Sustainability review

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2Cosun Sustainabi l i ty review 2012

About CosunRoyal Cosun is an agro-industrial group that is firmly rooted in the primary sector. Of the five businesses that make up Cosun, Suiker Unie and Aviko are the most widely known. They have traditionally produced sugar and potato specialities respectively. Sensus produces inulin from chicory for use in foodstuffs. Inulin is a dietary fibre that is used to reduce the sugar and/or fat content of food.

SVZ processes fruit and vegetables into concentrates and purees for the food industry. The Duynie group is a trader and distributor of animal feed and develops advanced applications based on residual flows and by-products from the food industry. The Cosun Food Technology Centre (CFTC) supports the business groups with innovative technology and new applications.

Our success is increasingly being determined by our use of all the raw material in a process known as biorefinery. We begin by analysing the precise contents of a biomass flow. We then look at how we can extract

the components as efficiently as possible using the most appropriate techniques. The challenge is to extract as many components as possible in order to make optimal use of the biomass.

Sugar beet

Chicory

Potatoes

Fruit & Vegetables

Catering & Retail

Livestock farming

Chemicals

Energy

Food industry

CULTIVATION BIOREFINERY SALES MARKETS

Suiker Unie

Aviko

SVZDuynie-

group

Sensus

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3Cosun Sustainabi l i ty review 2012

PolicyCosun takes a pragmatic approach to corporate social responsibility (CSR). CSR defines how we take account of the various interests in our decisions. We look further and deeper than just our own activities and

the current financial year. The agri-food industry in which we operate provides both the framework and the departure point for our CSR policy.

External• Membersofthecooperative• Customers• Suppliers/partners• Consumers• Localresidents• Potentialemployees• Politiciansandpublicauthorities• Financialinstitutions

• Education• Media(press)• NGOs

Internal• Employees• WorksCouncils

STAKEHOLDERS

COSUN’S SUSTAINABILITY POLIC Y IS BUILT ON FOUR PILLARS

MISSION

1.Sustainablecultivationandrawmaterials(supplychainresponsibility)

2.Sustainableproduction(careforrawmaterials,consumablesandtheenvironment)

3.Goodemploymentpractices(committedemployees)

4.Transparancy(accountabilitytostakeholders)

Cosunoperatesclosetothearablesectorandworkswithfarmersonthesustainablecultivationofvegetablerawmaterials.

Weareconvincedthattherefineryofvegetablerawmaterialsisessentialtomakeoptimalandsustainableuseofouragriculturalrawmaterialsandnaturalresources.

Wedeliveringredientsforfoodandfeed,materialsformanynon-foodapplicationsandultimatelyforenergyproduction.

Wecarefullybalancerespectforpeople,planetandprofitwiththecontinuityofthebusinessandthecooperative.

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4Cosun Sustainabi l i ty review 2012

The way in which our vegetable raw materials are grown is very important. It is a key factor in the volume and quality of our production. The profitability of our factory processes is also closely linked to the cultivation method. That is why we and our growers invest in the further improvement, optimisation and sustainability of cultivation.

Suiker Unie is a pioneer when it comes to helping and advising the growers. Since beet cultivation at Cosun has traditionally been a cooperative endeavour, all links in the supply chain recognise the importance of delivering high quality raw materials to the sugar factories. This shared responsibility is underlined by working groups, demonstrations of sowing, processing and harvesting techniques and the like. Such demonstrations have been common practice at Suiker Unie for many years and were recently introduced at Sensus and Aviko.

Many beet growers use Unitip to optimise their cultivation and make it more sustainable. The programme provides an insight into the growers’ progress, makes comparisons between growers, generates useful information for both the growers and Suiker Unie and produces targeted advice for the growers. Sensus has followed this example and introduced its own online registration and evaluation programme for chicory growers: I-Top. It shows growers how they can make better use of crop protection agents and how to improve their yields.

SVZ buys most of its raw materials on the open market. The relationship between growers/sellers and industry/buyers is based on supply and demand. Quality, of course, is an important factor too.

SVZ makes high demands on the growers it contracts, such as the strawberry growers in the southwest of Spain.

