore, Thailand and India teamed together to combine their state-of-the-art laboratory capabilities in life sciences and food-related sampling in order to offer facilities which could meet the analysis and testing needs of the project. To streamline processes, SGS established a laboratory information management (LIM) system which meant the logistical challenge of consolidating, shipping and tracking all 23 000 products could be overcome.

Despite having limited capabilities established on the ground in Indonesia, an ability to quickly respond in SEAP and deliver strong collaboration from the various regional affiliates, allowed SGS to successfully deliver on the NA-DFC’s ambitious project and build a trusted partnership for future quality-testing projects.


23 000 INDIVIDUAL TESTS OF NETWORK STRENGTH

EXPLORATION

SHALE GAS The Cooper Basin is located approximately 800 km north-northeast of Adelaide in South Australia. It spans in excess of 130 000 km2 and the principal shale gas play is the Roseneath – Epsilon – Murteree (REM). SGS supplies well testing and flow back services, wireline and slickline operations, and environmental and other solutions to operators in the region.

SGS Wireline and Slickline Services provide a variety of well intervention and measurement services that maintain efficient well operation and production.

Mobile exploration and production laboratories from SGS deliver onsite routine and non-routine analyses for faster results without the risk of shipping samples offsite.

SGS supports explorations in the Cooper Basin with a comprehensive range of services that help customers fully understand the potential value and impact of their exploration programme.

Shale water testing from SGS ensures the highest environmental standards for the quality and integrity of flow-back and produced waters, minimising environmental impact and improving operational efficiency and equipment longevity.

>500% increase in region's Upstream

revenue since 2010

1ST

SGS is the leading onshore well testing provider in Australia

130 000 km2

the total area of the Cooper Basin

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RECOGNISING POTENTIAL

India’s seed industry is estimated to be worth nearly CHF 850 Mio. However, this figure accounts for less than two percent of the current global seed business which totals CHF 23 Bio, and is expected to rise to CHF 72 Bio by the year 2020. With such a huge potential for growth, SGS recognised early on it could be a leading player in the burgeoning seed and crop services market. Sudhir explains, “India has become a major investment centre for seed companies, most of them multinational operations but there are also many local seed companies heavily investing in their own capabilities. As an industry, seed production has become a very innovative business. The quality of the seed is being continually improved in order to get a better return per hectare. In addition, the seed is developed with the aim of delivering the same yield potential for each country and geography it is used. What our services provide is the opportunity to access a global network that has the local knowledge and facilities to make this a reality. Our presence in so many countries around the world, and especially here in SEAP, is how we add real value for our customers.”

PERFECT TIMING

The real turning point in positioning SGS India at the forefront of seed and crop services resulted from close ties within the network. “SGS North America had recently acquired a state-of-the-art seed testing laboratory,” he recalls,

“and suddenly the questions we were asking ourselves here in India ‘how to implement just such a facility?’ were answered. It all really fell into place from that moment on. Customers here in SEAP already were asking us for

help with seed testing but we had no infrastructure or technical knowledge until the US acquisition. As soon as we had access to this new understanding, our ability to provide a solution for our customers quickly resulted in increasing requests for services. So, the timing could not have been better. To replicate the US-based capabilities and make them readily available to our customers in SEAP, we only had one location choice: establish a seed testing laboratory in Hyderabad, the seed hub of India. In a short space of time, we had the exact same world-class facilities operated in North America here in SEAP. Our multinational customers knew they could depend on SGS’ benchmark standards of quality, cutting-edge technologies and leading industry knowledge in two of the most important seed markets in the world.”

UNIQUE FACILITIES

“Our facilities incorporate some unique and first-of-their-kind features in India, such as a paperless laboratory, and an internet-based online customer database for the tracking of samples and results. Because of this, we have rapidly expanded from servicing the needs of the domestic seed testing market to providing solutions for customers from China, Sri Lanka, Bangladesh and others, all due to our diversity and connectivity. We are in constant contact with our management teams across SEAP and have a desire to share information and provide our customers with the highest levels of service.” Demand from overseas brought a different challenge – government restrictions on seed import and export for sampling purposes.

“It quickly became obvious we needed a new solution,” continues Sudhir, as the regulations tightened on the

THERE IS NO BETTER EXAMPLE OF HOW CONNECTIVITY MAKES A DIFFERENCE THAN THE DEVELOPMENT AND REPLICATION IN SEAP OF SGS INDIA’S SEED TESTING SERVICES. When Sudhir Kumar, Vice President of SGS India, discussed India’s booming market for seed production services with his counterparts in North America, little did he realise the ripple effect it would have on demand from customers throughout SEAP.

