IDAVANG RussIA REPORT ON sOCIAL REsPONsIBILITY

IDAVANG Russia
REPORT ON SOCIAL RESPONSIBILITY
2013
CONTENTS
PROFILE AND STRATEGY
4−7 psl.
CORPORATE SOCIAL
RESPONSIBILITY POLICY
8−15 psl.
SOCIAL RESPONSIBILITY
GOALS IN 2014
16−17 psl.
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PROFILE AND
STRATEGY
ABOUT IDAVANG RUSSIA
Background and business
development
In 2007 Danish farmers who had founded pig Production
Company UAB Saerimner in Lithuania in 1999 decided to expand
their business to Russia. North-western region was chosen as a
strategic point because of its geographical position and undersupplied
market. The first project was acquisition of old pig farm built in 1973
(former state farm Vostochny). The farm was purchased in April
2008 and in June first weaners were brought from Lithuania for
fattening. In the same year Idavang started developing project in
the Pskov region where about 3500 ha of land were rented from
Ostrov municipality. We started to plough the land and grow grain
which was used to make feed for pigs in Vostochny. The old pig
farm Vostochny was renovated in 2009-2010, new closed lagoons
for manure were built and later on the whole unit for processing
slurry – EPP (Environmental Processing Plant) which separates slurry
into manure, ammonia water used as fertilizer and technical water.
In 2013 Vostochny farm sold over 180 000 slaughter pigs.
In 2011 construction of brand new farm was started in Ostrov.
In 2012 silos for 18 000 tons of grain as well as first six barns
were commissioned and the first breeding sows were brought from
Denmark. Last year we started selling first slaughter pigs in May and
by the end of the year we had sold about 50 000 slaughter pigs from
the new farm. The total cropped area in the Pskov region reached
4800 ha and the total yield was more than 16 000 tons.
In 2012 we started growing grain in Luga district of the
Leningrad region were more than 7 000 tons of grain were cropped
last year from the area of 2138 ha. Thus there are two main activities
in Russian companies of the Idavang group – growing slaughter pigs
and grain which is used for feed production. Growing our own grain
allows us not only to cut the production costs but also use all slurry
as organic fertilizer minimizing negative impact on the environment.
Structure
In 2013 Idavang Group managed business in Russia through
two companies: Rurik Agro (in the Leningrad region) and Idavang
(in the Pskov region). Each company besides the pig farm and the
fields around it has an independent separate grain growing division
– Rurik-Agro in Luga district and Udray in Velikoluksky district. The
Company has three sister companies in Lithuania: Saerimner, Kepalių
bekonas and Pasodėlė. Saerimner Group also includes construction
company Agrostatyba. All companies, Russian and Lithuanian belong
to Danish company Idavang whose shareholders are Danish farmers
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and the International Finance Corporation (IFC), which is a part of
the World Bank. The Chairman of the Board: Claus Baltsersen;
members: Jytte Rosenmaj, Michael Henriksen.
Financial results. As compared with 2012, the Consolidated
sales income of Idavang group Russia grew up for 9 %. In 2013,
Rurik-Agro and Idavang sold more than 230,000 pigs.
Taxes. Both Rurik-Agro and Idavang are one of the biggest
tax payers in their respective communities; our taxes constitute
considerable part of local budgets thus helping to improve living
conditions in rural areas.
Market. We sell all our slaughter pigs in Russia, about 90%
of all pigs are sold in the North-western region and the rest go to
the Central region of the Russian Federation.
Customers. Our customers are major meat processing
companies and slaughterhouses in the North-western region of
Russia such as Vsevolozhsky Myasnoj Dvor, MPK Tosnensky, TD
Lesnoe, Velikoluksky Meat Processing Plant, Myasnaya Lavka, Bekon
and other small slaughterhouses.
Partners. Each year we purchase approximately 50,000 tons
of grain from all over Russia (the Kursk region, the Tambov region
and Siberia).
Employees. Approximately 390 people work in our farms;
the majority of them live in rural areas. We also create 1,000 more
indirect jobs through our partners. Rurik-Agro and Idavang employ
equal number of men and women; the average age of employees
is 35-40 years.
Membership in organisations. We are members of the
Russian Pig Producers Union, the Investors’ Forum in the Pskov
region and the Leningrad Region Chamber of Commerce.
