A n n u a l R e p o r t
CAMARGO CORRÊa S.A. Summary
4 Corporate Profile 5 Values of the Camargo Corrêa Group 6 Message from the Shareholders 7 Message from the Board 9 Corporate Structure 10 Group Businesses 11 Timeline 19 Corporate Governance 20 Risk Management 21 Financial Performance 24 People Management 26 Sustainability 28 Sustainability Indicators 31 Camargo Corrêa Institute
33 Group Businesses 35 Cement 40 Energy Concessions 44 Highway Concessions 46 Engineering and Construction 52 Footwear 54 Steelmaking 57 Real Estate Development 59 Shipbuilding 61 Airport Operations
63 About the Annual Report 64 Advances in the Annual Report 65 GRI Indicators 78 Awards and Recognition 83 Corporate Information 85 Credits 3 annual report 2010 CAMARGO CORRÊa S.A. 4 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile “It is not enough to love Brazil, it is necessary to build the Brazil of the future.” Sebastião Camargo (1909-1994), founder of the Camargo Corrêa Group
GRI 2.7 GRI 2.1 The Camargo Corrêa Group is one of the largest estate and steelmaking. More than 61,000 people and 2.8 business groups in Brazil. Family-owned since its are employed in the Group’s companies, working to foundation, the Group invests in and contributes to accomplish the mission established by the founder, the economic and social development of the country. Sebastião Camargo, to build the Brazil of tomorrow. Founded as a construction company - originally called Camargo Corrêa & Companhia Limitada - Engenheiros The Camargo Corrêa Group is distinguished by its e Construtores, the Group expanded and diversified excellence in performance, by its competence in the GR1 2.2 its business. Today it holds significant participation management of its businesses, and by its efficiency and and leading roles in several sectors of the economy, innovation in its operations. The search for quality and including, among others, engineering and construction, best practices in providing services and producing goods cement, energy and highway concessions, footwear, is reflected by the certifications, awards and recognitions shipbuilding (with a focus on oil and gas), real received by the Group’s companies. 5 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Values of the Camargo
Corrêa Group GRI 4.8
Respect for people and the environment Always act in a fair and equitable manner in relation to shareholders, employees, customers, suppliers, governments, local communities and society in general. Act with responsibility toward the environment.
Responsible actions Comply with the requirements of the law wherever we work, acting with integrity. Respect diversity in accord with universal norms of good human relations, without discrimination in terms of race, gender, belief, religion, job position, function, or other.
Transparency Provide clear and complete information regarding the Group’s activities, achievements, policies and performance in a systematic and accessible form.
Focus on results Always seek to maximize the Group’s performance as a means of ensuring its perpetuity, its investments, returns for shareholders and adequate conditions for employees.
Quality and innovation Ensure the quality of services and products and continuously invest in improvement of employees and the Group’s companies. 6 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Message from the Shareholders GRI 1.1 We, the shareholders of Camargo Corrêa, pride Behind a corporate culture responsible for many icons ourselves on having built, and on continuing to of Brazilian development is the daily practice of our build, one of the largest business groups in Brazil, values, maintaining our results, our customer loyalty internationally recognized for the quality of its and increasing our pride in belonging to the Camargo operations, its accumulated knowledge, and its Corrêa Group. entrepreneurial capacity to generate wealth in a sustainable manner for investors, employees, partners Respect for people and the environment, responsible and for the communities where we operate. operations, transparency, focus on results and quality with innovation are the basic values of our commitment Successfully building our future - with economic profit, to all our stakeholders. It is through this commitment that respect for the environment and social equality - is we leverage our vocation to invest in capital-intensive more than just a great challenge, it is the assumption businesses, which now spread beyond the limits of our of our vocation as corporate citizens, participating geographic frontiers. in the construction of the development vision and transforming it into reality. Camargo Corrêa’s business It is this boldness that distinguishes the new generation of philosophy is grounded on long-term commitment, shareholders and executives who have the responsibility in which robust economic results are more than a of leading our business, now based not only on the routine, they are founded on the achievements of our legacy of 72 years of history, but also on a bold vision of most important asset: our people. transforming society through sustainable growth.
Our differential lies in being a family-owned business We live in promising times for the Camargo Corrêa aligned with global standards of quality, results Group businesses. The renewed cycle of economic and professionalism, and being in the vanguard of expansion through which Brazil is passing, and the management and pioneering technology in order to demands of the strategic markets in which we operate, serve our customers and other stakeholders. are served by differentiated products and services within our portfolio. Mature administration coupled with Our legacy of operations in engineering, construction financial strength and agile positioning differentiates and cement has enabled the expansion of our activities our ability to anticipate demands. into infrastructure segments such as energy and transport concessions, as well as basic industries and We have an unquestionable commitment to the future. consumer goods. We are ready to embrace the challenge! 7 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Legend: Carlos Pires Oliveira Dias, Vitor Hallack, Luiz Roberto Ortiz Nascimento and A.C. Reuter (from left to right) form the Board of Camargo Corrêa S.A.
Message from the Board GRI 1.1 The year 2010 will be remembered as a milestone in In the Engineering and Construction sector, large-scale the Camargo Corrêa Group investment cycle, with the projects have been completed, including the Serra do Facão total for the last decade reaching more than R$ 20 and Foz do Chapecó hydroelectric plants, and the Tucuruí billion. Results and achievements are distributed across River lock system, which allows navigation to return to the the various operational sectors, sustaining an average Tocantins River. With the aim of better serving engineering annual growth of 22% in net revenue over the past five and construction customers, a reorganization was years. Last year the Group achieved consolidated net implemented which created units specialized in Energy, Oil revenues of R$ 17.94 billion. and Gas, Infrastructure and Industrial Construction.
Strengthened by the constant support of our With over 40 years of experience in the cement market, shareholders and employees, we constantly seek to Camargo Corrêa Group made the largest acquisition in its link our investments to the values and principles of history in this sector: € 1.4 billion for a 33% stake in Cimpor - the Camargo Corrêa corporate culture. Our work is Cimentos de Portugal, becoming its single largest shareholder. recognized through our leading position and through A subsequent event in April 2011 changed the corporate the excellence of our products and services, which name of Camargo Corrêa Cimentos S.A. to InterCement leverage sustainable development in the regions Participações S.A., reflecting the desire for internationalization where we operate. beyond our positions in Argentina and Brazil. 8 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Message from the Board
In the Concessions sector, CPFL Energia, in from more than 3,700 employees in 897 registered which Camargo Corrêa Group is the main private projects, more than double the number for the shareholder in the controlling block, has applied previous edition. Last year also saw the Camargo time and resources in the search for generation Corrêa Institute complete ten years of operation. from renewable sources. These efforts resulted During this time it has assisted in around 150 projects, in two operations, which were announced in early benefiting some 83,000 people. At the end of the 2011: the acquisition of Jantus and the merger with year, the Institute entered into a partnership with Ersa to form CPFL Renováveis, which created the BNDES to create a joint fund worth R$ 50 million that largest Latin American company based on renewable will be used in programs to assist young people to sources. With regard to CCR S.A., which is also a enter the labor market. leader in Latin America in highway concessions, sound performance and strategic potential prompted In 2010, the macroeconomic scenario and the us to increase participation in the controlling group challenges of the international market continued to from 25% to 33.3%. demand agility, focus and management quality by governments and businesses. The vast opportunities Alpargatas S.A. once again stood out, with advances that remain on the horizon in the domestic markets in positioning managed brands that are desired by of emerging countries are mobilizing attention and the market, including Havaianas, Brazil’s most valued investments on various fronts, especially in Brazil, brand overseas. In 2010 shoe sales and profitability where the demands on infrastructure will facilitate reached a new record. In the steelmaking sector, much desired sustainable growth. the signing of a new shareholders’ agreement and the constitution of Mineração Usiminas S.A. are The Camargo Corrêa Group has learned, in its 72 highlighted. This will facilitate the advance of Usiminas year history, that our growth has been leveraged by in mining and logistics, without limiting investments in our capacity to endeavor. This vocation is witnessed its core business: steel production and sales. by landmarks in the history of Brazil, such as Itaipu, Tucuruí and the Rio-Niterói Bridge, which are now In 2010 CCDI - Camargo Corrêa Desenvolvimento being joined by the Ethanol Pipeline, the Estaleiro Imobiliário, our real estate development business, Atlântico Sul and many others presented in this achieved the best result in its history. The Shipbuilding Annual Report. The result which we achieved Unit was consolidated through the completion of together in 2010 would not have been possible if we construction of the EAS - Estaleiro Atlântico Sul had not operated as an integrated team, consistently -industrial park, an important milestone in the revival supported by our shareholders. Finally, I thank the of the Brazilian shipbuilding industry, and also through confidence of each of our customers and suppliers its success in winning the tender for the first seven and also the determination of our employees. deep water drilling rigs (Drillships) to be used in pre- salt oil exploration.
In the field of Sustainability and Social Responsibility, we can also celebrate important advances. The Vitor Hallack second edition of the Camargo Corrêa Group Chairman of the Board Sustainable Innovation Award attracted participation Camargo Corrêa S.A. 9 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Shareholder Structure GRI 2.3 T 99.0% T 66.4% T 44.12% T 99.99% T 99.99%
T 80% T 100%
Camargo Corrêa 100% T T 100% T 99.89% InterCement Energia e Brasil S.A. Construções
T 99.5% T 80% T 70.77% T T 100% Camargo Corrêa Óleo e Gás
T 80% T 31.01% T 16.35% T 18.69% T T 100% Camargo Corrêa Infraestrutura
Camargo Corrêa T 99.99% T T 35% T 100% ® Camargo Corrêa Construções Energia S.A. Industriais
T 34.29% T 99.99% T T 33.3%
Construções e Com. T 61,63% Camargo Corrêa S.A.
25.6% T 40% T 0.71% T 4.34%
T 1.42% Camargo Corrêa T 0.10% Naval T 99.9% Participações Ltda.
T 27.25%
T = TOTAL
Note: Position as of December 31, 2010, excluding the Environmental business. 10 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Group Businesses GRI 2.2, 2.3, 2.4, 2.9
Cement Energy Concessions Highway Concessions InterCement Participações S.A., a Camargo Corrêa Group is the Camargo Corrêa Investimentos em holding company that brings together largest private participant in the Infraestrutura participates in the the cement business assets, controlling block of CPFL Energia, controlling block of Companhia de participating in the Brazilian, Argentine which operates in electricity Concessões Rodoviárias - CCR, the and Paraguayan markets. Camargo generation, distribution and largest highway concessionaire in Corrêa Group is also a shareholder in commercialization. Latin America. Cimpor, which is based in Portugal and has operations in 12 countries.
Engineering and Footwear Steelmaking Construction Alpargatas S.A., a subsidiary of Camargo Corrêa Group participates in This division, formed by segmented Camargo Corrêa, operates in the the controlling share block of Usiminas, business units, operates in footwear and sporting goods the largest producer of sheet steel in infrastructure project construction and segments, with brands that include Latin America. management. It is present in South Topper, Rainha, Mizuno, Timberland, America and Africa. It is a leader in the Dupé and Havaianas, which is the construction of hydroelectric plants. most valued Brazilian brand overseas.
Real Estate Shipbuilding Airport Operations Development Camargo Corrêa is the founding Operation, investment and Camargo Corrêa Desenvolvimento shareholder of Estaleiro Atlântico Sul, administration of nine airports in Imobiliário - CCDI - operates in in the State of Pernambuco, the Latin America and the Caribbean, residential and commercial real estate largest shipbuilding company in the through A-Port. development. It also operates in the southern hemisphere, and also low-income segment through its participates in Quip S.A., specialized subsidiary HM Engineering. in constructing offshore oil platforms. 11 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Timeline
Ehenitaturia ili 1939s si solorum The 1940’s The 1950’s
March 1940-41 1955-65 • Founding of Camargo, Corrêa & • First construction contract: Road • Construction of the first hydroelectric Companhia Limitada - Engenheiros e leveling in Banhado Grande, Apiaí (SP). plant: Euclides da Cunha, in São José Construtores. do Rio Pardo (SP). 1943-44 • Earthworks and paving at Santos Air 1956 Base (SP). • Acquisition of Companhia Auxiliar de Viação e Obras (Cavo). 1946 • The Company adopts the name 1957-63 Construções e Comércio Camargo • Earthworks, main road and side- Corrêa S.A. street paving and dam construction at Paranoá, in Brasília (DF). 1948 • Foundation of Companhia Jauense Industrial, a threads company. 12 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Timeline
The 1960’s The 1970’s The 1980’s
1971-74 • Construction of the Presidente Costa e Silva Bridge (Rio-Niterói), 13.3 km long, the second longest bridge in the world at the time.
1971-76 • Construction of the first section of the São Paulo Metro, the North-South line.
1972-77 • Construction of the Imigrantes Highway (São Paulo-Santos). 1962-78 1980-96 • Construction of Jupiá (MS) and Ilha 1974-75 • Construction of Cumbica International Solteira (SP) hydroelectric plants - the • Construction of the Trans-Amazon Airport (São Paulo). latter being Brazil’s largest hydroelectric Highway. plant and one of the three largest in the 1982 world at the time. 1975-79 • Camargo Corrêa becomes a • Construction of the Ferrovia de Aço shareholder in Alpargatas. 1963-67 railway (Minas Gerais). • Construction of the Presidente Castello 1984 Branco Highway (SP). 1975-83 • Camargo Corrêa becomes a • Construction of hydroelectric plants shareholder in Alcoa. 1968 Itaipu (PR), Tucuruí (PA) and Guri • Foundation of Camargo Corrêa (Venezuela), three of the largest in the Industrial, later renamed Camargo world. Corrêa Cimentos. 13 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Timeline
Ehenitaturia ili The 1990’ss si solorum The 2000’s
1992 2000 • Start of operation of the second furnace • Creation of the Camargo Corrêa at the Apiaí (SP) cement factory. Institute.
1993 2002 • Inauguration of the Camargo Corrêa • Acquisition of control of Alpargatas. Industrial cement factory in Bodoquena (MS). 2003 • Inauguration of the Ijaci cement factory 1996 (MG). • In consortium, Camargo Corrêa wins the concessions for the Rio-Niterói 2005 Bridge and the Via Dutra, the first • Purchase of the Loma Negra cement two concessions let by the Federal plant in Argentina. 2008 Highway Concession Program. • The construction division begins • The construction company wins the construction of Jirau hydroelectric plant • Incorporation of the Camargo Corrêa tender to construct the Inter-Oceanic on the Madeira River. S.A. holding company. highway in Peru, and the Porce III hydroelectric plant in Colombia. • Inauguration of Estaleiro Atlântico Sul. • Camargo Corrêa S.A. becomes part of the Usiminas controlling group. • Formation of Estaleiro Atlântico Sul. • Acquisition of Alpargatas Argentina.
