Social Responsibility Report of China Mengniu Dairy Company Limited of China Mengniu Dairy (2008-2013) Report Responsibility Social Little Happiness Matters
Social Responsibility Report of China Mengniu Dairy Company Limited (2008-2013)
SEHK Stock Code: 2319
Social Responsibility Department of China Mengniu Dairy Company Limited Address: 29F Tower A, 8A International Finance Center, Jianguomenwai Avenue, Chaoyang District, Beijing Post Code: 100022 www.mengniu.com.cn This report is made of degradable paper that is environment-friendly and recyclable About the Report
Period of report The report covers information from January 01, 2008 to December 31, 2013, using in particular the information in 2013. The data in this report is as of December 31, 2013.
Scope of report This report covers relevant information of China Mengniu Dairy Company Limited and its subsidiaries. For convenience of expression and understanding, "China Mengniu Dairy Company Limited" is also expressed as "Mengniu", "the company" and "we/us" in this report.
Issues of report This is the second issue of Social Responsibility Report by Mengniu. The rst release was made by Mengniu in 2008 - Social Responsibility Report of Mengniu— Share our Growth (1999—2007). According to Mengniu's plan, a Social Responsibility Report will be issued every two years as from 2014.
Basis of report International Standard Organization: ISO 26000: Guidance on Social Responsibility (2010) Global Reporting Initiative: Sustainability Reporting Guidelines (G4) TThe Stock Exchange of Hong Kong Limited: Guidelines on Environment, Society and Regulatory Reporting
Data and description All information and data included in this report by reference are taken from o cial documents, statistical reports and nancial statements of the company, as well as related sustainable development information of various functional sectors and operating units collected, summarized and reviewed in accordance with social responsibility management systems of Mengniu. Photos and pictures are provided by Mengniu’s employees and partners and are only to present images of Mengniu employees and partners, and should not be used for any commercial purpose.
Language and versions This report is made in both Chinese and English. In case of inconsistency, the Chinese version shall prevail.
Feedback and suggestions If you have any question or suggestions on this report, please contact us by writing to Social Responsibility Department, China Mengniu Dairy Company Limited. Address: 29F Tower A, International Finance Center,. 8A Jianguomenwai Avenue, Chaoyang District, Beijing Telephone: (010) 5657 0938 Fax: (010) 5657 0900 Website: http://www.mengniu.com.cn/ Contents
01/ A Letter from Our President
03/ About Mengniu
07/ Social Responsibility Management
13 23 33 Food Safety and Health Product and Service E cient Operation and Innovation Management 39 49 57 Low-carbon and Employee Care and Community Involvement Green Development Development and Development
65/ Prospect 66/ Index of Report 67/ Veri cation Statement 69/ Expert Review Every Drop Represents Our Heartfelt Efforts —— A letter from our president
Dear friends:
I became a member of the big family of Mengniu in April 2012 with trust from the Board of Directors. Over the past two years of arduous work, we have deeply realized that the great power that drives a company forward comes from its people, system and culture. Two years ago, we came up with the brand conception of "Little Happiness Matters" which is interpreted today by us making "every drop of happiness". Together with 30,000 Mengniu employees, 300,000 partners, we have reestablished the corporate vision of becoming a “consumer-oriented and innovation-led nutritious and healthy food company”, for which we pool all efforts to build a sustainable ecosystem and to provide consumers with every drop of happiness.
We spare no efforts to improve quality in every drop of our milk and to build our ecosystem and an open culture. With every tiny action we take, we are changing our own world. With these numerous efforts, we are becoming more confident than ever and changing our attitude towards work from purely assuming responsibility to devotion to it. We are changing our communication with customers from making our information transparent to frank interaction. We are leading your health and nutrition through continuous innovations more than satisfying your needs for food. More importantly, the revolution in the Internet is changing our communication means. We hope you can feel the warmth from us in every detail we make and choose our products through better understanding of Mengniu and Mengniu's people once you refuse to turn down warmth and happiness. We highly value sharing and cooperation, and expect to jointly build and improve a sustainable ecosystem, to contribute and reward the society.
01 In the future, we will make continuous innovations in products and service, and will pool every tiny effort from each single person to spread Mengniu's conception of "Little Happiness Matters" and to interpret our values of "Openness, Integrity, Accountability, Innovation". Mengniu is to realize a complete reform and transformation: we are not just based on the resources in China but also those around the world; we are not just a dairy products producer but a leading nutritious and healthy food company; we are not only the expert of one specific food category but a contributor to healthy and innovative development of the dairy industry.
We will make persistent efforts and devote full attention to our goal.
Sincerely yours Sun Yiping August 2014
02 02 About Mengniu
China Mengniu Dairy Company Limited is a listed company in the Stock Exchange of Hong Kong (SEHK). Mengniu provides consumers with diversi ed products and services, including liquid milk (such as UHT milk, milk beverage and yogurt), ice cream, milk powder and other dairy products (such as cheese). In 2013, Mengniu liquid milk hit top in Chinese market in terms of sales volume and revenue. In 2014, Mengniu became the constituent stock of Hang Seng Index, making it the rst blue chip Chinese dairy product manufacturer.
Our footprints
1999 2000 2001 2002 2003 2004 2005 2006 2007 swept China; Mengniu was established in a 53-m Mengniu produced the rst bag of milk in Tetra Fino packaging; of Chinese Milk"; "Building a City Mengniu initially proposed the conception of Mengniu Mengniu produced milk exclusively for Chinese astronauts; On June 10, 2004, Mengniu was listed in SEHK (HK2319); The show TV Mengniu was listed as Top 500 Asian Brands; industry; Innovation in dairy October,In Mengniu became the first Chinese winner of IDF Award for Chinese strong and healthy"; campaign of "AMengniu launched its charity of milk a day catty makes The academy products; pooled global intelligence in dairy base of Mengniu,production was built up with an investment of RMB1.2 billion. Product MengniuAcademy, High-tech Dairy also the highly intelligent ’ s products entereds products Hong Kong market; “ the Super Girls ” sponsored by Mengniu Suansuan Ru 2 shabby house in Hohhot;
03 03 2008 2009 2010 2011 2012 2013 Mengniu launched its "Safe Milk Project";Mengniu launched its "Safe Milk shareholder of Mengniu; Foodstuffs Corporation (COFCO) which became the largest strategic July,In Mengniu entered into strategic cooperation with China Oil & Top enterprises of the world; 16 dairy Mengniu was listed as Most Valuable Chinese Brands 2009, and became RMB 30 billion in Chinese market; enterprise with annual revenue exceedingMengniu the first dairy Mengniu's annual turnover hit a record of RMB 30.2 billion, making World Conference; Dairy Mengniu "Xinyangdao" was granted "Award Innovation" in the 28th of Dairy years; won the rst place in terms of sales revenue in 5 consecutive of similar products annual turnoverMengniu's reached RMB 37.3 billion, by has which Mengniu for which Mengniu was responsibleDenmark, for the implementation in China; established under guidance from of agriculture the ministries of China and Dairy June,TechnologyIn the Sino-Denmark Cooperation Center was second largest strategic shareholder of Mengniu; Mengniu entered into strategic cooperation Foods with Arla who became the industry.merger and acquisition in Chinese dairy June,In made a general Mengniu offer to Yashili, which is by far the largest and meanwhile, Danone became a strategic shareholder of Mengniu; venture will be established and specialized and sales of yogurt in production enteredMengniu a framework agreement with Danone, by which a new joint cow breeding enterprise in China, and became its single largest shareholder; Mengniu increased its shareholding Dairy, in China Modern the largest dairy
04 Our philosophy Little happiness matters ——every drop of happiness
Vision In Mengniu, We make more than good milk, Become a consumer-oriented, innovation-led, nutritious and healthy food company For we make milk a bridge of love between people. When people enjoy our pure and yummy milk product, Mission And whenever they touch with our brand, Develop with customers, employees, They feel the affection in every drop of the milk, shareholders and all other stakeholders, to build a win-win ecosystem And feel delighted for it. We believe, Core Values As long as we present the world with goodness drop by drop, Openness,Integrity,Accountability,Innovation These drops gather and form a fountain of happiness. In Mengniu, Little Happiness Matters.
05 Organization structure
China Mengniu An integrated and collaborative platform of investment, nancing and decision-making center
Liquid milk + Ice cream Infant milk formula Plant-based protein Farming, etc. Established business Emerging business Embryonic business Investment business
Strategy Finance R&D Risk& Supply Public Quality Organizational Information Audit chain relations safety development innovation
Ms. Sun Yiping has been appointed as President and Executive Director of Mengniu.
A Board of Directors has been established with due diligence and a complete set of internal control policies.
The Board of Directors comprises 2 executive directors, 6 non-executive directors and 5 independent non-executive directors.
The Board of Directors is mainly responsible for formulating overall strategies and policies, setting performance and administration goals, evaluating business performance and supervising the management.
06 Social Responsibility Management
Social responsibility management model
We, in association with partners including ranchers, suppliers and city managers, perform our social responsibilities by innovative means and create comprehensive economic, social and environmental values in six core domains of social responsibilities including food safety and health, product and service innovation, e cient operation and management, low- carbon and green development, employee care and development as well as community involvement and development. With these e orts, we build up a sustainable ecosystem and present consumers with healthy food and nutrition of ne quality, boost cooperation and mutual bene ts with ranchers and city managers, and drive the sustainable development of Mengniu and society.