Reporting. At the end of each year we draw reports on
implemented social responsibility initiatives, publish them in our
website and share them with our employees. We also use regional
mass media to inform local communities about implemented social
responsibility initiatives.
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PROFILE AND STRATEGY
BUSINESS PHILOSOPHY
The clear corporate vision and mission is the foundation of our
business philosophy.
Our vision is to become a leader of high quality and healthy
pig farming in the North-western region of Russia and deliver high
quality and healthy pork for Russian consumers. We want to be
known among our clients, suppliers and buyers as an important,
reliable and stable business partner.
Our mission is to efficiently produce high quality products while
meeting all ethical and environmental requirements and to sell them
in deficient markets.
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•Respect and trust. Each employee and partner is extremely
important to us – we treat them fairly and with respect, and expect
the same from them in return.
•Quality and ethic. We follow animal welfare principles and
produce only high quality products.
•Transparency. We always act legally and justly, transparently
and fairly.
•Responsibility towards environment. We use high-tech
and adhere to social responsibility principles.
•Constant development. We are open to changes and
innovations, and responsible for personal and professional
improvement of our employees.
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Our values are the key guidelines of corporate activities that
help us purposefully achieve the set goals.
Values of Idavang:
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CORPORATE SOCIAL
RESPONSIBILITY
POLICY
Corporate social responsibility (CSR) policy, which is based on the
values of Idavang, consists of 8 principles:
1.Human rights. We strictly adhere to the internationally
recognised principles of human rights. We do not tolerate
forced labour or child labour.
2.Labour policy. We guarantee rational labour, rest and
holiday schedule as well as a reasonable remuneration system
for our employees.
3.
Responsibility to local communities. Local
communities are our partners. Our relationship is based on
trust, respect and transparency. We support the basic needs
of local communities and try to ensure their sustainable
development in every possible way.
4.Responsibility to the environment. We are responsible
for the environment in which we operate; therefore,
we develop environmentally-friendly agriculture. When
expanding our business, we always assess environmental,
sanitary and technological conditions of the newly acquired
farms. We renovate old buildings by applying the best world
practices. New farm in Idavang meets all European standards
and comply with all environmental and sanitary requirements.
5. Animal welfare. We follow the principles and general
requirements of European animal welfare rules.
6.Active leadership. We are one of the market leaders
in the North-western region of Russia and we understand our
responsibility to the regional economy. By representing the
most technologically and environmentally advanced business,
we support the domestic market and encourage it to get
closer to the latest and most advanced global standards.
7.Customer relations. Our business relations are based
on mutual trust. We follow the principles of transparency
and fair business practices in our co-operation with all our
customers and partners.
8.Anticorruption. We protect our reputation and
interests of our shareholders, and we have zero tolerance
to corruption in any form. Idavang employees do not take
bribes and do not try to bribe customers, agents, contractors,
suppliers, employees or representatives of public authorities.
Children‘s Playground in Tosno reg. which was sponsored by IDAVANG
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CORPORATE SOCIAL RESPONSIBILITY POLICY
Environment protection
Being responsible for the environment in which we operate, we
tolerate only the environmentally-friendly farming, pursue different
environmental initiatives and strictly adhere to Russian, EU and the
especially high IFC environmental requirements and standards, animal
welfare rules, prevention of pollution and odour control standards.
Modern farms
In pig farms managed by Rurik-Agro and Idavang we comply
with all environmental and sanitary requirements. Rurik-Agro farm
continuously undergo renovation in order to be in line with the
highest EU standards. The major share of the corporate profit is
invested into the renovation of farms; we have already contributed
approximately RUB 156 million to the environment-related renovation
of EPP, slurry processing unit which considerably diminishes the
negative impact to the environment. In previous 2013 year our
investment in development to EPP was more than RUB 4 mln.
Environmentally-friendly
transportation
For the transportation of equipment and raw materials from
Denmark and Lithuania to Russia we use international logistic
companies which try to ensure the most environmental friendly ways
of transportation. Most of our cargo from Denmark is transported by
sea to the port of St. Petersburg and for the inland routes we try to use
cargo carriage only by new EURO4 trucks that use ecological AdBlue
fuel additive for towing vehicles. It is a solution, which dissolves
nitrogen oxide into two non-hazardous substances, nitrogen and
water. It can only be used by towing vehicles equipped with special
SCR equipment, which together with AdBlue reduces environmental
pollution and thus the fuel consumption. Furthermore, we have
selected the method of optimal logistics, which has resulted in the
reduced fuel consumption during transportation leading to further
reduction of environmental pollution.
