Patrick Hartless

Nestlé MY & SG

Green

Logistics

Agenda

Nestlé Globally

Nestle Malaysia

Green Logistics

Questions

Nestlé: Largest food & beverage company

Founded 1866 in Switzerland as a nutrition company

110 billion Swiss Francs sales in 2010

Operates 480 factories and employs 276,000 people in 86 countries around the world

Transforming into Nutrition, Health & Wellness company

Nestlé in Malaysia

Started business operations in 1912

Publically listed on Bursa Malaysia in 1989

5,000+ people across 7 factories, 1 Regional Office, 1 NDC & 1 Head Office in Malaysia

Brands include: Milo, Nescafé, Kit Kat, Nestlé , Koko Krunch, nesVita, Felix and nutren

RM 4.0 billion in sales turnover 2010

Malaysia’s leading Halal food company

Green Logistics

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What should be measured to understand the environmental impact of Distribution?

Energy consumption

Air pollution (CO2e)

Land consumption

Lost farmland

Wildlife habitat loss

Water and land pollution

Noise pollution

direct influence from Nestlé

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What is Nestlé's carbon footprint?

For Distribution:*estimate based on:total delivered products : 41 mio tonsaverage transport distance : 800 kmtotal distance : 2.6 bio kmtotal ton-km run : 32.8 bio ton-kmusing about : 900 mio litres fuelaverage CO2 emission : 72 g per ton.km

Direct CO2 emissions: 2.4 mio ton of CO2About 60 kg of direct CO2 per ton of product (with large variations according to distribution network)

For Production:

*From Management report 2008

Direct CO2 emissions: 4.1 mio ton of CO2

Indirect CO2 emissions: 3.0 mio ton of CO2

95 kg of direct CO2 per ton of product

What is a carbon footprint?

A “measure” of the impact human activities have on the environment in terms of the amount of greenhouse gases produced, measured in units of carbon dioxide

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CO2 emissions = [CO2/Ton.Km ] x [Tons] x [Km]

CO2/Ton.km depends on Levers

Mode of transport Alternative transport modes

Fuel type Alternative fuels

Fuel efficiency Engine type, driver training, technology

Loading factor Collaboration, palletization, planning, optimal use of load capacity

What are our levers to sustainability in Distribution?

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Alternative transport modes

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Nestlé MexicoContainers in Double Platform: Shipping Containers in Double Platform help decreasing the number of trucks on the road.

Approximately the 98 % of the exports containers are delivered at port in double platform.

Alternative transport modes

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Alternative fuels

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Driver training and telematics

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Engine type

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Loading Factors

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Examples of Surface Utilisation

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Redesign Distribution Network:Nestlé Thailand

Example from Central Returns Warehouse

CREATING AWARENESS AND SUSTAINING AN ENVIRONMENTMANAGEMENT SYSTEM WHICH PREVENT POLLUTION, COMPLYINGTO ENVIRONMENTAL ACT AND CONTINOUSLY IMPROVING THE SYSTEM

Results achieved up to March 2011

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2010 Safe Driving Accomplishment

Safe Driving KPI

• 21.3 mil. Total KM Driven (JAN - DEC 2010) = for Employees Driving

• 23.6 Million Km Driven (JAN- DEC 2010) = for 3RD Party Driving

• Number of Accident with & without Injury reported : 2 Accident

TOTAL VAFR per million KM Driven = 0.04

VAFR with & without Injury = 2

Safety driving Initiatives

• Festive Season Driving FLYERS via Intranet

• Monthly SAFE DRIVING TIPS via Intranet

• Road safety talks / Exhibition during Safety Day in NDC

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Current Focus Areas Nestle Malaysia

Put in place measurements for carbon and road kilometers

Create scorecard based on vehicle utilisation - volume not pallets

Explore ability to move to double stacking pallets in-transit and change pallet configurations

Maximise 40ft containers to East Malaysia

Maximise all backhaul opportunities

Network analysis to see what further efficiencies could be gained

Questions?