C it rs Food Safety y e M h and Health c a n n a a R g Community e Product and r Involvement and Service s Development Innovation
Consumers Employee Care E cient and Operation and Development Management
Low-carbon and Green Development
Suppliers
07 Social Responsibility Management
The value in Mengniu sustainable cycle has gone beyond the social responsibilities of a company. It has formed an ecological environment for the mutual promotion and co-existence of enterprises and stakeholders and has established a new mode for social issues and innovation.
- Yu Zhihong, Chief Editor of China WTO Tribune Social value Social Social innovation oriented
Industry cooperation oriented
Market price oriented
Ecosystem 3.0 Ecosystem 2.0 Ecosystem 1.0
Enterprise competitiveness Product Industrial Responsibility competitiveness competitiveness competitiveness
In the past, we focused on our competitiveness in products and industry and were devoted to producing products of nest quality and to winning competitive advantages for the Company. On such a basis, we began to integrate resources along the industrial chain, to promote industrial cooperation and to build a sustainable ecosystem. In the future, we will further facilitate value sharing and cooperation functions of the ecosystem, collaborate with three core partners and integrate three major industrial resources. We will also perform the six major social responsibilities and strive to realize sustainable development of enterprise, industry and society.
08 Core meaning of social responsibility management
In Mengniu, we integrate our social responsibilities in routine operation and management, hoping to build a sustainable ecosystem, create social values and promote sustainable development, through innovations in corporate social responsibilities and cooperation with partners.
Management We expect to build a sustainable ecosystem and to realize the vision of becoming a goals "consumer-oriented, innovation-led nutritious and healthy food company".
Based on food safety: Safety and quality of dairy products are essential to all work; Led by product innovation: Through innovations, Mengniu focuses on and leads consumer needs; Management Driven by responsibility: Mengniu integrates resources in the ecosystem through principles project-based operation; Measured by social contribution: Contribution to society is the touchstone to evaluate company operation and management.
Continuous innovation: Supported by sustainable ecosystem, Mengniu expects to innovate its practices in performance of social responsibilities; Management E cient management: Mengniu facilitates the concepts of social responsibilities and measures integrates it in company operation and management; Transparent communication: Through frank communication, Mengniu wins the understanding, recognition and support of stakeholders.
09 Social Responsibility Management
Organizational systems of social responsibility
On basis of its Social Responsibility Committee, Social Responsibility O ce and social responsibility liaison o cers of existing business systems, Mengniu has established, step by step, a complete and e ective social responsibility organizational system with clear rights and liabilities and collaboration between all levels. Through these e orts, Mengniu has realized a three-level linkage mechanism covering the headquarters, business systems and subordinate companies.
The Social Responsibility Committee is an important organizational guarantee for Mengniu to promote sustainable development. The Social Responsibility Committee is directed by Chief Executive O cer of the Company, with principals from all systems as its deputy directors. It is responsible for strategic development directions of corporate social responsibilities, the supervision of the implementation of social responsibility activities and performance evaluation. The Social Responsibility Committee is supported by a Social Responsibility O ce which is responsible for coordination of activities of work groups under the Social Responsibility Committee. Focusing on the major domains in social responsibilities, Mengniu established work groups under the Social Responsibility Committee, and invited its professional partners as consultant of the work group, in order to realize cross-system and cross- eld collaboration within and outside the company.
Social Responsibility committee
Social Responsibility O ce
Work Group of Social Responsibility Committee
Community Food Safety and Product and Service E cient Operation Low-carbon and Employee Care and Involvement and Health Innovation and Management Green Development Development Development
Milk Sourcing Strategy Finance Management Milk Sourcing Human Resources Public A airs Management System Management System System Management System Management System Management System
Quality Safety R&D Management Operation Operation Party A airs Party A airs Management System System Management System Management System Management System Management System
R&D Management Market Management Information Public A airs Information System System and Innovation Management System and Innovation Development System Development System Information and Innovation Development System
Professional Professional Professional Professional Professional Professional Partners Partners Partners Partners Partners Partners
10 Materiality analysis
Engagement Capital and in disaster asset relief operation Sales quality management Environmental protection Legal Employee compliance care Environment management system Nutrition standard Factory quality management
Green Storage & Transportation
Product Innovation
Employees’ Interests & rights Mutually Ranch -bene cial quality Partners management Employee Service development innovation Green ranch
Supporting education 实质性议题
Identi cation Ordering Examination Con rmation Identi cation
Issue Company strategy and key In uence on company: strategic Examined by Con rm key issues in various operation importance, in uence on company leaders elds to promote social business responsibility activities International standards on Examined by business social responsibility In uence on stakeholders: social systems trends, importance of issue to Macro-policies and stakeholders Examined by experts background of social responsibility
Concerns of stakeholders
Identify issues of corporate social responsibilities, analyze its nature, and formulate strategies on the implementation of social Implementation Implementation and Evaluation responsibility issues
Turn a social responsibility issue into speci c and feasible targets, to facilitate its implementation
Carry out project-based management and facilitate project implementation by applying "revolutionary innovation, e cient of management and transparent communication"
Encourage stakeholders to actively participate and boost the realization of goals
Quantify and rate the implementation of social responsibility issues and make improvements on basis of evaluation results
11 Social Responsibility Management
Stakeholder communication
Communication and Stakeholders Expectation response channels
Maintenance and appreciation of assets value Shareholders Annual report and Protection from operating risks announcement and investors Exploration of new markets and opportunities Non-deal / Deal Road show
Governmental Legal operation Supervision and evaluation and regulatory Tax payment according to law requirements Positive tax payment organizations Contribution to local economic development Specialized meetings
Safe and healthy products Corporate microblog Consumers Smooth communication channels Corporate Wechat
Open, fair and just procurement Supplier conference Suppliers Honesty and faithfulness Rating management of suppliers Con dentiality of information
Distributor conference Mutual bene ts City managers Mutual improvement Decision-making Management Committee
Environmental protection On-line monitoring Environment Energy saving and emission reduction Microblog
Occupational health Manager mail box Wages and welfare guarantee Employee Employee representative congress Establishing platform for employees’ development Balanced work and life Training course and communication
Creation of job positions Employment promotion Community Boosting development of relevant Local economic development local industries Improvement of local infrastructure
12 100 100 59 raw 94 batches of products First Pass Yield (FPY) milk test indicators milk sources provided by receive plant quality safety including physical scaled ranches and farms inspection and chemical testing, microbiological testing, and others stricter than national standards
1 Food Safety and Health Full-chain Quality Ranch Quality Plant Quality Sales Quality 15 Management 17 Management 19 Management 21 Management
Fully-enclosed transportation ensures raw milk safety
Xu Zhengqiang: I am a driver of Mengniu milk truck. Many people around me care passionately about raw milk transportation safety issues. However safe and reliable the raw milk may be, if any problem occurs in the transportation process, it is hard to guarantee that products from the raw milk are of the nest quality. Therefore, Mengniu has very strict and speci c requirements on raw milk transportation, which is known as the "4 ℃ and 24 hour delivery to plant" principle. After raw milk is collected in enclosed workshop and loaded on the lorry, an employee will seal all valves and inlets of the milk tank by an E-Seal, which will be opened and veri ed by another employee when the truck arrives at the manufacturing workshop. The E-Seal technology can protect the milk tank from being opened in the middle way and from counterfeit, so that it ensures the raw milk is transported in a completely closed environment free of contamination. In order to guarantee the freshness of raw milk, there are strict plans on routes and time of the milk lorries to guarantee the transportation process.
13 1. Food Safety and Health
14 Full-chain Quality Management
With close cooperation with ranchers, raw material suppliers and community partners, we ensure the quality and safety of dairy products throughout the supply chain with close attentions to every single link from the farms to the plants, and to market.
Strict compliance with Food Hygiene Law, Product Quality Law as well as other domestic and international laws, regulations and standards Strict compliance Certi cation of 4 major management systems, including ISO 9001, HACCP, ISO with quality safety 14001 and OHSAS18001, as well as 3 major product certi cations on organic food, health food and student milk
Ranch Plant Sales Ranch regulations Involvement in formulation and revision of national quality standards on food and dairy products
Identify 11 quality risk sources and 39 risks points in milk sources, suppliers Analyze quality risks and production and carry out quality Real-time track and monitor existing risks; study and predict future risks tracking Establish quality safety control and traceability system and trace full industrial chain
Establish and Build a uni ed laboratory inspection and examination system improve technical Facilitate standardization and controllability of full industrial chain quality inspection process inspection Introduce top-level dairy product inspection technologies and management speci cations standards
Strengthen strict Improve internal quality inspections on all links, including plant operation and nal products evaluation and Improve admittance standards of suppliers and city managers to realize strict quality inspection control over raw/auxiliary material quality
1515 1. Food Safety and Health
Technology determines quality
Ranch Quality Raw milk management inspection supervision inspection
Mengniu ensures the product quality safety at Mengniu has established dual assurance of Based on the cooperation with Denmark Arla, its sources by introducing the internationally quality inspection through introducing Asure Mengniu introduced its raw milk ngerprint advanced Arla Gaarden farm management Quality, an authoritative third party quality spectrum technology, which helps to system from Arla Denmark to launch inspection institution in New Zealand. e ectively detect and monitor abnormal raw standardized and scienti c management of milk so as to ensure 100% of raw milk is up to Mengniu ranches. standard.
