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Environmental and

Social Report 2012


DeLaval worldwide DeLaval worldwide

Local sales organization


Manufacturing
Distribution
Regional HQ
Research & development unit
Global HQ

DeLaval worldwide DeLaval in figures

DeLaval is a leading supplier of solutions that improve the performance of farms Net sales 2011 (million Euro):  955
for professional food producers. We support our customers in reducing their Local sales organizations:  35
environmental footprint while improving food production, profitability and the Independent dealers:  1,384
Markets covered:  >100
well-being of the people and animals involved. We offer products, systems and
Manufacturing units:  18
services for all steps of milk production. Our solutions are used by millions of R&D units:  3
dairy farmers around the globe every day. Installers:  1,388
Delivery trucks and mobile shops:  736
DeLaval, alongside Tetra Pak and Sidel, is part of the Tetra Laval Group. Employees:  4,454

www.delaval.com

1
Contents
Our vision CEO letter 4
Our approach 6
Innovation 8

Environment Our customers 10


Our operations 12

Animal welfare Collaboration16


Dairy development 18

People & society Our employees 20


Food for Development 23
Hamra Farm 25

Governance Framework 27
Supplier commitments 27

Report parameters How we report 28


GRI index 29

Milk contains 18 of the 22 nutrients we need on a daily basis. A cow can convert grass
and water into milk. Cows and small ruminants are versatile, providing not only milk, but
also meat, leather, fertilizer, energy, housing materials and a livelihood. We use precious
soil, energy and water resources to feed ourselves. And we need to improve. Our vision
More on the progress made by dairy farmers and the challenges ahead: quiz.delaval.com
Introducing the new vision
of DeLaval.

Cover model: Elly, born 31 October 2008, yield 11 623 kg energy corrected milk, Hamra Farm.

2 3
Our vision | CEO letter Our vision | CEO letter

A new vision to Do more with less


For present and future generations, food needs to be
baseline was first established in 2009; not least when it comes
to improving energy efficiency and reducing waste water.

challenge and lead us


produced in a sustainable manner. First step for us is to
support increased productivity on farm and better resource There is much more to be done, but we have made a good
efficiency in our own operations. start and we will continue to report on our environmental and

over the long term During the reporting period we have been able to release
social performance.

solutions that are more energy efficient, use less water and Monday morning
improve feed efficiency. We have launched and are proposing For the long term, we are creating networks and partnerships
to launch solutions that deal more effectively with manure and that will help us understand and improve overall farm
Challenges But to focus on the environment alone is not enough. The term
effluent management and we are helping farmers plan right management and sustainability.
Today, we are part of a value chain that needs to increase sustainable, as defined within DeLaval, is based on four interlinked
from the start for more profitable and productive farms. All
productivity to ensure food safety and security for 7 billion people pillars: Environment, Animal Welfare, Social Responsibility
these are areas that customers have identified as priorities. And we have put in place a new vision: We make sustainable
a number that is expected to touch 9 billion by 2050. and Farm Profitability.
And all will contribute to help us reach our strategic goal of food production possible. It underlines the fact that our
doubling the company by 2015. customers are professional food producers and that sustainable
As part of this challenge, the food sector needs to secure The goal is to reduce environmental footprint while improving
development will from now on drive our strategy.
nutrition for the one billion people who are undernourished and production, profitability and the well-being of the people and
Animal welfare is also playing an ever-greater role. Not only
meet demand from an increasingly affluent urban population in animals involved. Or put another way to do more with less.
does a healthy, well-cared for cow become more productive Major innovations will be
newly developed and emerging economies.
and use less antibiotics. It takes 24 months to raise a milking necessary, but it is not
While food producers are facing demands to increase
productivity, they also need to reduce environmental impact.
We make sustainable cow and by adding one lactation through proactive animal
health and cow comfort measures, the environmental and
just about making big
changes. It is also about
Science is telling us to speed up the rate of change and
reveals that it is on the farm that the biggest improvements
food production financial gains can be considerable. what we can do, starting
Monday morning each
and productivity gains can be made. possible. The new DeLaval vision Agriculture remains one of the worlds most dangerous professions.
By automating laborious tasks, for example with the help of milking
week, to ensure
continuous improvements
and feeding automation, we can help reduce physical strain, reduce in the way we work and
accident risks and prevent injuries. support our customers.

In addition to supporting customers, we have made a number of Joakim Rosengren,


improvements to our own operations since the group reporting President & CEO DeLaval

4 5
Our vision | Our approach Our vision | Our approach

Identifying challenges Sustainable Dairy Farming


and opportunities How we are providing solutions to improve the productivity and overall
sustainability of dairy farms.
Industry collaboration is an important starting point for us to understand
the environmental and social impacts of milk and dairy farming and where
we as a company can make a difference. For the period 2010-11 we have focused on six areas A Scientific Committee of internal experts has identified these
for customer products and services: Feed, Animal health, areas based on a) the importance for the operation of the
Manure, Energy, Water, and Working conditions. farm business and b) the role that can be played by DeLaval.
DeLaval has been part of the reference teams for the IDF Guide milk in terms of greenhouse gas emission (CO2-eq) and
to Standard Lifecycle Assessment Methodology for the Dairy freshwater use. DMI has also shown how more than 90% of
Reduce energy use for cooling,
Sector (IDF 2010) and the Food and Agricultural Organisation of the total water used in the dairy value chain is used on farm. Increase feed efficiency
milking & cleaning
the United Nations Greenhouse Gas Emissions from the Dairy
Sector (FAO 2010). Studies clearly show that it is on the farm where major
impact and improvement opportunities can be found and
DeLaval also joined the Sustainability Council at the Innovation not just environmental impacts. The World Development Improve animal health Cut fresh water use for cleaning
Centre for U.S. Dairy, a part of Dairy Management Inc (DMI), Report 2008 indicated that investment in smallholder
as a founding member in 2009. The diagram from DMI below farmers is among the most effective way of fighting poverty
shows the footprint, across the value chain, for generic U.S. and malnutrition. Improve manure &
Automate laborious tasks
effluent management

