Sustainability

 

Sustainability management at Almarai


Almarai - the region’s largest food and beverage company - plays an important role in contributing to global sustainability. Our goal is to maximize the shared value we create for our business and for society, by integrated management of our economic, environmental and social performance. Both now and in the future, we aim to implement industry-leading practices to protect the well-being of our consumers and employees, ensure the health of our farm animals, protect the natural environment and generate significant economic value. As we look to the future, we will further develop our sustainability management approach to strategically address our most material issues.


 

Our sustainability framework


Our sustainability framework summarizes what sustainability means for Almarai, by identifying the key areas that need to be managed and balanced to build a more inclusive, resilient and successful company. Our framework captures all of our material issues and forms the foundation of our sustainability strategy and reporting.

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Promote responsible consumption

We are proud of our honest marketing practices, ethical standards and the initiatives our business takes to reduce food waste. We are committed to helping consumers make better-informed choices regarding the nutritional value of our products, promoting food waste reduction, and ensuring that our marketing practices promote our products responsibly. We believe that these goals are fundamental to our success and to global sustainable development, Saudi Arabia’s Vision 2030, and the National Transformation Program 2020.

We are continually looking at ways to improve and encourage responsible consumption. In line with our efforts to become an industry leader in food waste reduction, we work to prevent food waste by accurate demand forecasting. We have established partnerships with several local organizations to donate surplus or returned products that cannot be sold, and to recycle packaging materials. We are also committed to ensuring that our marketing practices promote our products responsibly, providing credible, clear and useful information so that consumers can make well-informed decisions that support their health and wellbeing.


Material issues Ambitions
Food waste reduction To be an industry leader in forecasting production and consumer demand, and to develop novel applications to eliminate food waste in our value chain.
Responsible marketing To always market our products to consumers following transparent, honest marketing practices and stringent ethical standards.
Consumer health and choice awareness To educate our consumers with the knowledge they need to make more informed dietary decisions.

To read more about our efforts to deliver on our ambitions, read this section of the Sustainability Report 2017


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Ensure ethical and sustainable sourcing

We are the Middle East’s leading food and beverage manufacturer and distributor and the world’s largest vertically integrated dairy company. To continue on our path towards true sustainability, we must work with our suppliers to ensure that they act ethically and responsibly.

We source a wide range of goods and services from numerous internal and external suppliers, based locally, regionally and internationally. By exercising direct control of our supply chain, we can ensure the quality and safety of our products to our consumers. We are working to improve our procurement processes to ensure that our product ingredients and other inputs are sourced according to the highest ethical, environmental and social standards.

Safeguarding the health and wellbeing of all animals within our care is of vital importance to us, impacting not only on the animal’s quality of life, but also the quality and safety of the food we produce. We ensure that the animals we raise to produce our products are properly and humanely treated.


Material issues Ambitions
Sustainable procurement To ensure our supply chain is free from unethical, illegal or irresponsible practices that harm people and the environment.
Sustainable land use and biodiversity protection To protect the natural environment in areas where we operate.
Animal welfare To set and maintain a high welfare standard for animals in our care.

To read more about our efforts to deliver on our ambitions, read this section of the Sustainability Report 2017


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Prioritize quality and safety

Our promise to stakeholders is - and always has been - to deliver “Quality you can trust”. Our commitment to this has never changed, from our very first days as a business. We are committed to providing products that are manufactured to the highest food safety standards and contribute to a nutritious and balanced diet.

Our commitment to quality, safety and health does not just apply to our products. It is embedded in the way we manage our business, underpinned by management systems. Rigorous quality control is crucial to all aspects of our business. We focus on ensuring that the growing size and complexity of our business never compromises the quality of our products or the way we run our operations - including providing for the health and safety of all of our workforce.

We directly own most of our supply chain from feed production and importing to manufacturing, packaging and distribution, enabling all stages of product development to be subjected to rigorous testing to ensure food safety and quality. Almarai laboratories conduct more than 10,000 quality tests on our products daily.


Material issues Ambitions
Food safety and quality To deliver quality you can trust, always.
Product nutrition and health To set the standard for high quality and improve the nutritional content of our products.
Workforce health and safety To ensure that our employees return home from work safely, every day.

To read more about our efforts to deliver on our ambitions, read this section of the Sustainability Report 2017


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Reduce natural resource use and waste

We continually work to reduce the environmental footprint of our business. Our aim is to reduce our impact on the environment by lowering our greenhouse gas emissions, energy use, water consumption, and waste generation throughout our value chain. Tackling these issues are not just necessary to manage the financial and operational risks they pose for our business, it is essential to help safeguard the environment for future generations.

We routinely measure and manage our emissions and are working to contribute to national and regional targets and goals. Water conservation and sustainable farming methods are central to fulfilling our growth strategy. Through new technologies we have made significant improvements in water management and in packaging technology - delivering environmental benefits, operational efficiencies, and better end-products for our consumers.


Material issues Ambitions
Climate change mitigation and adaptation To work towards becoming a net-zero impact company, dedicated to producing innovative solutions to emerging sustainability challenges.
Energy and fuel efficiency To implement technologies, systems and processes to increase the proportion of energy and fuel consumption from sustainable sources.
Water protection To champion commercial water stewardship across GCC.
Packaging and waste reduction To work towards becoming a zero to landfill company.

To read more about our efforts to deliver on our ambitions, read this section of the Sustainability Report 2017


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Nurture and reward colleagues

Our employees are at the heart of our business success and we cherish our relationships with them. We are committed to attracting, developing, and retaining a motivated and diverse workforce in Saudi Arabia and all the regions where we operate. In line with Saudi Arabia’s National Vision 2030, we prioritize the development of local leadership.