16 Ranch Quality Management
Careful planting
Planting environment Field management Seed screening
3-dimension indicators of soil, 4 regular guidance on sowing, 4 inspections on purity, irrigating water and air fertilization, weeding and cleanliness, germination rate harvest and water content
Scienti c farming
Scaled ranches Quality seeds Health monitoring
94% of Mengniu raw milk is Introducing high-quality Specialized electronic records collected from scaled ranches Holstein cows were created for cows to maintain intelligent record of cow information Mengniu introduced Arla Cooperating with specialized Gaarden ranch management cow breeding companies Patent ear tags, pedometers are system from Arla Denmark used to keep informed of the health Breding elite cows t for conditions of cows all the time growing environment in China
Disease prevention Feed management
A specialized cow life management Feed suppliers with high integrity are area has been established uniformly introduced in
Professional veterinarians on duty Strict feed storage standard
Veterinary drug inspection and Regular inspections use rules stricter than national standards
17 1. Food Safety and Health
Milk collection
Mechanized milking Standardized
80 position rotating disc process milking machines Milk produced in rst Fully-automatic milking three milking attempts is robots discarded
100% mechanized milking Nipple disinfection Mechanized automatic milking Raw milk inspection and detection
59 raw milk testing indicators stricter than national standards
Mengniu introduced advanced ngerprint veri cation technology from Arla, to realize rapid inspection of raw milk quality
Enclosed Ton per Cow per Year transportation 7 6.8 100% 94% 6.7 Strict85% observance of 4℃ 6.6 70% 77% 6.2 and 24-hour delivery 6.0 51% 57% 5.7 6 50% principle
5 0% 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 Statistics on Mengniu’s yield per cow 2008-2013蒙牛牧场规模化、集约化占比 from 2008 to 2013
Technical service for farmers to jonitly ensure raw milk quality
Taking advantage of technology in cow and feeding improvement, epidemic prevention guidance and others, Mengniu built a technical service team to provide ranchers with technical service through customized training system via telephone, Internet and eld visits in line with their practical needs and acceptance level. By the end of 2013, Mengniu technical service team has provided over 2,000 training sessions to 30,000 dairy farmers.
18 Plant Quality Management
Product development
Safe formula Strict tests Project based operation
In strict compliance with Strict tests and improvements Build R&D teams with joint international formula standard on various indicators including involvements of suppliers and city Mengniu focused on studies on edibility, nutrition, popularity and managers, etc other indicators dosing of main dairy material, E ectively identify and lead auxiliary materials and additives consumer needs Strict testing process
Purchase of raw materials and auxiliary materials
Admittance of raw/auxiliary Examination of raw/auxiliary materials materials Under joint control of R&D and technology Every material supplier is subject to strict management sectors examinations Raw/auxiliary material standard is to be decided jointly Field investigation, pilot production, site on basis of product attribute evaluation, etc Process control, traceability and statistics
19 1. Food Safety and Health
Production
Retrieval mechanism Electronic night patrol Control over key inspection process Specialized retrieval cards have been in use Build scienti c and sound electronic night Inspection is made over 9 patrol inspection system processes, 36 monitoring 5-Level in-depth retrieval including daily, points and 105 indicators weekly, ten-day and monthly inspection Patrol is scheduled once every 6 hours. as well as monthly evaluation Strengthen real-time control Whole-process video monitoring over over key aspects Identify and eliminate safety issues in time 1,000 monitoring projects Exit-warehouse Inspections regardless of Full-process tracing
cost Every single product bears a bar Mengniu strengthens its capacity code for tracing of laboratory inspection and Information such as production tests. Once a pack of products date, production line, work shift, fails, all products from the same warehouse and milk tanks are batch will be traced inspected in time
As a leading enterprise in dairy industry with its insistence on the safety philosophy of "Without quality all is vanity", Mengniu strives to ensure product quality throughout the production 100% process, by strict control over materials, complete quality management systems, implementation of related work, improvement of R&D, and others. In 2013, Mengniu dairy Quality safety is an essential social responsibility of an enterprise in the dairy products First Pass industry, and we hope Mengniu makes good use of its demonstration e ect Yield (FPY) was 100% and lead the sound development of dairy enterprises in China.
- Song Kungang, Director of China Dairy Industry Association
20 Sales Quality Management
Storage and Cold chain
transportation of Coolers are placed in point of sales
nished products Truck transportation is used to minimize transportation time
Products are transported in an ideal temperature of 2-6 celsius degrees
Timely tracking
Mengniu cooperates with China Mobile to realize mobile phone base positioning during transportation of ice-cream products
Tracking and veri cation via mobile phones during products ordering and transportation by forwarding agents are realized
Quality of Sales
Account control Tracking platform
All distributors are required to maintain timely records of Multiple platforms are established on basis of internet, mobile type, speci cation and quantity of dairy products sold phone sms and qr code
Timely tracking of dairy products is realized to remind Keep consumers informed of Mengniu products city managers of replenishment
Disposal of discarded products
Products that have expired warranty or fails inspection are strictly prohibited from sales
Uniform replacement of products for city managers
21 1. Food Safety and Health
Mengniu has established standardized process and policies in place on every link of dairy product sales, and carries out strict management plans over all details, such as product display.
- Gao Huqing, City Manager, Tianmen, Hubei Region of Mengniu Sales Management System
Unit: Person time Consumer feedback 1,085,648 1,000,000
800,000 770,198 758,409 620,849 600,000
470,245 454,622
After-sales service 400,000
Nation-wide service hotline 200,000 O cial microblog and wechat accounts 2008 2009 2010 2011 2012 2013 Response to consumer complaints in 24 hours Consumers received on plant opening days from 2008 to 2013
Plant opening day
Regularly invite consumers to visit Mengniu plants
Organizing lectures on milk related knowledge
22 2 postdoctoral 0 prohibited 270 plus 0 complaint research stations or disputable product is SKUs launched from on privacy infringement sold 2008 to 2013 and loss of customer data
2 Products and Services Innovation Product and Meeting Basic Nutrition Specific Nutrition 25 Service Innovation System 29 Needs 31 for Different Age Groups
Awakening youth rejuvenates the aged
Gu Erhui: I am a product manager of Mengniu. We are always concerned about health issues of the aged. For the sake of a enjoyable life of the aged in their later years, we have made extensive investigations into their health needs and launched an innovative product, Mengniu · Awakening Youth. It helps the aged build stronger bones, improve cardiovascular functions and mitigate the impacts of chronic diseases to their well-being. We made great innovations in product functions and provided sufficient Vitamin D and Casein Phosphopeptides (CPP), deep sea fish oil and phosphatide, which promote easy absorption of calcium and realize e ective intestines and stomach conditioning. In June 2012, Awakening Youth was successfully launched and won great popularity and trusts among the elderly consumers.
For better and more comprehensive care to the elderly consumers, we also launched a series of activities in various forms. For instance, in August and September of 2013, we launched a Mengniu Awakening Youth activity themed as "Stay young with new bone energy", to which we invited professional physicians to provide bone mineral density tests, lectures on rational calcium supplement and shows of Taichi Ball Game to elderly consumers from 24 communities in 9 districts of Chongqing City.
Awakening Youth is more than providing elderly consumers with nutrition, and it also leads them to good patterns and attitudes to live!
23 2. Product and service innovation system
24 Product and Service Innovation System
We strive to provide consumers with healthy and considerate production based on all-encompassing mining of consumers' needs and the establishment of Mengniu's product and service innovation system through a platform for cooperation with Internet-based organizations, suppliers, city managers and scienti c research institutions.
Consumer needs-driven innovation
With consumer needs as the longstanding core of our operation, we build R&D teams together with partners. Through full insight into consumer needs, we have established complete production innovation procedures to provide consumers with satisfactory products.
25 2. Product and service innovation system
1 Insight into consumer needs 2 Focusing on creative ideas 3 New product initialization
Market survey to understand Conducting studies into consumer Project approvals consumer needs needs Integrating supplier and partner Hearing opinions of suppliers/city Extracting information innutrition resources managers needs Building new product R&D team Learning from domestic and foreign Building ideas on product Project-based operation experiences of nutrition researches development
Focusing on product innovation and positioning 4 Product development 5 Evaluation and con rmation 6 Launch of new product
Introduction of specialized Inspections and tests on nutrition Innovating marketing modes technologies, experiments balance, applicability and Cooperation with city managers anaphylaxis of new product Authoritative nutrition conception, Collecting consumer feedback on conversion from concepts to product New product improvement new products Review and con rm by third party Improving new product marketing
Convenient service channels
We have established a service platform based on city managers and e-commerce by building a product distribution network and diversifying product marketing and selling to provide consumers with convenient and a ordable products. 1 e-commerce platform Cooperating with 3 leading supporting omni-channels e-commerce operators
18 major sales regions 1,720,000 points of sale
3,652 front-line salespersons
Milk powder
26 Your question, our responsibility
Mengniu invites all partners to participant in Mengniu's brand building efforts. Continuous improvement in communication channels helps boost consumers' confidence. In 2013, we launched the innovative consumer communication platform of "Your Question, Our Responsibility", which e ectively promote the information transparency and in-depth communication with our consumers.
