INTEGRATED REPORT - 2015
Voluntary
commitments
NUMBER OF UNITS / NUMBER OF PARTICIPATIONS
A
COMPANY
BUILT TO
LAST
In Brazil, which is our main market,
due to the political and economic
scenario, we had to react quickly
in 2015, with measures that
would safeguard our operations
and business activities.
At the same time, we continued with our long-term investment plan in order to increase
our geographical diversification and consolidate our position in markets with high growth
potential.
The economic recovery in the
United States and the improved
performance of our operations
in North America, Europe, Africa
and Asia offset the decline in
consumption in Brazil. The devaluation of the R$/US$ exchange
rate also contributed positively
to our consolidated results.
We were the first Brazilian
company to make a bond issue in
the international capital markets
in 2015, in the amount of EUR
500 million.
For our employees, we are
committed to creating an increasingly challenging internal environment. In 2015, we invested
20 million reais in the development of our teams. For our customers, we improved the average
service time and our product
quality index in all segments.
Sustainability is one of the main
drivers of our business activities.
We developed a Sustainability
Strategic Plan and established
a series of commitments and
targets to be achieved by 2020.
In 2015, we participated in the
COP 21 meeting in Paris and
created a new area to seek new
options for Alternative Fuels and
Raw Materials (AFR).
We still have much to build for
this and future generations.
OUR BUSINESSES AND MARKETS
Cement
Plants
Grinding
Mills
Concrete Batching
Centers
Aggregates
Plants
Mortar
Plants
Lime
Plants
We are signatories of
the following voluntary
global and national
pacts and initiatives:
1. United Nations Global
Compact (UNGC) – This is
a United Nations initiative
to encourage companies
to respect human rights,
support decent work, protect
the environment and fight
corruption;
● CEMENT
● CONCRETE
● MORTAR
● AGGREGATES
37,2 MILLION METRIC TONS
IN 2015
10,2 MILLION M3 IN 2015
1,8 MILLION METRIC TONS
IN 2015
26,7 MILLION METRIC TONS IN 2015
In Brazil, we market concrete
in 15 Brazilian states through
our Engemix affiliate, a
well-known brand name
that specializes in concrete
batching centers.
Our biggest business area
and main product is still
cement.
APPLICATIONS: It is the basic
component of concrete and
mortars. Cement is used
in construction in general,
for industrial, commercial
and residential surfaces and
floors. It is used in all types of
infrastructure construction.
APPLICATIONS: Composed of
a mixture of cement, sand,
aggregates and water, it is the
most common construction
material. It is also used for
paving outdoor areas.
LIME
HYDRATED LIME
A material with a plasticizing
capability, used in construction
and mortars.
We provide gravel and sands
of different grain sizes for the
construction industry, to meet the
needs of the market segments for
concrete producers, industries,
infrastructure, paving and retail.
In Brazil, we produce three
ranges of mortars: the
Matrix brand, which is a
range of standard mortars,
the Votomassa brand, a
range of adhesive mortars
and Decoratta brand, a fine
plaster for finishing masonry.
APPLICATIONS: It is used to
join blocks or bricks, finish
surfaces and lay ceramic tiles.
LIME PAINT
Economically attractive
material, used to paint large
areas at a lower cost.
APPLICATIONS: Materials used
mainly for the manufacture of
concrete but also for: asphalt,
pre-cast slabs, reinforced concrete
structures, pre-cast concrete
artifacts, cyclopean concrete, and
materials for landfills, drainage,
base and sub-base of highways
and paved areas.
● AGRICULTURAL
LIMESTONE
Used in agriculture and in
animal husbandry in order
to: correct soil acidity,
neutralize aluminum toxicity,
increase the efficiency of
fertilizers and improve
nutrient availability. Due to
the high levels of calcium
