Engro Stakeholder's

8/3/2019 Engro Stakeholder's

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CSR IN PAKISTAN

Most responsible organizations and businesses in Pakistan are making cash and in kinddonations for humanitarian and religious reasons. About 60 per cent of Public ListedCompanies (PLCs) make some sort of contributions to charitable or social developmentinitiatives.Humanitarian and faith-based donations mostly go to social sectors such as education andhealth. Some of the major factors determining philanthropy could include tax benefits,marketing advantages and better public relations. Despite the developing state of itseconomy, philanthropy is common in Pakistan. CSR, however, is at a nascent stage ofdevelopment. In recent years responsible multinationals and national companies havestarted executing CSR projects and creating positive examples for others to follow. Themomentum could build up but is contingent on a positive and sustainable businessenvironment. Pakistans leading businesses have wowed to abide by and adopt the tenguiding principles laid down by the UN Global Compact. But not all of them havetangible CSR programmers. The number of those who have CSR programmer is,

nevertheless, gradually on the rise.

Globalization has changed corporate social responsibility, the boundaries betweendomestic and foreign industry and between in-house and out-houses activities which hadled corporate to view from both political and economic view. On one side multinationalcompanies have taken the role of state and thus they should behave responsibly and onthe other hand they need to have corporate social behavior in order to protect their image.

Search for oil by Pak Stanvac, an Esso/Mobil joint venture in 1957, led to the discoveryof Mari gas field situated near Daharki -- a small town in upper Sindh province. Esso was

the first to study this development in detail and propose the establishment of a urea plantin that area. The proposal was approved by the government in 1964, which led to afertilizer plant agreement signed in December that year. Subsequently in 1965, the EssoPakistan Fertilizer Company Limited was incorporated, with 75% of the shares owned byEsso and 25% by the general public. The construction of a urea plant commenced atDaharki the following year with the annual capacity of 173,000 tons and productioncommenced in 1968. At US $ 43 million, it was the single largest foreign investment byan MNC in the country.

A full-fledged marketing organization was established which undertook agronomicprograms to educate the farmers of Pakistan. As the nations first fertilizer brand, Engro

(then Esso) helped modernize traditional farming practices to boost farm yields, directlyimpacting the quality of life not only for farmers and their families, but for thecommunity at large. As a result of these efforts, consumption of fertilizers increased inPakistan, paving the way for the Companys branded urea called "Engro", an acronym for"Energy for Growth".


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VISION:

To be the premier Pakistani enterprise with a global reach, passionately pursuing valuecreation for all stakeholders.

ENGRO BUSINESSES:

Engro Chemical Pakistan Limited (ECPL) The Companys current manufacturing baseincludes urea name plate capacity of 975,000 tons per annum and blended fertilizer(NPK) capacity of 160,000 tons per year. A premier brand and nationwide presenceensure sellout production.

Additionally, the company imports and sells phosphatic fertilizers for balanced fertilityand improved farm yields. Engros share of Pakistans phosphates market mirrors orexceeds its urea market share. Expansion plans include a new urea plant of 1.3 milliontons annual capacity, also at Daharki. The US$ 1 billion project is well underway and on

track for commercial production in mid 2010. This addition will increase Engros ureamarket share to 35% from 19% at present.

Engro Foods Limited (EFL) Engro Foods, a wholly owned subsidiary had its first fullyear of operations in 2007. The Company continued expanding with additions to brandportfolio, milk production and distribution capacities.

The portfolio now includes four impressive brands; Olper's milk, Olpers cream, Olwelland Tarang. Olpers market share peaked at 17% during 2007. EFL operates two dairy processing factories located in Sukkur, and Sahiwal. The companys milk collectionnetwork now boasts over 700 village milk collectors and 400 milk collection centers.

Covering 2400 villages across Pakistan, the activities of the Company touch the lives ofalmost 51,000 farmers.


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ENGRO CSR ACTIVITIES:

As part of its enduring commitment to improve the quality of life for its stakeholders,especially neighboring communities, ECPL contributed over Rs. 40 million under itssocial investments portfolio in 2009

This section describes Engros major initiatives:

1. Sahara Welfare Society Projects

Registered under the Voluntary Social Welfare Agencies Ordinance 1961, SaharaWelfare Society located in an office adjacent to the Daharki plant - is a nonprofitorganization managed by Engro employees and financed through employee and companycontributions.