Environmentally-friendly
technologies
In Rurik-Agro we switched the boiler house from using diesel
to natural gas which is much more environmentally sound heating
technology.
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Preservation of resources
In order to preserve the environment and contribute to the
welfare of the future generations, we pay much attention to the
efficient and economical use of energy and material resources.
Therefore, in 2013, we regularly drafted information articles for
employees on the benefits of saving, thus encouraging employees
to implement saving not only at work but at home as well. We have
attached guides on preservation of resources on all our information
boards. In 2012 we established permanent working group on energy
saving, the goal of the group being to find the ways to decrease our
electricity consumption minimum 5% per year. The group analyses
the existing situations and works out measures and procedures to
reduce the energy consumption. In 2013 in the frames of the energy
saving program several items of the equipment with high energy
consumption (pumps and air compressor) were replaced with more
modern ones with lower energy consumption, up to 20% of all
electric lamps were replaced with energy saving ones.
Environmental activities
We try to contribute to the maintenance and improvement of the
environment at our local communities. In 2013 Rurik-Agro helped to
clean the drainage and fire protection channels in the forest located
next to the farm thus preventing possible forest fire.
Co-operation with neighboring
farmers
Every year we sell manure to the local farmers and we deliver
manure to their fields ourselves. Thus local farmers can save money
on chemical fertilizers and produce organic food using only natural
organic fertilizer. We also help local famers to cut grass in the season
when we are cutting grass on our fields situated next to them.
In 2013 we invested over RUB 70 million in order to meet
environmental requirements:
• Water supply in Rurik-Agro farm was renovated and the new
automatic chlorine dosage system was installed reducing the amount
of chlorine used for water preparation;
• New pumps and air compressor were installed at the water
cleaning station in Rurik-Agro reducing the energy consumption by
5%;
• Old fuel oil storage facilities were cleaned in Rurik-Agro;
• In Idavang closed lagoons for liquid manure were constructed,
commissioned and put into operation;
•We developed the users’ manuals for waste sorting and
continued educating our employees about their responsibility to
perform proper and environmentally-friendly waste management.
RELATIONSHIP WITH COMMUNITIES
From the very start of our activities we willingly contribute to the
improvement of the living conditions of local communities: support
the environment in which they live and contribute to the meaningful
leisure and all rounded improvement of these communities.
In 2013, in order to establish close relationship with potential
employees and to contribute to the quality of studies in the field of
agriculture, we signed a cooperation agreement with Agricultural
Academy in Velikie Luki and enlarged our co-operation agreements
with the Veterinary Academy in St. Petersburg and Agricultural
University in Pushkin.
We allocate to local communities: we help to repair
kindergartens, schools, art schools, community centers and libraries,
support excursions and trips for local school children, sponsor local
festivals. We allocate support after discussing it with community
leaders and with due consideration to the most important needs of
the community. We never refuse the demands for help, we always
discuss the possibility to help in some way with local community
boards and find the solutions to help in the most efficient way.
Helping does not always mean straight money donations, we often
help to find relevant information and partners, organize the work
and prepare application for various state programs.
it out free of charge to all people who attended the festival. Our
team was working for more than four hours and we gave out more
than 1000 portions!
For educational establishments
and their initiatives:
in 2013 we helped to repair heating system in our local
kindergarten in Nurma, we also helped local art school to install
new doors in order to comply with fire safety regulations, we donated
new computer for the local library and district municipality provided
free Internet access for schoolchildren and local people. Every year we
sponsor summer camp for teenagers and we did the same in 2013
and we also helped local children jazz orchestra to take part in Jazz
Parnas Festival in St. Petersburg where they got the first diploma.