and magnesium in its
composition it also provides
these macro-nutrients for
crop development.
33.3
VOTORANTIM
CIMENTOS BRAZIL
VOTORANTIM CIMENTOS
NORTH AMERICA
5.2
3.2
17 10 104 18
9
2
3.0
Great Lakes ● ● ●
United States/Canada
In 2015 we inaugurated three production
units: a cement plant in Edealina (GO),
with a capacity of 1 million metric tons/
year; a mortar plant in Camaçari (BA);
and an agricultural lime production plant
in Arroio Grande (RS).
4/1
5.9
●●●●
1.2
0.8
Spain
●●●
Morocco
Florida ● ●
5
Expansion of our Charlevoix plant
in Michigan, United States. The
production capacity of the plant
will be increased from 1.3 to 1.9
million metric tons/year. Our plant in
Bowmanville, Canada, received its first
long-term government authorization
to use low-carbon fuels.
Turkey ● ● ●
1.8
2 103/18 43
China ●
Tunísia ● ●
1.2
India ●
VOTORANTIM CIMENTOS
LATIN AMERICA
● Peru
5
0.2
2/1 6/43 1/16 1/1 4
We signed a financing agreement for the
construction of a new cement plant to be
constructed in Santa Cruz Province, Bolivia.
In Argentina, we approved an expansion
project in San Luis, which will increase its
production capacity to 993 thousand metric
tons/year. Also in Argentina, we invested
US$ 12.6 million in the modernization of a
lime factory to serve the construction market.
We started up operations at an adhesive
mortar plant in Uruguay, with a capacity
of 25 thousand metric tons/year.
2.2
2.8
● Bolivia3
VOTORANTIM CIMENTOS
EUROPE, ASIA AND AFRICA
BRAZIL ● ● ● ●
São Paulo
0.5
●●●
●●●
Chile2/6
14
Uruguay4 ● ● ● ●
Argentina1/6
1. Argentina, participation of 49% (Avellaneda) | 2. Chile,
participation of 16.7% (Bio Bio) | 3. Bolivia, participation of 67%
(Itacamba) | 4. Uruguay, participation of 51% (Artigas) | 5. Includes
100% of the installed annual capacity of Suwanee, which is not
consolidated in VCSA's financial statements | 6. Includes 100% of
the installed annual capacity of Bío Bío and Avellaneda, which are
not consolidated in VCSA's financial statements
INSTALLED ANNUAL
CEMENT CAPACITY OF OUR
CONSOLIDATED OPERATIONS
1 MILLION
METRIC TONS
=
55,5
MILLION
METRIC
TONS/YEAR
83 MARACANÃ
STADIUMS
8 104 21 2
Expansion of our cement factory
in Sivas, Anatolia, Turkey. The new
production line, which has a planned
capacity of 1.2 million metric tons/
year, is expected to begin operations
in early 2017. This investment,
amounting to EUR 140 million, is
the largest ever made by Votorantim
Cimentos outside the Americas.
2. Cement Sustainability
Initiative (CSI) – This is an
international cement industry
protocol, signed by the 25
largest producers of building
materials in the world, to
promote the adoption of best
practices in the cement sector;
3. Business Pact – "In the
Right Direction" Program
– By signing this pact
the signatories commit
to combating the sexual
exploitation of children and
adolescents along Brazilian
highways;
4. SBE-VC-RBMA Technical
Cooperation Agreement –
This is a partnership among
Votorantim Cimentos, the
Brazilian Society for Speleology
(SBE), and the Atlantic
Forest Biosphere Reserve
(RBMA) to develop social and
environmental practices that
contribute to the protection of
caves and the Atlantic Forest
biome;
5. Global Reporting Initiative
(GRI) – This is an independent
international organization that
helps businesses, governments
and other organizations to
understand and communicate
their impacts on critical
sustainability issues such as
climate change, human rights,
corruption and many others;
6. Open Letter to Brazil on
Climate Change (ETHOS
Institute) – This is a Brazilian
business sector initiative,
coordinated by the ETHOS
Institute, under which the
company makes a number
of commitments to combat
climate change.
KEY ACTIVITIES
CUSTOMER
SEGMENTS
MANAGEMENT OF PROJECTS AND INDICATORS
Advocacy
B2C
RETAIL
Distributors: small
retailers, home centers
B2B
REAL ESTATE
Construction companies
INFRASTRUCTURE
Infrastructure construction
companies
INDUSTRIAL
Concrete batching centers