Share of greenhouse gas emissions for generic milk in the U.S. (DMI 2010) For more on customer products and services, head to
www.delaval.com/en/About-DeLaval/SDF/Solutions/
52%

20%

8% 7%
6% 5%
3%
Feed Milk Production Processing Packaging Transport/ Retail Consumer
Production Distribution

Balancing four pillars


Sustainable Dairy Farming, as defined within DeLaval, is based
on four interlinked pillars: Environment, Animal welfare, Social
Responsibility and Farm profitability. The goal is to reduce
the environmental footprint of farms, while improving milk
production, farm profitability and the well-being of the people
and animals involved.

Our role at this stage is to team up with customers to support


them with the technology and knowledge they need to improve
productivity to do more with less.

DeLaval dairy farm design, here for 1000 cows.

6 7
Our vision | Innovation

Innovation award
Existing technology and knowledge improves productivity on
the farm, yet the need for innovation will accelerate in order to
ensure sustainable development.

Tetra Laval, DeLavals parent company, was named in 2011


as one of the worlds 100 most innovative companies in
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Thomson Reuters list of Top 100 Global Innovators. The
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programme honours companies and institutions that lead the
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world in innovation, driving inventions for economic growth,
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influencing future technologies and shaping the future.
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One example is AMR, the worlds first automatic milking
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This high-capacity automatic milking parlour uses six robot
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arms and was developed in close cooperation with Australias
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FutureDairy project.
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Environment
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8 9
Environment | Our customers Environment | Our customers

Identifying Energy efficient motors


environmental priorities New, energy-efficient motors and vacuum frequency controls are examples
of how our technology can help reduce environmental impacts and costs.
Customer feedback enables us to identify and challenge the focus areas
that drive continuous improvement.
The customer survey from 2009 showed
that electricity consumption was a concern.
Surveys are useful tools for structuring customer feedback. They % of customers that strongly agree that their business will be heavily DeLavals new series of motors meet the
allow us to see what our customers need and to understand the
affected by these areas over the next three years European Commissions requirements
extent to which we are meeting those needs. The main DeLaval for energy efficiency which is scheduled
Customer Survey is quantitative and run every two years. In 23
24
23 2009 2012 to take effect in 2017. These strict new
22 standards call for a reduction of about
2011, qualitative research was done to synchronise the survey 21
20
design with a new segmentation model hence data from 2009 50 per cent compared to the standards
and 2012 here. issued in June 2011.
14

Comparing 2012 to 2009, manure handling, electricity 11 11 11 By meeting the EC standards early,
consumption and water management remain the greatest areas DeLaval can help customers stay ahead of
of concern. Whereas the trend in North America and Europe is the curve on energy efficient electric motors
stable, while customers in Latin America expect the impacts to for both automated and conventional
be higher, especially in the area of manure handling. milking systems. With the new motors, a
Manure Electricity Water Methane Packaging
& Recycling
farmer using the VMS 2012 voluntary
2012 milking system for 150 milking sessions per
day can cut energy consumption by about
South America North America Europe China Australia 8 per cent.

40
The frequency control unit adjusts the
vacuum level automatically, ensuring the
vacuum pump operates at the correct
33.5
level at all times. It is almost silent and
30
29 reduces earth leakage currents, making it
27
25.5 25.5 26 25.5 possible to use standard residual current
21.5
breakers. This can help improve cows
19.5
18.5 18.5 19 health and reduce stress, two important
17 17 factors in milk production, and provides a
15.5 15.5 16 16 DeLaval LVP vacuum pumps.
quieter environment for farmers.
11 11
9
8

3.5

Electricity consumption Manure handling Water management Methane emissions Packaging & recycling

Customer satisfaction Change


Since 2009, customer satisfaction has 2012 2009 Scope
2009-2012
been measured in relation to the three
main areas of our product offering: Satisfaction, aftermarket 88% 76% 12% 12 countries

capital goods, aftermarket and service


and parts. The 2012 survey covers Satisfaction, service and parts 86% 81% 5% 12 countries
12 countries and 3400 respondents.
Satisfaction has increased in all three Satisfaction, capital goods 91% 82% 9% 12 countries
areas since 2009.

10 11
Environment | Our operations Environment | Our operations

Our operations Unit 2011 2010 2009


Change
2009-2011
Scope

Energy
We integrate environmental considerations into our business, and strive for
Direct energy use by primary source
continuous improvement in our development, sourcing, manufacturing, and
transportations activities. Natural gas MWh 7 116 7 116 7 320 -3% 16 GMUs + 2 DDCs

Liquified petroleum gas and propane MWh 214 133 145 48% 16 GMUs + 2 DDCs

Boundary setting Fuel oil MWh 682 505 639 7% 16 GMUs + 2 DDCs
Sixteen Group Manufacturing Units (GMUs) For BA Aftermarket & Services,
Indirect energy use
and our two main distribution centres products include liners and tubes,
(Glinde and Kansas City) have been detergents, teat dips and other animal Electricity MWh 13 833 15 029 13 102 6% 16 GMUs + 2 DDCs
chosen for reporting environmental health related products.
performance data. District heating MWh 10 191 12 731 9 893 3% 16 GMUs + 2 DDCs
DeLaval manufacturing output is diverse
The decision is supported by the GRI and we are looking at ways to standardize Total energy use MWh 32 037 35 514 31 099 3% 16 GMUs + 2 DDCs