Plant opening day As one of the first national industrial tourism models, we stick to the "opening day" activities, and invite media, opinion leaders and consumers to visit Mengniu's plants and ranches, so that we show consumers a real and transparent Mengniu through face-to-face communication.
Primary school students visited Mengniu’s plants Partners visited Mengniu’s plants
In 2013, we received 1,085,648 consumer visitors during the opening days
27 2. Product and service innovation system
Hotline customer service Micro-platforms
We have set up Mengniu's official service hotline, We have launched Q&A platforms in a variety of forms, to respond in time to questions and complaints of including Wechat, microblog and website, to respond consumers over Mengniu's products and service and to and solve the concerns of consumers on milk. to hear their voices.
Cumulative 352,380 successful Cumulative 267,090 interactions human interactions with consumers
28 Meeting Basic Nutrition Needs
We stick to the idea that rational diet improves fitness, and takes public health as our goals and provide the public with diversi ed products with various avors and nutrition.
Keeping leisure and comfort around
Based on extensive investigations into the needs and expectations in leisure hours of consumers of various ages, sexes and habits, we strove to make products with new design and taste to cater for the public with healthy dairy products with various avors during their leisure times and hot summer days. Consumers can take both necessary nutrition and have a good time.
Mengniu’s Suan Suan Ru yells out sour and sweet youth
Mengniu's Suan Suan Ru builds close connections with consumers in an absolutely new way based on analysis of diversified psychology and needs of young consumers for nutrition, leisure and fashion. We appointed Mayday, a famous rock band, as its spokesperson and launched "Sour and sweet youth", and sponsored a popular music reality show The X Factor on Hunan Satellite TV to advocate new youth claims and awaken new vigor of society.
29 2. Product and service innovation system
Starting a day o with Mengniu breakfast milk
Nutritious breakfast provides human body with 60%-70% vitamins and minerals need every day. However, busy lives make it harder to nd the time to have breakfast. We actively developed Mengniu breakfast milk with various avors and portable packages, and added a variety of grain essence and dietary ber, in order to make up the "nutrition de ciency" due to the skipped breakfast.
Morning energy in cities
Invoking the Rio 2 image of the popular little bird on the package of its breakfast milk, Mengniu hopes to advocate young people wake up earlier and pass on the healthy life style. By the end of the activity, over 54,690,000 consumers participated in the campaign via PC and mobile devices, covering 3,300,000 independent consumer QQ numbers and nally 158,000 consumers reached the nal end.
Cute Big Eye comes to play Maintaining a natural and tricks, you must be happy balanced lifestyle everyday We cooperated with Universal Picture Corporation According to statistics, average milk consumption of and combines the "Minions" in Despicable Me 2 Chinese people is less than 1/2 of world average, and with our new products and built the brand of "Cute the resulting acalcerosis attracted extensive attentions. Big Eye". With milk and banana, Big Eye presents We developed pure milk and yogurt products to help consumers with tasty milk and also inspires their consumers keep t by maintaining intestines and stomach joyful and healthy mindset to act cutely. dynamics and providing them with all necessary protein their bodies need.
30 Specific Nutrition for Di erent Age Groups
We have carefully studied the nutrition needs of various consumer groups including children, middle aged and elderly consumers and people with lactose intolerance, by which we researched on more dedicated and diversi ed products to cater for nutrition needs of special consumer groups.
Making milk more suitable for children
We focused on nutrition needs of children in various periods of growth, in order to speci cally provide children with nutritional supplement. We selected fine quality raw milk and employed professional experts in children nutrition industry to develop special milk for children. We specially added DHA algae oil, prebiotics, taurine and other healthy nutrients that could satisfy international standard, in order to meet demands of children for digestion, bone development and intelligence growth.
Guaranteeing student health with student milk
We have set up an exclusive ranch to produce student milk with an even higher standard. We ensure each child has safe and nutritious milk based on stricter standards at all links of student milk, including propaganda, delivery, storage, distribution and recycling.
Awakening youthful energy
We developed high-end functional dairy products for middle-aged and elderly consumers, which guarantees calcium absorption by adopting special formulas and helps them dealing with health problems due to osteoporosis and cardiovascular diseases.
31 2. Product and service innovation system
Caring for those with lactose intolerance Do you know? Since Mengniu Xinyangdao employed internationally advanced EHTTM A certain group of people in China cannot drink milk technology, nearly 100% lactose had been hydrolyzed, which is much higher than for lactose intolerance caused by personal physical similar products. Therefore, nutrition could easily reach every part of the human problems of nature or nurture. Mengniu made body and significantly reduced the gastrointestinal discomfort of such a consumer innovations and developed the Xinyangdao product group with lactose intolerance, enabling them to enjoy a feast of milk. to cater for nutrition needs of such consumer group, and realized the breakthrough of transforming milk from being "nutritious" to "easily assimilated". Living a higher-quality life In 2011, Mengniu Xinyangdao was granted the "IDF Award of Dairy Innovation" which is the most With improvement of life quality and awareness of health, consumers tended authoritative award in the dairy industry. to be ever demanding on quality of dairy products. We developed the first high- end milk of Mengniu, of which the raw milk was taken from Milk Deluxe exclusive organic ranch. We implemented dual certification of Chinese national standards and EU standards throughout the industrial chain and carried out complete source tracking. The content of high-quality natural lactoprotein in every 100ml Milk Deluxe milk was as high as 3.3g, which is 13.8% higher than required content by Chinese national standard, so that we could cater pursuit of consumers for high quality both in nutrition and technologies.
Champion, new concept of health life
Working overtime, staying up late, poor air quality and lack of exercises...... Mengniu had deep understanding of health troubles of office staff. So Mengniu developed the Champion which is the first product in domestic market with bifidobacterium number of 107/gram. Champion marked a new era of dual health care effects of "adjusting intestinal flora and improving immunity". With various activities at "World Sleep Day" on March 21st, "World Digestive Health Day" on May 29th and "National Fitness Day" on August 8th Champion hoped to advance the healthy lifestyle by spreading related ideas and creating a stimulating intellectual atmosphere for national fitness.
32 52.761 billion RMB 43.357billion RMB 1.631 billion RMB 2.711 billion RMB corporate market value (as of business income net pro t tax paid December 31, 2013)
Efficient Operation 3 and Management
Strengthening Compliance Improving Management Integrating International 35 Management 36 E ciency 37 Resources
With YASHILI, milk powder business is brought to a new height
Li Xianming: I am a marketer of YASHILI milk powder. We are pleased to see that Mengniu kept YASHILI in independent operation after the acquisition in 2013. The leading position of Mengniu in domestic market and the strategic resources provided by COFCO as a large state-owned enterprise injected new energy to YASHILI's business development.
Our milk powder business will well supplement and improve Mengniu's product line, providing consumers with a wider portfolio of healthy products. After the acquisition, relying on the advantages of Mengniu in its raw milk chain management and international resources, YASHILI's milk powder quality was further improved. I could feel it intuitively that our products were better recognized by consumers and our business was also developing fast. I wish YASHILI could work together with Mengniu to provide healthy and safe milk power products to more Chinese babies.
33 3. E cient Operation and Management
34 Strengthening Compliance Management
The compliance with laws and regulations in business operation is the basis for sustainable development. We have carried out inspections and evaluations on internal control, in accordance with related requirements in China and SEHK, to ensure that the internal systems operate in full compliance.
Operational risk management
Conducting risk assessment over operation and management of 12 major systems and identifying 340 risks points.
Enacting detailed precautions and countermeasures against long-term major risks.
Perfecting system building
Enacting series of anti-corruption regulations and policies, including the Mengniu Disciplinary Inspection and Supervision Management System, to ensure integrity and compliance in corporate operation.
Signing Anti-commercial Bribery Contract with Mengniu’s suppliers to regulate the operation of industrial chain.
Establishing a Disciplinary Inspection and Supervision Office to strengthen anti-corruption practices by dedicated organization.
Standardizing business operation
Implementing SAP project, employing the management information systems to regulate business process and review systems, and integrating standardized operation into corporate management.
35 3. E cient Operation and Management
Improving Management Efficiency
We have realized in depth that to improve the operation capacity of Mengniu, we are in more needs of conceptual breakthrough than funds and investment in technologies. We targeted Mengniu as an internationally leading company, and for this purpose, we summarized the best practice of Mengniu in management and operation, established the Mengniu Excellent Operation (MNWCO) mode, and have worked out innovative IPO management approaches and contributed to implementation of corporate development strategies.
Integrating information platform throughout the industrial chain
In 2012, we introduced the SAP system to make our supply chain management more effective and efficient by promoting IT application integrating the information platform through the entire industrial chain. Based on macro-data analysis, we can optimize the operating cost structure and improve our social values and competitiveness.
Mengniu excellent operation mode
Improving management Enhancing execution Building image
Building image as Improving management systems Rationalizing internal procedures industrial model
Building an images of Fixing management modes Promoting practical experiences healthy brand
Spreading outstanding Realizing lean management Fostering innovative culture management philosophy
36 Integrating International Resources
Our strategic partners
COFCO: introducing its industrial chain management
In 2009, COFCO became the single largest shareholder of Mengniu.