Precast concrete industry
Concrete artifacts industry
Fiber cement industry
Mortar industry
1
2
3
4
RESEARCH*
PLANT
CONSTRUCTION
MINING
PRODUCTION
KEY ACTIVITIES
1
2
3
VALUE PROPOSITION
Brand credibility and legacy
Process improvement and bureaucracy reduction
Investments in sustainability
Customer relations
Quality and variety of the product range
Technical expertise and safety at work
IMPACTS BY ACTIVITY
Positive impacts
Negative impacts
SOCIAL
Generation of Employment and Income
Modernization of Public Administration
Overloading of local infrastructure
Truck traffic
ENVIRONMENTAL
Social and environmental education
Archaeological and paleontological protection
Rehabilitation of degraded areas
Removal of vegetation
Noise
Emissions of particulate matter
Impacts (soil, biodiversity and communities)
Biodiversity management
Waste
Co-processing
CO2 emissions
Other emissions (NOx,SO2,etc.)
Effluents
ECONOMIC
Taxes on contracted services
Taxes on mineral exploration (CFEM)
Taxes on the acquisition of goods and services
Taxes on the sale of products and services
* Geological research, Research and Development (R&D) and Market research
4
5
6
7
OTHER STAKEHOLDERS
Shareholders
Investors
Financial institutions
Employees: own and
third-party contract staff
Society
Local community
Class associations
8
MAIN RESOURCES
Investment capacity
People
Mines
Natural resources
Fuel
Energy
Water
Inputs
Firewood
Machinery/equipment
Gas
Vehicle fleet and concrete mixers
Plants
Infrastructure
Concrete batching centers
Media and marketing
Distribution centers
IT
Technology center
PARTNERSHIPS AND
STRATEGIC ALLIANCES
● Community/Social license
● Universities
● Training Schools
● Environmental Institutes
● Government entities
● Trade Unions
● Government
● Class Associations
● Banks
● Suppliers
● Equipment Suppliers
● Coke Suppliers (fuel and additives)
● Supplier of alternative fuels
● Co-processing services
● Transport companies and independent
truck drivers
● Brazilian Army (explosives)
● Cementitious products companies
● Opinion leaders/influencers
● Customers/promoters
● Newspapers, magazines, TV and websites
● Customers
● Key accounts (Large construction
companies and Home Centers)
● Technical Laboratories
MATERIALITY
5
6
7
8
INBOUND/
OUTBOUND
LOGISTICS
COMMUNICATION
SALES
AFTER-SALES
SERVICE
Services
Financial Capital
Human Capital
Social and relationship Capital
Natural Capital
Mine closure
STRATEGIC DRIVERS
Customer
Focus
A Ethics, transparency and integrity
Empowered
People
Operational
Excellence
Sustainable
Practices
B Occupational health and safety
C CO2 emissions
D Anti-corruption practices
KEY ACTIVITIES
1
2
3
4
5
6
7
8
and compliance with the competition laws
E Regulatory risks
PERFORMANCE INDICATORS
Community engagement
Reduction in emissions of NOx and SO2
Use 30% of alternative fuels
Security (fatality rate)
Water and biodiversity
Ethical business practices (conduct code)
AFR - Alternative fuels target
EBITDA
Sustainability in the supply chain
Reduction of CO2 emissions
Global Environmental Policy and Green Rules
Cash Cost process
Clinker / Cement Factor
IQP processes
Commercial NPS
OEE - Productivity and Quality
Tmac - Customer Service
Index of engagement
F Supply chain management
G
G Contribution to local I
development
E M
C
K
L
E
B
E
O Q
H Economic performance: I Community relations
A D
C
K
J Government relations
L
K Energy efficiency
H
F
G
C
I
C
P
P
P
C K L MN O
economic value generated
and distributed
L Alternative sources of
electricity and fuels
M Air emissions (Particulate
Matter, NOx and SO2)
N Management and re-use of civil construction waste and reverse logistics for used cement bags
O Water consumption
P Customer satisfaction
Q Biodiversity conservation
SOCIAL PERFORMANCE
ECONOMIC PERFORMANCE
In a year which saw a sharp downturn in the Brazilian market, we revised our organizational structure, with the challenge
of seeking a balanced budget and at the same time, preserving the knowledge base and maintaining the company in a