A. Sahara Community School

Through Engros support, the Sahara Community School was established in 2002. Theschool educates 247 children from nursery through class 5, of which 108 are girls and139 boys, taught by 17 teachers. To maintain quality, the school keeps a good teacher-student ratio with the annual intake of students being restricted to 30 children in eachclass.

In addition to regular classes, the school also holds non-formal classes where a five-yearprimary curriculum is covered in three years. The non-formal classes, which started inAugust 2006, are meant for overage children who cannot be admitted to regular classes.Currently two batches, consisting of 46 and 42 children respectively, are benefiting from

this program.

b. Dar ul Shifa Clinic

Since 2002, the Dar-ul Shifa Clinic, an evening clinic in a dedicated room at SaharaWelfare Society, provides free medical consultation services to patients (mostly womenand children). The clinic has treated over 43,000 patients and provided medicines worthover Rs. 1.8 million since its establishment.

In 2008, 5,039 patients availed this facility and received free or highly subsidized

medicines worth over Rs. 372,000. The most commonly treated medical ailments wererespiratory tract infections (over 50% of total patients treated), skin diseases(approximately 25% of total patients treated), and gastro-intestinal tract infections (over8% of total patients treated). The highest number of patients treated by the clinic in 2008were children (2,665 or nearly 53% of total patients), followed by women (1,977 oraround 39% of total patients) and men (397 or 8% of total patients).


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C. Sahara Arts & Crafts Center

The Sahara Arts & Crafts Center was established in 2003 to impart vocational training tofemales in the surrounding communities to enhance their income generation skills. It isfully equipped and operates three shifts of two hours each for different batches of

students. The center has four well qualified instructors who provide training in differentskills including drafting, cutting, stitching, hand embroidery, machine embroidery andkhadda embroidery. All training activities of the center are designed and carried out inaccordance with the curriculum of the Sindh Board of Technical Education. Many of thestudents who enroll at the center are illiterate. The center provides training to its studentsfree of cost. Since its inception, the center has trained over 700 students in various artsand crafts, including 43 who enrolled in diploma courses. In 2008, the center impartedtraining to 264 students in stitching and embroidery, while an additional 16 enrolled inthe diploma course. USAID has provided financial support for the initiative in 2008through the International Youth Foundation and Rural Support Programmers Network(RSPN).

d. Teaching and Resource Center (TARC)

TARC was established in partnership with the Ali Institute of Education, Lahore, in 2000to provide a dedicated resource for teachers training. From 2000-2008, TARC hastrained 2,358 teachers from various government schools. In 2008 alone, TARC conducted190 hours of training sessions to train 45 teachers from katcha schools, adoptedgovernment schools and the Sahara school. TARC provides two kinds of training to theteachers. Through Subject Based Training sessions, teachers knowledge and skills arebuilt to deliver subject-specific classes in subjects like math, science, social studies andlanguages (English, Urdu, and Sindhi). While through Strategy Based ProfessionalDevelopment Training sessions, the teachers are trained in lesson planning, teachingmethodologies, class room management, child psychology, motivation, timemanagement, stress management, team building, conflict resolution, co-curricularactivities etc.

2. Katcha Schools Program

Under this program, Engro is supporting eleven primary schools in different villages ofthe katcha (river line belt) area along the Indus since 2001. Currently, 1,224 students areenrolled in these schools. The following table provides a snapshot of the program.

Engros support ensures provision of free education for all children enrolled at thesekatcha schools. Engros contributes furniture, text books, stationary items, and otherteaching and learning materials for the students, teachers, and the schools. In addition,twenty four teachers at the eleven katcha schools are employed on Saharas payrollthrough Engros financial support to address teacher shortages. Regular teachers trainingfor the katcha school teachers is provided through TARC. It is important to mention thatthese schools serve as the first and only access to education for the children in thesedeprived communities which suffer from extremely poor social and economic


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development conditions. These areas - based in an ecologically fragile area prone tofrequent flooding in rainy seasons lack basic health, education and infrastructurefacilities, and have traditionally suffered from high crime rates. Local communitiessupport the formation of these schools and are appreciative of Engros efforts to provideeducation for their children.