Decision Tree for Boundary Setting, where output metrics across all operations. 6 GMUs
Energy efficiency number 21.2 21.7 18.1 17%
Yes is the answer to the first two questions, However, energy efficiency and waste (Milk Quality & Animal Health)

i.e. Do you have control over the entity? water KPIs are reported on here for the Definition: Output / total energy used at facility.
and Does it have significant impact? Two six Milk Quality & Animal Health units that Water
manufacturing units have been excluded manufacture detergents and teat dips.
due to size (Kansas City and Shanghai). Total water withdrawals m3 92 966 92 698 82 959 12% 16 GMUs + 2 DDCs
Of the sixteen manufacturing units reported
Note: All water withdrawn from municipal sources.
The units manufacture and perform final on, six are certified in accordance with both
6 GMUs
assembly of products for DeLaval Business ISO 9001 and ISO 14001. For our suppliers Waste water % 39.2% 38.5% 40.3% -1.1%
(Milk Quality & Animal Health)
Areas (BAs), Capital Goods and Aftermarket we have standardized environmental Definition: Water not included in final products / total water used at facility.
& Services. For BA Capital Goods, products assessments during the reporting period,
include integrated automation, diagnostics, including follow up of the percentage of our Waste
stalling, milking parlours, voluntary milking total spend on capital goods suppliers that
Recycled metric tons 1 074 1 095 1 008 7% 16 GMUs + 2 DDCs
systems, and feeding and cooling. are ISO 14001 certified (48% in 2011).
Energy recovered metric tons 817 596 521 57% 16 GMUs + 2 DDCs

Incinerated metric tons 55 104 70 -21% 16 GMUs + 2 DDCs

Managing REACH Landfill

Total non-hazardous waste


metric tons

metric tons
480

2 426
363

2 159
402

2 001
19%

21%
16 GMUs + 2 DDCs

16 GMUs + 2 DDCs

DeLaval is working systematically to implement The substances targeted by Total hazardous waste metric tons 105.5 82.7 80.3 31% 16 GMUs + 2 DDCs

REACH the strictest chemical law in the world REACH are included in DeLavals Note: All hazardous waste dealt with in accordance with local regulations.
throughout the lifecycle of its products (design, Black & Grey lists that define
manufacturing, use and disposal). DeLaval Groups minimum
environmental requirements.

Progress report
The DeLaval Group initiated a process that will secure Waste
compliance of its products with the EU regulation concerning The Black List contains substances and chemical Stabilize non-hazardous waste reporting, improve waste handling
the Registration, Evaluation, Authorisation and Restriction of constituents that are forbidden or strictly restricted for use together with local recycling schemes, monitor hazardous waste
Chemicals (EC 1907/2006), commonly known as REACH. within DeLaval. The Grey List contains substances that are Environmental focus areas have been: and reduce packaging complexity.
restricted for use within DeLaval.
Performance 2009-2011: Non-hazardous waste reported.
The project began in 2010 with the following objectives: Energy Membership of farm agricultural product recycling schemes.
Identify products in DeLavals assortment that are affected DeLaval has an obligation to report Substances of Very High Reduce the amount of energy used per production output in Hazardous waste up 31% as a result of warehouse extension
by REACH Concern (SVHC) to the relevant body within the EU. To detergent and teat dip production. (Glinde distribution centre) and improved cleaning processes
Develop procedures, tools and an organisational achieve this, a thorough investigation throughout the whole Performance 2009-2011: 17% improvement. Energy audits. (Wroclaw manufacturing). Monitoring and reduction a priority for the
structure for operational management of identified Supply Chain has been initiated. DeLaval needs more detailed Lighting and ventilation improvements. coming period. Packaging improvements, including FSC (Glinde).
REACH obligations information about each purchased article than was previously
Identify DeLavals obligations under REACH for identified required. We need to know which articles might contain Water Hazardous substances
REACH products and chemicals. SVHCs and to what extent in terms of concentration and Reduce the amount of waste water in relation to the total volume Initiate global REACH and RoHS projects for monitoring and
amount. Our suppliers have to do the same investigations in of water used in detergent and teat dip production. phase-out planning (suppliers and own operations).
The DeLaval Group also chose to apply REACH requirements their Supply Chains. REACH is a long journey for all involved
Performance 2009-2011: 1% improvement, including usage of Performance: Supplier portal established. Phase out of phthalates in
on DeLaval products marketed outside the European Union. and DeLaval has now taken the first steps along that path.
pinch technology and water recycling (Drongen). rubber compounds (global supplier and Chillicothe manufacturing).

12 13
Environment | Our operations

FSC packaging
improvements
DeLaval has been entitled to display the mark of the Forest Stewardship
Council (FSC) globally on all its transport boxes since August 2011.

DeLaval has further strengthened its work with the certification scheme there is a
in reducing its environmental impact and visible environmental mark on the boxes
has been running a packaging project in showing that they are FSC approved.
Glinde. The project is looking at ways to
reduce the environmental effects of Two outcomes of this project so far are The fact that
DeLavals transport boxes, as well as
improving design and cutting costs.
that we have saved around 14 tons of
CO-eq at the supplier site by using less our boxes are
The FSC label signifies that the
material to produce the boxes;
and the boxes themselves FSC marked Animal welfare
raw materials used are from
responsibly-harvested and
have a better appearance,
said Anja Pfeiffer,
underlines
sustainable sources. FSC is
an independent, non-
Quality Manager, Glinde.
our ambition Animal welfare is one of the four pillars in our
sustainability approach.
governmental, not-for-profit
organization established to
In the autumn of 2011,
DeLaval also conducted
to reduce
promote the responsible
management of the
a dealer survey to find out
more about their opinion of
environmental
worlds forests. our packaging. The result showed impacts.
that DeLaval was using too many plastic
All DeLaval boxes are produced using at bags when packaging products. As a
least 70% recycled material or raw result, the packaging instructions have
material from renewable sources and been changed so that fewer plastic bags
well-managed forests. In accordance will be used from now on.

