Paper 6_Nestle_ARCoFS 2013.pdf

8/14/2019 Paper 6_Nestle_ARCoFS 2013.pdf

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CO-AGR

CREATING SHARED VALUE -

SECURITY THROUGH SUSTAINABILITY

Nestl Malaysia Agriculture Services

ASEAN REGIONAL CONFERENCE on

FOOD SECURITY

8-10 October 2013, Penang


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CO-AGR

1.Creating Shared Value2.Nestle Supplier Code

3.Nestle Sustainable Agriculture Initiatives4.Nestle Paddy Club5.Conclusion

AGENDA


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Creating Shared Value

At Nestl, we believe that to have

long term bu siness success, you

mus t simu ltaneously create value

for our sh areho lders and fo r the

pub l ic. We cal l this Creating

Shared Value and this is a

fund amental pr inc iple behind the

way we condu ct bus iness at

Nestl.

Mr. Paul Bulcke

CEO, Nestl S.A.


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4 17 October 2013

Nestl in Society:

Creating Shared Value and Meeting Our Commitments


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Rural Development Highlights

17 October 2013 5Nestl in society: Creating Shared Value and meeting ourcommitments

Working directly with more than 690,000 farmers

Employing more than 1,180 agronomists and 12,000 support staff

Providing financial assistance to 44,000 farmers worth USD 37.8 million

89.5% of our suppliers complied with the Nestl Supplier Code

In Malaysia, projects involving chillies, rice, oil palm etc


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The Nestl Supplier Code

The Nestl Supplier Codeestablishes certain non-negotiableminimum standards that we ask our suppliers to respect andadhere to when conducting business with Nestl

Business IntegrityCompliance with applicable laws andregulations

SustainabilityWe support and encourage operating

practices, farming practices, and agricultural productionsystems that are sustainable

Labor Standard - Prison/forced labour, child labour, workinghours, non-discrimination in employment

Safety and HealthSafe & healthy work condition. Product &services supplied must meet quality & safety standards asrequired by applicable law

EnvironmentSuppliers must operate with care for theenvironment and ensure compliance with applicable laws andregulations.


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by implementing SustainableAgriculture Initiative Nestl,

SAI-N, practicesto impact

Food safety

Quality Assurance

Farm income generation

Crop and yield improvements

Cost improvements

Animal health

Transport and logistics

Water use & irrigation

Technical extension

Corporate Communications

Certifications

Etc

How do we achieve our CSVand NSC goals?


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Fresh Chilli Contract Farming

- Spicing Up the Community

Project Objectives:Commenced in 1985 to create new income

opportunities for local farmers, and ensure

a supply of reliable, controllable, traceable

and sustainable supply of chilis for Nestle.

Through transfer of technology on GAP,

farmers improve their yield and quality of

crops to meet strict Nestle standards.

Approximately 80% of the chili produced

under this scheme is purchased by Nestl,

which is estimated to meet 60% of Nestls

fresh chili requirements for its products.

Nestl (Malaysia) Berhad


10/3317 October 2013TPM - AM Pillar 10

Nestl Initiative on Sustainable Rice

Nestl Malaysia Agricultural Services


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JL25.8.11

Project initiated in May 2010 in

Kerpan, Kedah, north Peninsular

Malaysia

Started with 20 farmers over 40 has

as pioneer pilot batch

No. of farmers increased to 59 in May

2011 over 110 has, and today

membership stands at 320 farmersover 842has

NestlPaddy Club was officially

launched on 16 Feb 2012

About Nestl Paddy Club


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Objectives of Nestl Paddy Club

Commercialise Semi Aerobic Rice Intensification (SARI), a Nestledeveloped innovation, to deliver triple people-planet-profit wins.

Procurement of a reliable, controllable, traceable and sustainable

white rice for Infant cereals manufacturing.

Ensure and maintain quality of rice produced to be in full

compliance throughout the supply chain.

To increase yields and/or reduce unit costs by using

environmental friendly and natural/organic based approaches,

and encourage ecological farming practises among farmer

members.

Reduce environmental impact of rice growing, especially in

terms of lesser water usage and decrease in methane emission.

Optimise the use of chemical based fertilizers and pest control.

Communicate Nestls commitment to Sustainable Agriculture

Practises vis a vis an effective Creating Shared Value platform.


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Expected PPP Benefits

People : Easy and environment-friendly way toincrease yields and/or rationalise costs, safe handling ofagri-inputs, pride in effort and network.

Planet : Water conservation (30-40% less), methaneemission reduction, reduced environmental footprint,natural augmentation of soils.

Profit : Better potential for farmers to get extra real

income rather than from outright price difference. Nestlhas access to a reliable, controllable, traceable andsustainable source of rice for infant cerealsmanufacturing.


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Alternative Miller

(future/BCP)

Nestl Paddy ClubSupply Chain Flow Chart

Supply AO with 40%

discount of market price

to Nestl and product

technical support.

NestlCereal PlantFinal inspection of

rice prior to use for

production

(Secondary

Cleaning)

2nd process

and cleaning

prior delivery to

Nestl.

Last season- 289 farmers

over 784 has, ave. yield 5 mt

Current season-320 farmers

over 842 has.