In Poland, SVZ made further investments in model farming. It is aiming to make the cultivation of soft fruits more sustainable by using fewer growing agents and reducing CO2 emissions during cultivation and transportation to the factories. It is also improving social aspects such as safe working conditions for the growers in the fields.

Aviko is investing in the quality of its raw material, potatoes, and making potato growing more sustainable. The close contacts between the field service and the growers are of decisive importance, as is Aviko’s Potato Growing Committee (ATC). The ATC advises on the implementation of improvements.

Just like Suiker Unie, Aviko encourages growers to work in accordance with the guidance of the Skylark Foundation. Skylark is a joint initiative of growers, processors and consultancies to make arable farming more sustainable. Specialists from Suiker Unie, Aviko and other participants consult and advise on soil fertility, fertilisation, crop protection, biodiversity and supply chain management.

The companies in the Duynie group buy their raw materials not from growers but from other businesses in the food industry, including Suiker Unie and Aviko.

1. Sustainable cultivation and raw materials (supply chain responsibility) Wefeelpartofthearablefarmingsector.Toenhancesustainablecultivationwemakeconsiderableinvestmentsintheknowledgeandexpertiseofthegrowerswhosupplyourbusinessgroups.Webearourresponsibility,especiallyforthoselinksdirectlybeforeouractivities.

4Cosun Sustainabi l i ty review 2012

Suiker Unie is a pioneer when it comes to helping and advising the growers. Since beet cultivation at Cosun has traditionally been a cooperative endeavour, all links in the supply chain recognise the importance of delivering high quality raw materials to the sugar factories. This shared responsibility is underlined by working groups, demonstrations of sowing, processing and harvesting techniques and the like. Such demonstrations have been common practice at Suiker Unie for many years and were recently introduced at Sensus and Aviko.

Many beet growers use Unitip to optimise their cultivation and make it more sustainable. The programme provides an insight into the growers’ progress, makes comparisons between growers, generates useful information for both the growers and Suiker Unie and produces targeted advice for the growers. Sensus has followed this example and introduced its own online registration and evaluation programme for chicory growers: I-Top. It shows growers how they can make better use of crop protection agents and how to improve their yields.

SVZ buys most of its raw materials on the open market. The relationship between growers/sellers and industry/buyers is based on supply and demand. Quality, of course, is an important factor too.

emissions during cultivation and transportation to the factories. It is also improving social aspects such as safe working conditions for the growers in the fields.

Aviko is investing in the quality of its raw material, potatoes, and making potato growing more sustainable. The close contacts between the field service and the growers are of decisive importance, as is Aviko’s Potato Growing Committee (ATC). The ATC advises on the implementation of improvements.

Just like Suiker Unie, Aviko encourages growers to work in accordance with the guidance of the Skylark Foundation. Skylark is a joint initiative of growers, processors and consultancies to make arable farming more sustainable. Specialists from Suiker Unie, Aviko and other participants consult and advise on soil fertility, fertilisation, crop protection, biodiversity and supply chain management.

The companies in the Duynie group buy their raw materials not from growers but from other businesses in the food industry, including Suiker Unie and Aviko.

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5Cosun Sustainabi l i ty review 2012

2. Sustainable production (care for raw materials, consumables and the environment) Naturalresourcesandrawmaterialsarebecomingscarcerandmoreexpensive.Theenvironmentbenefitswhentheimpactofouractivitiesisminimisedandcyclesareclosed.Cosuninvestsinitsprocessingfacilitiesandpeopletomakeoptimaluseofscarceresourcesandimprovethequalityoflifenearitsfactories.

The total volume of CO2 emissions per tonne of product in 2008-2012 shows that Cosun has comfortably achieved its goal of an average reduction of 2% per annum at all its locations.

Direct Indirect

2010 2011 201220092008

320

300

280

260

240

220

200

Total CO2 emissionsin kg, per tonne of product

264

285280

288

311

59

4545

35

33

252243

235250

231

Water consumption per tonne of product has been more or less stable in recent years. We are currently studying where and how further savings can be made.