Anja Pfeiffer with one of the new transport boxes.

14 15
Animal welfare | Collaboration Animal welfare | Collaboration

Developing through Sharing knowledge


collaboration in China
Broad collaboration is and will be necessary to better define, measure and With the rapid development of dairy farming in China, the need
improve animal welfare. for well-trained Herd Managers is growing quickly.

Industry groups Research cooperation Cornell


DeLaval joined the Sustainable Collaboration with universities is critical Cornell College of Veterinary Medicine in A cooperative programme, the Sino-Swedish Dairy Centre, In the past decade, Chinese milk production has increased
Agriculture Initiative (SAI) Platform in to research and development, not least the U.S. is committed to the advancement is helping to meet that need. Programme partners include 400 per cent and demand is still growing. To meet that
2011. As an active member of the Dairy in terms of better understanding and of dairy management. DeLaval is supplying DeLaval, Tetra Pak, the Swedish University of Agricultural demand, dairy farms have been consolidating. Major farm
Working Group, we are measuring animal health and welfare. Cornells new teaching barn with milking Sciences (SLU), the Chinese Ministry of Agriculture, China operators often have very large herds, with as many as
part of the team working equipment and DeLaval activity meters for Agricultural University and the Beijing Capital Agriculture Group. 100,000 cows. China does not have a long tradition of
to establish metrics for SLU monitoring cow activity and cow health. large scale and efficient milk production, notes George
measuring animal health The Swedish University of Agricultural Approximately 150 cows will be milked at The introductory programme began in August 2011 at SLU in Zhang, managing director of DeLaval China. Farms have
and welfare. Sciences new Swedish Livestock the new facility, which will be available to Uppsala. The first course participants were 11 Chinese dairy been small, with herds of five to 20 cows. As farms have
Research Centre at Uppsala-Lvsta offers College of Veterinary Medicine and College farm managers who had on-site training at Hamra, DeLavals consolidated, milk quality has not kept pace. Better herd
Founded in 2002, SAI is a non-profit research of the highest quality in animal of Agriculture and Life Sciences students. state-of-the art farm at its headquarters in Tumba, Sweden. manager training can help improve milk quality, ensuring
organization dedicated to helping share welfare, animal health, climate-smart DeLaval also cooperates with Cornell on food safety and consumer confidence.
knowledge and initiatives that support animal management and sustainable food animal health research projects and The participants say that the programme has helped them to
the development and implementation of production. DeLaval has supplied the new evaluation of the cow comfort range, better understand the relationship between healthy cows, food
sustainable agriculture practices. It centre with equipment, including testing including the swinging cow brush. safety and profitability, as well as how to manage large herds.
comprises the different stakeholders of of automatic milking rotary AMR and
the food chain. voluntary milking system VMS.

SAI is the main food industry initiative


supporting the development of sustainable
agriculture worldwide. Food industries are
the biggest purchasers of agricultural raw
materials and in order to rely on a constant,
increasing and safe supply of agricultural
raw materials, these basic materials must
be grown in a sustainable manner.

The Dairy Working Group of SAI Platform


is due to release the first outcome of its
metrics work during 2012.

In 2010 and 2011, we supported the


annual International Dairy Federation
(IDF) World Dairy Summit, focusing on
farmer best practice, environmental
research and animal
health. We are also proud
to be a founding member
of the Sustainability
Council at the Innovation Photo: Jack Mikrut
Centre for U.S. Dairy. Swedish University of Agricultural Sciences new Swedish Livestock Research Centre at Uppsala-Lvsta.

16 17
Animal welfare | Dairy development

Continuous dairy development Heading


The importance of animal welfare: we talk with Charlotte Halln Sandgren, 2 colour split
Dairy Development Director at DeLaval.
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What is your job here at DeLaval? A healthy start in life is also important. The foundation for
I am responsible for development of products that are kind the lifetime health of the cow begins at the point of calving. So
to animals. As a veterinarian and a researcher Ive been we have to find smart solutions that help the farmer to take
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working with animal health for 20 years, including at the care of their calves, and here feed plays an important role.
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Swedish Dairy Association.
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Experience shows that farmers care and early detection and
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Throughout the technological development of DeLaval products treatment of potential problems mean that they earn more
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I check against the focus areas and try to ensure that we take money. A healthy cow really is a happy and productive cow!
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the animals perspective, adapting the technology for the cow,
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not the other way around. How do you see the future?
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We must create a common message about solutions and
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What are the challenges for dairy farmers today? best practices that ensure animal health. We need to clearly
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Keeping the animals healthy. They need the right environment
something we call Cow Comfort. For instance, they are very
sensitive to heat when they are most productive. When a cow
show the benefits of Cow Comfort and how to achieve it.
Were creating solutions that effectively support the farmer in
working with their animals health.
People & society
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produces the most milk she makes about as much energy in
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one day as a man does when running two marathons. In the long run this will help to reduce the amount of antibiotics People make business, so its important that
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and other medications currently in use so that animals can live we are a good employer, business partner and
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Were building up a wealth of knowledge around maternal health a longer and healthier life. And we want to further refine and corporate citizen.
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before and after calving. Only the best is good enough for our develop tools for the early detection of disorders and integrate
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cows if they are to reach optimal health and production in the these in solutions for preventative measures.
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coming lactation.
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Underscoring everything is the need to increase the interest
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It is important that the cow has clean hooves that are in good and knowledge of what represents good animal health, and
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condition, and she should have plenty of opportunities to rest. its implications both inside and outside the company.
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undam que nem quae officab oreprorit et autem et voluptae adi ullupta tendescium simus eos.
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anihicaborem dellecum ut eatemol tisc ienihictur, quat.
uptatur rem earcil mi, aborios cor sunt
Six Tips for Animal Welfare hici tem seque nos essum dolo dolorem Hit alibeaqui seruptur sa qui consequi ut

1  here animals are concerned,


W
keep it clean and tidy and the
animals free from infection.