1997 2006 2009 • Purchase of Cimento Cauê. • Launch of the “Charter for • A-Port completes the acquisition of 51% Sustainability: The Challenge of of the Curaçao Airport concession. • Through VBC, the Group acquires a stake Innovation”. in Companhia Paulista de Força e Luz • The Group takes a 100% stake in VBC. (CPFL). 2007 • Camargo Corrêa Desenvolvimento • Construction work starts at the Moatize 1998 Imobilário (CCDI) starts trading shares coal mine, in Mozambique. • Camargo Corrêa participates in on the Bovespa. the formation of Companhia de Concessões Rodoviárias (CCR). • Formation of A-Port. 14 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Timeline
February March 20 10 17 1 • Camargo Corrêa Group acquires • Camargo Corrêa Cimentos approximately 33% of the Portuguese joins the Global Compact, a UN company Cimpor, becoming its largest initiative. individual shareholder, following an investment of € 1.4 billion. 24 • Alpargatas launches a line of closed 26 shoes with the Havaianas brand, the Soul • C PFL starts commercial operation Collection. of the Baldin thermal power plant, generating electricity from the burning 29 of sugarcane bagasse. • HM Engenharia delivers the first 294 properties in São Paulo within the Federal program Minha Casa, Minha Vida.
30 • Inauguration of the southern section of the São Paulo Ring Road, 17 km of which were built by a consortium led by Camargo Corrêa. 15 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } timeline
Ehenitaturia ili Mays si solorum July August
6 4 • Havaianas (Alpargatas) opens its first • CCR Group announces the acquisition exclusive store in the United States. of the SPVias concessionaire.
30 13 • Camargo Corrêa Cimentos erects • Construtora Camargo Corrêa donates the cornerstone for the first Cimentos the work site offices on the left bank Yguazú plant, in Paraguay. of the Jirau hydroelectric plant to the Chico Mendes Institute, to serve as the future headquarters of the Mapinguari National Park.
7 • Estaleiro Atlântico Sul launches its first oil tanker, named João Cândido.
25 • The ViaQuatro Consortium and the State of São Paulo Government inaugurate the first section of Metro Line 4 (Yellow), with an extension of 3.6 km. 16 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } timeline
September October
24 19 • Start of operations of the new • Inauguration of the Serra do Facão Usiminas coke oven at the Ipatinga hydroelectric plant (GO), with 210 MW plant (MG). installed capacity.
30 • Completion of the industrial park construction works at Estaleiro Atlântico Sul. 17 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } timeline
November December
23 21 30 • Launch of the ethanol logistics system • Porce III hydroelectric plant is • Foz de Chapecó (SC/RS) project, with participation from inaugurated in Colombia, with 660 hydroelectric plant is inaugurated, Petrobras and Camargo Corrêa. MW installed capacity. with 855 MW installed capacity.
29 • Inauguration of the Tucuruí River locks (PA). 18 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } timeline
February April 20 11 10 4 • The Camargo Corrêa Institute and • Letter of Intent signed between EAS BNDES signed an agreement for R$ and Petrobras for construction of seven 50 million destined to the Futuro Ideal deep water drilling rigs (Drillships). program. 7 21 • CPFL Energia acquires Jantus SL, • Fitch upgrades the Camargo Corrêa holder of the largest portfolio of wind S.A. foreign currency rating and the farms in Brazil. national long-term and short-term company rating. 20 • CPFL Energia and Ersa enter into an association to form CPFL Renováveis, creating one of Latin America’s largest renewable energy generation companies.
25 • Launch of the InterCement brand, the holding company for the Group’s cement business. 19 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Corporate Governance
Corporate governance of the Camargo Corrêa Group these three being listed on the São Paulo Stock, aims to ensure that our Values, Sustainability Principles Commodities and Futures Exchange (BM&FBovespa) and Code of Conduct are strictly adhered to. New Market -, Alpargatas S.A., Usiminas, Tavex Corporation and Cimpor. Our companies have guidelines to govern the The Camargo Corrêa S.A. holding company is owned relationship between employees, customers, by Participações Morro Vermelho S.A., which is jointly shareholders, suppliers and the communities owned by its shareholders. neighboring our operations. The Group’s governance structure is led by the Board, GRI 4.1 GRI 2.3 and 2.6 Created in 1996, Camargo Corrêa S.A. is the holding consisting of the President, Vitor Hallack, and three company that directs the management and control vice-presidents: A.C. Reuter, Carlos Pires Oliveira of the Group’s businesses. Camargo Corrêa S.A. Dias and Luiz Roberto Ortiz Nascimento. In addition to is a major shareholder in several publicly traded ensuring the Group’s governance, the Board oversees companies, such as CPFL Energia, CCR S.A., the management of business units and ensures effective Camargo Corrêa Desenvolvimento Imobiliário - application of synergies through advisory committees.
Board of Directors GRI 4.1 and 4.3 Vitor Hallack A.C.Reuter Carlos Pires Oliveira Dias Luiz Roberto Ortiz Nascimento
Executive Committee Communications
Finance Control Committee Audit & Risk
Human Resources Institutional Committee Relations
Sustainability
Engineering & Construction Division Concessions Division Cement Division Real Estate Division Corporate Division Antonio Miguel Marques Francisco Caprino Neto José Édison Barros Franco José Diniz Marcio Garcia de Souza 20 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Corporate Risk Management
GRI 1.2 Corporate risk mapping encompasses the main Financial business units, in which Internal Audits are • Fraud undertaken. The objective is to assist management • Accounting records in establishing an Internal Audit Plan for the year. • Taxes Internal Audit Methodology (IAM) is used to achieve • Credit and collection this goal, through which each company is aided in • Market (enterprise value) assessing its risks. • Continuity
The work is conducted in three phases: Regulatory • Legal (government regulations) 1. Interviews with company leaders • Contractual • Internal standards 2. Identification of the key corporate risks of the • Code of Ethics and Conduct business, by type, as follows: • Environment
Strategic 3. Classification of gross risks and residual risks, • Strategic and confidential information by process: • Market share and brand value • Image Gross risks • Alliances and acquisitions • When there is possibility of events or circumstances • Customer satisfaction that may prevent the company from achieving its objectives, not taking into account the mitigating effect Operational when internal controls exist. • Sales (shipping and distribution) • Human resources Residual risks • Information technology • The risks that remain after taking the mitigating • Health and safety effect into account. • Use of assets 21 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Financial Performance GRI 2.8, 2.9, EC1 The Camargo Corrêa Group registered record • The Cement business unit registered net revenues consolidated net revenues of R$ 17.94 billion in 2010, of R$ 2.5 billion, a historical record. In the same up 11% over the previous year. Investment of R$ 5.24 period, EBITDA reached R$ 616 million, representing a billion was also a record; this includes the acquisition decrease of 4% over the previous year, due in part to of 33% of Cimentos de Portugal – Cimpor - for the adverse impact of foreign exchange income from € 1.4 billion, the largest acquisition in the company’s overseas operations. In the case of Brazil, high market history. Camargo Corrêa Group’s consolidated demand was registered, mainly due to growth in the net revenues rose to R$ 19.64 billion, a figure 21% housing market, including the Federal government’s higher than in 2009, by adding the values related housing program ‘Minha Casa, Minha Vida’, and the to interest in Cimpor. major infrastructure projects which are underway in the country, partially offsetting the impact. Last year, net profit reached R$ 1.3 billion. By the BR GAAP criterion, which was the accounting rule in force • Strong growth in the Brazilian economy in 2010 up to 2009, this value amounts to R$ 2.0 billion. The boosted CPFL Energia’s results. CPFL’s net revenue difference is in the IFRS accounting rules and the fair reached R$ 12 billion, up 5.9% over the previous year - value of the Cimpor share acquisition, which had a R$ 600 the value proportional to the Group’s participation in the million negative impact on the consolidated results. company amounted to a net revenue of R$ 3.1 billion.
GRI 2.9 and 3.10 The financial information in this Annual GRI 2.9 and 3.10 To express the results of the Group more Report integrates the value of the Camargo Corrêa S.A. clearly, certain adjustments were made in corporate information. holding company and its subsidiaries. Data from subsidiary The main adjustments are related to the adaptation of acquisition companies is considered in the proportion of participation by capital structure, the alignment of results by business and the the holding company in the respective equity. valuation of investments in other companies.
The numbers presented with effect from 2010 include the application of accounting pronouncements (CPC) in convergence with international standards (IFRS); in the Real Estate business unit OCPC 4 was applied, as edited by the CPC, which deals with the recognition of revenues and costs in this sector. Net Revenue (billions of R$) EBITDA (billions of R$) 17.94 3.21 3.17 16.18 2.42 13.16
10.48 1.91 8.36 1.61
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 22 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } financial performance
The Group’s participation in EBITDA jumped from R$ 139.3 million, up 106% over 2009. Net revenue R$ 716 million in 2009 to R$ 873.5 million in 2010. reached R$ 2.27 billion, compared to R$ 2.01 billion in the previous year, largely thanks to strong growth in • The volume of traffic on highways managed by CCR sales in the Brazilian market, while EBITDA reached also grew significantly in 2010, with positive impact on R$ 405.3 million, representing an increase of 36.2% the company’s financial results. Net revenue increased over the previous year. Shares of Alpargatas rose 22.2% over the previous year, to R$ 3.7 billion, with 93% in 2010, and return on equity was over 26%. net revenue proportional to the Group’s share of the company being R$ 769.2 million with an EBITDA of • The heated domestic market also led the Real Estate R$ 409.2 million. CCR’s net profit was R$ 671.7 million Development division to post the best financial result in for the year, 5.2% lower than 2009 due to an increase its history. Net revenue was R$ 1.1 million and net profit in financial expenses in the period. Net profit proportional was R$ 143.2 million, up 62.7% and 147% respectively to the Group’s participation was R$ 129.7 million. on the previous year.
• The Engineering and Construction division recorded • On December 30, 2010, the company sold all of its 5% growth in net revenue to R$ 6 billion in 2010. participation in Itaúsa. The deal, worth R$ 2.7 billion, However, the rising costs of labor and consumables, was undertaken on the BM&FBovespa. pressured by an economy in strong growth, brought a negative impact on the profitability of the division. Net • On March 4, 2011, the company sold its entire income of R$ 297.6 million and EBITDA of R$ 561.5 stake in the Cavo Serviços e Saneamento S.A. million were therefore lower than the values obtained subsidiary, which holds stakes in Essencis Soluções in the previous year. Ambientais S.A. and in Unidade de Tratamento de Resíduos S.A. The stake was purchased by DMTSPE • The Footwear unit had excellent performance, Empreendimentos e Participações, a company with record net profit. The result proportional controlled by BTG Pactual Delta III Fundo to the Group’s share of the company amounted to de Investimentos em Participações.
Net Profit Consolidated Investment (billions of R$) (billions of R$) 1.62 5.24 4.66 1.47 1.3
0.98 0.86 1.84 1.63 1.27
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 23 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Financial performance
Average Capital Employed by Business Unit (Participation in %)
29.2 27.1 2009 2010 20.8 19.6
11.9 10.7 9.5 7.6 7.6 7.0 7.2 7.1 6.8 6.3 6.6 4.9 4.5 3.6 1.1 1.0
Construction Cement Energy Transport Footwear Steel Real Estate Ship Airport Others Concessions Concessions Building Operations Net Revenues by Business Unit (Participation in %) 35.6 33.7 2009 2010
18.6 17.3 14.7 14.4 12.5 12.6
4.7 5.7 4.3 4.3 3.9 3.9 3.9 3.3 2.6 2.9 0.6 0.5
Construction Cement Energy Transport Footwear Steel Real Estate Ship Airport Others Concessions Concessions Building Operations
GRI EC1 Distribution of Added Value Camargo Corrêa and subsidiaries (billions of R$) 2010 2009 Employee remuneration 2.5 2 Governments 3.8 3.4 Financiers 2.1 1.3 Retained earnings 0.3 1.3 24 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
People Management
GRI 2.8 To achieve and maintain world class standards in employees in 11 countries. The results show managing our talent is at the core of our human outstanding development in the aspects evaluated, with resources strategy. We believe that people are the basis an increase of eight percentage points in the overall for every great business success. It is they who connect index of favorable opinions in relation to the previous the past, the present and the future through the survey in 2008. application of knowledge, processes, technology, innovation and the daily practice of the ethical and Among the key attributes indicated in the answers of responsibility values of the Camargo Corrêa Culture. employees who participated in this edition were issues that are relevant to corporations throughout the world. In 2010, important advances were recorded in the area According to the survey, the main strengths of the of People Management: Camargo Corrêa Group are: credibility, sustainability and external relations. These results vindicate the strategies Organizational Climate adopted and demonstrate a solid relationship of trust and We held the fourth biennial cycle of Corporate Climate confidence between the company, its leaders and its Survey, with participation from more than 30,000 team of employees. A natural consequence of this 25 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } people management
business and work environment is the high level of pride study, a new leadership development program was in belonging to the Camargo Corrêa Group. prepared, for implementation through this year and up to the end of the first half of 2012. The program is divided Internal Recruitment into three anchor themes: “Strategic Management”, The value that we give to our talent is reflected in the “Competitiveness and Performance Improvement” and Global Internal Recruitment Policy, which discloses “Managing High Performance Teams”. opportunities in a transparent manner to stimulate mobility of employees between the various businesses The results expected go beyond achieving a high level of of the Group. The main objective is to enhance personal performance; the program will also provide opportunities for professional and career development. competitive advantages for business through the ongoing dissemination of knowledge, proactive posture Well-being and Quality and shared responsibility. To reinforce the commitment of the Camargo Corrêa Group to the well-being and quality of life This initiative aims to align leaders and teams with the of its employees, a new Supplementary Pension Plan best corporate governance practices, ensuring the daily was established in 2010, with more flexible and practice of its four pillars: transparency, accountability, comprehensive rules across hierarchical levels fairness and corporate responsibility. and functions. Our Permanent Challenges Leadership Development Consolidate a culture of merit, innovation and ethics, Program as well as strengthen the bonds in our people In an outstanding effort between Business Unit leaders management model, forming the basis for our ongoing and human resources managers, a revision to the agenda. Every day we perfect our processes and integrated model of human resource management was raise our goals and values in respect of corporate undertaken, focusing on leadership skills. From this objectives and values. 26 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Sustainability GRI 1.1, 1.2 and 4.8
The search for business sustainability is part of each year - included, for the first time, guidelines for daily routine in the Camargo Corrêa Group. Going sustainability in its text. Performance has since then been beyond promoting the values that underpin the measured in terms of economic, environmental and social Group’s operations, actions aimed at preserving results which in turn affect the variable compensation of the environment, valuing people and the search all executives across the business units. For example: the for transparency are the daily pursuit of all our reduction in the consumption of diesel in Construções e subsidiaries. Each business unit has a high-ranking Comércio Camargo Corrêa work sites in 2010 was 6% executive specifically designated as the “guardian of when compared to 2009, an improvement on the 4.5% sustainability”, who drives the adoption of corporate target established at the beginning of the year. guidelines. The Board directly oversees sustainability programs developed by the Group. The Group’s Climate Agenda, developed since 2009 with the participation of 150 executives, is responsible for The Group’s explicit commitment towards corporate the technical definition of goals related to reducing and sustainability dates back to 2006, when shareholders mitigating greenhouse gas emissions. launched a challenge to managers to innovate business conduct in order to ensure the long-term continuity of Another important tool for planning and managing the company. sustainability in the Group’s businesses is the Group Sustainability Radar, based on global and GRI EN 18, Since that time the strategy of the Group and its local indicators (ISE, Ethos, GRI, Ibase and DJSI). EN 26 and EC2 business has been inseparable from the respect for the A questionnaire of 40 items is used by different environment, the creation of opportunities for employee businesses of the Group helping identify the key gaps and community development as well as the search for that must be addressed in the following years. In 2010, competitiveness. In 2010, the Letter of Expectations tailor-made questionnaires incorporated specific issues - a document sent by the shareholders to managers of different subsidiaries. For years 2010 and 2011, the Group selected the following priorities: health and safety in the workplace; sustainability education for employees; the development of good practices in the value chain; and sustainability with innovation.