2010 2011 201220092008

Water consumptionin m3, per tonne of product

2.5

1.7 1.5 1.4 1.5

1.1 1.3 1.1 1.1

Groundwater Mains water

3.6

2.82.5 2.6

2.8

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

1.1

The increase since 2011 is due to improvement measures (TPM). More waste is now collected and sorted. The increase in mixed waste arose at the sugar factory in Anklam, which supplies all its waste to a specialised sorter.

2010 2011 201220092008

0.10

0.09

0.08

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0

Amount of wastein tonnes, per tonne of product

0.004 0.004 0.003

0.0240.028

Mixed Other separated

Energy consumption inourproductionprocessesmustbereducedby2%onaverageperannum.ThiswillcontributetoafurtherreductionintheCO2emittedbyourproductionprocesses.

Water consumptionwillbefurtherreduced.In2013wewillstudyhowthiscanbestbeachieved.

Cosunminimisesthevolumeofwasteitproduces.Measuresaretakenateachlocationtodeterminehowthetotalvolumecanbefurtherreducedandwhetherthewasteshouldbesortedornot.

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Cosun Sustainabi l i ty review 2012

3. Good employment practices (committed employees) Weinvestinourpeoplebyofferingthemprofessionaltrainingcourses.Wealsoprovideasafeworkplaceandpleasantworkingconditionsandlookaftertheirphysicalandmentalwell-being.Fitandmotivatedemployeesaremoreproductive.

The number of lost time incidents is too high and the trend is very undesirable. Incident prevention therefore has highest priority at our production facilities. Substantial investments are being made in technical safety measures and in safe working practices.

2010 2011 201220092008

35

30

25

20

15

Lost time incidents

19

2624

Lost time incidents per 1,000 FTEs

26

32

Cosun has met its target as the national rate of sickness absence in the Netherlands was 5% in 2012. The rate at Cosun was on average more than 1 percentage point below this figure.

2010 2011 201220092008

5

4

3

Sickness absence

3.6

4.2

3.5

Sickness absence at Dutch locations (%)

3.8

3.5

Cosunisworkinghardonreducingthenumberoflost time incidents.Theupwardtrendmustbereversedin2013to25incidentsatmostper1,000FTEs.Theratemustbereducedtozeroinsubsequentyears.

Therateofstaff sickness absence mustremainatleast20%belowtheratereportedforDutchindustryasawhole.

6

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7Cosun Sustainabi l i ty review 2012

4. Transparency (accountability to stakeholders) Cosunisacooperativethatistransparenttoitsmembers.Wehavelong-termtieswithourmembersbecausetheyalsosupplythebeettoourDutchsugarfactories.Theyareconsideredinthedeliberationsanddecisionsofthecooperative’smanagementandinitsmeetingsandpublications.

The members’ bonus is paid to the members as part of the quota beet price and recognised as a cost of raw materials in ordinary operating profit.

201020092008 2011 2012

200

175

150

125

100

75

50

Members’ bonusin millions of euros

179

118

64

5033

The beet yield per hectare, calculated on the average yield with average quality and after premium payments.

201020092008 2011 2012

5.000

4.500

4.000

3.500

3.000

Beet yield per hectare in the Netherlandsin euros

4.871

4.038

3.0823.252

2.902

Total number of complaints about Cosun’s 30-plus production locations in the Netherlands and abroad.

2010 2011 201220092008

70

60

50

40

30

20

10

3430

46

5862

Number of complaints

Werenderaccounttoourmembersregardingthereturnoncapitalinvestedandourcontributiontothefinancialyieldperhectareofsugarbeet.Thelatterisasharedresponsibilitybetweenthemembers/beetgrowersandourselvesasthesugarmanufacturer.Otherstakeholdergroupsarealsoactivelyinvolvedinandinformedofourperformancewhereitaffectsthem.

Cosunseekstocausetheminimumpossibleinconvenienceatandarounditsfactories,facilitiesandoffices.Inconvenienceintheformofodourornoiseissometimesinevitable,however,attheproductionsites.Thegoalfor2015istoreceivelessthanonecomplaintonaverageperlocation.

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Van de Reijtstraat 15, 4814 NE BredaP.O. Box 3411, 4800 MG BredaThe Netherlands

www.cosun.comwww.annualreport-cosun.com

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