2 Give all animals a balanced diet


of quality feed.

3 Make the best cow comfort


available to the animals.

4 Monitor & care for animals with


disorders directly.

5 Take extra care of cows before


and after calving.

6 Give calves a good start in life.

Charlotte Halln Sandgren at Hamra Farm.

Picture captions look like this. Hicae sa quunt a solupta vera nonsectento te quundan ducipsandus veliquatio.

18 19
People & society | Our employees People & society | Our employees

Our employees
Our Code of Conduct states that Change
Unit 2011 2010 2009 Scope
companies within the DeLaval Group 2009-2011
recruit, employ and promote employees
Accidents
on the sole basis of their qualifications
and ability and there shall be neither Serious accidents number 34 35 33 +1 16 GMUs + 2 DDCs
negative nor positive discrimination.
Definition: Injuries that require medical advice/attention but lead to more than 1 working day of lost time.

We are committed to providing safe and Extraordinary accidents number 0 3 1 -1 16 GMUs + 2 DDCs
healthy working conditions for employees Definition: Any injury causing death, loss of body part or permanent disability.
in all parts of the world. All employees are
expected to share this commitment and Diversity
we do not tolerate any kind of harassment
Age and gender
or abuse in the workplace.
Employees aged <30 (female) number 138 143 131 +7 DeLaval Group
We strive for a good balance in the
workplace between men and women, Employees aged <30 (male) number 471 423 403 +68 DeLaval Group
age groups and nationalities. The ongoing
Employees aged 30-50 (female) number 532 485 404 +128 DeLaval Group
Diversity Challenge project involves
mapping DeLaval as a suitable employer
Employees aged 30-50 (male) number 2048 1991 2004 +44 DeLaval Group
for both men and women and will form the
basis for the next step in our diversity work Employees aged >50 (female) number 235 236 223 +12 DeLaval Group
to create a workplace that increasingly
reflects the markets we are present in Employees aged >50 (male) number 1030 997 951 +79 DeLaval Group
regarding culture, ethnicity and gender.
Gender

We believe diversity drives creativity and In January 2012 we received the Top Jobs award for the third time for our location in Glinde, the second Female employees % 20% 20% 18% 2% DeLaval Group
makes organisations more profitable. largest in terms of employees, as one of Germanys 100 most attractive medium size companies.
Female managers % 16% 16% 14% 2% DeLaval Group

Female non-managers % 21% 21% 19% 2% DeLaval Group

DeLaval honoured with Satisfaction

Australian Agsafe Award


I can influence my work situation Scale 1-7 4.94 * 4.90 +0.04 DeLaval Group

I have freedom to take initiative Scale 1-7 5.16 * 5.18 -0.02 DeLaval Group

I constantly develop myself in my job Scale 1-7 5.28 * 5.22 +0.06 DeLaval Group

In Australia, DeLaval Pty Ltd, which supplies farmers and vets, *Note: Survey run every two years
has been striving to continually improve safety, storage and
transport facilities for several years. In 2011, that dedication
was rewarded with a national Agsafe Achievers Award.

The award is part of the Agsafe Accreditation and Training Progress report
programme, an industry initiative that helps agronomy
and veterinary chemical businesses to comply with People focus areas 2009-2011 have been: Diversity challenge
government regulations. DeLaval employees are all Agsafe Mapping gender and age distribution.
accredited and have been involved with the service for Workplace safety Performance: Mapped and reported.
more than 15 years. Reduce serious and extraordinary accidents.
Performance: Slight improvement on 2009 and continued Employee satisfaction
Both the Advanced Agsafe Accreditation and the priority. Baseline extended to include all field and office Improve performance on key parameters.
Achievers Award are dedicated to a small warehouse personnel for inclusion in 2014 report. Training programs
Performance: Slight decline in freedom to take initiative.
staff in Tullamarine who have worked tirelessly to ensure implemented, including Des Plaines.
Improvement in the ability to influence ones work situation
that DeLaval endeavours to meet obligations on safety, The team in Tullamarine.
and develop oneself at work.
transportation and warehousing on a daily basis.

20 21
People & society | Our employees People & society | Food for development

Food for development


Employees at Des Plaines
celebrate Risk Award How public-private partnerships are being used to fight rural poverty
and malnutrition.

Des Plaines is the largest Milk Quality & Animal Annual safety programs were updated and fulfilled: fire
Health manufacturing unit in the DeLaval Group. drills, monthly inspections, monthly safety meetings,
MSDS documentation. OSHA training in General Safety,
In 2011, the U.S. facility achieved the Highly Protected Risk spill response, AED and CPR, as well as lock out Tag out.
rating from the property insurance carrier FM Global. All employees are required and given awareness training
in all these areas. The Emergency Response Team is
Highly Protected Risk is the highest level that can be trained in handling spills, accidents, and fire. Certification
awarded to a facility by the company. In order to achieve for Transportation of Dangerous Goods is also part of
such a high status, Des Plaines has implemented safety the training.
training and numerous safety measures to protect the
property, including sprinkler systems and evacuation plans. Our production range includes: FDA registered products,
DEA controlled substances, and EPA registrations; we need
In all chemical facilities, there are many elements of risk; to be well trained, well documented and be aware of any
they range from the facility, to the people, the equipment, risk that may cause an injury or an environmental concern.
the raw materials and even the products themselves. The
interaction of all these are a daily menu that Plant Mangers And the journey of improvement is continuing.
face each and every shift.