The Prêmio Inovação Sustentável - ‘Sustainable Innovation Award’, which is granted every two years, received 897 entries and had 3,729 participants from five countries (Argentina, Brazil, Chile, Mexico and Peru) in 2010. The first edition of this initiative, which aims to identify good practices and stimulate new sustainable business ideas, involved over a thousand people, with 425 projects being registered - viable ideas were implemented throughout 2009. 27 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } sustainability
GRI 4.12 and 4.13 Camargo Corrêa Group is a partner in the following entities:
• Brazilian Council for Sustainable Construction • Reference Center for Sustainability of the Dom Cabral - CBCS (through the subsidiaries Construções Foundation, which developed a project to review the e Comércio Camargo Corrêa, Camargo Corrêa human resource policy in light of sustainability. Cimentos and Camargo Corrêa Desenvolvimento Imobiliário). The Group sponsors the International • Fundação Instituto de Administração (FIA), for the Symposium on Sustainable Construction. development of carbon management programs.
• Planeta Sustentável, an initiative of Editora Abril that • Industrial Liaison Program (ILP) of the MIT is also supported by Camargo Corrêa, has become (Massachusetts Institute of Technology) together the Portuguese language reference point on the with subsidiaries Construções e Comércio Camargo theme of sustainability. Corrêa, Camargo Corrêa Cimentos and Alpargatas. 28 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Sustainability Indicators GRI EC1, EC8 and EC9
Social Investments - Camargo Corrêa Institute 2010 2009 Investment by Camargo Corrêa (1) (millions of R$) 12.6 11.8 Partner Organization Resources (millions of R$) 5.5 6 Number of projects in progress 114 73 Number of cities with projects in progress 47 42 Public directly benefited (thousands) 20 18 Public indirectly benefited (thousands) 111 65 (1) Projects started in 2008. (2) Target public. (3) Public benefited by the actions. Social Investments - Alpargatas Institute 2010 2009 Resources Invested (millions of R$) 2.2 1.8 Number of projects carried out 33* 132 Number of cities with projects carried out 15 10 Public benefited (thousands) 66 39 * In 2009, each school was considered as a project. In 2010, the projects represent actions in each city or specific service, i.e., 33 projects attended to 308 different institutions or specific actions.
Social Investments - Loma Negra Foundation 2010 2009 Resources Invested (thousands of R$) 527.3 276.5 Partner Organization Resources (thousands of R$) 245.0 256.0 Number of projects in progress 14 18 Public benefited (thousands) 8.5 6.4
Camargo Corrêa Group Investments in Donations and Sponsorships Values Own Resources R$ 1,865,240.00 Incentive to Culture, through the Rouanet Act R$ 4,101,359.00 Sports Incentive Act R$ 993,000 Municipal Fund for Children and Adolescents (FUMCAD) R$ 1,050,000.00
GRI EN8 Environmental Indicators (thousands) Supplier Water m3 960,341 4.39% Surface Water m3 13,019,700 59.49% Subterranean Water m3 7,904,977 36.73% Water Consumption Total water consumption m3 21,886,361 Water reused/recycled m3 414,374 Recycled Water Index % 1.89% 29 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Sustainability Indicators
GRI EN3 Energy sources - 2010 Energy Consumption (MMGJ): 38,2
31% 29%
17% 17%
4.26% 5% 5% 1.32% 0.66%
Natural Coke Electricity Coal Wind Diesel Solid Wood Others Gas Power Waste
GRI LA1 Total Employees By Work Contract and Region Distribution by Geographic Region Work Contract - TOTAL - 2010 Work Contract - TOTAL - 2009 Complying with Statutory (*) Internship Complying with Statutory (*) Internship Labor Laws Labor Laws Brazil North 15,552 - 3 8,981 - 8 Northeast 15,343 - 16 10,361 - 13 Center-West 2,823 2 2 5,758 2 4 Southeast 11,503 74 130 10,412 74 122 South 5,912 - 2 4,517 - 3 Subtotal 51,133 76 153 40,029 76 150 Other Continents America (except Brazil) 10,150 5 14 7,213 4 6 Europe 57 - 1 40 - - Africa 247 - - 15 - - Subtotal 10,454 5 15 7,268 4 6 Total 61,587 81 168 47,297 80 156 (*) Statutory: Administrators and Directors who statutorily represent the company 30 annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Sustainability Indicators
GRI LA1 Total employees with employment card registration and statutory employees, by work period Distribution by Geographic Region Type of Employment Contract - 2010 Type of Employment Contract - 2009 Full Time Less than Full Time Full Time Less than Full Time
Brazil North 15,552 - 8,971 10 Northeast 15,342 1 10,345 16 Center-West 2,825 - 5,726 34 Southeast 11,541 36 10,143 301 South 5,905 7 4,513 4 Subtotal 51,165 44 39,698 365 Other Continents America (except Brazil) 10,155 - 7,259 - Europe 57 - 40 - Africa 247 - 15 - Subtotal 10,459 - 7,314 - Total 61,624 44 47,012 365 (*) Statutory: Administrators and Directors who statutorily represent the company
GRI LA1 Employees at end of the period* (thousands) Third parties*
61.7 56.8 57.9 54.4 8,667
41.4
4,414
2006 2007 2008 2009 2010 2009 2010
* Annual totals include Camargo Corrêa Group employees, * Third parties: Employees registered with including subsidiaries (in total); consortia (only those in which companies providing specialized services, Camargo Corrêa is a leader, in proportion to its participation), contracted by the company to carry out activities and overseas works. They do not consider interns, contractors characterized as ancillary or support to the core and workers of shared control companies (CPFL Energia, CCR, business, such as cleaning and security Usiminas, Essencis, Loga and Estaleiro Atlântico Sul) 31 Annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile
Camargo Corrêa Institute GRI 4.12
The Camargo Corrêa Institute (ICC), established At the outset, ICC made grants to existing projects in the in 2000, aims to articulate and guide the social areas of education, health and culture, with a focus on actions of the Camargo Corrêa Group. In ten years of children and adolescents in low-income groups. Based activity, it has supported 150 projects and benefited on its experience, the Institute refined its strategy in 2007 83,000 people. Investments have amounted to and started developing actions which prioritize locations R$ 70 million over this period. The 2010 budget of where the Camargo Corrêa Group companies are present. R$ 16 million allowed the execution of 93 projects in Its mission is to articulate and strengthen organizations 51 municipalities in 14 states. Internationally, the ICC that contribute to the integral formation of children and has supported activities in Angola, Argentina, Peru adolescents, seeking sustainable community development. and Paraguay. At the end of the year, a partnership The target public has been expanded and now includes was formalized with BNDES for creation of a joint young adults up to age 29. Four social programs have been fund worth R$ 50 million – R$ 10 million per year structured around this axis: Ideal Childhood, Ideal School, over five years–- for the expansion of the Ideal Future Ideal Future and Ideal Volunteer. Several complementary program, focused on creating income generating projects were prepared for each program. The main projects for low income youth. actions undertaken in 2010 were as follows: 32 Annual report 2010 CAMARGO CORRÊa S.A.
Corporate Profile } Camargo Corrêa Institute
> Ideal Childhood - The program is geared to program encourages entrepreneurship and the creation defending the rights of children and develops projects of income generating projects in partnership with Sebrae in the areas of infant education, care for pregnant and other non-profit organizations. Ideal Future was women, strengthening the System of Guaranteed primarily developed around large projects such as the Child Rights, and improvement of infant health. In Foz de Chapecó hydroelectric plant in Santa Catarina and 2010, the program operated in ten municipalities, the Jirau hydroelectric plant in Rondônia. In 2010, there with 20 projects that complemented government were 27 projects executed in 29 Brazilian cities. actions, benefiting 10,400 people. In November 2010, a seminar was held with representatives from all the > Ideal Volunteer - This program encourages municipalities, to exchange experiences and improve and creates conditions for the Group’s employees program support activities. to undertake voluntary actions. Each business unit has a Committee to Encourage Volunteers and > Ideal School - The program’s theme is Quality Community Interaction (Civico), which is responsible Public Education. Present since 2008 in Curitiba for encouragement and ongoing support for (PR) and in six municipalities in Paraíba, in 2010 the volunteer work. program was extended to Ipojuca (PE), Apiaí (SP), Itaoca (SP), Porto Velho and Guajará-Mirim (RO). > Doing Good Day - In 2010, the Doing Good Day One of the projects is the Integrated Administration took place on August 22 and involved 8,000 volunteers System, which promotes improvements in all school from 11 countries and 14 companies of the Group. services, involving all the teachers, students and 95 actions were undertaken, benefiting approximately staff. Another highlighted action in 2010 was the 72,000 people. Held annually, the day includes actions award for best practices in encouraging reading such as donating materials, repairing day care centers, developed by teachers, schools and local educational schools and social institutions, organizing leisure authorities in Paraíba. activities for seniors and children, among others. Established in 2009 to mark the 70th anniversary of > Ideal Future - Focused on professional training and the Camargo Corrêa Group, the Doing Good Day is the inclusion of young adults in the labor market. The devoted to volunteer activities by employees. 33 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses 34 annual report 2010 CAMARGO CORRÊa S.A. 35 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Cement GRI 2.3 and 2.7 GRI 2.1 and 2.9 With over 40 years of activity and an established controller Camargo Corrêa S.A. carried out a corporate presence in the Brazilian and Argentine markets, in reorganization that culminated in the formation of a 2010 Camargo Corrêa Cimentos took its first steps holding company for the cement business, named toward achieving the goal of becoming one of the InterCement Participações S.A. world’s largest companies in this sector by 2012. Subsequently, the corporate name of Camargo Corrêa In December, the company shareholders and its Cimentos S.A. was changed to InterCement Brasil
GRI EC1 Performance indicators Cement Sales (million tons)
2009 2010 10.2 11.5
Concrete Sales (million m³):
2009 2010 2.5 2.3
Direct Jobs (thousands):
2009 2010 3.9 4.8 36 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Cement
S.A. Throughout this chapter, year 2010 information momentum with the investment of ¤ 1.4 billion by and results for Camargo Corrêa Cimentos and its the parent company Camargo Corrêa S.A. for the subsidiaries already consider this new name. acquisition of a 33% stake in the Portuguese company, Cimpor, the eighth largest cement company in the GRI 2.5 and 2.9 The change reflects the company’s desire to world, with a presence in 12 countries. Besides internationalize rapidly. This intention gained being prominent in Portugal and Spain, Cimpor has
GRI EC1 Net revenue Ebitda Net profit (millions of R$) (millions of R$) (millions of R$)
2,474* 2,362 641 616* 2,042 541
1,598 456 400 420 337* 1,481 211 193 186
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
* Includes Cimpor equivalence 37 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Cement
two thirds of its assets located in emerging markets for large-scale works remains heated, mainly due to such as Brazil, China, India and South Africa. In the choice of Brazil host for the 2014 World Cup and 2010, InterCement announced the allocation of more the 2016 Olympics. The continuity of housing policies than US$ 500 million for construction of plants in and the still enormous shortage of housing should also Angola (Palanca Cimentos) and Paraguay (Yguazú ensure high demand for cement in the long term. With Cementos). Ten other modernization projects and/ this scenario, InterCement plans to double its sales or plant expansions were initiated during the year, volume through organic growth and the opening and such as the construction of a new grinding unit at acquisition of new plants. Catamarca (Argentina) and renovation of systems and parts at the Ijaci plant (MG). In parallel to its expansion Argentina GRI 2.8 plans, InterCement undertook ongoing investment Loma Negra, a subsidiary of InterCement in in personnel development, systems, processes Argentina since 2005, has nine cement production and products in order to reduce operating and units with more than 2,700 direct employees environmental costs. and is the undisputed leader in the country. The company also owns the La Preferida de Olavarría GRI 2.2 and 2.8 Brazil quarry and 11 concrete plants under the Lomax InterCement has seven factories in Brazil, employs brand. Loma Negra has a competitive differential more than 2,000 people, and holds third position in that it controls Ferrosur Roca S.A., a 3,181 km in the sales rankings. The Cauê and Cimento railway that cuts through the center of Argentine Brasil brands secured a market share of almost territory and connects with four of its plants. The 10% for the company in 2010. In the concrete country consumed 10.2 million tons of cement in market, InterCement maintains 18 concrete units 2010 according to the Asociación de Fabricantes de and ranks fourth in Brazil. The company also has Cementos Portland. This volume is 11% higher than two gravel quarries in a strategic region. Cement that recorded in 2009 - a year that saw a six-year consumption in the country has been growing cycle of continuous market growth broken by the continuously and consistently since 2005 (except global financial crisis. The solid performance of the for 2009, which was stable), reflecting a cycle of agricultural sector and a return to previous levels of economic expansion that has led to growth in per consumption underpinned the resumption of sales capita income, large investments in infrastructure levels in 2010. The prospect of 4.5% growth in GDP projects, and growth in the residential construction in Argentina for 2011 justifies new investments in market. In 2010, national cement consumption grew local operations. 14.8%, reaching 59.1 million tons, according to the Sindicato Nacional da Indústria de Cimento (SNIC). Together, the operational units in Brazil and Argentina This volume places the country among the world’s produced 11.5 million tons of cement in 2010, ten largest cement consumers. representing a growth of 12.7% over the previous year. This is a record in the company’s history and reflects – Despite the strong increase in demand recorded in in addition to market expansion – frequent investments recent years, there are macroeconomic conditions that in improving operational processes, management and support a new cycle of investments in the sector – in quality. An internal reorganization of the company, which the Group has a significant position. The market completed in 2010 and kept under constant refinement, 38 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Cement