3. Government Schools Adoption Program

Initiated in 2004, this program enables Engro to identify and adopt government schools inneighboring villages with support from the provincial education department and localcommunities. Currently Engro supports ten adopted schools in eight villages (five eachfor boys and girls) with an enrollment of 2234 students. The following table presents asnapshot of the program. Engros support has led to improvements in physicalinfrastructure and academic standards of the adopted schools and in turn contributing toincreased demand for enrollment in these schools. In many cases, parents have withdrawntheir children from private schools to enroll them in Engros adopted schools.

Various stakeholders including government officials, principals, teachers, parents andlocal communities continue to express their appreciation for Engros efforts towardscreating a conducive environment and improving the quality of education for theirchildren.

4. Snakebite Treatment Facility

Engros snakebite treatment facility, housed at the Engro Clinic at Daharki, is a one-of-a-kind facility available for snakebite victims in Ghotki and surrounding districts. The

facility is open round-the-clock with professionally trained paramedic staff available toattend to patients.Since its inception, the snakebite clinic has treated nearly 80,000 patients and savedinnumerable lives. In 2008, the facility treated 4,962 patients, of which 1,416 patientswere administered the anti-snakebite venom (ASV) serum. Since the ASV serum is notproduced locally, the company imports the serum from India and provides it free of costto patients. In 2008 alone, over Rs. 2 million were spent on treatment of snakebitepatients. The following graph shows the number of patients treated over the year, with a peak in the July-September months when snakes are most active as a result of themonsoon season.

5. Indus River Dolphin Conservation Project:

The Indus River Dolphin is an endangered species and the only species out of four knownfreshwater dolphin species in the world to be completely blind. In 2006, Engro becamethe major sponsor for the Indus River Dolphin Conservation Project, with WWF Pakistanas the implementing partner. In 2008, the fully equipped multimedia Indus DolphinConservation and Information Centre, established in Sukkur, through significantcontribution from Engro, organized presentations for visitors, in an effort to promote


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awareness about the conservation of dolphins and dolphin habitats. Other activities whichwere organized through the project in 2008 included boat safaris, awareness raisingworkshops, an Open Day on Environmental Awareness, a Speech Competition as well asan Awareness Walk in 2008. Students, teachers, NGO representatives, localcommunities, Taluka Municipal Officers and the general public participated in these

outreach activities. Project support also led to the hiring of four community watch guardsin Sukkur and Guddu last year for dolphin watch and rescue activities and for raisingcommunity awareness for protection and conservation of dolphins. In addition, background work was also completed last year for the establishment of FisherSustainability Schools (FSS) to reduce threats to the dolphins survival by introducingsustainable fishing practices to the local fishing communities. The background workincluded socioeconomic survey of eighteen fishermen communities, development of arelevant FSS curriculum, and training of four Master Field Trainers from four localfishing communities.

6. Project Hope (Telemedicine)

Project Hope was established in April 2005 as a partnership between JinnahPostgraduate Medical Center (JPMC) and Engro. In 2008, Engro contributed Rs. 2million for the project in continued support, taking Engros total contribution to Rs. 8million since the projects inception It provides free and easy access to high qualitymedical consultation services of JPMC specialists to poor patients in remote rural areasof Sindh. Under the project, a hub and spoke model has been developed wherebyJPMC acts as a hub while the health facility in a particular rural location serves as aspoke. JPMC specialists are seated at the hub while patients are seated at the spokeaccompanied by a local doctor. Through video conferencing facilities, JPMC specialistsundertake consultation and diagnosis of patients. In addition, medical data supported by

specialized computer software allows JPMC specialists ready access to x-rays, ECG andother diagnostics information of patients in real time which assists them in diagnosis andtreatment.