Arla Foods: introducing international leading ranch management system
In June 2012, an agriculture development agreement was signed by and between the ministry of agriculture of both China and Denmark, by which the "Sino-Denmark Dairy Technology Cooperation Center" was established. The project was jointly undertaken by Mengniu, COFCO and Arla Foods.
Danone: improving R&D technology and collaborating on the low-temperature yoghurt market
In May 2013, a cooperation agreement was signed among COFCO, Mengniu and Danone.
Asure Quality: building safety certification covering entire industrial chain
In April 2013, Mengniu entered into a cooperation framework agreement with Asure Quality, a state- owned enterprise in New Zealand and world famous food quality and safety certi cation organization.
Modern Dairy: strengthening supervision over raw milk quality
In May 2013, Mengniu increased its shareholding and became the single largest shareholder of China Modern Dairy Holdings Ltd..
37 3. E cientE cient Operation and Management
Extending industrial chain
Liquid milk Ice cream Milk powder Other dairy products
Business income (in RMB million) 441.6
2012 32,336.0 3,171.5 130.3
2013 37,902.8 3,023.4 2,177.3 253.5
An improved and more comprehensive Mengniu product category and portfolio
This transaction is fully in line with Danone's strategies: By increasing shareholding in Mengniu and enhanced cooperation, Danone will further explore the huge potential in Chinese yoghurt market. Our cooperation made us both winners. Through the cooperation, we can provide consumers with healthy and tasty products and inspire the great potential in Chinese yoghurt market, and we can also let more Chinese consumers know Danone brand.
- Franck Riboud, President and CEO of Danone
38 39 4. Low-carbon and Green Development
ton standard RMB 0.24 coal/ton 4.67 ton 468 ton 12.2 million overall energy consumption comprehensive water COD emissions investment in per ten-thousand-yuan output consumption per ton environmental protection product
Low-carbon and 4 Green Development
Improving Management Green Storage and Green Ranch Green Plant 41 Systems 43 45 47 Transportation
New-type environment-friendly ranch
Wurenqiqige: I am a heifer breeder at Fuyuan Farming in Togtoh Ranch. The Togtoh Ranch is located in Togtoh County of Hohhot, Inner Mongolia and is an innovative ecological ranch designed on basis of environmental carrying capacity. There are 20,000 Mu of meadow around the ranch, so that the environmental capacity is utilized for the disposal of feces produced at the ranch. The grassland is mainly used to grow silage corn, to provide cows in the ranch with roughage. On the basis of local environmental conditions, we estimate that the optimum number of cows to be raised is 5,000. With this farm scale, the farm can realize economic bene t of large scale farming and will not cause pressure to the local environment or a ect the normal lives of local residents. We develop circular economy at the farm and collect cow dung for use to produce organic fertilizer. The yearly production of solid organic fertilizer is about 30,000 tons and the production of liquid organic fertilizer is about 90,000 tons, which are used for growth of silage corn and ordinary farms in the local places, in order to develop the local ecological agriculture and to realize harmony between human and environment.
40 Improving Management Systems
We introduced the ISO 14001 Environmental Management System in 2002 and established organizational systems in the Company and incorporated various work into environmental management. By 2004, we had established a complete environment management system and had applied the "green" concepts to each production and operation process. We worked with all partners on the industrial chain to jointly cope with climate changes, to build our "CSR competitiveness" in low-carbon economy and to realize harmonious development of both the company and environment.
Strengthening management
Establishing organizational system
We have established a three-tier safety and environmental protection group including headquarter, functional system, business divisions and production sites , which takes charge of environmental protection activities.
Improving system building
In 2007, Mengniu began to implement its environmental protection system.
From 2008 to 2010, on the basis of updated national regulations, policies and standards on environmental protection, Mengniu had established a complete set of scienti c and reasonable management systems.
In 2010, Mengniu established a new emergency response management system and strengthened its environmental management and control systems on sub-quality products, to improve its management systems.
41 4. Low-carbon and Green Development
Monitoring the Improving environmental implementation protection awareness
Strengthening procurement review Enhancing education on environmental protection Mengniu incorporated energy-saving and emission- reduction practices and the use of environmental friendly Mengniu launched a series of promotion campaigns materials by its suppliers into its review. on energy conservation and emission reduction and strengthened its conservation-oriented company culture. Improving monitoring measures Mengniu carried out regular education and training Mengniu worked out its energy management system and programs to its employees on energy consumption environmental protection management system. measurement and statistics as well as the management of Mengniu deployed computer systems to monitor pollutant emissions. and control the energy consumption and emission of Mengniu strove to improve the professional skills of its contaminants, in order to realize standardized statistics. operators operating energy-consuming equipments and Mengniu realized online monitoring over emission at workers managing pollutant emissions. the source of contamination and established network connection to the numerical control platform of local environmental protection bureau.
Mengniu strengthened management on energy procurement and use and its energy statistics met national requirements.
42 Green Ranch
Best use of environment capacity Green selection of The environment capacity should be made the best use of to eliminate site influences on people’s lives and to realize harmonious coexistence of human, cow and nature.
Scienti c measurement and calculation of environment capacity Green construction Mengniu is devoted to balance between ranch production and environmental protection. By properly determining the farm capacity, Mengniu can effectively mitigate pressures on environment.
Turning wastes into valuable materials
Green Mengniu adopts specialized equipment to realize treatment of contaminants operation produced on the ranch and transforms them into electric power or organic fertilizer, to realize circular economy.
Biodiversity protection
We took protective actions on biodiversity and have built the Mengniu Natural Museum of Grassland. We began the grassland restoration program and made specimen. The museum is open to consumers and the public, to call for social concerns on biodiversity protection.
43 4. Low-carbon and Green Development
Do you know? The cow dung produced by a cow in one year can be used to generate 1,000 kilowatt-hour of electric power, which can power ve household refrigerators in one year.
44 Green Plant
In 2010, 29 production units under Mengniu successfully passed the certi cation of environment management systems. We invested and carried out energy-saving and emission-reduction technical transformation on production process with large energy consumption and emission of contaminant. We have included the environmental protection performance of its suppliers into the supplier review rules, by which we expected to help suppliers to improve their capacity in environmental protection, to lead the development of the entire industrial chain and to practice the environmental protection responsibilities.
Green construction Green production
Mengniu implemented green construction and Mengniu evaluated and reviewed energy all newly built projects are efficient in energy consumption indicators during the production consumption, land use, and water and material process to facilitate implementation of green consumption production
All new plants are built to realize integrated and Mengniu gradually utilized its solar power generation intensive production and the three workshops are technologies, to cut down power consumption and built as one large workshop with shared energy and to reduce carbon emission power system Mengniu deployed gas-fired boilers in replace of Mengniu optimized plant layout to utilize natural coal- red boilers, to increase thermal e ciency and lighting in the daytime and LEDs in the nighttime to reduce dust emission
45 4. Low-carbon and Green Development
Packing Materials
Environmental-friendly packing Recycle materials Mengniu selected "regenerated forest"__Tetra Mengniu established a 10,000-ton sewage treatment packing materials, certi cated by Forest Stewardship plant, realizing yearly sewage treatment of over 15 Council (FSC), so as to avoid "one-off" use of forest million tons resources Mengniu released real-time monitoring data on Mengniu used 3 billion recycled packs every year, o cial website, to accept social supervision equivalent of 1 million trees saved
46 Green Storage and Transportation
In transportation and retail sales, we made the best of our forwarding agents and terminal partners to build up a complete green industrial chain. We cooperated with logistic agents to build an information technology platform, to optimize the modes and routes of logistics, to reduce energy consumption and emission of greenhouse gases during transportation and to contribute to a clean sky.
We advocated green and low-carbon logistics. In cooperation with freight agents, we advocated integration of social logistic resources and carried out joint delivery to cut down social logistic costs. We cooperated with logistic companies including CSL, COSCO Joint delivery LOGISTICS, YCIL and Zhongpin Cold-chain Logistics, to carry out joint delivery in many regions in China. In future, Mengniu will cooperate with other fresh fast-moving consumer goods (FMCG) companies to realize joint warehousing and delivery services in inter- provincial distribution center.
We are the rst dairy company in China to adopt railway transportation. In comparison with road transportation, railway transportation is more friendly to the environment. Low-carbon Mengniu has consecutively entered into strategic partnership with Beijing Railway Bureau transportation and CRCT, by which ve special freight trains were launched and most dairy products of Mengniu sold to East China and South China were transported by railway to Shanghai and Guangzhou and then distributed to adjacent areas.
In order to ensure that consumers can drink the freshest milk, we adopted the operation Sales at the mode of "Locally produced products are sold locally". We have established 31 production place of bases and cover 1,720,000 points of sales throughout China, to effectively reduce production transportation distance and carbon emission.
47 4. Low-carbon and Green Development
Recycle packaging to advocate green consumption
We are the rst in China to raise the idea of “paid packaging recycling”, installing packaging recycling machines in supermarkets. Consumers can get a certificate for recycling and a ticket for a Mengniu event after putting a certain number of packaging into the machine. This campaign has activated the “paid ecology”, a model aimed to encourage public participation in environmental protection. By the end of 2013, we, together with Tetra Pak, recycled more than 40,000 tons of packaging materials, which could be used to pack 4 billion packs of milk or circle the earth by ten times.