has significantly increased operational efficiency. The also contributed to reduced profitability. Cash flow Group’s presence in South America is completed by (EBITDA), in turn, showed a slight decrease: R$ 616 commercial operations in Bolivia and Paraguay. million against R$ 641 million in 2009. This satisfactory result is due to a reduction in operating costs and strong The cement plant industrial park is considered expansion of the Brazilian market. the most modern on the continent, which ensures GRI 4.11 a combination of high financial profitability for In the environmental area, 2010 was also a year and 4.12 InterCement and respect for the environment. of progress and achievements. During the year InterCement signed cooperation agreements with GRI EC1 The financial year 2010, as with previous years, brought the State environmental watchdog, Companhia significant and consistent financial results. Appreciation de Saneamento Básico de São Paulo (Cetesb), and in the value of the Brazilian Real and increases in the the Institute for Technological Research (IPT) for costs of production - especially relating to labor and development and improvement of sustainable practices maintenance costs - affected results. Net revenue of in the production chain. The company also reinforced R$ 2.5 billion grew 4.7% over 2009 while net profit was its commitment to the Global Compact, a UN initiative R$ 337 million, against R$ 541 million in the previous to protect the environment and enhance human and year. The appreciation of the Real against the U.S. dollar labor rights. The Corporate Social Responsibility (which causes a direct impact on revenues in Argentina) Policy was drawn up in 2010. 39 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Cement
GRI 4.12, EN18 and EC2 These initiatives reflect the priority given to good The asset is considered strategic to the operations of practices in business management. The issue of Loma Negra, since four of its nine plants are connected sustainability is a priority in all companies of the Group, to the railroad. The concession from the Argentine and is tied to operational constraints. InterCement government is valid up to 2023 and may be extended signed the Cement Sustainability Initiative (CSI), for a further ten years. a global commitment by companies in this sector concerned with minimizing the environmental impact In fiscal year 2010, Ferrosur Roca announced of their operations. Practices adopted in production investments of US$ 14 million to increase its movement seek mainly to reduce carbon dioxide emissions, which capacity. Total disbursements of US$ 25 million are requires the use of additives in the cement composition planned, over five years, for a 25% expansion in and the use of cleaner fuels in furnaces, among other railroad transport capacity. In August, the company mitigation measures. To ensure the use of “clean” announced an agreement to transfer the concession energy in the production processes, the company of a 756 km stretch of track between the cities of holds minority stakes in three hydroelectric companies General Cerri (Buenos Aires) and Zapala (Neuquén) to (Machadinho Energia, Energética Barra Grande and Vale Logística de Argentina S.A. The transaction was Estreito hydroelectric plant). closed for US$ 60 million, subject to the approval of Argentina’s economic defense organ. To ensure business expansion without major upheavals, the Critical Risks Map was updated in 2010 From an operational standpoint, the year 2010 brought - produced, like the map of critical processes, using the positive indicators, following the severe effects caused methodology laid out by the Committee of Sponsoring by the global crisis of 2009. The railroad transported Organizations (COSO). This instrument allows the 5.2 million tons in the year, representing an increase of administration to monitor strategic, regulatory, financial 2% over the previous year and reflecting the beginning and operational risks. The review of the Risk Map also of recovery in economic activity in Argentina. Financial led to the definition of a timetable for implementation indicators also showed a moderately positive reaction. of new processes and activities related to this area for The average tariff per ton was US$ 10.86, or 14% the period 2011 to 2014. By that time the processes of higher than in 2009. risk management should be consolidated and mature, which should help ensure the long-term sustainability of InterCement. Ferrosur Camargo Corrêa Group’s investments as a concessionaire in the railway sector are concentrated in Ferrosur Roca S.A. This Argentine company has 80% of its capital held by the Loma Negra cement company, which also belongs to the Group, and operates 3,181 km of track crossing the provinces of Buenos Aires, La Pampa, Río Negro and Neuquén. 40 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Energy Concessions GRI 2.7 Camargo Corrêa Group, with 25.6% of total capital, is the distribution sector, R$ 1.1 billion was applied to the largest shareholder in the controlling block of CPFL expanding and reinforcing the electrical system. In
GRI 2.1 Energia, the largest publicly traded company in the the generation sector, R$ 645 million were allocated, GRI 2.6 Brazilian electric sector, listed on the BM&FBovespa mainly for projects in construction during the year. and the New York Stock Exchange (NYSE). In 2010, Further R$ 28 million were invested in energy trading CPFL Energia’s performance showed significant and value-added services. evolution, reflecting growth in energy consumption in the regions served by its distribution companies, the Increasing economic activity was reflected in the GRI EC1 results of a strategy of expansion and diversification company results. Gross revenue of R$ 17.5 billion and net of the business, and the commitment to continuously revenue of R$ 12 billion represent growth of 6.6% and seeking increased efficiency in its companies. 5.9% respectively over the previous year, on an equivalent Investments for the year totaled R$ 1.8 billion. In comparative basis. EBITDA reached R$ 3.35 billion and
Performance indicators
Distributed Energy (thousand GWh): Captive market + TUSD*
2009 2010 48.6 52
* Tariff for the use of the Electrical Distribution System
Installed Capacity (MW)
2009 2010 1,737 2,309 41 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } energy concessions
net profit reached R$ 1.56 billion. There was a decrease of 7.6% in net profit compared to 2009, mainly due to an increase in net financial expenses and lower utilization of tax credits in comparison with the previous year.
In the distribution sector, CPFL recorded a significant increase in demand in 2010 of 7.3% over 2009 – a year in which industrial consumption fell by 5% as a consequence of the global financial crisis. The resumption in industrial activity in Brazil was accompanied by an increase in workers’ available income, which also contributed positively to the good performance of the company during the year. Residential consumption grew 3.8% in the period, driven by increased purchases of electrical goods and
Clients (million):
2009 2010 6.4 6.6
Population served (in million inhabitants)
2009 2010 19 19 42 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } energy concessions
household appliances. The company gained 200,000 project, which has an installed capacity of 855 MW. new customers in the period, and ended the year with Investments in power generation from biomass also a total of 6.6 million residences and businesses in the gained momentum in 2010. The Baldin thermoelectric 568 municipalities in which it operates, in the States plant in Pirassununga (SP), which generates power of São Paulo, Rio Grande do Sul, Paraná and Minas from the burning of sugarcane bagasse, entered into Gerais. In total, the company distributed 51,600 GWh in operation with a capacity of 45 MW. A partnership 2010, compared with 48,600 GWh in 2009. with Grupo Pedra, established in 2010, envisages the construction of a further three cane biomass plants. In the Power Generation sector, we highlight the The projects, to be inaugurated between 2011 and commitment and advances made by CPFL in the 2012, will have an installed capacity of 145 MW. In 2011, formation of a generation platform based on a matrix of the BioFormosa thermal power plant, in Rio Grande clean and renewable sources. Total installed capacity do Norte, will be commissioned, also using sugarcane reached 2,309 MW, up from 1,737 MW in 2009. The bagasse as a fuel (with up to 40 MW capacity). main highlight of the year in this area was the start of operations at the Foz de Chapecó hydroelectric plant Another important event during the year, within the in the State of Santa Catarina. CPFL holds 51% of the strategy of investment in clean energy generation, 43 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } energy concessions
was the commencement of construction of the private companies with operations in Brazil. As a result offshore wind farm in Santa Clara, Rio Grande do of its intense activity in this area, the company was Norte, with a generation capacity of 70 MW. CPFL recognized by Latin Finance magazine during 2010 also secured contracts for the Campo dos Ventos as the Best Energy Company in Sustainability in Latin wind farm during the year; this will begin operation in America. In addition, CPFL was chosen by the Exame 2013 and is also located in Rio Grande do Norte. Two Sustainability Guide as the Model Company for the important projects in the Northeast of the country – eighth consecutive year. the Termoparaíba and Termonordeste thermoelectric plants – reached 90% completion in 2010. The plants The consistent performance of CPFL in the search will begin operation in 2011. for sustainable and responsible operations in a sector that is key to the development of the country Concern for power generation with low environmental is perfectly aligned with the broad strategy of the impact is just one of the many CPFL activities linked to Camargo Corrêa Group. GRI 4.12 best sustainable practices. The company is a signatory of the main business commitments aimed at preserving In April 2011, CPFL Energia acquired Jantus SL, the environment, such as the letter of commitment which holds the largest portfolio of wind farms by the Business Movement for Conservation and in Brazil, later joining with Ersa to create CPFL Sustainable Use of Biodiversity, and the Open Letter to Renováveis, the largest generator of energy from Brazil prepared by the Climate Forum, formed by 22 renewable sources in Latin America.
GRI EC1 Net revenue* EBITDA* Net profit* (millions of R$) (millions of R$) (millions of R$)
873 326 3,015 3,097
716 247 227
510 187 1,564 449 1,532 141 1,266 384
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 * Values are proportional to the participation of the Camargo Corrêa Group in CPFL Energy 44 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Highway Concessions CCR, in which Camargo Corrêa Group is one of the operator of the São Paulo Metro Line 4, which founders and controlling shareholders, is engaged commenced operation in May 2010.
GRI 2.2 in the management of 2,446 km of roads located in São Paulo, Rio de Janeiro and Paraná. In 2010, CCR, which is listed on the BM&FBovespa, is the the company invested a total of R$ 1.48 billion, a largest company in its sector in Latin America. In GRI 2.9 record amount in the history of the company. These 2010, the Camargo Corrêa Group expanded its GRI 2.9 resources were mainly directed to: acquisition of the participation in the control block of the company from SPVias concessionaire, adding 516 km to the road 25% to 33.3% through acquisition of the interests of network administered by CCR; major works on roads the Portuguese company Brisa. The excellence of its such as Via Dutra and the Anhanguera-Bandeirantes operations, recognized by millions of users who drive complex; and also to the ViaQuatro concessionaire, daily on its administered highways, is testament to the
Performance indicators tolled vehicles (million)
GRI 2.2 and 2.3 CCR Concessionaire: CCR Concessionaires Rodonorte - 567.78 km Presidente Dutra Highway - 407.1 km Lagos Highway - 56 km Rio-Niterói Bridge - 23 km 2009 2010 Anhanguera-Bandeirantes Autoban System - 316.8 km Castello Branco - Raposo Tavares System - 168.62 km Mário Covas Ring Road - 32 km 700.651 868.557 Renovias - 345.6 km SPVias - 516 km ViaQuatro - 12.8 km Total - 2,446 km
Brazilian Market:
2009 2010 1,483.20 1,600.28 45 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Highway Concessions
commitment of the Group to the transportation sector, to the profit in 2009, since that year included an which is strategic to the development of Brazil and extraordinary result from the capital gain on the intrinsically linked to the pace of economic activity. asset value of the Group’s participation, in function of the primary offering (follow-on) at market value, In the 2010 fiscal year, the company was directly impacted which was greater than the Equity value. by the resumption of vigorous growth in the local market
GRI EC1 after the global crisis which began in 2008. Net revenue In addition to highways and direct participation GRI 2.3 increased to R$ 3.7 billion – 22.2% up on the previous in management of the São Paulo Metro, CCR has year on an equivalent comparative basis. The number of 38.5% stake in STP, the company that operates the vehicles circulating the highways held under concessions electronic payment systems Sem Parar and Via by the company grew 24% in the year, from 700 million Fácil, and 45% of Controlar, which is responsible for to 1.19 billion; without considering the expansion related vehicle inspections in the city of São Paulo. to the acquisition of SPVias, this growth would have been 12.1%, almost twice the growth in Brazilian GDP in In the medium term, the company plans to the period. CCR’s net profit was R$ 671.7 million for the continue diversifying its portfolio. Projects are year, 5.2% lower than 2009 due to increased financial being developed in new sectors such as light rail expenses in the period and adjustments resulting from the vehicles (LRVs) and high-capacity rapid transit adoption of new accounting practices. buses. Plans are also being drawn up for entering Metro operations in other Brazilian capitals. The However, the net result obtained by the Camargo company is also considering operating in other Corrêa Group showed a greater reduction in relation Latin American countries.
GRI EC1 Net revenue* EBITDA* Net profit* (millions of R$) (millions of R$) (millions of R$)
769 291
409 359 538 330 489 437 276 394 232 127 130 100 104
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
* Values are proportional to the participation of the Camargo Corrêa Group 46 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Engineering and Construction GRI 2.7 In 2010, the Engineering and Construction Division e Participações holding company, which also heads of Camargo Corrêa Group consolidated its strategic Construções e Comércio Camargo Corrêa, the decision to focus on highly complex, large-scale company that originated the Group and undertook engineering and logistics projects which require a high management of all division projects up to 2009. degree of specialization. The structural reorganization of Additionally, three new business units were created: the division that began the year before was completed Latin America, Africa and New Businesses – the over the course of last year and has brought greater latter aimed at developing new businesses based on flexibility to the management of projects. Another infrastructure services, with operation initially directed highlight during the period was the ongoing effort to at the sanitation and defense sectors. achieve the highest standards of quality in construction work, which resulted in the achievement of important The new structure of the division was well received by certifications by the company. customers, who now have closer and more focused attention for their requirements. The reorganization also GR1 2.3 and 2.9 The reorganization of the division created four new decentralized decision making, giving more autonomy companies, each specialized in their respective areas: and agility to operational areas. Reaction to the demands Camargo Corrêa Energia e Construções, Camargo of the market has now become faster and more Corrêa Óleo e Gás, Camargo Corrêa Construções effective. The continued drive for increased productivity Industriais and Camargo Corrêa Infraestrutura. They and competitiveness has led to prioritizing development are controlled by the Camargo Corrêa Construções of techniques, equipment and innovative processes.