We have comprehensive programs for developing the leadership skills of our local employees. Our Leadership Competency Framework fosters a performance culture by providing a consistent approach to attracting, managing, developing, and retaining talent. Our goal is to increase the number of employees using our e-learning solutions by 25%.

We have a range of other initiatives that demonstrate our commitment to support our employees and their leadership and professional development. These include the Almarai Future Leadership Program, our Graduate Professional Trainee scheme for new graduates and the Dairy and Food Polytechnic.

We also have a number of initiatives in place to monitor and increase employee satisfaction so that they are safe, healthy, and have access to opportunities that increase their career satisfaction and their personal life.


Material issues Ambitions
Local leadership development To attract, develop, and retain talented locals, strengthening our workforce in line with Vision 2030 and our strategic objectives.
Employee satisfaction and equal opportunity To achieve top quartile employee satisfaction and balanced workforce in line with local legislation, customs, and attitudes.
Training, development and retention To train, develop, and retain top talent.

To read more about our efforts to deliver on our ambitions, read this section of the Sustainability Report 2017


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Generate significant economic value

We are the largest food and beverage manufacturer and distributor in the Middle East with unique regional coverage, reaching a market capitalization of SAR 53.75 billion in 2017.

Our goal is to generate significant economic value for all our stakeholders by recognizing the need to improve value generation across our supply chain. This means that we need to continue to grow our business by expanding production capacity, innovating, and moving into new markets. We need to continuously improve our efficiency and reduce costs to ensure we remain profitable. We need to manage our working capital effectively and invest wisely. Finally, we need to make sure that the economic and wider benefits of all our efforts are understood and felt by our various stakeholders, including the communities where we operate.

We calculate that our economic value added in 2017 was 2.7%, or SAR 677 million, compared with 3.2% or SAR 757 million in 2016. This was based on invested capital of SAR 25,090 million in 2017 and SAR 23,958 million in 2016. We are strongly aware of the need to add real economic value through our business activities and will continue to work on the levers that deliver this.


Material issues Ambitions
Product innovation and new market access To grow our business by meeting changing consumer needs.
Efficient and profitable business To deliver sustainable value to all stakeholders and to become an internationally recognized food and beverage company.
Productive capacity expansion To increase our sales to maximize use of production capacity.
Community investment To enhance our reputation as a responsible company.

To read more about our efforts to deliver on our ambitions, read this section of the Sustainability Report 2017


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For more information on how we are managing sustainability, please read our

Sustainability Report 2017

Download Report
 

Sustainability performance dashboard


Promote Responsible Consumption
Key Performance Indicator 2014 2015 2016 2017
Number of incidents of non-compliance with regulations and / or voluntary codes concerning marketing communications
Percentage of significant product categories covered by and assessed for compliance with product information and labeling procedures
Ensure Ethical and Sustainable Sourcing
Key Performance Indicator 2014 2015 2016 2017
Percentage of total spending on local suppliers of goods and services
Prioritize Quality and Safety
Key Performance Indicator 2014 2015 2016 2017
Number of recalls
Average hours of health and safety training per employee
Reduce natural resource use and waste
Key Performance Indicator 2014 2015 2016 2017
Manufacturing water intensity (m3/metric ton production)
Manufacturing energy intensity (gigajoule / metric ton production)
Nurture and Reward Colleagues
Key Performance Indicator 2014 2015 2016 2017
New hire rate (18-30 years old)
Voluntary employee turnover rate
Generate Significant Economic Value
Key Performance Indicator 2014 2015 2016 2017
Net profit (SAR) per metric ton of production (Almarai Company)
Total value of community investment initiatives (SAR million)
 

Our Stakeholders


 

Employees


Paramount to our business success: by providing an inclusive work environment, with training and career development, we seek to promote employee commitment, dedication and innovation.
 

Consumers


At the heart of our business: we work to build the trust of our consumers by delivering top quality products that are nutritional, ethically produced and adhere to sound environmental practices.

Government regulatory bodies


A key partner in managing risk and compliance: we are committed to complying with all legal and regulatory requirements to ensure our business produces safe, quality products.
 

Civil society organizations


Helping us contribute to community development: through active engagement in projects and programmes, we build trust with the communities where we operate.
 
 

Investors


Supporting our future growth and success: through strong financial performance, we seek to deliver long-term sustainable returns for our investors.
 

Environmental Social and Governance rating agencies


Supporting our commitment to continuous improvement: by being transparent about our sustainability performance and goals, we can make sure that we are heading in the right direction.

Our Stakeholders


 

Employees


Paramount to our business success: by providing an inclusive work environment, with training and career development, we seek to promote employee commitment, dedication and innovation.
 

Consumers


At the heart of our business: we work to build the trust of our consumers by delivering top quality products that are nutritional, ethically produced and adhere to sound environmental practices.
 

Government regulatory bodies


A key partner in managing risk and compliance: we are committed to complying with all legal and regulatory requirements to ensure our business produces safe, quality products.
 

Civil society organizations


Helping us contribute to community development: through active engagement in projects and programmes, we build trust with the communities where we operate.
 

Short and Headlines are Best!


Supporting our future growth and success: through strong financial performance, we seek to deliver long-term sustainable returns for our investors.
 

Environmental Social and Governance rating agencies


Supporting our commitment to continuous improvement: by being transparent about our sustainability performance and goals, we can make sure that we are heading in the right direction.