40,000 tons can be used to Pack 4 billion of recyclable packs of milk or circle packaging materials the earth by ten times
Green Cold Chain Mengniu put in use 20,000 custom-made freezers, 20,000 each of which can save 180 kilowatt-hours worth of custom-made ’ electricity every year, thus lowering users power freezers save up to costs by over 30%. These freezers together can save up to 3.6 million kilowatt-hours every year, million kilowatt- an amount enough for 3,000 households’ power 3.6 supply for a whole year. hours
48 24.22 36.92 23.79 hours 74 percentage of women in middle percentage of employees average training hours employee and senior management with 5-year or longer service per employee per year satisfaction rate
Employee Care 5 and Development
Employee's Rights and Employee Employee Care 51 Interests 53 Development 55
Successful self- development in Mengniu Yu Xiaoqing: I am a CSR manager at Mengniu and my career development is in line with Mengniu’s development. I joined Mengniu, a big family in my eyes, in November 2003. At the beginning, I was an ordinary worker at the production line. Thanks to Mengniu's extensive training and talent selection philosophy of appointing people by abilities, I won various occupational training opportunities and worked on many positions. In the past 11 years, I have worked in many cities, such as Hohhot, Tongliao, Baoji, Taian and Beijing and on many positions, including normal worker, HR clerk, HR Manager and O ce Manager, and nally I became the CSR Manager. Mengniu has provided a platform for my career development. As my personal career developed, I also got married and had a happy family.
49 5. Employee Care and Development
50 Employee's Rights and Interests
Every day 70 million consumers consume Mengniu's products and over 30,000 Mengniu employees make it happen. We support their work by providing safe and healthy working conditions and comprehensive welfare.
Occupational safety and health Equal employment We acquired the OHSAS18001 certi cation We adhered to equal and normative employment We established a complete prevention mechanism against We prohibited any form of employment discrimination occupational diseases
We forbade the employment of child labor and forced We strengthened the occupational safety and labor health management for employees
We employed 38,000 sta We carried out physical examinations to employees with high risks of occupational Our labor contract concluding rate reached 100% diseases
Employee's We established health records for employees rights and Transparent communication Comprehensive welfare interests Mengniu has established its labor union, We paid for the ve insurance and one housing special President mailbox and employee fund for our employees Wechat group as communication channels
We o ered equal pay for equal work regardless of Mengniu enhanced internal communication gender on issues including payment system and employee welfare We were in a leading position in guaranteeing our employees’ income increase in line with the All emails from employees to senior managers company’s development were replied in time by the senior managers in person
51 5. Employee Care and Development
Fivefold incentive systems
Restricted shares granted as bonus to employees with excellent performance and general evaluation
Restricted Extra bonus on basis of outperformed Share Bonus to outstanding sales to be granted if business goals employees and teams on determined by the Board of Directors basis of performance in the have been accomplished year Better-than-expected
Performance Excellence
On basis that the yearly Employee has overall business goal has accomplished his/her Individual been accomplished, extra performance goals of the Performance pro t sharing bonus is to be Board of Directors/ Bene t year Sharing/ Target-reaching granted to senior managers, employees and responsible persons in major sales regions
Our male/female We had 25,620 employees under the age of employee ratio was 40, accounting for about 1:1.3 93.2% of total employees
We newly employed Employees with college or above education account for 6,270 sta 60.49 % of the total employees
52 Employee Development
We took employees’ personal development as a driving force for corporate development. In consideration of employee differences, we provided employees with personalized development platform, to give full play to their innovation and capability.
Mengniu has established development paths respectively for technical talents and managerial talents.
Sound career Mengniu encouraged employees to choose development path in accordance with their development path actual conditions and personal interest. In 2013, all the employees accepted regular performance and career development evaluations.
Mengniu provided training programs to all corporate employees and security personnel Complete on special technologies, management improvement and human rights protection. training system In 2013, Mengniu invested over RMB 19 million yuan in training programs and the average training time for employees was 23.79 hours per employee.
Tutor system for Mengniu assigned veteran colleagues to serve as tutors of new employees to help them new employees quickly get adapted to team work. management Senior President Deputy presidentDeputy
Professionals Management general manager,Senior directors Senior Expert, employees Expert, General manager,General Chief inspectors management General Senior managers,Senior Managers Senior employeesSenior Supervisors supervisors, Senior Advanced employees team leaders Employees execution Employee employee Primary
53 5. Employee Care and Development
Conducting training programs with partners
We cooperated with our partners to carry out various training programs. For instance, we cooperated with Cheung Kong GSB and AACSB International to provide senior managers with training programs on management. We also cooperated with partners on the industrial chain, such as Tetra Pak, to provide training programs on development trends of technologies and management in the dairy industry and practical skills. Through these e orts, Mengniu improved the knowledge and skill of our employees.
Mengniu 100 talent cultivation system
The secret in fast development of Mengniu lies in its talent training system. Mengniu established its Mengniu 100 system covering trainees, grass-roots leaders, senior managers and core backbone managers, to whom Mengniu provided corresponding training resources. When Mengniu trained talents for itself, it also laid a solid base of talents for the entire dairy industry.
Mengniu TOP20 leadership skills Mengniu 100
Mengniu 100 Junior
Mengniu 100 Management capability
MT Professional skills
Business Mengniu 100 management Grass-roots GT employees
54 Employee Care
Each Mengniu employee was supported by a big and warm family. They were proud of the supports from family members, cares from colleagues as well as happy life and work.
We provided employees oriented working environments by providing Comfortable leisure bar, sports ground and Yoga room etc. There are green plants in working offices and corridors and Mengniu also provides shuttle buses for the environment convenience of employees
Colorful We launched recreational and sports activities in various forms, including leisure basketball games and badminton games activities We encouraged employees to make better balance between work and life
Personalized We provided timely help and support for employees care Make sure that employees feel the warmth of family
55 5. Employee Care and Development
Personalized care We offered timely condolences and economic supports to employees su ering major emergent adversity We visited retired employees during holidays We provided female employees with free physical examination once every two years and provided restroom for pregnant women We created platforms for young employees to make friends with the opposite sex and holds group wedding ceremonies for the young lovers
Cozy working environment
We set up leisure bar
Installed air conditioning and broadcasting facilities Rich corporate cultural O ered free washing services of uniforms to activities employees We hold nationwide sports events, summer cultural festivals and "Happiness Provided personal Express Cup" basketball and volleyball games on a regular basis. protective equipment and emergency drugs
As a member of Mengniu, my wife and I were very lucky to join the group wedding ceremony for new couples. We received blessings from leaders and colleagues. How touching and unforgettable that is. I work in Mengniu and get married in Mengniu. Through these years, I can feel the strong love from the company.
- Wang Hong, Director of No. 1 Business Sector, Milk Sourcing Management System
56 57 6. Community Involvement and Development
RMB plus 18.075 million 6,832 volunteers 400 village 58 partners total charity investment in 2013 participated schools were benefited participated in the charity from our activities activities organized by Mengniu
Community Involvement 6 and Development
The Development of Give a Lecture in My 59 Mengniu’s Public Good Cause 61 Hometown
63 Anti-haze Campaign 64 Community Care
Mengniu helped better our life
Mimaciren: I am a teacher in Dongba Primary School in Gangga Town, Dingri County, Rikaze, Tibet Autonomous Region. The primary school is in very poor conditions. The classrooms have fallen into disrepair and we have even troubles in getting water. However, things began to change after Mengniu sent a team to help us. They built a warm duty room for us, but also built a water storage tank with 5-ton capacity. What’s more, they brought to us winter clothes which our impoverished students were in need of in the past winter. In addition, they o ered generous help to over one thousand households in seven villages around the primary school. The kind help from Mengniu and its partners totally changed our lives, for they brought us hope and love.
58 The Development of Mengniu’s Public Good Cause
We have paid continuous attentions to the cause of public good, and made devoted e orts to create a harmonious society and community since Mengniu was founded. Through the past 15 years, we have witnessed the contributions of Mengniu to community development and all e orts made in exploring new modes of public good activities.
On this basis, we strove to build a social responsibility platform of "You are the nishing touch". With public good project as the bond and partners as core participators, Mengniu brought its employees, city managers, suppliers, media and celebrities together in carrying out practical, measurable, sustainable, socialized and re ned social responsibility activities and played its social roles throughout the industrial value chain.
2001 Mengniu donated to the construction of a Hope Primary School in Dalian.
2002 Mengniu sponsored the campaign of "orphans in Inner Mongolia returning to Shanghai to look for their parents".
2003 We donated cash and milk worth of RMB 12 million in the battle against SARS. We also donated pure milk worth of RMB 30 million to 1.2 million teachers throughout China.
Mengniu donated RMB 590,000 to people su ering from the indian ocean tsunami. We carried out the campaign of "drinking one pack of Mengniu milk means donating one cent to the development of Beijing". 2005 Invested RMB 10 million in establishing Hohhot milk risk foundation.
Mengniu launched a campaign of “A catty of milk a day makes Chinese strong and healthy" and donated 2006 milk to one thousand primary schools in poor areas in 31 provinces and autonomous regions in China. We also named and sponsored the "Between Cities" sports campaign in order to support nationwide sports.