Performance indicators
GRI EC1 Net revenue EB ITDA Net profit (millions of R$) (millions of R$) (millions of R$)
6,047 889 5,758 638
4,765 561 462 2,993 280 298 1,896 147 115 113 64
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 47 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Engineering and Construction
and several other projects, as well as ongoing execution 2010 of two dozen other large-scale projects in Brazil, other
Hydroelectric plants: 8 South American countries, and in Africa. Locks: 1 Metro: 73.66 km Highways: 528.7 km Participation in high complexity works, such as Railways: 42 km the bridge over the Rio Negro in Manaus (AM), or Shipyard: 1 Refineries: 3 the Jirau hydroelectric plant in Rondônia, requiring Bridges: 3 Sanitation projects: 2 the use of innovative techniques and materials to Mining units: 5 minimize environmental impact, are emblematic of the Dredging projects: 1 Irrigation projects: 1 willingness of the Group to confront the challenges Transmission lines: 1 required to contribute to the development of the Brazilian infrastructure.
The division delivered four hydroelectric plants (a The division is a world leader in building hydroelectric GRI 2.2 historical record), expansion and modernization works plants and has a prominent position in segments on the Henrique Lage Refinery – Revap – in São José including industrial (mining), oil and gas, roads, ports dos Campos (SP), the Tucuruí River locks, stretches and sanitation, among others. Besides acting as of Lines 2 and 4 of the São Paulo Metro, 17 km of the a service provider with internationally recognized Southern section of the Greater São Paulo Ring Road quality, the engineering and construction division 48 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Engineering and Construction
problem was also addressed with the offer of more attractive compensation and benefits packages.
The year 2010 was marked by further improvements to systems for risk management and health & safety within the division. Having been reviewed in 2009, practices that enable the identification and minimization of business risks – including economic, environmental, social, or labor risks directly related to the execution of each project – were adopted on a large scale and given priority status. All works in execution received investments in new programs and health and workplace safety campaigns. In the field of sustainability, the division has made significant progress, obtaining NBR 16001 certification for two of the consortia in which it participates (CCPR, which also develops and participates as a shareholder operates in the expansion works at the Refinaria do in infrastructure projects - such as the case of Paraná, and BVS, which undertook modernization Ethanol Pipeline in the State of São Paulo, which works at Revap, in São Paulo) – both projects already had agreement signed for the first section at the end held certification related to the environment (ISO of the year. New contracts captured in 2010 totaled 14001), quality (ISO 9001) and health and workplace R$ 9.2 billion, a volume that ensures a sustainable safety (OHSAS 18001). growth path for the coming years. Main projects Our new form of operations helped provide the The Engineering and Construction Division of the division with growth in net revenue of 5% in 2010, Camargo Corrêa Group participated in around 50 reaching R$ 6 billion. However, the high number of large-scale projects in Brazil and overseas in 2010. At closure of old projects (for example, Tucuruí River the end of the year, the company had 32,000 direct locks), and the rising costs of labor and inputs caused employees, in addition to tens of thousands of people by a strongly growing economy, had a negative impact who contribute indirectly to the success of projects. on the profitability of the division. Both net profit of R$ 297.6 million and cash generation (EBITDA) of Abreu e Lima Refinery R$ 561.5 million were lower than the values achieved Located in Ipojuca (PE), this is the first refinery in in the previous year. Northeastern Brazil. The works for the venture, known as RNEST-UCR, took shape and ended the year with a To restore desired profitability levels, the division is large-scale mobilization of employees. constantly reviewing its cost structure and has begun to invest more intensively in in-house manpower Serra do Facão Hydroelectric Plant training in order to overcome the shortage of qualified Located in Catalão (GO), with a generation capacity of professionals in regions where it operates – this 210 MW, the plant commenced commercial operation. 49 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Engineering and Construction
Revap Rio Negro Bridge The Henrique Lage Refinery, in São José dos Campos This bridge will connect the capital city of the (SP), commenced operation of a new HDT unit, State of Amazonas to the municipality of Iranduba, producing diesel and hydrogen. and was close to completion at end of the year. The central span and the cable-stayed section have Foz de Chapecó been fully completed. Hydroelectric Plant Located between the States of Santa Catarina and Jirau Hydroelectric Plant Rio Grande do Sul, the plant commenced commercial The largest hydroelectric power under construction in generation in the second half of 2010. An innovative Brazil at the time, the pace of construction accelerated aspect of its construction is the first use in Latin in 2010 with some 20,000 professionals directly America of a dam core seal in asphalt, an innovative involved in the project, which is located in Rondônia. technique that reduced environmental impact and project construction period. Euzébio da Rocha Thermal Power Plant Repar This thermal power plant, with 208 MW capacity, was The Presidente Getúlio Vargas refinery, in Araucária inaugurated by Petrobras in 2010. The project, valued (PR), constructed in partnership with Promon, marked at R$ 1 billion, was built in partnership with Skanska. an expansion with the delivery of substations SE-2212 and SE-6821. Ethanol Pipeline This project refers to the construction of a pipeline to São Paulo Ring Road transport ethanol produced in the Ribeirão Preto region The southern stretch of the Greater São Paulo Ring to the petrochemical complex at Paulínia, in the State Road was inaugurated by the State Government in of São Paulo. Total investment will be R$ 5 billion. April 2010. The 17 km extension built by the division The contract for the first section was signed at the was delivered on time. end of the year.
Metro Barro Alto Project The first 3.6 km stretch of Line 4 entered into trial The Anglo American nickel processing plant located operation in March. The division also delivered the in Barro Alto (GO) advanced significantly during 2010. Sacomã station and the permanent passage for Line 2. The ore dryer area, for example, was fully completed.
Administration City Mineral Pipeline The new seat of the Minas Gerais State The largest mineral pipeline under construction in government, the ‘Cidade Administrativa Presidente the world, on behalf of Anglo American, it crosses 32 Tancredo Neves’ was inaugurated in February municipalities along its 32 kilometer extension between 2010. The construction has the largest free span the States of Rio de Janeiro and Minas Gerais. of any building in the world, among other features. Important milestones were achieved in 2010, including The division led the consortium that constructed completion of the Carangola/Faria Lemos tunnel in the project. Minas Gerais. 50 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Engineering and Construction
TFPM and TMPM Porce III Works commenced at the Port of Ponta da Madeira This 660 MW hydroelectric plant in Colombia began rail and sea terminals in Maranhão during 2010. This commercial power generation in late 2010. Its project has been contracted by Vale. construction was marked by engineering and logistical challenges that required the excavation of 21 kilometers Tucuruí River Locks of tunnels. The civil works for this system - which will allow the return of river transport to the Tocantins River, lost Piura after the construction of the Tucuruí dam – were The division agreed with the government of Piura, delivered in November. The division participated in the Peru, to develop an irrigation and power generation works for two locks and a 6 km long section of canal. system. In the final phase, a 13 kilometers tunnel will be constructed. Pará Railway Branch Line Also contracted by Vale, Camargo Corrêa was Mphanda Nkuwa contracted to construct the Serra Sul de Carajás This hydroelectric project in Mozambique is at the branch line in Southeastern Pará. final stages of environmental licensing and financial engineering. It has an estimated investment of US$ 2 billion. GRI 2.5 International Presence The Engineering and Construction division participated in nine projects in six countries during 2010: Uige Transmission Line This project is vital to the development of the inlands Huachipa of Angola. It entered its final stages during 2010, with This sanitation project in Peru ended the year 90% commissioning expected in early 2011. complete. The operation of the dam sluices and water intake began at the end of the year. Camargo Corrêa Berazategui leads the consortium responsible for the project. This sewage treatment plant is part of a major project by the Argentine government for recuperation of the Interoceânica Plate River. The consortium for the works is led by The highway linking Acre to the Pacific Ocean, via Camargo Corrêa; the project will enable the installation Peru, was completed. The Camargo Corrêa consortium of a sewage pre-treatment unit. was responsible for a stretch of more than 300 km. Moatize Rio Tuy Basin Camargo Corrêa participates in a consortium This project, in Venezuela, valued at US$ 2.2 billion, constructing the Moatize coal mine facilities in aims to bring sanitation and water supply to a Mozambique. When complete, the mine will be population of about 5 million people in the Tuy River operated by Vale. region. Camargo Corrêa leads the development of the project. 51 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Engineering and Construction
GRI 2.8 Number of employees (Thousand):
2007 2008 2009 2010 27.6 26.6 31.7 32.9 52 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Footwear GRI 2.3, 2.5, 2.7 and 2.8 GRI 2.1 São Paulo Alpargatas, controlled by the Camargo Corrêa April 2011, an Extraordinary General Meeting approved a Group, reaches consumers on four continents with change in the company’s registered name to Alpargatas GRI 2.2 brands such as Havaianas, Dupé, Topper, Rainha, Mizuno S.A. Headquartered in São Paulo (SP), the company GRI 2.8 Timberland and Sete Léguas. Listed since 1913 on the has four factories, nine satellite plants, three distribution stock exchange, the company is today part of Level 1 centers and a research and development center in Brazil. Corporate Governance on the BM&FBovespa - 44% In Argentina, the industrial park is made up of nine units of the total capital belongs to the Group; 1% is held in and a distribution center. Alpargatas also has offices and GRI 2.4 treasury, while the remaining 55% is on the market. In distribution centers in the United States and Europe. Performance indicators
Number of employees GRI 2.8 (Thousands):
2009 2010 15.7 17.5
Footwear Sales (millions of pairs):
2010 2102009 236.7
Exports (millions of pairs):
2009 2010 19.4 27 53 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Footwear
Competence in building and managing brands that Year 2010 also saw the beginning of a new planning are desired by consumers in several countries has cycle that aims to consolidate achievements and allowed Alpargatas to create value and expand all take the company to a new level in terms of of its businesses. The company posted record sales operational and financial resources, achieving a and profitability in 2010. Consolidated sales volume greater participation in footwear market in Brazil increased 11.5% to a total of 244 million pairs. and internationally. The Lógica Project, designed to Net revenue of R$ 2.26 billion and net profit of be a reference model in supply chain management, R$ 303.1 million showed strong growth, with increases commenced in 2009 and underwent several GRI EC1 of 12.4% and 147.2% respectively. developments in 2010. The goal of the project is to manage the supply chain throughout the entire product Cash flow (EBITDA) was also positive at 18% against life cycle, seeking to raise global standards of quality 15% in 2009. The strong performance of the Brazilian provided to Alpargatas customers. In the 2010 fiscal economy throughout the year, which was directly year, 12% of revenues were invested in marketing. reflected in the level of consumption, was the main factor The Pampero brand (Argentina) and the Locomotiva driving the business. company (Brazil) were sold during the period.
Good financial results also reflect success in implementing In a business that has successful brand management the actions defined in the Strategic Plan, developed in as its competitive differential, Alpargatas achieved GRI 2.9 2004 and revised in 2010. During this period, Alpargatas important advances in 2010. The company launched a GRI 2.2 reached excellent operational and marketing standards, line of sneakers under the Havaianas brand, with sales aggressively expanding its market share, gaining a results that exceeded expectations. The company also prominent position overseas and making a series of worked throughout 2010 on a new market position acquisitions – the most important during the period for the Rainha brand, renewed the Timberland license being that of Alpargatas Argentina in 2008. In April 2011, agreement, and continued to launch new products Alpargatas gained control of 86.7% of company capital. under the Mizuno brand.
GRI EC1 Net revenue EBITDA Net profit* (millions of R$) (millions of R$) (millions of R$) 139 2,266 1,978 2,015 405
293 292 297 89 90 1,301 1,370 82 215 68
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 *Values are proportional to the participation of the Camargo Corrêa Group in Alpargatas.. 54 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Steelmaking GRI 2.7 GRI 2.1 The Camargo Corrêa Group is part of the controlling market, Usiminas serves other countries in the block of Usinas Siderúrgicas de Minas Gerais Americas, Europe and Asia. The company, whose (Usiminas), the leading sheet steel producer in Latin shares are traded on stock exchanges in São Paulo America. The Group holds 13% of the voting stock (BM&FBovespa), New York (NYSE) and Madrid of the company, which represents around 20% (Latibex), has the automotive, oil and shipbuilding of its controlling block. In addition to the domestic sectors as its main customers.
Performance indicators
usiminas system
Raw Steel Production (million tons):
2009 2010 5.6 7.3
Sales of finished products (millions tons):
Internal market
External market 2009 2010 4.0 4.9
2009 2010 1.6 1.7 55 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Steelmaking
Total Consumption:
Brazil
2009 2010 World 26.5 33 2009 2010 1,219 1,410 56 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Steelmaking
In 2010, the company made investments of over Although still suffering the effects of the global financial R$ 2.2 billion, 57% more than in 2009. Capital crisis which commenced in 2008, year 2010 saw investment was directed at increasing capacity in recovery in financial and operational terms. Raw steel products with high added value, increasing efficiency production grew from 5.6 million tons to 7.6 million and modernizing plants located at Ipatinga (MG) – tons in the period. However external consumption where the blast furnace was restarted in February, remained well below expectations, with 1.7 million tons having added a new coke oven and a new galvanizing sold against 1.6 million tons in 2009. GRI 2.9 line (in completion) – and at Cubatão (SP) – where the installation of a new hot rolling mill is well advanced. This reaction in sales led to a net revenue for Mineração Usiminas S.A., a new mining and logistics Usiminas of R$ 12.9 billion, or 19% greater than 2009. EC1 company, had 30% of its capital acquired by the Cash flow (EBITDA) increased 54% to R$ 2.65 billion. Japanese company Sumitomo during 2010. This Net profit for the year closed at R$ 1.58 billion, transaction will allow Usiminas to lever its mining 24% greater than the previous period on an business without affecting investment in steelmaking. equivalent comparative basis.