SEED OF SUCCESS


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cross border movement of seed through India. In SEAP, we may wish to be borderless, but that requires more than just words. Our actions led us to replicating our success and technical competencies in seed testing from North America to India and then also to our smaller SEAP affiliates such as Sri Lanka for instance, which may not be a large country, but the demands from customers are still there.

India’s seed industry is estimated to be worth nearly CHF 850 Mio. However, this figure accounts for less than two percent of the current global seed business which totals CHF 23 Bio, and is expected to rise to CHF 72 Bio by the year 2020

“How we view things in SEAP is that the services we offer in Sri Lanka are an extended arm of our business here in India. Customers needing state-of-the-art seed testing in Sri Lanka receive the same world-class solution as the major seed production companies here in India. This is how we extend competitive advantage to our customers in SEAP, by connecting our businesses, services and knowledge, so it can be accessed wherever needed in the region.”

CONTAINS17% of the

world’s human population

CORRALS15% of

the world’s livestock

COVERS2.4% of

the world’s geographical

area

CONSUMES4% of the

world’s water resources

KEY FACTS

>50%of India’s total land mass is used for agriculture

30%of seeds are certified/quality seeds

14% of India’s GDP comes from agriculture

11% of India’s exports are agriculture-related

50%of the Indian population rely on agriculture as the principal source of income

2%India’s share of the global seed market

10%the projected share of the global seed market for India in the next decade

2012-13 ADVANCE ESTIMATES FOR AGRICULTURE PRODUCTION

250.14 Mio tonnes of total foodgrains production

101.80Mio tonnes of rice (both kharif and rabi)

17.58 Mio tonnes of pulses

29.46Mio tonnes of oilseeds

334.54Mio tonnes of sugarcane

33.80Mio bales of cotton (170 kg each bale)

2ND India is the second largest producer and consumer of rice in the world and is the second largest producer of vegetables after China

1ST India is the largest producer, consumer and exporter of spices and spice products in the world

HALF of the world’s 100 plant species known to yield spices and spice products are grown in India

R CE is an important Indian food crop in term of area, production and consumer preference

INDIA

Our customers rely on our independent third-party

inspection, testing and auditing solutions to

ensure products, services and processes comply with

the latest quality standards. Our global network of state-of-the-art facilities provides information to certify and verify quality worldwide.

We help organisations develop effective health and safety systems to protect

employees, generate consumer confidence

and enhance trust in business operations. We

support our customers in adhering to best practices and complying with local, national and international regulations.

Our tailored business solutions help our customers

implement processes and systems that make business operations faster, simpler and more efficient. We deliver unrivalled efficiency results from locally accessed SGS experts,

who draw on the global experience of the entire SGS network.

Our training and outsourcing solutions

ensure productivity keeps pace with developments in our customers’

organisations. In the short-term, we

help by outsourcing our world-class productivity experts. In the long term, we deliver focused training

to develop specialist skills in our customers’ existing personnel.

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SAFETY

PRODUCTIVITY

QUALITY

EFFICIENCY

SGS

Our global reputation for independence and integrity enables us to build trust

wherever needed. We provide

transparent and unbiased inspection, testing,

verification and certification solutions so our

customers can give assurance in their products, processes, systems and services.

We help our customers take ownership for

building a more responsible and

sustainable future. We encourage environmental responsibility

and reduce the risk of corruption in our customers’ projects. Our

services assist in developing

sustainable facilities and production, as well as better working and social environments.

We provide our customers with independent and

impartial services that enable them to identify, manage and

reduce risk. Our experts deliver risk management solutions, drawing on our testing and inspection capabilities to verify risk prevention measures are in place. Across a

wide range of industries we assist with compliance to international risk management standards.

Compliance with the requirements of target

markets is key to increasing speed to market. Our consultancy, testing and certification services help our

customers overcome the complex challenges

of understanding and meeting market demands anywhere in the world, whatever the industry or sector.

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REDUCED RISK SPEED TO MARKET

TRUST SUSTAINABILITY

SGS

Our specialist teams deliver

trusted results in world-

leading services, covering

virtually all industries. We

audit across the entire value

chain, providing benefits in all

business sectors. We ensure

our customers’ projects,

products, processes and

operations meet and exceed

regulations and standards, and

we provide the verification

and certification needed to

trade in target markets around

the world. Our consultancy

services inform organisations

on market demands, while our

outsourcing solutions provide

the expertise, experience

and resources that enable

our customers to meet their

goals. We use state-of-the-art

examination methodologies

with unsurpassed accuracy

to perform inspections that

reduce risk and control

quality and quantity, while at

the same time we conduct

testing of raw materials,

components and products

in our global network of

facilities. Our industry experts

also deliver world-class

training, specifically designed

for the precise needs of our

customers, providing the right

skills and knowledge to

maximise efficiency and

improve productivity.