In Ostrov municipality:
In 2013 we allocated more than RUB 1.5 million for the principal
areas supported by Idavang group Russia:
We helped local war veterans organization, local kindergarten
and schools, we bought materials (cloth, threads and buttons) for
local workshop for handicapped people. We continued helping local
school for children with development problems buying them books,
educational toys and special equipment
In Nurma municipality
(Tosno district):
For sports organizations and
events:
in 2013 our local village of Nurma celebrated its 200 anniversary.
We took active part in the preparation for the event and in the
festival itself. We installed new children playground in the village
and during the festival we made shashlyk from our pork and gave
we supported biathlon European Cup which took place in Ostrov
and bought 10 pairs of skis for local school children so they could
take part in youth competitions.
Anniversary in Nurma Leningrad district
Biathlon competition in Ostrov Pskov district - Idavang supported
young sportsmen
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CORPORATE SOCIAL RESPONSIBILITY POLICY
RESPONSIBILITY FOR EMPLOYEES
ANIMAL WELFARE
We unconditionally take care of the animal welfare in our farms. In
order to ensure the highest level of animal welfare and the efficiency
of production, we regularly review and assess our activities.
Safe environment in line with the principals of ethics. We
renovated the farm in Rurik-Agro in compliance with all laws and
regulations that concern animal welfare. The new farm in Idavang
was built according to animal welfare principals strictly following
Russian and European norms and requirements. We always consider
the principal interests of animals; therefore, the level of health and
performance in our farms is higher.
Hygiene. In our farms we guarantee high standards of hygiene
and sanitation, and we regularly inspect animal welfare conditions. As
all animals have different needs, we ensure regulated air temperature
and proper lighting. In 2013 our new farm in Idavang was awarded
4th (highest) compartment regarding bio safety which means that
we comply with all norms and rules of animal welfare. In Rurik-Agro
we renovated the roofs and installed the new heating system in
the finisher stables thus considerably improving conditions for the
animals.
Balanced nutrition. Feed is the main factor deciding the animal
health and welfare and determining the quality of meat. We ensure
balanced nutrition only by top quality grain, such as wheat, barley,
soy. We have instrument for humidity analysis of the grain and we
pay great attention to quality control of all incoming grain.
Qualified monitoring. Our company employs only highly
qualified specialists. Employees of Rurik-Agro and Idavang participate
in international fairs, trainings and continuously improve and develop
their knowledge and skills.
Transportation. In order to ensure the safety of transported
animals, we provide special training to all drivers who transport
animals. Persons who handle animals during transportation have
to attend training and be familiar with standards of performance.
In 2013 we made sure all our farms meet EU animal welfare
requirements, which came into force on 1 January 2013, so in our
farms you will find “toys” for pigs, enlarged pens, reduced gaps of
pen gratings.
People working in Rurik-Agro and Idavang are our greatest
treasure and potential. We wish that every employee, whatever
his/her position, seeks to be a highly qualified specialist capable
of contributing his/her knowledge and initiatives to good relations
between the company and neighboring communities, customers and
partners. When implementing our aspirations we especially focus on
ensuring the best possible working conditions.
Equal opportunities
We are always fair and open with our employees and potential
candidates: we offer equal employment, improvement and career
opportunities irrespective of the gender, age or nationality. We apply
fair remuneration system. We show zero tolerance to discrimination
and disrespectful behavior among employees. Our relationship with
employees is based on respect, we seek openness and transparency
in our cooperation. We provide all social guarantees.
Provision of good working
condition
We guarantee safe and convenient workplaces that meet
safety requirements. We regularly inspect the workplace conditions
and resolve issues related to occupational safety and health at
work, ensure periodical medical examination of employees. Field
department team has special medical check to ensure they can
work with agricultural chemical substances; we also provide special
training for them and control their use of individual protection means
(gloves, glasses, respirators, etc.). In 2013 we arranged external and
internal training on occupational safety issues in order to avoid any
accidents or incidents at work, and performed their prevention.
We provide employees with free working clothes and all required
individual protection means in order to ensure occupational safety.
Compliance with labor laws
We operate according to the laws that regulate the hiring and
dismissal processes, work and rest schedules. Persons engaged
in personnel management regularly refresh their knowledge by
attending various seminars and trainings.