state of preparedness for an upswing in the economy. We recorded a significant improvement in our Organizational Climate
Survey indicators, in several countries, as a result of the strengthening of our corporate image as a global company.
Our long-term strategy, which focuses on geographic diversification, commitment to improve operational excellence
and financial discipline (cost reduction, divestiture of non-strategic assets, extended debt profile and an adequate level of
liquidity), demonstrates the company's capacity to adapt to any scenario, including, principally, unfavorable situations, such
as that experienced in Brazil. These actions enabled us to maintain our leadership position in the Brazilian market and to
consolidate our position in other countries where we operate, without impacting the investors' confidence in the company.
TOTAL EMPLOYEES
2013
2014
2015
16,756
15,779
15,288*
NUMBER OF SOCIAL PROJECTS – 2015
WOMEN EMPLOYED
11.7%
10.5%
12.3%
EMPLOYEES OVER 50 YEARS OLD
9.9%
17.9%
19.9%*
-
73%
76%
* Figures do not include China
ENGAGEMENT INDEX BRAZIL
EXECUTED
SOCIAL INVESTMENTS – R$ MILLION
7.5
2014
2015
6.8
CONTRACT STAFF
9
7
3
2014
THIRD PARTIES
8
3
1
EMPLOYEES
3
1
0
Cement, aggregates and concrete*
EBITDA
R$ MILLION
3,483
CONSOLIDATED
3,512
3,231
8.4
2013
NUMBER OF FATALITIES VCBR
112
110
BUDGETED
* Figures have changed since 2014 they now include China
OWN
THE VOTORANTIM
7.6 INSTITUTE +
THIRD-PARTY FUNDS +
TAX INCENTIVES
2,679
BRAZIL
2,709
2015
1,916
FOR EVERY R$ 1.00 INVESTED
IN SOCIAL PROJECTS INTHE
COMMUNITY, VOTORANTIM
CIMENTOS GENERATED A RETURN OF
R$ 4.54 . Result of a study on the return
LOST TIME RATE FRENQUENCY 0.74
(number of injuries with lost time compared to
millions of man-hours worked, included injuries
to third parties. We recorded the lowest global
injury frequency rates in the last ten years.
on social investment at our cement plant
in Primavera (PA), using the Return on
Investment (ROI) methodology.
EUROPE, ASIA
AND AFRICA
373
741
414
NORTH AMERICA
356
ENVIRONMENTAL CAPEX AND OPEX – R$ MILLION
2014
2015
79
67.8
93.1
51.2
41.6
OPEX Environmental expenses
33.3
91
88
2013
2013
CAPEX Environmental investments
302
LATIN AMERICA
74
ENVIRONMENTAL PERFORMANCE
483
20141
2015
NET REVENUE
R$ MILLION
SPECIFIC CO2 EMISSIONS – kg CO2 /METRIC TON OF CEMENTITIOUS PRODUCT
GROSS
657.1
657.3
659.3
NET
649.6
646.8
647
NITROGEN OXIDES (NOX)
65,407
61,005
56,997
SULFUR DIOXIDE (SO2)
22,665
20,735
22,149
PARTICULATE MATTER
3,302
3,126
1,977
CLINKER FACTOR – TARGET 2020 - 72%
76.1%
74.7%
73%
SPECIFIC CONSUMPTION OF ELECTRICITY
109.4
112.2
109.1
OTHER AIR EMISSIONS – METRIC TONS/YEAR
kWh PER TON OF CEMENTITIOUS PRODUCT
ENVIRONMENTAL PRODUCT
DECLARATIONS
We prepared five environmental product
declarations for existing products selected
from the cement, concrete, and mortar
product ranges. We used the methodology
defined by ISO 14025 (EPD) and ISO 14040
(LCA), and a software package developed
by the Cement Sustainability Initiative
(CSI). These declarations are of particular
interest to companies seeking certification
under the Leadership in Energy and
Environmental Design (LEED) standard.
+7%
We created a new business unit
focused on Alternative Fuels and
Raw Materials (AFR), aimed at
increasing co-processing and the
use of alternative fuels to replace
fossil fuels. At a global level we
increased our rate of utilization of
alternative fuels from 7.8% in
2014 to 8.9% in 2015. This was
an important initiative for reducing
carbon dioxide emissions.
14,046
GLOBAL
13,130
BRAZIL
8,545
-8%
7,831
PRODUCT LIFE-CYCLE ASSESSMENTS
We conducted two studies to assess the environmental performance of our products, considering the impacts
throughout their life cycles, from the extraction of natural resources to their final disposal or recycling.
1. Eco-efficiency of the cement produced on Rio
2. The environmental and economic
Branco unit (PR) (2005 to 2014) - In a comparative
