About Arla Foods Ingredients 5 Health 6 Inspiration 9 Natural 12 Human Rights 15 Ambitions & Progress 18
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CORPORATE RESPONSIBILITY REPORT - SUPPLEMENT 2018 Arla Foods Ingredients CONTENT Sustainable growth is a collective effort 3 Our contribution to the global goals 4 About Arla Foods Ingredients 5 Health 6 Inspiration 9 Natural 12 Human rights 15 Ambitions & Progress 18 2 SUSTAINABLE GROWTH IS A COLLECTIVE EFFORT limate change, the growing global population objective is to take our operations to a new level and, and the importance of nutrition to good health through that, contribute to improved quality and food Care topics that, today, frequently make headline safety within the food industry at large. news. All over the world, governments, businesses and individuals are also recognising their responsibility to In addition to improving our own way of working, we contribute to a sustainable future, where there will be welcome opportunities to support the development of enough safe and healthy food for all and where the way sustainable practices within the entire food value chain. we produce it minimises our burden on the planet. This could be through our participation in industry working groups that aim to reduce the risk of chemical The UN’s sustainable development goals have set out contaminants in food processing or through projects to how, through our collective efforts, we can be a part of improve the sustainability of milk production. We have reaching this vision for the future. For many businesses engaged in several new activities of this kind in 2018. – Arla Foods Ingredients included – they have become the yardstick for measuring sustainable growth and Partnerships for affordable food performance. In this 2018 corporate responsibility Through our business interest in ingredients for infant supplement, you will notice that we have taken a closer nutrition, we have particular knowledge to share as an look at the areas where we believe we can contribute. active member of the GAIN Nordic Partnership and in our new partnership with DanChurchAid, which we en- Our focus on resources tered in 2018. By working in cooperation, the objective Environmental impact is one of our primary focus areas is to improve access to affordable and nutritious food in due to the highly resource-intensive nature of our pro- developing countries, where a high percentage of chil- duction. Although our energy and water efficiency are dren are malnourished. The current projects in Ethiopia not yet where we would like them to be, we have made and Zambia are progressing as planned. good progress in 2018. Our well-established research cooperation with univer- Installation of biogas motors at our major whey process- sities continues to chart the full nutritional potential of ing plant Danmark Protein is now underway, which whey and the health benefits at all stages of people’s means 80% of the site’s electricity consumption will lives. There is still much to be discovered. In 2019, we come from fossil-free sources by the end of 2019. At look forward to sharing the latest findings. all sites, initiatives to reuse water extracted from whey has enabled us to reduce our reliance on drinking water Every year, we gain a clearer understanding of the work supplies. Investments in new processing equipment are that is still to be done before we can call Arla Foods optimising our use of raw materials further. Ingredients a truly sustainable business. We believe our collective efforts – those of our colleagues and external Developing the food value chain partners – have moved us further in the right direction The ongoing rollout of our Quality & Food Safety strat- in 2018. We expect to report an even more sustainable egy is key to achieving our goal to become the leading performance in the year ahead. trusted partner for safe ingredients. Over the past year, we have mapped how we work with quality across our Henrik Andersen organisation and established new global standards. The CEO 3 OUR CONTRIBUTION TO THE GLOBAL GOALS he 17 UN Sustainable Development Goals are a strong tool for guiding responsible business Toperations and growth. At Arla Foods Ingredients, we consider the SDGs a source of inspiration and moti- vation in our continuous improvement work. In this supplement, we have highlighted activities that contribute to specific goals. Our objective in doing so is to recognise the efforts of our international colleagues to make a difference – and draw attention to the many End hunger, achieve food Ensure healthy lives and Ensure inclusive and equi- Ensure availability and opportunities to do even better in the future. security and improved promote well-being for all table quality education and sustainable management of nutrition and promote at all ages promote lifelong learning water and sanitation for all During 2018, we have identified contributions to the sustainable agriculture opportunities for all following goals: Ensure access to affordable, Promote inclusive and sus- Ensure sustainable con- Take urgent action to com- Strengthen the means of reliable, sustainable and tainable economic growth, sumption