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AGRICULTURE & FOOD

Our services deliver end-to-end

supply chain solutions that

reduce risk, ensure quality and

improve productivity. AGRICULTURE & FOOD

We play a key role in protecting the integrity of global food

production through our agricultural goods tracking from field to fork. Consumers want assurance of safety and quality at every stage of the process. We safeguard their interests through our involvement from primary production to the point of processing or custody transfer. We assist with legislation compliance, ensure correct storage, shipping, packing and distribution, and assess products throughout diverse agricultural and food supply chains. Through our comprehensive range of cost-effective solutions we continuously improve safety, quality and sustainable development. Further to this, our approach to delivering services to our customers is harmonised across the largest independent network of experts in the world.

We grow consumer trust in safety and quality from field to fork

AUTOMOTIVE

We help every player in the

automotive industry improve

performance and reduce risk. AUTOMOTIVE

Our services focus on the design, construction and operation of

motor vehicle inspection solutions that limit damages and increase automotive safety. We manage supply chains to provide reliable vehicles, cost reductions, shorter delivery times and improvements in build quality and efficiency. At the same time, our logistics and supply chain security, and dealership and workshop audits, keep aftermarket and distribution operations in line with brand guidelines. We increase safety and reduce the environmental impact of road traffic through our vehicle inspections to national requirements, testing and calibration of speed safety cameras, traffic management, driver examination and vehicle axle load control. Across our worldwide network we have the resources and expertise to deliver independent, accurate and secure vehicle and automotive solutions.

We drive performance and safety worldwide

SGS

BY

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CONSUMER GOODS & RETAIL

Our consultancy and cross-

business services help to facilitate

quality, compliance, safety and

sustainability across global

supply chains. CONSUMER GOODS & RETAIL

Manufacturers, importers, exporters and retailers of

consumer products rely on our expertise to enable them to meet the challenge of delivering trusted consumer products. We help organisations to reduce risk, improve efficiency and ensure compliance with contractual or regulatory requirements throughout the supply chain. We provide a broad and detailed understanding of consumer goods and retailing, supporting our customers in building stronger and more resilient businesses. With our support, our customers gain a competitive edge by developing products, processes and supply chains that surpass expectations.

We deliver quality, compliance and safety to global supply chains

CONSTRUCTION

We ensure construction sites are

safe, processes run efficiently and

reliable materials are sourced. CONSTRUCTION

Partnering all organisations constructing buildings or

infrastructure, we determine how best to add value to all stages of both small and large scale construction projects. Our Geotechnical Services and Environmental Services conduct construction feasibility, risk assessment and management studies. We perform chemical and physical testing of the durability of materials and provide materials certification, checking suppliers and materials at source. In addition, we offer equipment services and an AHEAD asset management system to keep track of machines and other assets. Once a building is complete, we provide facilities management, waste management and inspection requirements, including energy audit certification. Thanks to our wide-ranging knowledge of construction and engineering, we ensure our customers realise projects on time, on budget and within all safety regulations.

We build efficient and sustainable businesses

CHEMICAL

Industrial chemicals companies

trust SGS to provide the

services they need to remain

innovative, sustainable, efficient

and competitive.CHEMICAL

Our services help to control chemical use according to the

tolerance levels in place for an industry. We offer a comprehensive range of chemical solutions as well as asset integrity management services, lean optimisation programmes, project lifecycle services and technical support to help businesses run more smoothly, profitably and effectively. We have the knowledge, experience and global reach to assist with staff training or the provision of extra staff. We support our customers in meeting complex industry requirements, dealing with intricate equipment and sometimes difficult and dangerous logistics. Our services are designed to augment our customers’ existing processes and procedures and are delivered by our experienced operatives and qualified scientists.

We test safety in everything from perfumes to paints to toys

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SGS BY INDUSTRY

INDUSTRIAL MANUFACTURING

Our testing and conformity

assessments ensure processes

and projects meet all quality and

performance requirements and

minimise environmental impact. INDUSTRIAL MANUFACTURING

Industrial manufacturers across a wealth of business areas, from

pharmaceuticals to farm machinery, aerospace to automotive, and everything in between, rely on SGS for independent advice on growth strategy execution and market best practices. Whether an organisation is fabricating components or finished products to be sold directly to consumers, we understand its operations from process control to logistics. Due to the complex nature of manufacturing attention to national and international compliance with quality, health and safety legislation is essential. We ensure both products and processes comply with specific regulations related to the area of manufacturing. Our experts are skilled at helping our customers build more competitive and profitable businesses through our trustworthy, reliable and independent services.