analysis, the cement produced in 2005 is more ecoefficient
than the 2014, however, the performance of our product
has improved in the last few years, being necessary 9%
less cement for the same cubic meter of concrete. The final
results put the 2014 concrete in a more ecoefficient position
than the 2005 concrete. Besides that, the production cost
of Rio Branco's cement in 2014 is lower compared to 2005.
performance of a rigid concrete pavement
and a flexible asphalt pavement for the
construction and maintenance of a highway
over a period of twenty years. The rigid concrete
pavement, which is currently used in only 4%
of Brazil's highway network, is 53% more
eco-efficient and costs 54% less, considering
the costs of construction and maintenance.
NORTH AMERICA
2,290
EUROPE, ASIA AND AFRICA
1,974
LATIN AMERICA
340
+55%
3,544
+17%
2,308
+19%
2014
1
1. Figures have changed since 2014 they now include China
2. Includes R$ 117 million of derivative transactions
405
2015
BRAZIL – In 2015 the economic and
political crisis accelerated significantly,
requiring a fast reaction on our part.
We adapted our business structure
to the new market conditions by
focusing on operational excellence
and cost optimization. According
to the National Cement Industry
Union (SNIC), the apparent cement
consumption decreased by 9.5% in
2015 compared to 2014. The main
factors causing the fall in consumption
were increased unemployment, reduced
credit availability and a deceleration in
construction sector activity.
NORTH AMERICA – The recovery of
the North-American market, combined
with the devaluation of the R$/US$
exchange rate, helped us to offset the
decline in our business in Brazil. The
operating performance for the year
was the best since our acquisition in
2001. According to the United States
Geological Survey (USGS) and the
Canadian Cement Association (CAC), the
cement consumption in the Great Lakes
Region, Florida and Ontario grew by
6.3%, 8.1% and 4.3% respectively.
EUROPE, ASIA AND AFRICA – In
Europe, Asia and Africa, we have
different dynamics for each market.
The highlights of the year were the
economic recovery in Spain, the high
rate of capacity utilization registered
in our operations in North Africa
and Turkey, and the impact of the
devaluation of the R$/EUR exchange
rate on the consolidated results. At
year-end we consolidated the results
of our operations in China, due to IFRS
requirements. Previously, since 2012,
these assets had been accounted for as
assets for sale. However, we have no
intention to hold these assets in China
and will continue to seek buyers.
LATIN AMERICA – We only
consolidate the results of our
operations in Bolivia and Uruguay.
All these countries, especially Bolivia,
are emerging markets that have growth
potential. According to estimates
published in The Global Cement Report,
the consumption for Bolivia and
Uruguay in 2015 increased by 7.9%
and 4.3% respectively.
DEBT AND
LEVERAGE AT
YEAR-END 2015
R$ MILLION
19,497
GROSS DEBT
4,734
CASH + FINANCIAL
INVESTMENTS
2
14,646
NET DEBT
AMORTIZATION
PROFILE EXTENDED
We were able to access
financing lines at attractive
terms and interest rates,
which enabled the company
to extend its debt profile,
thus ensuring greater
liquidity and reducing
refinancing risk.
We were the first
Brazilian company to
make a bond issue in
the global capital markets
in 2015. We raised
EUR 500 MILLION
with a maturity date of
2022 and an interest rate
of 3.5% per year.
OUR TARGETS FOR 2020
Sustainability is inherent to our business approach and activities. It is also
one of the main drivers of our strategic plan. To highlight its importance
and to stimulate a change of attitude in our employees, encouraging them
to constantly pursue sustainability and innovation in doing business, we
established our Sustainability Commitments for 2020.
MAIN R&D
AND QUALITY
PROJECTS
NEW PRODUCTS
 Target achieved  Target on schedule  Target behind schedule
SAFETY