Reconciliation of work and
private life
By fostering the loyalty of our employees and their satisfaction
at work and by increasing their efficiency we ensure the balance
between their professional and private lives. We encourage our
employees to get involved in socially responsible activities in their
community, to pursue their favorite hobbies, e.g. we organize
corporate competitions, various contests related to leisure activities
of employees. In 2013 we held contest of children drawing for the
children of our employees during which children had to draw their
mom or dad working place. All participants got souvenirs from our
company and the authors of the best drawings got substantial rewards.
Remuneration
In 2013 we carried out a study of labor remuneration in the
Leningrad and the Pskov regions in order to analyze the labor
remuneration market in the North-western region of Russia and to
assess our position in the labor market. The study proved once again
that we offer a competitive remuneration in the agricultural sector,
which corresponds to the general dynamics in the remuneration
market. The average unskilled labor remuneration in the agricultural
sector of the North-western region is approximately RUB 18,300
(before taxes); meanwhile, the average remuneration of unskilled
employees in pig production is RUB 27,600 (before taxes). In
addition to the reasonable remuneration, we offer bonuses and
other payments for the achieved results. We provide frees meals for
all workers in the production (lunch, coffee, tea, etc.), which amount
around RUB 30,000 per person per year, and work clothes, which
cost around RUB 3,500 per person per year. Office employees can
get lunch with 50% discount. In 2013 we bought additional medical
insurance for all our employees which gives them access to medical
service of higher standard. We spent RUB 1.2 million for additional
medical insurance and it is free for all employees who have worked
in our company for more than one year.
Incentives
Awarding employees, who were working for 5 years in company
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We provide our employees with support in the case of a loss of
their immediate family members. Not only do we work together,
but we also enjoy our leisure time together: each year we organize
corporate events (e.g. summer and Christmas festivities, trips to
concerts, theatres, water parks, etc.). We celebrate birthdays of our
employees. In 2013, in order to strengthen the loyalty of employees,
we rewarded our employees who have been with us the longest,
i.e. more than 5 years.
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CORPORATE SOCIAL RESPONSIBILITY POLICY
Performance appreciation
In 2013 we introduced the official performance appreciation
system. During our annual interviews we single out the objectives
set by employees and by the company, and discuss the motivation
and perspectives of employees in the company. During interviews we
provide the employee with his/her performance appreciation, based
on which we then discuss his/her career opportunities. In 2013 we
performed an employee opinion poll for the purpose of finding out
how satisfied employees were with their work, working conditions
and internal communication. An action plan has been developed
on the basis of employee responses. Employees are able to freely
communicate with the management and to state their opinion, which
is then being considered during meetings. In 2013 we introduced
the “worker of the month” award. Each month the section leaders
choose the best worker of the month and he or she gets a reward
from the company – a family trip to aqua park, new TV set, etc.
Training and improvement of
qualifications
We take care of the continuous professional and personal
improvement of our employees and the application of their experience
at work. We encourage them to submit their proposals and ideas of
how to improve our activities and working conditions. In 2013 we
introduced ‘Proposal Box’ in Idavang into which employees can place
messages with their comments and proposals. We develop personal
training programs for employees, improve their foreign language
skills. In 2013 each employee had the average of 8 hours of training.
We provide additional support to employees who undergo studies
closely related to their work. In 2013 all our managers of middle
and top level attended training courses for personal development
and efficiency. We spent more than RUB 600 000 for trainings and
seminars of different level.
Customer relations
We continuously develop business relations based on mutual
trust. Consideration of the needs and expectations, competence
and professional standard, flexibility and transparency, politeness
and friendliness as well as regular communication – these are the
principles on which the relations of the company with each customer
and business partner are based.
Quality products
We supply only the top quality products to our customers.
Top quality is guaranteed by the demanding and well-organized
production based on the best practices, careful selection, balanced
animal nutrition, and strict adherence to animal welfare policy
principles and veterinary standards. The quality Rurik-Agro and
Idavang pigs complies with all EU requirements and standards
applicable to the top quality products.
Responsible choice of business
partners
As we strive to exceed the expectation of our customers, we are
especially careful in choosing our business partners. Good reputation,
high quality of products and services, efficiency and strict compliance
with laws, veterinary standards and animal welfare provisions – such
are the requirements applicable not only to the suppliers and carriers
of products, but also to companies to which the production of our
farms is supplied. Before we start cooperation, our representatives
visit the partner’s company and our principles of transparency and
anti-corruption. We check our main partners to make sure they are
diligent tax payers and comply with fair business practice.