We make businesses more productive and profitable

FINANCE

Our services help organisations

ensure they have the right advice

to reduce the risks in project

finance decisions. FINANCE

We evaluate lending, assess risk management, facilitate trade, and

provide audit, certification and verification solutions along with finance training. For investment or borrowing on a new project, acquisition or venture, we inform on whether an investment or lending decision is viable and sound. Our teams deliver due diligence services throughout a project’s development phase; and for implementation phases we offer comprehensive monitoring, technical and financial risk management, as well as guarantee and collateral services. For financiers or banks providing funding to facilitate trade, we inspect, test and verify cargo and goods and perform collateral management and trade documentation assistance. Our knowledge of local, national and international standards and legislation enables us to meet the financial challenges facing any organisation.

We draw on expert knowledge for the full financial picture

ENERGY

We ensure regulations are met,

safety is considered at every

stage and environmental impact

is limited.ENERGY

We support organisations involved in both renewable energy

generation and conventional power plants drawing on our petroleum, gas, electrical power, coal and renewable energy industries expertise. Our independent inspectors verify and validate everything from petroleum fuel quality to stock levels. We support natural gas extraction and coal gas manufacture, as well as electrical power generation. For the coal industry our services cover exploration to decommissioning and we assist renewable energy organisations with hydroelectric power, wind power and solar power generation. Across all sectors we risk assess projects and support our customers through sales and distribution processes. Used on a standalone basis, or alongside existing working processes and methodologies, our services help energy companies run efficient, profitable and reliable businesses.

We power processes from renewables to conventional energy generation

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MINING

As a strategic partner, we provide

testing, technology, trade services

and consulting to help deliver

growth and lean efficiencies. MINING

Our expertise in mining covers steel manufacturing processes,

coal and coke trading, risk reduction and maximising profits and efficiencies in precious or base metal mining or extraction. We are a trusted third-party service due to our exploration, production, industrial applications, and decommissioning and closure solutions. Our services, delivered by our team of specialists, include advice on the most suitable technologies for a project and flow sheets to chart project progress. We work with customers to meet the challenges of this dynamic sector by improving speed to market and ensuring market developments and advances in technology are embraced.With our global network and cutting-edge facilities, SGS is trusted to provide transparent and unbiased support, helping organisations to flourish.

We find solutions that reduce risk and deliver competitive advantage

LOGISTICS

We work closely with our industry

partners to find innovative

solutions to develop and grow

businesses through processes

that work better, faster and

more profitably. LOGISTICS

Designed to ease the process of freight forwarding, whether by

sea, rail or road, our services include extensive import and export assistance. Our solutions encompass marine services such as cargo and vessel services, plant and terminal operations (PTO), import control services and international customs data exchange. For customers moving freight by rail or road, our essential solutions include terminal manning and weighbridge management services. We examine the operation of the interconnected processes and by using various tools and technologies we help to streamline operations and improve operating efficiencies. To support the logistics process we have a wide range of audit, certification and training services designed to help our customers run better businesses.

We create partnerships that streamline operations and improve efficiencies

LIFE SCIENCES

Our services provide analytical,

bioanalytical and clinical trial

testing, along with process

management, enabling

pharmaceuticals to swiftly reach

those that need them with minimal

cost and maximum safety.LIFE SCIENCES

Our services get pharmaceuticals and medical devices to market

quickly, while adhering to best practices and conforming to national and international regulations. We offer vital support and expertise throughout every stage of the drug development cycle. Partnering with SGS, our customers receive access to comprehensive biopharmaceuticals services and our in-depth knowledge of the medical device regulatory environment. Our staff-training covers pharmaceuticals, medical devices and health, beauty and wellness; with courses tailored to the requirements of individuals and businesses. There is no industry more heavily regulated than the development, testing and distribution of medicines and medical devices and our customers trust us to help them navigate the complexities.

We protect safety and costs in pharmaceutical and medical devices development

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SGS BY INDUSTRY

PUBLIC SECTOR

We offer verification and

technology-based solutions,

covering compliance assessment,

government revenue, trade

facilitation, good governance and

sustainable development. PUBLIC SECTOR

We cannot replace public infrastructure but our expertise in

public protection through border control is unrivalled, while our road safety solutions offer everything needed to ensure an effective transport system. Our e-government services touch on almost every aspect of everyday life and we have a broad range of quality management systems and health, safety and environment solutions. Our services are tailor-made to integrate and enhance existing policies and processes, or to act standalone as part of a broader package. By working with us, public sector organisations are able to improve customer experience while reducing costs, timescales and backlogs.