GRI EC1 Net revenue* EBITDA* Net profit* (millions of R$) (millions of R$) (millions of R$)
186 905 361 183 839 796 297 688
531 107 102 182 171 88
94
2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
*Values are proportional to the participation of the Camargo Corrêa Group in Usiminas. 57 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Real Estate Development GRI 2.7
GRI 2.1 Camargo Corrêa Desenvolvimento Imobiliário - CCDI, a scale, high-standard corporate office accommodation and 2.3 company listed on the BM&FBovespa since 2007, had (triple A) - registered significant growth in new projects the best results in its history in 2010. The three areas and sales. In total, R$ 1 billion was incorporated and of operation of the company - housing for low-income R$ 1.18 billion was sold in the year, representing an GRI 2.2 customers, through the subsidiary HM Engenharia; increase of 152.5% and 75.3% respectively over the medium and high standard developments; and large- previous year. Net income jumped to R$ 1.1 billion
Performance indicators
Units developed:
2009 2010 3,045 8,157
Units sold:
2009 2010 4,991 4,590
GRI 2.8 Number of employees:
2009 2010 1,205 2,171
Note: The indicators reflect the performance of management in setting corporate information, especially those related to the adequacy of the capital structures of acquisitions and conformity of the results. 58 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } real estate development
(62.7% greater than in 2009) and net profit reached Minas Gerais and Paraná. The demand for housing GRI EC1 R$ 143.2 million (up 147%). Cash flow (EBITDA) was will remain heated in the coming years, due to an 94% greater: R$ 196.2 million. accumulated housing deficit and favorable consumer credit. CCDI projects sustainable growth in its CCDI launched 26 projects in 2010, up from 10 in 2009. operations during the coming years. GRI 2.8 8,157 units were launched, and 4,590 units were sold. The first units built by the company targeting low- In the commercial real estate sector, the company is income customers – located in the city of Campinas (SP) gaining a reputation in the market in function of awards for – were delivered in March. Of all the projects carried quality and sustainability received by its projects. In 2010, out throughout the year, 17 were within the Federal the Matarazzo Tower and the Cidade São Paulo shopping government Minha Casa, Minha Vida program. The mall, both in São Paulo, received Gold category pre- company entered the low-income segment in 2007 certification for Leadership in Energy and Environmental with the acquisition of HM Engenharia. Design for Core and Shell (LEED C&S). The seal is awarded by the United States Green Building Council for The continued growth of CCDI is assured, with buildings that emphasize good environmental practices. R$ 8.5 billion in overall sales value registered in the company’s Land Bank – of which R$ 1.7 billion relates Note: The indicators reflect certain administrative to HM Engenharia. The stock of land areas held by adjustments in shareholder information, mainly where the company is concentrated in the main consumer related to aligning the capital structures of acquisitions markets in the country: São Paulo, Rio de Janeiro, and the adequacy of the results.
GRI EC1 Net revenue EBITDA Net profit* (millions of R$) (millions of R$) (millions of R$)
95 1,029 196
632 579 101 37 38
230 51 153 13 3,8 2007 1,7
2006 2007 2008 2009 2010 2006 2008 2009 2010 2006 2007 2008 2009 2010 -16
* Values are proportional to the participation of the Camargo Corrêa Group in Camargo Corrêa Desenvolvimento Imobiliário 59 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Shipbuilding GRI 2.1, 2.3 and 2.4 Camargo Corrêa Group’s operations in the shipbuilding tankers, container carriers, bulk and general cargo, sector are through Estaleiro Atlântico Sul (EAS), in among others – and offshore oil exploration platforms. the Suape Complex (PE), and through Quip in Rio Quip, in which the Group owns 27.25% of the shares, Grande (RS) – two of the leading Brazilian companies serves the offshore platforms market and is the first GRI 2.2 in the shipbuilding and offshore platform sector. EAS company in the country to develop a basic design for was developed by the Group, which holds 40% of oil platforms in EPC mode (Engineering, Procurement its capital, and produces all types of cargo vessels – and Construction). Participation in these companies
Performance indicators
Number of employees:
EAS
QUIP 2009 2010
3,423 4,747 2009 2010 380 905
EAS Processing capacity (thousand tons of steel plate per year):
2009 2010 160 160 60 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Shipbuilding
demonstrates the Group’s belief in the sector potential P-63 Platform, worth US$ 1.3 billion. The company resulting from the exploitation of reserves discovered in also made progress with platform construction, the pre-salt layer on the Brazilian coast. commencing Platform P-55 topsides at the Rio Grande dry dock and commencing P-63 jacket conversion. The year 2010 marked the christening and launching ceremony of the ship João Cândido, the Both EAS and Quip are responsible for positive GR1 2.8 first Suezmax produced by EAS – the only fourth economic and social impacts in the regions where generation shipyard in the Southern Hemisphere. they are based. Half of the jobs in the shipyard are The shipyard has followed on with the laying of the occupied by residents of the surrounding area, having second Suezmax keel. Both are within the scope undergone specific training for their duties – which of the Transpetro Program for Modernization and required an investment of R$ 16 million. Expansion of the Fleet (Promef). At the end of the year EAS won a R$ 4.65 billion tender from The impact of the shipyard transcends borders. In Petrobras for the construction of the first seven deep 2010, 130 Brazilian welders who were working in water Drillships for pre-salt oil exploration. In total, the Japanese naval industry were repatriated and the shipyard has an order portfolio of R$ 8.2 billion. employed by EAS. Quip operates in a region that has already experienced high growth rates in recent years Quip ended the year with R$ 2.2 billion in its order due to the resumption of activity at the shipbuilding portfolio. In January 2010, the company signed center in Rio Grande. The companies maintain a series a contract with Petrobras for construction of the of social and environmental projects at their locations.
GRI EC1 Net revenue* EBITDA* Net profit* (millions of R$) (millions of R$) (millions of R$)
694 106 54
85 40 428
123 9 4,3 2006 6 2006 2007 2006 357
-4 2007 2008 2009 2010 -7 -3 2008 2009 2010 -4 2007 2008 2009 2010
* Values are proportional to the participation of the Camargo Corrêa Group in Estaleiro Atlântico Sul and Quip (the latter from 2009). 61 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses
Airport Operations GRI 2.7 GRI 2.2, 2.3, 2.5 GRI 2.1 Created in 2008 and headquartered in São Paulo airports at Puerto Montt, La Serena and Calama, in and 2.7 (SP), A-Port invests in airport management and Chile, and Curaçao airport in the Netherlands Antilles. infrastructure in Latin America and the Caribbean. A pioneer among Brazilian private companies in The company also has technical service agreements this sector, it is already recognized as one of the (TSA) with Eldorado airport in Bogotá, Colombia, GRI 2.8 main references in this sector in Latin America. The and Tegucigalpa, San Pedro Sula, La Ceiba and Roatán, Camargo Corrêa Group owns an 80% stake in the in Honduras. company, along with Swiss company Flughagen Zürich AG (the Zurich airport operator), with 15%, and Chilean In total, these airports registered passenger movement Gestión e Ingeniería IDC S.A., with a 5% stake. of 18.9 million passengers in the year 2010 against At the end of year 2010, A-Port held concessions for 15.7 million passengers in 2009. In Brazil, the company
Performance Indicators
Passenger throughput at airports (thousand) 2009 2010 Curaçao 1,466 1,418 Calama (El Loa) 473 626 La Serena 318 390 Puerto Montt 803 814 Tegucigalpa 421 493 San Pedro Sula 697 742 La Ceiba 171 181 Roatán 172 214 Bogotá 11,174 14,034 Total 15,696 18,911
Congonhas airport parking (Millions of vehicles per year):
2009 2010 1.055 1.108 62 annual report 2010 CAMARGO CORRÊa S.A.
Group Businesses } Airport Operations
GRI EC1
Net revenue EBITDA (millions of R$) (millions of R$)
94 92 33 31
12 Net profit 25 (millions of R$)
2008 2009 2010
2008 2009 2010 2008 2009 2010 -2.2 -2.4 -3.9
operates the parking concession at Congonhas airport in São Paulo (under the name SAO Parking), which received 1.1 million vehicles in 2010.
As part of its business strategy A-Port seeks new opportunities in countries such as Chile, Peru, Colombia and Puerto Rico (United States). In Brazil, the company is accompanying discussions on the definition of a new regulatory framework for the airport sector. Strong growth in air traffic in the country and the upcoming World Cup in 2014 and the Olympics in 2016 will require large investments in the sector’s infrastructure by the end of the decade.
GRI EC1 In financial terms the year practically repeated the results of 2009, with some slight variations. Net income was R$ 91.9 million, with cash generation (EBITDA) of R$ 31.5 million. 63 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report 64 ANNUAL REPORT 2010 CAMARGO CORRÊa S.A.
About the Annual Report
Advances in GRI 3.1, 3.2, 3.3, 3.5, 3.6, 3.7, 3.8, the Annual Report 3.10, 3.11
This is the third time that the Annual Report of Camargo all its stock in the Cavo Saneamento S.A. and Cavo Corrêa S.A. holding company follows the model guidelines Meio Ambiente subsidiaries for sale. The transaction of the Global Reporting Initiative (GRI), version G3 – occurred on March 4, 2011. In addition, Camargo recognized in Brazil and internationally for the presentation Corrêa Cimentos, one of the holding company of economic, social and environmental indicators. subsidiaries, is now named InterCement Brasil S.A.
The information in this publication includes a review This edition also incorporates opportunities for of the activities and financial results of the holding improvement that were noted in evaluations of company and its subsidiaries. Data from subsidiary the previous annual report undertaken by the companies is considered in the proportion of participation Associação Brasileira das Companhias Abertas by the holding company in the respective equity. (Abrasca), and based on public consultation. In order to facilitate their identification, GRI Indicators are There have been changes in corporate structure since marked with labels that identify their number the 2009 Annual Report. The holding company placed and segment throughout the text:
GRI 1.1 to 1.2 Profile, strategy and analysis GRI HR1 to HR9 Human rights
GRI EN1 to EN30 Environmental performance GRI 4.1 to 4.17 Governance and commitments
GRI 2.1 to 2.10 Organizational profile GRI SO1 to SO8 Social performance
GRI LA1 to LA14 Labor practices GRI EC1 to EC9 Financial performance
GRI 3.1 to 3.12 Annual Report parameters GRI PR1 to PR9 Product responsibility
The GRI Table of Contents provides complementary with indicators relating to risks and opportunities, information. It was possible to confirm that this Annual report scope, governance, forms of management and Report meets Application Level B of the GRI-G3 model, performance indicators. 65 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report
GRI Indicators
1 Profile, strategy and analysis Pages Answers 1.1 Statement from the most senior decision-maker 6, 7 and 26 of the organization (such as CEO, Chairman of the Board or equivalent position) concerning the relevance of sustainability to the organization and its strategy
1.2 Description of the key impacts, risks 20 and 26 and opportunities
2 Organizational profile 2.1 Name of the organization 4, 35, 40, 52, 57, 59 and 61 2.2 Primary brands, products and/or services 10, 37, 44, 47, 52, 53, 57, 59 and 61 2.3 Operational structure of the organization, 9, 10, 19, 35, including main divisions, operating units, 44, 45, 46, 52, 57, subsidiaries and joint ventures 59 and 61 2.4 Location of organization’s headquarters 10, 52 and 59
2.5 Number and names of countries where the 36, 50, 52 and 61 organization operates 2.6 Nature of ownership and legal form 19 and 40 The Camargo Corrêa S.A. holding company is a privately held limited liability corporation. The remaining Group subsidiaries and affiliates are closed capital and/or open corporations, some being publicly traded
2.7 Markets served 40, 46, 52, 54, 57, 60, 61 and 35 2.8 Scale of the reporting organization 10, 21, 24, 37, 51, 52, 57, 58, 60 and 61 2.9 Significant changes during the reporting period 21, 35, 36, 44, 46, 53 regarding size, structure or ownership and 56 2.10 Awards received in the reporting period 78
3 Report parameters 3.1 Reporting period 64
3.2 Date of most recent previous report 64
3.3 Reporting cycle 64
3.4 Contact point for questions regarding 83 the report or its contents 3.5 Process for defining report content 64
3.6 Boundary of the report 64 66 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
3.7 State any specific limitations on the scope or 64 boundary of the report 3.8 Basis for reporting on joint ventures, 64 subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period 3.9 Data measurement techniques and the bases The techniques and systems in force of calculations, including assumptions and in Brazil and generally used in Western techniques underlying estimations applied countries were applied to the compilation of the Indicators
3.10 Explanation of the effect of any re-statements of 64 information provided in earlier reports, and the reasons for such re-statement (e.g., mergers and acquisitions)
3.11 Significant changes from previous reporting 64 periods in the scope, boundary or measurement methods applied in the Report
GRI Summary
3.12 Table identifying the location of the This Table of Contents Standard Disclosures in the Report
Assurance
3.13 Policy and current practice with regard to seeking The Camargo Corrêa Group Annual external assurance for the Report Report is submitted to the Brazilian Association of Listed Companies (Abrasca) for evaluation. Financial statements published in this edition of the Annual Report were audited by the independent auditors Deloitte Touche Tohmatsu 4 Governance, Commitments and Engagement Governance
4.1 Governance structure of the organization, 19 including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight
4.2 Indicate whether the Chair of the highest The President of the Board is not an governance body is also an executive officer Executive Officer of Camargo Corrêa S.A. 4.3 For organizations that have a unitary board 19 structure, state the number of members of the highest governance body that are independent and/or non-executive members 67 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
4.4 Mechanisms for shareholders to provide Shareholders make suggestions and recommendations or direction to the highest recommendations to the Executive Committee governance body (COMEX), led by the Chair of the Board of the holding company. Among other forums for exchanging information are: regular meetings, performance reports, and IR websites for shareholders in public companies within the Camargo Corrêa Group. The company is the controller of subsidiaries that are present in the New Market of the São Paulo Stock, Commodities and Futures Exchange (BM&FBovespa). Participation in the New Market requires best practices in governance and communication with shareholders. For communication with our employees, the holding company maintains the Nós.com Intranet portal, specifically for company employees, and additionally the ‘Linha Ética’, through which employees and third parties may request consultations or make anonymous reports of violations of the Camargo Corrêa Group Code of Business Conduct. This service has a phone line and e-mail address under the responsibility of PriceWaterhouseCoopers. Information received is sent to the holding company Ethics Committee, which forwards the information for resolution in the business units
4.5 Linkage between compensation for members of The Group’s companies offer variable pay, the highest governance body, senior managers and linked to organizational performance. executives, and the organization’s performance (including social and environmental performance) 4.6 Processes in place for the highest governance The Camargo Corrêa holding company is body to ensure conflicts of interest are avoided a privately owned, closed capital, limited liability corporation 4.7 Process for determining the qualifications and The Board members are appointed by expertise of the members of the highest governance shareholder representatives and have a two body for guiding the organization’s strategy on year renewable term of office economic, social and environmental topics
4.8 Statement of mission or values, codes of The Camargo Corrêa Group has a conduct e principles relevant to economic, corporate Code of Conduct, which sets environmental, and social performance and the standards of behavior expected of the status of their implementation employees in performing their functions and provides information on employee rights. Also see the section relating to Camargo Corrêa Group’s Values 4.9 Procedures of the highest governance body Financial statements are independently for overseeing the organization’s identification audited by Deloitte Touche Tohmatsu and management of economic, environmental and social performance, as well as adherence or compliance with internationally agreed standards, codes of conduct and principles 68 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
4.10 Process for evaluating the highest governance The Board of Directors is analyzed body’s own performance, particularly with respect by the shareholders to economic, environmental and social performance