and production bat climate change and its implementation and revital- modern energy for all employment and decent patterns impacts ise the global partnership for work for all sustainable development 4 ABOUT ARLA FOODS INGREDIENTS Arla Foods Ingredients is a global whey ingredients company and 100% owned subsidiary of Arla Foods. We sell our ingredients to food manufacturers in more than 100 countries. Results 2018 Overview of production: Our net revenue totalled EUR 695 mEUR in 2018, which is 10% lower than the previous year. More information about our financial performance is Danmark Protein, Denmark available in the Arla Foods annual report. Advanced whey protein processing facility, including dedicated plants for hydrolysate and dry-blend lactose production Market development Arla Foods Ingredients is one of the world’s leading producers of whey- Arinco, Denmark based ingredients for paediatric, sports and medical nutrition, health foods Third-party manufacturer of products for child nutrition and milk powder and everyday foods, such as bakery, dairy and confectionery products. We have built our business around our ability to discover and deliver the AFISA, Argentina components in whey that can bring value to the food industry. Our goal is to Leading whey processor in MercoSur, producing whey proteins and perme- make the best possible use of our entire raw material. ate Production sites mentioned in this supplement Biolac, Germany Our flagship whey processing facility is Danmark Protein, located in West Joint venture with MTS, producing whey protein concentrate and lactose Jutland, Denmark. This is where we produce the most specialised whey- based ingredients in our portfolio and the highest volumes overall. Our ArNoCo, Germany third-party manufacturing facility and second largest site, Arinco, is located Joint venture with DMK, producing whey protein concentrate for further nearby. processing at Danmark Protein and lactose In January 2018, Arla Foods Ingredients took over 100% ownership of MVI, UK our AFISA facility in Argentina, a former joint venture. Our current joint Joint venture with Volac, producing whey protein concentrate and permeate venture facilities are now Biolac and ArNoCo in Germany and MVI in the UK. powder Information about MVI is included in the ‘Ambitions & progress’ chapter of this supplement for the first time this year. More performance data will be available in 2019. 5 HEALTH Whey is a powerhouse of nutrients that can benefit consumers throughout life. At Arla Foods Ingredients, we continue to discover new opportunities for health using whey. Through our proactive Quality & Food Safety strategy, we are strengthening our ability to deliver whey-based ingredients of the highest global standards. We support research Working with to investigate the role university partners, of whey ingredients we are exploring how in the treatment whey components of moderate acute contribute to dietary malnutrition treatments for chronic health conditions 6 ealthy foods must be safe as well as nutritious. In developing the strategy, one of our key tasks was to Contaminant monitoring investigation and mitigation. Developed by our in-house During 2018, we launched the first wave of map our performance throughout the value chain. This Our global monitoring programme uses random sam- data scientists, SPC ensures a faster response to food Hthe Quality & Food Safety strategy we finalised confirmed that all our sites have a strong focus on qual- pling to test for contaminants in the products produced safety issues, reduces product waste and provides in 2017. Building on our existing quality assurance ity, but that they approach it differently from place to at our factories. The list of contaminants is regularly customers with better delivery security. systems, this lays the foundations for a more proactive place. One of our 2018 priorities was to establish global adjusted in response to changes in legislation, customer approach to achieving our long-term ambition, which standards to ensure a uniform way of working, for exam- demands and alerts about new potential risks. In 2018, A food safety and hygiene upgrade is also in progress is to become the leading trusted partner for delivering ple with whey sourcing, microbiology analyses, incident we initiated a revision of the entire programme, includ- to raise the level of bacteriological control at Danmark safe ingredients. handling and quality management. These standards are ing the content and frequency of the tests we carry Protein. Until now, critical ‘red zone’ requirements for currently being implemented. out and how we communicate the results. The revision safety and hygiene – indicating the highest level of Definitions of quality often depend on perception and process will be complete in 2019. Global monitoring control – have applied to the production of the most a company’s position in the food value chain. At Arla New guidelines for whey sourcing runs at least twice a year and is in addition to our regular sensitive products for infant formula. Once the upgrade Foods Ingredients, we have an ongoing dialogue with As our business grows, so does our need for whey.