We ensure sustainable development of public sector services

OIL & GAS

Our robust technology,

knowledge-based approach and

dedication to quality and safety

allow us to provide innovative

solutions to every part of the oil

and gas industry. OIL & GAS

Whether our customers are exploring, extracting, refining,

transporting or marketing oil, gas, oil sands or other hydrocarbons, they turn to us for specialist advice and tailored solutions. We support upstream activities such as applied mineralogy, metering, measuring or hydrocarbons allocation with services that can be used independently or as packages. Our downstream services support distribution and retail, as well as the design and execution of optimisation processes and global trade inspection. Throughout both sectors our services enrich the value chain and impact on everything from transport fuel and heating products, to plastics, fertilisers and pharmaceuticals. Organisations partner with SGS to support them in achieving efficient processes and in maximising production.

We enrich quality and value in the exploration, extraction and distribution of hydrocarbons

ENVIRONMENTENVIRONMENT

Our international team of experts provides guidance on everything

from complying with environmental regulations to assessing environmental performance. We support and enhance reputations through state-of-the-art laboratory analyses, knowledgeable consultants, and specialised environmental and climate change services. The environment is at the top of the agenda for governments, civil society and citizens and is increasingly important for business and purchase decision-making, legislation and standards. We help with every aspect of environmental responsibility covering air, soil, water, waste, climate change and financial services. We also provide third-party assurance that goods exist and the right quality and quantity are delivered.

HEALTH & SAFETYHEALTH & SAFETY

Our services make working environments as safe as possible

by carefully performing risk assessments and executing preventative measures. Occupational health and safety is a major consideration for successful businesses. We ensure that organisations have effective occupational health and safety systems in place to protect employees, generate customer confidence and enhance business reputations. Quality, Health, Safety & Environment (QHSE) policies also protect co-workers, family members, employers, customers, suppliers, nearby communities and other members of the public who are impacted by a workplace environment. We help with occupational or industrial hygiene, assessing working environments with regard to air quality, dust, noise and vibration, technical due diligence and hazardous substances. We are also experienced at environmental audits and economic and social sustainability evaluations.

RISK MANAGEMENTRISK MANAGEMENT

Our specialist risk management teams identify and quantify specific

risks and make decisions about how to manage and mitigate them in the future. Whatever industry an organisation operates in, ensuring the safe execution and maintenance of all projects, operations and business activities, including trade, is a necessity. We draw on more than 50 years of risk management experience to deliver solutions for a broad range of economic sectors: agriculture to life sciences, mining to finance. Covering all aspects of risk management, equator principles monitoring and issues relating to cost management, we ensure our customers achieve identifiable schedule milestones and key performance indicators. We review transactions making sure they are secure and in full compliance with rules, regulations and industry best practices.

SUSTAINABILITYSUSTAINABILITY

Our services focus on providing a more responsible, balanced and

sustainable future. We help organisations ensure that they and their partners have efficient and manageable processes and systems in place, which comply with stakeholder requirements. We offer services covering everything from environmental responsibility and ensuring sustainable facilities and production, to minimising the risk of corruption and developing a better working or social environment. We can audit environmental management systems and undertake due diligence checks as part of certification programmes. We also help with supply chain management, social responsibility, traceability and training. As the world’s leading testing, inspection, certification and verification company we offer unrivalled experience, expertise and a global reach.

TRADETRADE

Our experts cover all aspects of trade activity to assess the

associated risks in order to mitigate and minimise liability for successful trade transactions. Managing the risks associated with trade and financing trade is a complex process that needs practical and objective planning. We certify that products are compliant and that the commodities bought are of the specified quality and in the correct quantity. We provide the independent control and assurance that allows banks and the finance world to supply loans and letters of credit to those who trade. For countries upgrading their institutional infrastructure, we maintain a smooth flow of commerce in and out of their borders. Plus, we collate independent information for import and export tax purposes. Our services help global trade to function as efficiently and fairly as possible and ensure trust between trade partners.

TRAINING COURSES & SEMINARSTRAINING COURSES & SEMINARS

People who are given proper training and support in their

professional development are likely to be more motivated, proud of their position and responsibilities, and more skillful, knowledgeable and productive. Over the years, SGS has trained professionals at some of the biggest companies and government organisations in the world. Our training and development solutions are designed to help organisations and individuals improve personal competence and skills: core enablers of sustainable business development and competitive advantage. The courses we offer address learning objectives in areas such as quality and safety improvement, compliance, sustainability, the safety of products and systems, risk management and brand protection.

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SGS 2013 Annual Report Business Review