7. Engro Thalassemia Center

In 2008, the Engro Thalassemia Center in Sukkur, housed at Sukkur Blood & DrugDonating Society, provided free blood transfusion facilities to 4,413 patients. Of thesepatients, 3,309 girls and 1,104 boys received blood transfusions. This facility serves as acritical life saving function for the most vulnerable children who are the main users of the

facility, many of whom travel with their parents from far away communities to avail thisfacility.


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8. Earthquake Relief in Balochistan

In response to the devastation caused by the earthquake in Balochistan in October 2008,Engro provided 4,000 cartons of milk as part of the primary relief efforts. The milkcartons were distributed among the earthquake affectees of seven union councils of Ziarat

and Pishin districts in Balochistan, in partnership with Hisaar Foundation.

9. Eye Camp in Sahiwal

With Engros support, a two-day free eye camp was organized on November 14 and 15,2008 at Sahiwal by the Al-Shifa Eye Trust Hospital. This event was well publicized forthe benefit of local communities and there was a large patient turnout. Over 900 patientsavailed the facilities at the camp, 600 patients received free medicine, while 300 patientsreceived free eye glasses. 120 patients were diagnosed for surgery at Al-Shifa EyeHospital, Rawalpindi, with the travelling expenses borne by Engro.

10. Malaria Control Program

Engro continued to work closely with local health department to promote healthy livingin the Daharki Union Council in 2008 by helping to effectively control the threat ofmalaria in surrounding villages. The inefficient drainage systems in these villages causewater pools to form, which in turn serve as breeding grounds for mosquitoes.

Engros contribution consisted of fuel and anti-malarial insecticides for two anti-malarialspraying campaigns. These spraying campaigns were held in July and September,considered peak months for the spread of malaria, in Daharki and villages of Jam AbdulFateh, Raharki, Kahir Mohammad, Fateh Pur and Dad Lighari.

11. Polio Immunization Campaign

Engro partnered with the Department of Health, Government of Sindh, and World HealthOrganization to undertake 10 polio immunization campaigns in Taluka Daharki in 2008.On average, 55,000 children were vaccinated during each campaign. Engros contributionconsisted of providing logistical support in the form of hired vehicles for mobilization ofpolio immunization teams in far-flung areas for the entire length of the campaigns, aswell as providing lodging and boarding facilities for WHO teams.

13. Infrastructure Schemes

Through drainage and brick-paving schemes, Engro contributed towards improving basicinfrastructure in the poor communities. While drainage schemes are aimed at improvinghygiene and health conditions of local residents, the brick paving schemes are geared toreduce possible injuries to pedestrians from walking on unpaved streets, especially after


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sunset and rainfall. Jung has benefited from the drainage scheme in 2008 while BagoBhutto was a beneficiary of the brick paving scheme in the same year.

14. Kidney Dialysis Centers

Established with Engros support in 2001 and 2005 respectively, two dialysis centers areoperating in government hospitals at Daharki and Mirpur Mathelo. These centers offerfree dialysis services to the needy patients with ongoing financial support from Engro forthe running costs. In 2008, the two facilities jointly conducted a total of 867 dialyses forpatients (525 at Mir Pur Mathelo; 342 at Daharki). Patients visit these facilities not onlyfrom surrounding areas, but also from far flung areas like Kashmore and Rahim YarKhan.

RECOMMENDATIONS FOR CSR PROGRAM:

Engros overall csr activities are quite satisfactory. The initiatives and endeavors thatengro has taken since its inception are worthwhile. What engro believes is its continuousstrive for the development and welfare of the poor. It has certainly catered varioussegments in a very efficient manner. Besides catering the grass root level in the countryEngro must also step forward towards the Career Counseling of the teenagers who arequite indecisive about their strengths and the field they must opt for their future. Themajor part of the population of Pakistan comprises of youth that is under age of 25.Therefore, in order to channelize the youth another initiative towards technical educationfor industries must be taken. This step will not only help out the company but will also bebeneficial for the economy our country. The technical literacy will assist the company toexpand its operations and its multiple growth providing with an edge over its competitors.The cost it has to incur to educate at the upper level will not only be reduced but also letthe company to have dedicated staff that can work with the company on long term basis.This act in particular will assist the firm to work side by side in completion of its vision.