Commitment to External Initiatives
4.11 Explanation of whether and how the precautionary 20 and 38 approach or principle is addressed by the organization 4.12 Voluntary and externally developed economic, 26, 31, 38, social and environmental initiatives to which the 39, 43 and 78 organization subscribes or endorses 4.13 Membership in associations, and/or national or The holding company has the opportunity international advocacy organizations to communicate with diverse audiences - to listen to and present points of view - by participating in institutions such as the Associação Brasileira de Infraestrutura e Indústria de Base (Abdib), the São Paulo Industry Federation (where the company participates in the Council and the directorate), the Ethos Institute for Business and Social Responsibility (member and committee participant), among others. In addition, the company participates in initiatives organized by entities such as the WCF Childhood Institute, the Movement for Corporate Conservation and Sustainable Use of Biodiversity, the Climate Forum, and the Business Pact for Integrity and Against Corruption. Also see page 26 Stakeholder Engagement
4.14 List of stakeholder groups engaged The Camargo Corrêa holding company by the organization interacts with: customers, shareholders, governments, civil society institutions, sectoral associations, financial institutions, employees, suppliers, communities, media, non-governmental organizations, national and international syndicates. InterCement, Camargo Corrêa Institute and the Engineering and Construction division possess specific system tools for stakeholder engagement
4.15 Basis for identification and selection of The identification and engagement of stakeholders with whom to engage these groups arises from the activities undertaken by the Group, and also from its social and environmental operations 69 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
4.16 Approaches to stakeholder engagement, including All the groups mentioned in the previous frequency of engagement indicator have means of expressing themselves within the Group and are also involved in internal and external events related to business and corporate activities. The Construction, Cement, Real Estate Development, Footwear, Steelmaking, Shipbuilding, Airport Operations, Engineering & Construction, Highway Concession and Electricity Concession areas undertake customer satisfaction surveys to identify opportunities for improvement. Employees undertake an Organizational Climate Survey every two years, and neighboring communities are served by: The Camargo Corrêa Institute, Alpargatas Institute, Loma Negra Foundation, volunteer programs developed by employees and communication channels with operations managers
4.17 Key topics and concerns that have been 64 All the groups mentioned in the previous raised through stakeholder engagement, indicator have means of expressing and how the organization has responded themselves within the Group and are also to those key topics and concerns involved in internal and external events related to business and corporate activities. The areas of Construction, Cement, Real Estate Development, Railway Concessions and the Environment, as well as other subsidiaries, conduct customer satisfaction surveys to identify opportunities for improvement. Employees undertake an Organizational Climate Survey every two years, and neighboring communities are served by: The Camargo Corrêa Institute, Alpargatas Institute, Loma Negra Foundation, volunteer programs developed by employees and communication channels with operations managers
5 Financial performance indicators Financial performance
EC1 Direct economic value generated and 21, 23, 28, 35, 36, 38, distributed, including revenues, operating 40, 41, 43, 46, 53, 56, costs, employee compensation, donations 58, 60 and 61 and other community investments, retained earnings and payments to suppliers
EC2 Financial implications and other risks and 26 and 39 opportunities for the organization’s activities due to climate change EC3 Coverage of the organization’s defined See information under indicator GRI LA3 benefit plan obligations 70 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
Market Presence
EC6 Policies, practices and proportion of spending on Several business units within the Group’s locally-based suppliers at significant locations of companies have programs to train operation suppliers. For example, the Engineering and Construction division promotes the Partnership for Sustainability Program, which enables suppliers to meet the social and environmental requirements of the company, as well as prioritizing contracts with local suppliers. In the case of Alpargatas, suppliers of raw materials are subject to assessment of responsible management practices and sign a commitment letter covering: not using child or forced labor, a guarantee of safety, health and workers’ rights, no tolerance of discrimination, and maintenance of appropriate remuneration and employee relations practices
Indirect Economic Impacts
EC8 Development and impact of infrastructure 28 investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement
EC9 Understanding and describing significant indirect 28 economic impacts, including the extent of impacts
Environmental performance indicators
ENERGY
EN3 Direct energy consumption by primary energy 29 source WATER
EN8 Total water withdrawal by source 28
EN10 Percentage and total volume of water 28 recycled and reused BIODIVERSITY
EN11 Location and size of land owned, leased, managed The cement unit in Pedro Leopoldo (MG), in, or adjacent to, protected areas and areas of high located within an Environmental Protection biodiversity value outside protected areas Area (APA), complies with specific conditions for its operation 71 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
EN12 Description of significant impacts on biodiversity The Pedro Leopoldo (MG) cement unit, of activities, products and/or services in terrestrial, located within the Carste1 de Lagoa Santa fresh water and marine environments Environmental Protection Area, complies with specific conditions for its operation, such as speleological studies in the area to be mined to survey for historical, paleontological and archaeological material; it undertakes projects for recuperation of degraded areas aligned to the predominant biomes, and conducts an ongoing environmental education program in the region to educate the neighboring community on environmental preservation.
1 Carste de Lagoa Santa is considered to be the cradle of paleontology, archeology and speleology, being the region with highest recorded number of caves in the country
EN18 Initiatives to reduce greenhouse gas emissions 26 and 39 and reductions achieved EN21 Total water discharge by quality and destination All withdrawn water is destined to the municipal sewage network after use in those municipalities where the companies operate
PRODUCTS AND SERVICES
EN26 Initiatives to mitigate the environmental impacts The Group’s companies have environmental of products and services, and extent of impact management systems with goals for mitigation reducing environmental impact. Also see page 26 72 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
Performance indicators relating to labor practices and decent work EMPLOYMENT
LA1 Total workforce by employment type, employment 29 and 30 The Camargo Corrêa Group ended the contract and region year with 61,668 employees, 61,587 hired under labor laws regulations, and 81 with statutory contracts, in addition to 168 trainees and 8,667 contractors. In relation to geographical distribution, 25.22% of employees are in the Northern region, 24.88% in the Northeast, 4.58% in the Center-West, 18.77% in the Southeast, 9.59% in the South and 16.96% overseas.
LA2 Total numbers and rate of employee turnover The average monthly turnover by age group, gender and region rate was 5.69% LA3 Benefits provided to full-time employees that are The Camargo Corrêa Group offers a Pension not provided to temporary or part-time employees, Plan in partnership with a private institution. by major operations The benefit is offered to employees in companies under 100% Group control in Brazil. The Alpargatas Plan has specific characteristics
LABOR/MANAGEMENT RELATIONS
LA4 Percentage of employees covered by collective Up to the end of 2010, 260 unions bargaining agreements covered 55,068 employees, 99.3% of the total analyzed (55,468)
OCCUPATIONAL HEALTH AND SAFETY
LA6 Percentage of total workforce represented in In 2010, Camargo Corrêa Group’s formal joint management-worker health and companies had 63 committees active safety committees that help monitor and advise on in Brazil and 25 overseas occupational health and safety programs 73 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
LA8 Education, training, counseling, prevention and The construction company undertakes risk-control programs in place to assist workforce campaigns and lectures at work sites, focusing members, their families or community members on both the health and safety of our employees. regarding serious diseases The most frequent subjects, in addition to occupational topics such as hearing and respiratory protection, are related to endemic diseases, AIDS, sexually transmitted diseases (STDs) and alcoholism. The information also reaches family members. In the Footwear area, employees are involved in programs for blood pressure control, vaccination campaigns against rubella and flu, family planning programs, monthly distribution of condoms and sexual orientation programs, as well monthly guidance for pregnant women (employees and employees’ wives). In the Cement plants in Brazil, in addition to workplace exercises, lectures are held to prevent diseases such as hypertension, diabetes and RSI, among others. In Argentina, the Cement business conducts training and programs for employees on: dengue, influenza A, alcohol, drugs and smoking, hypertension, cholesterol, healthy habits, and cardiovascular risks LA9 Health and safety topics covered in formal The Cement companies have taken their own agreements with trade unions decision to include topics relating to health and safety into formal agreements with trade unions TRAINING AND EDUCATION
LA10 Average hours of training per year per In 2010, 44,150 employees from the Camargo employee by employee category Corrêa Group underwent a total of 1,121,251 hours of training - an average of 25.40 hours per employee LA11 Programs for lifelong learning that support the The companies have specific programs to continued employability of employees and assist meet these objectives. Alpargatas, for example, them in managing career endings has a program for performance evaluation, individual development planning, and a program to encourage study. Another example of a performance evaluation program applicable to the Construction business graduates identifies the strengths and development opportunities for each employee. Based on the overall results, new training programs are defined to complement existing corporate programs. There is a policy in place to guide the offer of subsidies for long- and short-term external training programs and support for language courses. Also see the response to GRI LA10. 74 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
DIVERSITY AND EQUAL OPPORTUNITY
LA13 Composition of governance bodies, including 83 men to women ratio
Indicators related to Human Rights
Investment practices and purchasing processes
STRATEGY AND MANAGEMENT
HR1 Percentage and total number of significant In the holding company, Construction investment agreements that include human business, Alpargatas and InterCement, all rights clauses or that have undergone human contracts with suppliers have provisions rights screening for the prohibition of child labor and forced labor. Alpargatas also conducts audits of suppliers to ensure compliance with social criteria. In Estaleiro Atlântico Sul, contracts signed with Petrobras and Transpetro contain clauses prohibiting the use of child labor by the contractor and all its suppliers
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING HR5 Operations identified in which the right to exercise The Camargo Corrêa Group seeks to freedom of association and collective bargaining maintain a respectful relationship with may be at significant risk, and actions taken to unions and does not practice any kind of support these rights discrimination against unionized employees
FORCED AND COMPULSORY LABOR
HR7 Operations identified as having significant The quality assurance process of Cement risk for incidents of forced or compulsory labor, operations requires and encourages and measures to contribute to the elimination supplier operations to obtain international of forced or compulsory labor certifications; the already low risk of forced labor is made even less likely in these companies. In the Construction company, the efficient control of work shifts, in accordance with legislation, avoids this risk
SECURITY PRACTICES HR8 Percentage of security personnel trained Approximately 90% of the guards in in the organization’s policies or procedures the Cement business in Argentina have concerning aspects of human rights received human rights training. Only newly admitted personnel have not gone through this training 75 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
Social performance indicators
COMMUNITY
SO1 Nature, scope and effectiveness of any programs In the Construction company, one of and practices that assess and manage the impacts the requirements of the system of of operations on communities, including entering, management of social responsibility is operating and exiting to identify and address the impacts of operations, not only on the community but also on other stakeholders, such as suppliers. The Cement business has environmental control systems that monitor noise and air quality surrounding the operations, surface and groundwater quality, atmospheric emissions from stationary sources and from vehicles, and the quality of rainwater, oil and sanitation effluents. Also see pages 25 and 77
CORRUPTION
SO3 Percentage of employees trained in organization’s The Group’s companies promoted actions to anti-corruption policies and procedures strengthen the application of the company’s Code of Business Conduct, which provides a solid reference point regarding the behavior expected from employees with regard to workplace ethics
PUBLIC POLICY
SO5 Public policy positions and participation in public The company is actively involved in youth policy development and lobbying and child public education programs through the work of the Camargo Corrêa Institute in social programs (see further information in the section on Social Management). The Camargo Corrêa holding company and the Construction and Cement companies also joined the Companies for the Climate program, which produces sectoral studies with recommendations for government on how to promote a low carbon economy. The Group also participates in the Climate Forum along with 20 other companies, and in the Ethos Institute, which prepares recommendations to the government with regard to a regulatory framework for climate change. The company is also committed to the Camargo Corrêa Group Climate Agenda, which lays out the Group position and seeks to positively influence the engagement of other companies and sectors in actions to reduce greenhouse gas emissions 76 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators
Product responsibility performance indicators
CUSTOMER HEALTH AND SAFETY
PR1 Life cycle stages in which health and The Construction company uses procedures, safety impacts of products and services are plans, programs, ergonomic studies and assessed for improvement, and percentage operational controls specific to each of significant products and services categories of its works. These documents aim to subject to such procedures investigate and classify risks to health and safety at every stage of the activity and to provide guidance on the implementation of operational controls, such as Pre-Task Analysis (PTA), Emergency Care Plan, workplace exercises, campaigns, among others. Surveys for the investigation and classification of waste, effluents and emissions are also undertaken. Each of these is subject to distinct techniques for monitoring, control and disposal in order to mitigate or eliminate health risks
PRODUCT AND SERVICE LABELING
PR3 Type of product and service information required In Alpargatas, all products have identification by procedures, and percentage of significant tags, in accordance with current laws. products and services subject to such information Some product lines include instructions on requirements handling and use on their labels as well as material composition, in accordance with standard ABNT NBR ISO 37.582:2006
PR5 Practices related to customer satisfaction, The Customer Satisfaction Survey for including results of surveys measuring 2010 for Camargo Corrêa’s Real Estate customer satisfaction Development Company (CCDI), which consolidated the survey results from 11 developments in Brazil, found that 76.88% of customers were satisfied with the delivered product MARKETING COMMUNICATIONS
PR6 Programs for adherence to laws, standards The holding company meets standards and voluntary codes related to marketing and specific laws for donations and communications, including advertising, promotion sponsorship contracts and sponsorship 77 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } GRI Indicators 78 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report
Certifications and Awards Index GRI 2.10 and 4.12 Institutional commitments
Engineering & Construction • All 44 works executed by the Construction company went through a diagnostic for greenhouse gas emissions. The survey aimed to assess the environmental impact of projects and to provide a basis for mitigating actions.