To ensure the effective adoption of the
Global Health and Safety Policy and the
Life Saving Rules.

To implement sustainable supply chain
standards.

Promote healthy working conditions
and zero harms environment for all
our employees. To reach zero fatalities
and a LTI* Rate for direct employees of
less than 0.4.
ETHICS AND COMPLIANCE

Ethical Business Practices: to ensure
that all of our operations are carried out
in an ethical manner and in conformity
with the Votorantim´s Code of Conduct.
ECO-EFFICIENCY AND INNOVATION

Sustainable products and services:
to promote the implementation of new
sustainable solutions, products, services
and innovation – achieve a clinker/
cement factor of 72%.

CO2 emissions: to reduce our CO2
emissions per ton of cement by 25%
compared to 1990 levels.

PM NOx SO2
Air emissions: to reduce particulate
matter, NOx and SO2 emissions per ton
of clinker to 65g, 1950g and 750g / ton
of clinker, respectively.

Water and biodiversity: to implement
water management plans for scarcity
areas in our business units.


COMMUNITY ENGAGEMENT
Supply chain standards: to promote
sustainable supply chain standards by
way of our business units.

Non-fossil fuels: to use 30% non-fossil
fuels in our cement plants.
DECORATTA
Development of a surface finishing
product, aimed at a practical form of
application and a fast drying time. Up to
30% reduction in the application time.

Water and Biodiversity: to ensure that
all of our quarries have rehabilitation and
biodiversity management plans for local
and sensitive biodiversity regions.
Environmental Policies: to ensure
the implementation of our Global
Environmental Policy and Green Ruless.
ACTIVATED POZZOLAN
Production of activated pozzolan from
the calcination of kaolin clay and
limestone, aimed at improving cement
quality and reducing costs.

To ensure the implementation of
a community engagement plan in
communities where we operate that
have a high degree of social vulnerability.
* (LTI Lost-time injury) is defined as an occurrence which results in a
fatality, permanent disability or lost time at work for a shift or more.
PERVIOUS CONCRETE
Development of a concrete with a high
degree of porosity for use in pavements,
that has a a number of benefits.
COST REDUCTION
MANGANESE SLAG
Manganese slag is used to improve
cement quality and reduce costs.
DOWNLOAD THE COMPLETE VERSION OF THIS REPORT AT:
www.votorantimcimentos.com/pt-BR/sustainability/Paginas/Integrated-Report.aspx
E-MAIL FOR CONTACTS: [email protected]
Period of analysis for this report: January to December 2015.
ZERO LOSS I
Aims to re-use concrete by the
addition of stabilizers.