If any of these are not maintained, monitored, or not


functioning properly within specifications we create risk.

During the reporting period, the Des Plaines facility has


made changes: updated sprinkler systems, water pumping
systems, lighting projects and floor repairs have improved.
A complete review of all production equipment took place
and required replacement of pumps, scales, agitators and
drives, and tanks.

An audit of all processes and documentation resulted in


right sizing the organization and gave all employees a
sense of ownership and accountability for their activities.
Clean ups occurred in many areas: record keeping was
Tetra Laval Food for Development Office activities, a joint initiative Dairy Hubs in Bangladesh
updated; retention of samples was cleaned up and The team at Des Plaines.
between DeLaval and Tetra Pak, are part of our long-term business In an effort to increase the collection of locally produced milk
procedures were written.
development projects. Their aim is to encourage demand for locally for industrial processing, DeLaval and Tetra Pak joined forces
produced dairy products and support the transformation of to support PRAN Dairy Ltd, part of the PRAN-RFL Group food
subsistence smallholders into commercially viable farmers. processing conglomerate, in expanding its collection network
Labour management relationships by setting up dairy hubs.
Since 1998, we have had a Group Dairy Hub Development Concept
Personnel Representative Body in A dairy hub is a centre combining collection of smallholder milk The first hub in Bangladesh opened in September 2010 in
accordance with the European Works with services and training for farmers. A hub typically brings Chatmohar in Pabna district, and the second in September
Council Directive (94/95/EC). The body together 15-20 villages with 800-1,000 smallholder farmers and 2011 in Sirajgonj district. In the Chatmohar district, milk
meets at least once a year with the up to 10,000 cows, all working closely with a dairy processor collection went up from 2000 litres to 24,000 litres a day
CEO and has the overall objective of collecting their milk. By treating cows from many villages as one during the first 15 months.
promoting interaction between man- herd, economies of scale are achieved and farmers receive
agement and staff and to enhance training in feeding, breeding and animal health. Farmers connected to this first hub increased their monthly
relations between the personnel in incomes from an average 100 to 133 USD between October
different organizational entities. Throughout 2010 and 2011, DeLaval worked on Dairy Hub 2010 and January 2012. During the same period, milk yields
development in Pakistan and Bangladesh. Specifically we are increased from just under 6 to almost 8 litres per cow per day,
delivering and supporting the development of practical training compared to the average in Bangladesh of around 3.6 litres.
modules in such areas as feeding practices, silage and hay making,
breeding, calf rearing, cow health, mechanized dairy farming and (contd) >>
Members of our European Works Council. milk production as a business. We are also providing cooling tanks,
entry level milking machines and aftermarket products.

22 23
People & society | Food for development People & society | Hamra Farm

Hamra Farm
The view from here...
Hamra Farm is located next to DeLaval company headquarters,
30 kilometres south west of Stockholm. The farm has 230 milking cows
Amjad Khan Chowdhury (CEO of PRAN-RFL
and covers 2406 hectares, of which 851 are arable land.
Group) and his son Ahsan Khan Chowdhury
(Deputy Managing Director of PRAN Foods)
share their views on the development of dairy
hubs in Bangladesh. This holding enables DeLaval to develop Additional environmental initiatives include: their families, and inspired by its
and test new ways of producing high- success, Open Days have been held in
PRAN was founded by Amjad in Dhaka more than thirty quality milk, while serving as a model a manure handling system in the the autumn at Hamra since 2008 so the
years ago. Originally a processor of fruit and vegetables, farm with the best cows, conditions VMS Barn to reduce ammonia loss local community can also come and
the company now produces over 200 food products, and equipment. by up to 50%; take a look around. A total of 600
including dairy products since 10 years and exports to groundwater protection via a 6-metre visitors came to these events
77 countries. Hamra Farm was acquired by Gustaf protective zone maintained during
de Laval and his company AB Separator fertilization, sowing and spraying;
What are the challenges facing dairy production Amjad Khan Chowdhury, CEO PRAN-RFL Group in 1894 and remains today a way of a black earth spreader that is used to
in Bangladesh? keeping close to our customers and spread fertilizer down into the soil and
AHSAN: Bengalis have a tradition of drinking milk. But in this their daily operational needs. The farm can reduce nitrogen loss by up to 50%;
country of 160 million people, no more than 400,000 litres of AMJAD: The dairy hub model is more about social dairy is a subsidiary of DeLaval and run as a cultivation of own silage and maize,
milk are processed every day. Imports of milk powder have farming, which is probably more suited to our context than separate commercial unit. reducing the volume of external feed
met the large majority of dairy demand, while adults and even big farms. Our aim is to make the herds of 2-3 animals needed and thereby the number of
more children have often turned to other types of drinks. more productive, that is primarily what we are trying to do. Apart from milk production, the farm transports to and from the farm.
With this we can make dairy farming profitable, both for lets out properties, has its own crop
AMJAD: As a result, compared to other agricultural sectors the smallholder farmers and for our company. production, animal husbandry, plant Open Days
such as fruits (the mango revolution) and rice, dairy farming and equipment, forestry, a gravel pit Helping dairy farmers to provide quality
is a relatively underdeveloped sector. AHSAN: As my father said, dairy farming has traditionally not and a modern conference facility milk to local communities and beyond is
been seen as a profitable business. We can help to change that. with accommodation. an important social responsibility. It is also
What are the challenges facing dairy farmers? important for consumers to understand
AMJAD: One of the main challenges has been that dairy Looking ahead, what potential do you see? Environmental initiatives how their food is produced. Open day at Hamra Farm.
farming has not been seen as a business. Combined AMJAD: There is also a profound poverty alleviation aspect A wood chip burner has been installed
with a lack of land rights, this has seen to a relative lack to dairy farming. By building dairy hubs for dairy farmers, we on Hamra Farm for central heating. The A highlight of the Swedish farming year Improving farm working environments
of development. can create jobs where people are. Dairy farming is also so wood, which comes from the farms own is spring, when young calves and In 2010 and 2011, DeLaval hosted the
versatile, able to provide many more products than just milk, forest, now heats up personnel areas, heifers are released from the barn to Swedish Committee on Working
AHSAN: And then there is know-how. For example, just including fuel, fertilizer and leather. water for washing and has replaced pasture. At Hamra Farm, this popular Environment in Agriculture (LAMK)
importing semen from Australia, and expecting cows to 125 m of annual oil consumption. spring event is open to employees and annual conference at Hamra Farm.
perform, is not going to solve our problems. AHSAN: The challenge ahead of us is to produce more and
better milk. It is the challenge of replicating the success of the
How would you describe a dairy hub? first two dairy hubs, where DeLaval and the Tetra Laval Food
AHSAN: A dairy hub should provide smallholders with for Development team have provided technical guidance,
support on almost everything they need to know about commitment and enthusiasm. Our role is implementation.
dairy farming. Information on animal health, feeding, silage
making, deworming, milking machines, animal housing, AMJAD: In order to scale up the number of dairy hubs we
training and business; you name it. It should also be able will have to work very, very hard. But it is rewarding. And
to provide access to suitable milking technology. Im sure we will make it.