• Under the pact against sexual exploitation of children and adolescents, signed with the WCF Childhood Institute Brazil in 2010, the Construction company undertook awareness actions with 48 transport suppliers and deployed the Major Works Program, from the same entity, in five major works.
InterCement • The company is a signatory to the Global Compact, a United Nations (UN) initiative to encourage companies to adopt sustainability and corporate social responsibility policies, with emphasis on human rights, labor, environment and anti-corruption.
• InterCement participates in the Companies for the Climate Program (EPC): A Brazilian platform in which member companies undertake to carry out inventories of greenhouse gas emissions in accordance with the Brazilian GHG Protocol Program methodology, and create policies and plans for the management of greenhouse gases, to ensure competitiveness, innovation and stimulate a low carbon economy in the country.
• The company is also part of the Cement Sustainability Initiative (CSI), a part of the World Business Council for Sustainable Development (WBCSD). The initiative seeks to achieve sustainable development through a combination of three pillars: economic growth, ecological balance and social progress.
• In Argentina, Loma Negra participates in El Consejo Empresario Argentino para el Desarrollo Sostenible (CEADS), the Argentine branch of the World Business Council for Sustainable Development (WBCSD), and also the Convenio de Lucha Contra El Trabajo Infantil, signed together with the Ministry of Labor, Employment and Social Security. 79 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } Certifications and Awards Index
• Furthermore, the Loma Negra Foundation is affiliated with RedEAmérica, formed by private entities that work towards poverty reduction and social inclusion.
CPFL • CPFL became a signatory of the Commitment Charter of the Business Movement for Conservation and Sustainable Use of Biodiversity.
• The Open Letter to Brazil on Climate Change, delivered to the Federal authorities by 22 private companies, including CPFL, resulted in the creation of the Climate Forum. The initiative aims to reduce carbon emissions.
• Through the Business Pact for Integrity and Against Corruption, CPFL joins efforts to combat all forms of corruption and has adopted guidelines for the relationship between its value chain and the government.
Certifications
Engineering & Construction • Responsible for the sanitation project in Paraíba known as the Abiaí Papocas System, the construction company was awarded ISO 9001, ISO 14001, OHSAS 18001 and H-PBQP Level A certifications for the works.
• The BCV consortium, formed by Camargo Corrêa, Promon and MPE Engenharia, responsible for modernization and expansion works at the Henrique Lage Refinery (Revap), was awarded NBR ISO/TS 29001 certification.
• The Huachipa sanitation project, undertaken in Peru, earned NBR ISO 9001 certification.
• Responsible for one of the sections of the North-South railway, the Construction company obtained NBR ISO 9001 certification for the works.
• The CCPR consortium, formed by Camargo Corrêa and Promon, which undertook modernization works at the Presidente Getúlio Vargas Refinery (Repar), obtained NBR 16001 and ISO/TS 29001 certifications. 80 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } Certifications and Awards Index
• The Camargo Corrêa consortium that was responsible for the construction of the Minas Gerais Government headquarters – Centro Administrativo Presidente Tancredo Neves – won the certification for the Brazilian Program of Habitation Quality and Productivity (PBQP H-level).
InterCement At the end of 2010, the Company held the following certifications:
• ISO 9001: all 16 cement plants in operation, as well as the concrete units in Argentina, railway concession and waste treatment, are certified.
• ISO 14001: seven cement plants and waste treatment are already certified. The goal is to certify all remaining plants in Brazil and Argentina by 2015
• OHSAS 18001: one waste treatment plant is certified and another four are passing through the certification process. The goal is for all the cement plants to be certified by 2015.
Centro de Soluções Compartilhadas (CSC) ‘Shared Solutions Center’ • The legal area earned ISO 9001:2008 certification
CPFL Energia • Obtained Risk Management and Evaluation of Internal Control over Financial Statements certification – ISO 9001:2008.
• The Data Center Information Security Management System in CPF Energia in Campinas earned ISO 27001:2005 certification.
Awards
Engineering & Construction • The CCPR consortium, responsible for the expansion and modernization works at Presidente Getúlio Vargas Refinery (Repar), won the National Quality Management Award – Banas 2010, in the Quality & Environment and Quality & Sustainable Development categories.
• The CCPR consortium received the Brazil National Proteção Award – 2010 Edition from Proteção magazine. 81 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } Certifications and Awards Index
• The Caraguatatuba consortium also won the National Quality Management Award – Banas 2010, in the Quality category.
• The Jirau hydroelectric plant project won the Chico Mendes Award, awarded by the Chico Mendes Institute.
• The Jirau hydroelectric plant also won the 6th Amcham Brazil Environmental Award.
• The Jirau project plant also received an accolade from LEME Engenharia for results in workplace safety.
• The BCV consortium won the Prêmio Petrobras/Engenharia de Qualidade, Segurança, Meio Ambiente e Saúde.
CPFL • Best company in sustainability in the Latin America energy sector, according to Latin Finance magazine.
• Model Company in Sustainability according to Guia Exame de Sustentabilidade for the eighth year.
• Abrasca Award from the Brazilian Association of Listed Companies in the Best Annual Report category.
• Best Company to Work For, according to Guia da Você S.A., for the ninth consecutive year.
Camargo Corrêa Institute • Integral Protection Award from the Strategic Partnership for Integral Promotion of the Rights of Children and Adolescents, of the Brazilian Association of Magistrates, District Attorneys and Public Defenders for Children and Youth (ABMP).
CCR • Project Finance magazine award for Best Transport Operations – International in the transport sector.
• Award from Project Finance magazine and Euromoney – Best Financial Operations in the Transport Sector, and Best Financial Operation in Latin America. 82 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } Certifications and Awards Index
• IBTTA Award 2010 in the category Social Responsibility.
• Institutional Investor magazine award – Best Investor Relations Team in the Transport, Aviation and Industry sector, and Best Finance and IR Director.
• Bandeirantes Highway considered the best in the country by Guia Quatro Rodas for the fifth consecutive year.
Alpargatas • Gold Category for the Ninho Havaianas campaign in the Clio Awards.
• Gold Award from the Brazilian Advertising Association for the Sete Léguas brand in the Printed Media category.
• Silver Lion at the Cannes Festival for the Sete Léguas brand, Printed Media category.
• Timberland was chosen by the readers of Sport Life as the best adventure brand.
Alpargatas Institute
Campina Grande (PB) • Title of Campinense Citizenship.
• Motion of Congratulations by the Topper Award for Education (Student Grade 10).
Mogeiro (PB) • Motion of Applause for the partnership with the Department of Education to reform schools and train educators.
Guarabira (PB) • Motion of Applause for improvements provided to the municipality from the partnership between Alpargatas Institute and the Department of Education.
João Pessoa (PB) • Public recognition from the Secretary of Social Development for the successful partnership which assisted 100% of the Program to Eradicate Child Labor (PETI) centers. 83 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report
Corporate Information* CAMARGO CORRÊA S.A. Alpargatas S.A.I.C. – Argentina Paraguay Business Unit Director General Yguazú Cementos Board of Directors Cristino Javier Goñi General Manager President Cleber Ceroni Telephone: + 54 11 4303-0041 Vitor Hallack www.alpargatas.com.ar Telephone: + 595 21 281 822 Vice Presidents Angola A.C. Reuter CEMENT DIVISION Carlos Pires Oliveira Dias Director-General Luiz Roberto Ortiz Nascimento Sergio Bandeira President José Édison Barros Franco Palanca Cimentos S.A. Executive Committee Telephone: + 244 933302889 President Vice President of Operations Vitor Hallack Ricardo F. de Mendonça Lima CONCESSIONS DIVISION Members Corporate Directors Antonio Miguel Marques Claudio Borin Guedes Palaia President Francisco Caprino Neto Cleber Acurcio Machado Francisco Caprino Neto José Alberto Diniz Gueber Lopes José Édison Barros Franco Hector Grilli Camargo Corrêa Investimentos Marcio Garcia de Souza Jorge Eduardo Martinez em Infraestrutura S.A. Luiz Augusto Klecz Directors Nelson Tambelini Jr. Daniela Corci Cardoso CORPORATE DIVISION Ricardo F. Buarque Barbosa Gustavo Pelliciari de Andrade President Marcelo Pires Oliveira Dias Marcio Garcia de Souza Portugal Office Daniel Antonio Biondo Bastos Telephone: +55 11 3841-5511 Directors Adalgiso Fragoso de Faria Brazil Business Unit Airport Operations Arthur Sanchez Badin Director General Bruno Machado Ferla Business Unit Ricardo F. de Mendonça Lima A-Port S.A. Carla Duprat Directors Fernando Dias Gomes Directors Roberto Carlos Deutsch João Carlos Orzzi Lucas André Gama Schaeffer Henrique César Geovanini José Francisco de Campos Cleber Acurcio Machado Marcelo Lucon Kalil Cury Filho Dorivaldo Ferreira Marcello Antonio D’Angelo Rubens Prado Valentin Júnior Telephone: +55 11 3841-5511 Marco Antonio Zangari www.a-port.aero Roberto Navarro Evangelista InterCement Brasil S.A. Rodrigo Cardoso Barbosa Telephone: +55 11 3718-4200 www.intercement.com ENGINEERING AND Rua Funchal, 160 – Vila Olímpia 04551-903 – São Paulo - SP CONSTRUCTION DIVISION Telephone: +55 11 3841-5511 Argentina Business Unit www.camargocorrea.com.br Loma Negra C I A S A President Director-General Antonio Miguel Marques Osvaldo Jorge Schutz Unidade de Negócio Calçados Corporate Directors Alpargatas S.A. Directors André Clark Juliano President Ariel Damiano Celso Ferreira de Oliveira Márcio Luiz Simões Utsch Armando Sérgio A. da Silva Carlos Roberto Ogeda Rodrigues Eduardo Blake Curt Herweg Directors Juan Masjoan Francisco Borin Graziano Adalberto Fernandes Granjo Mauro Grecco Carla Schmitzberger Telephone: +54 11 4319-3000 Ney Mauro Simone da Silva Fernando Beer www.lomanegra.com.ar José Roberto Lettiere Vice President of Itamar René Ros Ferrosur Roca S.A. Institutional Relations Márcia do Nascimento Costa Director João Ricardo Auler Rogério Bastos Shimizu Luis Roberto Guillermo Irlicht
Telephone: +55 11 3847-7211 Telephone: +54 11 4319-3900 www.alpargatas.com.br www.ferrosur.com.ar 84 annual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report } Corporate Information
Construction Business Unit REAL ESTATE DEVELOPMENT Morro Vermelho Táxi Camargo Corrêa Construções AND SERVICES DIVISION Aéreo Ltda. – MVTA Industriais S/A Administrators Director Superintendent José Alberto Diniz President Marco A. de Araujo Costa Maron Marcel Guimarães Jose Alberto Diniz Directors Telephone: +55 11 5591-1700 Elias Herrmann Real Estate Development www.mvta.com.br Luiz Eduardo Appendino Business Unit Camargo Corrêa Desenvolvimento Camargo Corrêa Energia Imobiliário S.A. – CCDI SOCIAL INSTITUTIONS e Construções S.A. Director Superintendent Director Superintendent Francisco Sciarotta Neto Camargo Corrêa Institute Marco Antonio Bucco Directors Chief Executive Officer Directors Claudio André Sayeg Vitor Hallack Marcelo Sturlini Bisordi Ian Masini Monteiro de Andrade Renato de Arruda Penteado Maurício Tavares Barbosa Executive Director Francisco de Assis O. Azevedo Camargo Corrêa Infraestrutura S.A. Telephone: +55 11 3841-5511 Director Superintendent www.ccdi.com.br www.institutocamargocorrea.org.br Arnaldo C. de Souza e Silva HM Engenharia e Construções Ltda. Director Directors Alpargatas Institute Emílio Eugênio Auler Neto Henrique Ernesto de O. Bianco Chief Executive Officer Marcos Antonio Feliciani Márcio Luiz Simões Utsch Camargo Corrêa Óleo e Gás S.A. Mauro Rocha Bastazin Director Superintendent Sylvia Bianco de Azevedo Executive Director Dalton dos Santos Avancini José Berivaldo Torres Araujo Telephone: +55 17 3321-0777 Directors www.hmengenharia.com.br www.institutoalpargatas.com.br Eduardo Hermelino Leite Silvio Luiz Zen Centro de Soluções Fundación Loma Negra Compartilhadas – CSC President Av. Rio Branco, 115, 12º andar Osvaldo Jorge Schutz Centro – 20040-004 Directors Rio de Janeiro – RJ Maron Marcel Guimarães General Manager Telephone: +55 21 3344-8900 Ricardo Gomes de Castro Eduardo Raúl Ortega
Latin America Business Unit Telephone: +55 19 3471-5651 www.fundacionlomanegra.org.ar (Infrastructure) Other Businesses Director Arrossensal Agropecuária José Cesar Gazoni Martins e Industrial S.A. Director Superintendent Telephone: +55 11 2787-4000 Luiz Antonio Felippe
Structured Investments Director and Acquisitions Laércio Donizete Trentino Shipbuilding Participation Director Superintendent Telephone: +55 65 3642-6396 Carlos Reynaldo Camerato www.grupocamargo.com
Av. Rio Branco, 115, 12º andar Centro – 20040-004 Rio de Janeiro – RJ Telephone: +55 21 3344-8900
New Business Director Raggi Badra Neto
Telephone: +55 11 2787-4000 *As at April 30, 2011 85 aNnual report 2010 CAMARGO CORRÊa S.A.
About the Annual Report
Credits ANNUAL REPORT Year 2010
Camargo Corrêa S.A.
Director of Communications Marcello D´Angelo
External Communications Manager Mauricio Espósito
Support Team Cintia Mesquita de Vasconcelos, Danilo Strano de Lima, Elaine Pimenta, Elisete Augusto de Souza, Juliana Berti Iaquinto, Renato de Oliveira Diniz, Sara Barbosa de Souza and Sunara Avamilano
Creation and Production TV1 Conteúdo
Photos The archives of Camargo Corrêa Centro de Documentação e Memória, Alexandre Schneider, Eduardo de Sousa, João Musa, Lailson Santos, Mário Castello, Massao Goto, Netum Lima, Paulo Vitale and Tom Bonner
Annual Report 2010 contact: Communications Directorate [email protected]