2007 Mengniu named and sponsored the Top Chinese Music Awards to support the cultivation of music talents.
2001-2007 Supporting public good cause by donations in cash and in kind Mengniu actively participated in public good activities and o ered the best help to social groups in need. Besides, Mengniu donated nancial and material resources to solve as many social problems as possible by its own power.
59 6. Community Involvement and Development
We jointly donated RMB 10 million with Laoniu Foundation to assist people in South China suffering from snow disaster and launched the campaign of “Gensheng Philanthropy Home” activity. They also helped orphans, the single-aged and the single-disabled in the Mengniu joined the campaign disaster-stricken area in Sichuan and established the Chinese Milk 2012 of "Looking for teachers with the Love Foundation with China Children and Teenagers’ Fund to build 2008 most beautiful hearts in rural an open platform aggregating all charity powers in the society. areas".
Mengniu Ecological Grassland Foundation was founded. 2013 Mengniu joined in hands Mengniu invested RMB 10 million in the construction of "digging with 58 partners to carry out 2009 wells in the drought-hit pasturing areas" project. By 2013, 35 wells the campaign of "Looking for had been constructed, bene ting about 110,000 people. teachers with the most beautiful hearts in rural areas".
Southwest China was hit by severe drought and Mengniu donated Mengniu donated RMB 10 RMB 5 million. million and 10 thousand cartons of milk to people su ering from 2010 Mengniu donated RMB 5 million to people su ering from the severe earthquake in Ya’an, and sent earthquake in Yushu, Qinghai. a group of volunteers to the Mengniu launched a number of activities of "Mengniu's Love, disaster-hit area. Grassland Dream".
2011 Mengniu launched the love gift campaign which attracted famous TV stars, Fan Shaoxing and Yang Mi, and large numbers of college students to join our volunteers’ group. 2012-2013 Making joint efforts 2008-2011 for the public good with partners Paying constant attention to public good The efforts made by Mengniu cause through establishing platforms were far from enough. Mengniu Through continuous efforts in public good, Mengniu found that simple then began to join hands with donations in cash or in kind would not solve the key social problems and stakeholders to carry out the public only by establishing a constant and complete public good system can the good practices to contribute to a key social problems be greatly reduced fundamentally. happy China.
60 Give a Lecture in My Hometown
On the public good platform of "You are the finishing touch", targeted on the rural education, Mengniu launched its "Give a lecture in my hometown" program. We invited a number of public gures to give lessons to the children at village schools. We hoped their knowledge and experience could help to broaden the vision of the rural children and bring them dreams and hope for future.
In 2013, we hope that driven by the "Give a lecture in my hometown" campaign, more The day of teachers with the most public gures can return to their hometown and give lessons to the teachers and students there, bringing beautiful hearts in rural areas them new knowledge and opening a new window for them to know the outside world. In this way, we can help them grow up happily.
_ Sun Yiping, President and Chief Executive Officer of Mengniu
The campaign covered Happy gifts 22 provinces
Calorie exchange
Liang Chunshu, a typecast actor of Zhou Enlai
61 6. Community Involvement and Development
Looking for teachers with Employee t the most beautiful hearts in n e rural areas d T Improve school u e t a environment S c Government h Happy gift Rural e
r Broaden visions of teachers and students education Give a lecture in Media my hometown Promote the quality of education Partner Calorie exchange School
public gures were invited to give lessons at 30 village schools Hou Honglan, a famous ballet dancer
We gave 12 major courses including sports, lm and 12 commerce, etc
thousand teachers and students bene ted from 60 the campaign Shen Xingyun, rst chief director of the Chinese astronaut brigade
Lao Lishi, champion of diving at the Athens Olympic Games
Toy captain band
62 Anti-haze Campaign
The "anti-haze" public good experiencing campaign is an important part of the "making the sky blue and the land green" fund public good campaign launched by Mengniu. We called for social forces to take actions against haze, investigate into the biodiversity and carry out anti-haze summer camps. We hoped to pool the efforts from all ranks in the society and let blue sky and green land come back.
The volunteers planted trees and picked up the rubbish in the Kubuqi Desert in Inner Mongolia.
The volunteers took the challenge of 8-hour’s tramping and jogging to burn calories in exchange for gloves and exercise books for the children.
40 Volunteers joined the anti- haze campaign in Shanghai Chongming Dongtan Nationnal Nature Reserve.
63 6. Community Involvement and Development
Community Care
Supported by the social responsibility platform of "You are the finishing touch" and focusing on communities, Mengniu provided help for local communities, carrying out public good practices along its range of industrial chain.
Resources Services Volunteer activities
Employee Involved in disaster-relief Involvement in disaster relief
Providing job Taking precedence to provide job Partner opportunities opportunities to poverty-stricken areas
Caring for the vulnerable Helping to dig wells in the drought-hit Product groups pasturing areas
Supporting employee’s Employee blood donation Fund activities
Digging wells in the drought-hit Engagement in earthquake pasturing areas rescue and relief
Since 2011, we have launched a large project for people’s On April 20, 2013, Ya’an, a city in Sichuan, was hit by a well-being of digging wells in the drought-hit pasturing 7-magnitude earthquake. Three hours after the earthquake, areas. Together with local mainstream media, we invited we donated 2,000 cartons of milk and 2,000 cartons of hydrologists to carry out site investigations to dig wells. Suan Suan Ru to the earthquake-hit area. In addition, we With these practical actions, we hope to help people in the donated RMB 10 million through Sichuan Department of pasturing areas to fight against drought, bringing them Civil A airs to the earthquake-hit area in Ya’an. At the same convenient lives. time, we sent a "Mengniu volunteer rescue team" to the earthquake-hit area for site rescues. We donated RMB 10 million to dig wells within 5 years. By the end of 2013, we have dug 35 wells, bene ting Mengniu donated RMB 10 million about 110,000 people in the local area
64 Prospect
In 2014, we will actively promote the strategy of "sustainable cycle" and focus on core business in corporate management and operation. We will determine the key social responsibility work and take advantages of collaboration in the ecosystem, to combine the social responsibilities with all business areas, administrative levels and job positions, to boost the sustainable development of Mengniu and the society in a transparent and open attitude.
We will stick to the corporate vision of becoming a "consumer-orientated and innovation-led nutritious and healthy food company". We will make the best of Mengniu's advantages in resources, technologies and talents to promote the management and practices in Mengniu: we will keep close attention to all details from ranch to dining table and improve our quality management systems throughout the ranch, the factory and the industrial chain, in order to understand the demands of consumers and to develop prospective products and services. While we strive to meet the demands of various consumers, we are also going to build emotional connections to consumers. Starting with training of talents for middle- and small-sized ranches, we will strengthen our nancial and technological supports to partners. We hope to help the ranch-owners to make a fortune. Besides, we will facilitate the sustainable development of suppliers, city managers and the entire industrial chain: we stick to the ideas of "green Mengniu, green development and green renaissance" and reduce the impacts of production operation distribution, and sales on the environment, so as to encourage individuals to build a green and healthy society. Through innovative and complete talent training systems, we will provide various platforms for employee development and build up a high-quality talent team for sustainable development of the dairy industry.
In the future, we will take a more enthusiastic attitude to cooperate with company employees, city managers, suppliers, media and celebrities to contribute to the sustainable development of the society.
65 Index of Report
Index of Report
GRI Content Page Number GRI Content Page Number
Strategy G4-1 P1 G4-EN8 and analysis G4-2 P11 G4-EN9 P46 G4-3 P3 G4-EN10 P46 G4-4 P29-32 G4-EN11 P40/P43 G4-5 P3 G4-EN12 P43 G4-6 P3 G4-EN13 P43 G4-7 P3 G4-EN14 G4-8 P3 G4-EN15 Organization G4-9 P3/P18/P26/P51 G4-EN16 pro le G4-10 P49/P51/P52 G4-EN17 G4-11 P51 G4-EN18 G4-12 P7/P19 G4-EN19 G4-13 P3/P4/P37 G4-EN20 G4-14 P15/P41/P42 Environment G4-EN21 G4-15 P41 G4-EN22 P40 G4-16 G4-EN23 P40/P48 G4-17 About this report G4-EN24 Identi ed G4-18 About this report/P11 G4-EN25 material G4-19 P11 G4-EN26 G4-20 P15/P25-26/P35/P41-42/P51-56/P61-62/P64 G4-EN27 P43-P46 aspect and G4-21 G4-EN28 P46/P48 boundaries G4-22 About this report G4-EN29 G4-23 G4-EN30 P47-48 G4-24 P12 G4-EN31 P40/P46 Stakeholder G4-25 P11 G4-EN32 P45 engagement G4-26 P12 G4-EN33 G4-27 P12 G4-EN34 G4-28 About this report G4-LA1 P52 G4-29 About this report G4-LA2 P51 G4-30 About this report G4-LA3 Report pro le G4-31 About this report G4-LA4 G4-32 P66/P67/P68 G4-LA5 G4-33 P67/P68 G4-LA6 G4-34 P6/P10 Labor G4-LA7 P51 G4-35 P10 practices G4-LA8 P51 G4-36 P10 and G4-LA9 P49/P53 G4-37 P10/P11 decent work G4-LA10 P53/P54 G4-38 P6 G4-LA11 P53 G4-39 P10 G4-LA12 P52 G4-40 G4-LA13 P51 G4-41 G4-LA14 G4-42 P6/P10 G4-LA15 G4-43 G4-LA16 G4-44 P10 G4-HR1 Governance G4-45 P11/P12 G4-HR2 P53 G4-46 P10 G4-HR3 P51 G4-47 G4-HR4 G4-48 About this report G4-HR5 P51 G4-49 Human rights G4-HR6 P51 G4-50 P11 G4-HR7 P53 G4-51 P52 G4-HR8 G4-52 G4-HR9 G4-53 P52 G4-HR10 G4-54 G4-HR11 G4-55 G4-HR12 Ethics and G4-56 P5 G4-SO1 P59-60/P64 G4-57 About this report/ P28/P51 G4-SO2 integrity G4-58 About this report/ P28/P51 G4-SO3 G4-EC1 P33 G4-SO4 P35 G4-EC2 G4-SO5 P35 G4-EC3 P51 Society G4-SO6 G4-EC4 G4-SO7 Economics G4-EC5 P51 G4-SO8 G4-EC6 G4-SO9 G4-EC7 P59-60/P64 G4-S10 G4-EC8 P60/P64 G4-S11 G4-EC9 G4-PR1 P17-22/P29-32 G4-EN1 P18 G4-PR2 P25/P29-32 G4-EN2 P46/P48 G4-PR3 P46 G4-PR4 G4-EN3 P40 Product G4-PR5 P25-26/P28 G4-EN4 P47-48 Environment responsibility G4-PR6 G4-EN5 P40 G4-PR7 G4-EN6 P40/P46/P48 G4-PR8 G4-EN7 P45-48 G4-PR9
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Assurance Statement of Corporate Social Responsibility Report
TUV Asia Pacific Ltd. (‘TUV NORD’) has been commissioned by the management of China Mengniu Dairy Company Limited (Hereinafter ‘Mengniu Company’) to carry out an independent assurance of the Corporate Social Responsibility Report from the year 2008 to 2013 (Hereinafter ‘the Report’）.