Disaster Relief
In 2010, Tetra Laval approved several donations to victims of In 2011, a donation of Euro 6 million was made to support
natural disasters. On Tuesday the 12th of January 2010 an immediate disaster relief efforts in Japan after the country
earthquake struck Haiti, devastating a country that was already was severely hit by an earthquake and the tsunami that
facing significant challenges due to severe poverty, a limited followed. The purpose was to help address some of the
economy and malnutrition. Tetra Laval made a significant in-kind more acute issues related to the supply of milk, water and
donation to help the disaster relief initiative. Another country hit foodstuffs to the people affected. The Tetra Laval Group
by natural catastrophes was Pakistan, which experienced some Board also decided to donate Euro 100,000 to the people
of the worst floods in 80 years affecting about 14 million people. affected by the flooding in Thailand and another Euro 100,000
The Group donated Euro 100,000 in kind to the flood victims. to support those affected by the earthquake in Turkey; in
Many areas in the Khyber Pakhtunkhwa, Punjab and Sindh both countries to support with food and water supply.
provinces were inaccessible and some of Tetra Paks customers
were affected in terms of milk collection and product distribution.

24 25
Corporate governance | Framework

Corporate Governance
Framework
The Corporate Governance Framework of DeLaval sets the baseline
of how we act in our operations worldwide, internally as well as in our

Corporate governance
external relations.

DeLavals business is operated under a governance system, which The Framework is key to the sustainable The Code of Business Conduct, DeLaval staff are regularly trained in
involves a set of relationships between the companys management, and successful business of DeLaval. It is Corporate Governance Policies and corporate governance generally, as
developed and mandated by the Board other supporting documents and well as in specific areas such as
the board, our shareholders and other stakeholders. How does this
and DeLavals Group Management (GM) information within the scope of the anti-corruption, compliance with
governance system work?
and consists of the following components. Framework are easily accessible to competition law and financial reporting.
all our staff through our intranet. In 2010, an e-learning programme on
Roles & Responsibilities anti-corruption was successfully rolled
The Code of Business Conduct Controls and training out to 74% of DeLaval staff, including
Corporate Governance Policies The Roles & Responsibilities set the all levels of management, in an effort to
Controls framework for the controlling and further raise awareness in this subject
supervising of the adherence to the across DeLaval. The participation and
The Roles & Responsibilities define the Code of Business Conduct, the results of the programme was monitored
areas of responsibility of different bodies Corporate Governance Policies and and has been followed up by appropriate
and functions within DeLaval. By the other supporting policies and guidelines. complimentary training.
Roles & Responsibilities, the Board
delegate to our CEO the responsibility to The yearly Management Declaration Supplier commitments
implement and enforce compliance with signed by our CEO and GM assures In an integrated value chain, we believe
the Code of Business Conduct, the to the Board conformance to the customers and suppliers must work
Corporate Governance Policies and all Framework. The CEO and GM in turn closely together to reduce end-to-end
other parts of the Framework. verify conformance through signed impacts. DeLaval therefore requires its
Corporate Governance Confirmations, suppliers to commit to a high standard
The Code of Business Conduct which annual Control Self Assessments and of performance in relation to our
is further supported by our Corporate quarterly confirmations regarding environmental policy commitments,
Governance Policies covers, amongst compliance with specific corporate compliance with laws and regulations,
other areas, compliance with laws and policies, submitted by the managing product safety and compliance with
regulations, health and safety at work, director of each DeLaval legal entity. regulatory requirements. The
anti-discrimination, confidentiality and commitment of our suppliers is
information management, conflicts of The internal audit team of Tetra Laval incorporated in our supplier contracts,
interest, anti-corruption and bribery provides further comfort that the making it a contractual obligation to
prevention and prevention of child Framework is adhered to across the adhere to those requirements.
labour and forced labour. DeLaval Group.
We work closely with our suppliers
Top-level operational commitment to Through our whistle blowing policy, our to ensure adherence to our policy
the Framework is secured by a GM staff is encouraged to escalate breaches commitments. In 2010 and 2011,
member being assigned as owner of of the Framework or other serious specific projects were launched to
each Corporate Governance Policy. inappropriate behaviour that comes to follow up and ensure our suppliers
A Corporate Governance Council their knowledge. An employee blowing compliance with the EC Regulation
was in 2010 formed to support the the whistle in good faith is explicitly REACH (Registration, Evaluation,
governance of the Framework and the protected from disciplinary actions or Authorization and Restriction of
management of corporate governance other HR consequences by reason of Chemical substances) and RoHS
matters in DeLaval. the whistle blowing. (Restriction of Hazardous Substances).