The company can also have its own R&D centers all over the country inducting andinviting the local graduates to work with the company that will provide numerousopportunities for pass ours in various company sectors.

The other sector to look forward can be Environment control program initiatives that willeducate the masses on how our environment can be made safer.

Having extra funds, the company can also promote tourism by investing in the northernareas that will in return benefit the company.

The company has certainly shown its dedication towards social responsiveness at variousoccasions but it may also carry out the responsibility by venturing into such projects thatwill lead the company to long term triumph not only domestically but also globally.


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WORKING FOR STAKEHOLDERS

COMMUNITY AND SOCIETY:

We are sensitive to the needs of our stakeholders especially those of our hostcommunities, and most of our social investments directly address these needs. Engro

Foundation plays a leading role in making meaningful investments towards addressingthe social and economic needs of these communities.

Engro Foundation serves as a single platform for community engagement activities andsocial investments of Engro affiliates. By pooling their financial and managerialresources under the Foundation, Engro seeks to create large scale social impact

EMPLOYEES:

Engro is committed to conduct business in a manner that protects the health and safety ofits employees and the communities in which they operate. HSE performance andprograms at Engro are annually reviewed at the board level.

Engro also recognizes the importance of protecting the environment while conductingtheir business and believe that caring for the environment is not only an ethical and legalobligation but also a mechanism for success. Engro abides by all local environmentallaws and regulations including National Environmental Quality Standards (NEQS). Theycontinually strive to align our HSE management systems and processes to internationalbest practices including Occupational Safety and Health Administration (OSHA) andDupont Workplace Safety Standards.

The following aspects are hallmarks of our HSE systems at Engro:

PROCESS SAFETY:

At Engro, process safety information and operating and maintenance procedures aredesigned to identify and understand the hazards posed by processes involved in operatingthe plant and handling highly hazardous chemicals.


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Engro uses structured inspection and quality assurance mechanisms to ensure safety ofour operations. In the construction of new plants and equipment, Engro ensures that thefabricated and installed equipment is suitable for process application.

All the changes to process safety information, operating and maintenance procedures and

facilities are duly controlled through a robust change management system.

WORKFORCE SAFETY:

Every Engro employee involved in plant operations is given an overview of the processand operating procedures, with an emphasis on the specific HSE hazards, emergencyoperations including shutdown, and safe work practices applicable to the employees jobtasks.

They also keep our employees trained and up-to-date on all technological changes andensure control mechanisms duly account for employees performance on safety related

aspects of their jobs.

WORKPLACE HEALTH:

The Occupational Health program at Engro includes industrial hygiene and occupationalmedicine aspects, focusing primarily on reducing health risks of employees. Engromonitors our employees regularly with reference to the risks they are exposed to, takingall necessary steps to reduce these exposures.

FOOD SAFETY:

Engro seeks to become the preferred choice for all consumers by maintaining higheststandards of quality and safety, as our top priority, in food business.

To ensure that the products are of premium quality, they have implemented stringent foodsafety management systems that are aligned to the international standards. In addition,they have also adopted grass to glass approach for our products throughout our valuechains.

Food safety requirements are embedded in the business objectives, performance benchmarks, and business processes. Engro ensures compliance against these

requirements across our food business through regular internal monitoring mechanismsand external audits.

RISK MANAGEMENT & EMERGENCY PREPAREDNESS:

Engros direction on emergency response and planning is two-fold: to strengthen systemsand procedures according to world class safety standards and to conduct the business in asocially responsible manner.


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Engro employs comprehensive emergency plans at its sites which include defining keyroles in case of release of hazardous chemicals; simulation exercises to ensurepreparedness; and surprise drills to respond to emergencies

ENVIRONMENTAL PERFORMANCE:

Being a socially responsible company, Engro has a continuous focus on environmentalaspects of its operations and mitigation of their impacts.

Environmental awareness is deeply rooted in the work culture since the Companysinception in 1968. Various environmental projects have been carried out since then, andengro is continuously investing to upgrade our systems and improve standards tointernational benchmarks. In addition, measuring and monitoring performance againstsafety and environmental metrics is an integral part of the management system at Engro.

Documents

Engro Stakeholder's