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Presentation of products
When transporting pigs, our specialists take care of the
compliance with animal welfare and veterinary conditions. The strict
planning of transportation ensures that pigs reach the customer by
the agreed deadline. We implement the strict accident prevention.
While performing carriage, drivers follow safety standards and regular
rest periods.
Anticorruption
We value our image as a fair company, and we are opposed to
any form of corruption that may cause distrust in the management,
employees or partners. In 2013 in order to prevent bribery or any
other form of seeking person profit, we developed and adopted the
Corruption Prevention Program of Idavang Group, and made sure
that all our employees are familiar with it.
ACTIVE LEADERSHIP
Being a modern pig production company, we actively share our
knowledge, experience and visions with other players in this market
(partners, customers, organizations, decision makers). In this way
we make sure that pig production in Russia develops in accordance
with the best practices in the field of pig production, environment
protection, animal welfare, etc. Rurik-Agro takes an active part in the
activities of the Russian Pig Breeders Union, the Investors’ Forum in the
Pskov region and the Leningrad region Chamber of Commerce. We
always prepare our proposals on various issues concerning regulation
of pig production and land processing, participate in various meetings
and conferences and share our opinion and experience.
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CORPORATE SOCIAL
RESPONSIBILITY
GOALS IN 2014
Environment
protection
• We will continue improving our EPP unit for slurry handling.
In 2014 we plan to finish all necessary technical documentation for
ammonia water and get technical production regulations approved
and confirmed by the relevant authorities.
• In 2014 we will elaborate detailed fertilizer plan for Rurik-Agro
to make sure that manure and ammonia water are used in best
possible way to provide necessary nutrition for the fields and avoid
negative impact for the environment.
• In 2014 after we come into full production cycle we will develop
the new waste handling system for Idavang and get it confirmed
and approved by the relevant authorities.
• We plan to drill new water well in Idavang in order to provide
uninterrupted water supply for the new farm and make it possible
to do maintenance and repair works at the existing water well.
• We will improve and enlarge our video surveillance system in
both farms in order to make our working environment more safe
and better controlled.
•We shall continue to educate employees about their
responsibility to perform proper and environmentally-friendly waste
management.
Human resources
• We will continue to provide personnel management training to
the managers of all level in our company and make sure that internal
communication is being developed within departments, between
departments, between our two Russian companies and also our sister
companies in Lithuania. We plan a number of experience exchange
visits to the farms.
• By encouraging employees to be more active in submitting
proposals and getting involved into the improvement of the company,
we shall continue to use special ‘Proposal Boxes’ in all divisions
into which all employees of the company can place their proposals.
Proposals are reviewed and assessed on a daily basis; the best
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proposals are implemented, and from now on the authors of such
proposals shall be awarded prizes.
• In 2014 much attention will be paid to increasing the motivation
of employees, and to the appreciation and recognition of employees.
We will continue with annual appreciation interviews during which
the employee and his/her direct supervisor will discuss the employee’s
performance over the past period as well as plans and goals for
the future, the employee’s competences, the development plan,
the current motivation, expectations of the employee and his/her
perspectives in the company.
• We will pay more attention to attracting new employees, in
order to do it we will visit schools and invite students to visit us in
order to provide them with as much knowledge about the specific
character of our activities as possible.
• We will continue the project of implementing anticorruption
actions in the company, which will help ensure the transparency of
our activities and the fair treatment of employees, customers, agents,
contractors, suppliers and representatives of public authorities.
• We will prolong our cooperation agreement with the Veterinary
Academy in St. Petersburg, Agricultural University in Pushkin and
Agricultural Academy in Velikie Luki. In this way we shall promote
the cooperation of business and science: we will be actively involved
in the practical dissemination of professional knowledge and will try
to attract the students to come to our farms for practical education
and further on for permanent employment.
Community
support
We will continue our support to local communities based on
their needs and requests trying to ensure active communication and
participation of both parts.
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Contact us
Idavang Russia
187029 Russia Leningrad district
Tosno region village Nurma
Tel. +7 812 960 03 20
Fax +7 812 960 03 24
Email: [email protected]
www.idavang.ru
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