Mengniu Company is responsible for the collection, analysis, aggregation and presentation of information made available in the Report. TUV NORD’s responsibility in performing this work (assurance of the report) is in accordance with terms of reference agreed in the scope of engagement with Mengniu. Mengniu is the intended users of this statement.
This statement is based on the assumption that the data and information provided in the report is complete and true. This Report is the second Corporate Social Responsibility Report publicly published by Mengniu Company, and it’s the first time for Mengniu Company to invite the third party to give independent assurance.
Assurance Scope The Report revealed the accuracy and reliability for key performance, information and management system which happened in the period from 2008 to 2013. The address where the assurance was implemented is the CSR department of Mengniu Company which locates in Floor 29, Block A, International Finance Center, Jia 8 Jianguomen Wai Avenue, Chaoyang District, Beijing, P. R. China. The production plants and related stakeholders were not visited. We evaluated the management process concerning the collection, analysis, aggregation of the information and data. Due to finance data had been audited by the third audit firm, and published in Mengniu 2013 annual report, so the correctness of the financial data in the Report is not in our assurance scope.
Assurance of the Report was implemented on 19-20.08.2014.
Assurance Methodology Assurance process including following activities: Review the document information which provided by Mengniu Company; Interview the persons who collected the report information; View related websites and media reports, verify the data and information through sampling method; Refer to GRI Sustainability Reporting Guideline (G4) on balance, comparability, accuracy, timeliness, clarity, reliability, and give the evaluation; Refer to AA1000 AS (2008) Assurance methodology, and ISO 26000 Social Responsibility Standard.
Assurance activity is based on the procedures of TUV NORD CSR report assurance, and planned, implemented and gave the result regarding reasonable basis which identified by TUV NORD.
Assurance conclusion
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Mengniu Company Corporate Social Responsibility Report provides an appropriate and objective view of the sustainability & social programs and performances during the period from 2008 to 2013. The data in the Report is reliable and objective, TUV NORD didn’t find the systematic error or essential mistake. The disclosed information is clear, comprehensible and available; The Report takes ‘Live for drop of Happiness’ as the theme, and discloses the CSR philosophy, practices, result and typical cases from 6 fields covering food healthy and safety, product and service innovation, efficient operation and management, low carbon emission and green development, staff care and growth, community participation and development. Mengniu Company had set up CSR committee, and already carried out related CSR works.
Suggestion for improvement Regarding the assurance and evaluation, we suggested Mengniu Company improve CSR practice and management in the following aspects: Disclose more information on negative performance and company corresponding countermeasure, intend to improve the balance of the Report; Disclose more data on the subject of climate change, intend to reflect the efforts and contributions on CSR aspect.
Special statement This statement excluding: The activity outside the information disclosure; The position, viewpoint, faith, object, developing direction, and commitment which stated by Mengniu Company.
Statement of Independence and Competence TUV NORD Group is the world’s leader in inspection, testing and verification, operating in more than 70 countries throughout the world and providing services which includes management systems and product certification; quality, environmental, social and ethical auditing and training; environmental; social responsibility and sustainability report assurance.
TUV Asia Pacific Ltd. affirms its independence fr om Mengniu Company and confirms that there is no conflicts of interest with the organization or any of its subsidiaries and stakeholders when performing the assurance of the Report. TUV Asia Pacific Ltd. was not involved in any manner with Mengniu Company, when the latter was preparing the Report.
TUV Asia Pacific Ltd.
Team leader：Huang Li Authorized person ：Song Haining
Date：20.08.2014 Date : 21.08.2014
Please refer to the Chinese version upon the difference between English version and Chinese.
68 Expert Review
Mengniu's Social Responsibility Report 2008-2013 has systematically disclosed the corporate vision of becoming a "consumer-orientated and innovation- driven nutritious and healthy food company" and has fully demonstrated the characteristics in dairy industry and re ected the conception and practices of Mengniu to present consumers with safe, high-quality and healthy dairy products.
The report came out with an innovative concept of the sustainable ecosystem. Mengniu included its clients and partners, including consumers, suppliers and city managers into its corporate social responsibility management, to build a sustainable ecosystem. Mengniu advocates the ideas of value sharing and provides development platforms for all stakeholders on the industrial chain. Through cooperation of all parties involved, Mengniu works out an overall strategy on solving social issues and on meeting social demands.
The report re ected value creation in corporate social responsibility management. The report focuses on six core areas in corporate management and operation and discloses the social responsibility management systems and speci c actions in practices in each core areas. We can intuitively see scienti c corporate social responsibility management systems and feel the values created by Mengniu in the corporate social responsibility management.
The report is informative and well-structured. The report makes innovations to report structures and each chapter is started with an opening story, leading readers to the management systems in di erent areas. The responsibilities and practices are speci ed under the management system. The report complies with the codes and standards on social responsibility report and also demonstrates the characteristics in the industry and the company.
The report design echoes with the era of mobile internet in that it is provided with graphic display and images and illustration are added based on the content, which can vividly describe the values of all the e orts made by Mengniu. The Report is written brie y and concisely, easy to read with each chapter being an independent structure. It has shown the characteristics of communication in the ear of mobile internet.
Yin Gefei, Deputy Director of China WTO Tribune
I am totally attracted by the abundant information, in-depth thoughts and beautiful appearance of the report after I nished reading it, and I am especially touched by the sincerity and minds of Mengniu in undertaking its social responsibilities. I have to say that this is an excellent and valuable CSR report!
Throughout the report, I can feel the practical e orts in all aspects made by Mengniu, as a leading company in the dairy industry, to rebuild Chinese people's con dence and trust in the domestic dairy products. The saying that "Food is the paramount necessity of the people, and milk is the rst choice as food, while safety is an important priority to milk" is far more than a slogan but a supreme creed for people working at Mengniu. On the basis of seven major quality certi cations, including the ISO 9001, ISO 14001 and OHSAS18001, Mengniu also participated in drafting national standards and information collection for international standards on food and dairy products. Mengniu is leading the continuous improvement of quality and safety in the dairy industry.
Employees are the main body of a company. Mengniu regards its employees as source of its sustainable development. Mengniu established its unique "Mengniu 100" system, with which Mengniu established a complete training system covering all groups from management trainees to decision-making managers in the company and broke the boundaries of internal business in the company. Mengniu is making constant e orts to train excellent talents for its company and the entire society and on the other hand it meets the needs of employees for personal development.
The report is compatible with international standards and has shown its characteristics in globalization. The report is prepared with reference to ISO 26000 and con rms the six major social responsibility topics for Mengniu. The report covers all the G4 core indexes and provided a useful model and reference for drafting of reports by Chinese enterprises in accordance with G4 requirements.
Chen Yuanqiao, Senior Principal Researcher from China National Institute of Standardization
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Social Responsibility Report of China Mengniu Dairy Company Limited of China Mengniu Dairy (2008-2013) Report Responsibility Social Little Happiness Matters
Social Responsibility Report of China Mengniu Dairy Company Limited (2008-2013)
SEHK Stock Code: 2319
Social Responsibility Department of China Mengniu Dairy Company Limited Address: 29F Tower A, 8A International Finance Center, Jianguomenwai Avenue, Chaoyang District, Beijing Post Code: 100022 www.mengniu.com.cn This report is made of degradable paper that is environment-friendly and recyclable