26 27
Report parameters | How we report
GRI Category Indicator GRI Description Location (page)

Strategy & Analysis 1.1 Statement from the most senior decision maker of the organization. 4, 5

How we report Organizational profile 2.1

2.2
Name of the organization.

Primary brands, products, and/or services.


1

delaval.com

2.3 Operational structure of the organization. delaval.com


The aim of this report is to inform about the environmental and social
2.4 Location of organizations headquarters. 1
aspects of our business and to support dialogue with our stakeholders.
2.5 Number of countries where the organization operates. 1

2.6 Nature of ownership and legal form. Tetra Laval 2011/12

1,
Scope reporting, the following priorities were identified as subjects 2.7 Markets served.
Tetra Laval 2011/12
Unless otherwise indicated, this report covers selected activities for reporting.
2.8 Scale of the reporting organization. 12, 13, 21
across the global operations owned by the DeLaval Group from
January 2010 to December 2011. Some areas of engagement, Report parameters 2.9 Significant changes during the reporting period. none
such as disaster relief and Food for Development, are coordinated With regards the Global Reporting Initiative (GRI), we have used
2.10 Awards received in the reporting period. 8, 20
through Tetra Laval. the GRI framework as a reference point for the development of
this report. This is not a formal GRI report and we have not Report profile 3.1 Reporting period for information provided. 28
We have chosen the topics in this report to reflect the issues requested external assurance. 3.2 Date of most recent previous report (if any). 28
most relevant, or material, to our business. To determine these,
3.3 Reporting cycle (annual, biennial, etc.) 28
we mapped how our company and our stakeholders rated the Communication on progress
importance of sustainability issues. This is the first external report. Every two years we plan to report 3.4 Contact point for questions regarding the report or its contents. 28
on our strategy and how we influence the environmental and
3.5 Process for defining report content. 28
The main stakeholders who influence DeLavals performance social issues that matter most to our business and where we
and goals, or are influenced by the company, are: Customers, can have the greatest impact. The next update is due 2014. 3.6 Boundary of the report. 28
Dealers, the Board, Employees, Academic and Research
3.7 State any specific limitations on the scope or boundary of the report. 28
institutions, Suppliers and Trade associations. We have not On-line
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other
counted the number of stakeholders this represents and have This report is available on-line at 3.8
entities that can significantly affect comparability from period to period and/or between organizations.
28
identified the need for a more thorough stakeholder analysis. www.delaval.com/en/About-DeLaval/The-Company/
3.10 Explanation of the effect of any re-statements. no re-statements

Using customer and employee surveys, internal strategy The Tetra Laval 2011/12 report can be accessed at 3.11 Significant changes from previous reporting periods in scope, boundary or measurements methods. 28
documents, workshops, trend analysis, research and media www.tetralaval.com/annual_report 3.12 Table identifying the location of the Standard Disclosures. 28

Governance 4.1 Governance structure of the organization. Tetra Laval 2011/12

Focus areas 2010-2011 Customers Operations 4.2 Indicate whether the Chair of the highest governance body is also an executive officer. Tetra Laval 2011/12

For organizations that have a unitary board structure, state the number of members of the
4.3 Tetra Laval 2011/12
highest governance body that are independent and/or non-executive members.
Environment Energy Energy
Mechanisms for shareholders and employees to provide recommendations or direction to the
Water Water 4.4
highest governance body.
22
Manure Waste
4.14 List of stakeholder groups engaged by the organization. 28
Hazardous substances
4.15 Basis for identification and selection of stakeholders with whom to engage. 28
Social responsibility Working conditions Health, safety and diversity Key topics and concerns that have been raised through stakeholder engagement, and how the
4.17 10, 28
Food for Development Corporate governance organization has responded to those key topics and concerns, including through its reporting.

Customer satisfaction Employee satisfaction Environmental EN3 Direct energy consumption by primary energy source. 13

EN4 Indirect energy consumption by primary source. 13


Animal welfare Feed
EN5 Energy saved due to conservation and efficiency improvements. 13
Animal health
Initiatives to provide energy efficient or renewable energy based products and services,
EN6 11, delaval.com
and reductions in energy requirements as a result of these initiatives.

EN8 Total water withdrawal by source. 13

EN21 Total water discharge by quality and destination. 13

EN22 Total weight of waste by type and disposal method. 13

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. delaval.com

Rates of injury, occupational diseases, lost days, and absenteeism, and number of workrelated
Labour LA7 21
fatalities by region and by gender.
Composition of governance bodies and breakdown of employees per employee category
LA13 21
according to gender, age group, minority group membership, and other indicators of diversity.

Society SO3 Percentage of employees trained in organizations anti-corruption policies and procedures. 27

Practices related to customer satisfaction, including results of surveys measuring


Product responsibility PR5 10
customer satisfaction.
Development and impact of infrastructure investments and services provided primarily for
Economic EC8 23
public benefit through commercial, inkind, or probono engagement.

28 29
For more information
DeLaval Headquarters
DeLaval International AB
PO Box 39
SE-147 21 Tumba
Sweden
Phone: +46 (0)8 530 660 00 info@delaval.com
www.delaval.com Fax: +46 (0)8 530 689 00 www.facebook.com/smartfarming

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is a registered trademark of Tetra Laval Holdings & Finance S.A. and DeLaval is a registered trade/service mark of DeLaval Holding AB.
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