Final target of 900 has to

produce 9000mt paddy/ year

Nestl Agricultural

Services

Provision of Agri-Organica(AO) @ RM500/ha (charge to

ROH Cost)

Technical support and

organization

Ban Eng Hin & Chuan Huat

(Primary Mil l ing)

Appointed miller with

dedicated storage for NPC

Paddy is paid at market

price

MarketFinished goods

and ready for

consumptionRecycling of used HDPE container

Field School

Food Chain Partnership


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Conventional Contract Farming with Premium

vs Nestl Paddy Club

Nestl Paddy Club Targeted to increase 25% of

average yield of 4mt ie 1mt

extra

Potential to receive additional

income of RM1100based on1mt incremental yield

Provision of AO by Nestl @

RM500/ ha vs RM800/ha

market price

Inculcate farmer loyalty viadirect and close engagement

Platform to educate farmers

on GAP & sustainable

agriculture

Conventional Expected price premium

10cents/kg

Average yield is 4mt/ ha, hence

farmer will receive only RM400

based on above premium Impersonal

No control on farmers if other

miller offer at higher price

Difficulty on engaging the

farmers on GAP andsustainable agriculture

VS


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What is Agri-Organica?

Formulated and made in Japan using advanced

fermentation technology.

Contains live beneficial food grade microbes,

microbial enzymes and trace elements enabling

faster and stronger growth of plants.

100% natural, non-GMO, absolutely without

antibiotics and any other chemicals.

Totally safe to use, supports traceability andsustainability.

Has a very high microbial count of live microbes.


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AGRI-ORGANICA CONFORMS TO THE FOLLOWING ORGANIC

CERTIFICATION AND IS CERTIFIED 100% ORGANIC


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2ndPaddy Trial With Nestle


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NESTL PADDY CLUB 2011/2012(SAMPLE COPY OF NPC MEMBERS INFORMATION)

M NO. MEMBER DETAILS FARM FARM SIZE(RELONG)

Plantingdate

No. of AOissued (2L

bottle)1 2 3 4 5 Comments

00001SABRI BIN NAYAN

Matang Bongor 21I/C : 670219-02-5871

Tel : 012 - 4699 864

NO. SUBSIDI : K011 / 2626

00002KHOSIM BIN MD DAUD

Matang Bongor 7I/C : 571112 - 02 - 5683

Tel : 017 - 4269 572


00003ISMAIL BIN HASHIM

Matang Bongor 7I/C : 691211 - 07 - 5199

Tel : 017-420 3108

NO. SUBSIDI : PPK K011/2737

00004ABU HASAN BIN DIN

Matang Bongor 12I/C : 481022 - 02 - 5795

Tel : 04 - 7944 061

NO. SUBSIDI :

00005NAZARUDDIN BIN KAMIS

Matang Mahang 4I/C : 750404 - 02 - 5291

Tel : 016 - 4619 779

NO. SUBSIDI : K011 / 04284

00006 CHEW HOCK CHAIMatang Mahang 6

I/C : 550728 - 02 - 5419

Tel : 012 - 5641 882


00007 CHEW LOK TIN @ CHEW TONG TIN Matang Kenanga 3

I/C : 420109 - 02 - 5019

Tel : 04 - 7947 455

NO. SUBSIDI :


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6

4.48

6.85

0

1

2

3

4

5

6

7

8

Main Season (2011) Off Season (2011) Main Season 2012

NPC Target

National YieldAverageNational Yield

Yield(mt/

ha)

Average yield of Nestl Paddy Club

59 farmers/ 109 has 104 farmers/ 274 has 170 farmers/ 475has 289 farmers/ 784has

Off Season (2012)Main Season (2012)


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Yield Gap of Nestl Paddy Club

10.3

9.22

12.1

2.1

1.31

3.3

0

2

4

6

8

10

12

14

Main Season (2011) Off Season (2011) Main Season (2012)

Highest Yield

Lowest Yield

Yield(mt/

ha)


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Traditional Farming Practises are still very much

the norm

And Nestl focus is on

marrying the old and

new


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Nestl Paddy R&D

30 days15 days0 day

researchown and with UTARsmall box trial for new innovation4 replicates per treatment


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Nestl E&D Farm

located in Sik, Kedahstarted in year 2000semi-commercial trial on field15 plots (~1 ha/plot)

4 cycles (seasons) for eachtreatment


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DuPont / Bayer FCP

Collection center forused HDPE container

Training on GoodAgricultural Practises

(GAP) focus on PAT,Safety and Environment

Networking &

knowledge sharing


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Nestl Man on the Ground

Quality begins from the

Farm


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Moving ahead

Continue strong focus on looking for new Nestlrice innovations to address increasingly difficult

rice growing conditions.

Closer interaction with member farmers and

come up with a Best Practice Manual.

Reduce yield-gap between high and low

producing member farmers.

Maximise network to advance NPC objectiveseg SRP, IRRI, Nestle AgriNet etc


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Oil Palm Smallholder Engagement

Objective to engage with oil palmsmallholders in the Kinabatangan region,

with a view to acquiring Certified

Smallholder Sustainable Palm Oil status

and channel into the Nestle palm oil

supply chain

First pilot scheme of 30 oil palm

smallholders met on 6thDec.2012, and

active engagement since Jan.2013onwards, and target to acquire CSSPO in

two years.

CO-AGR


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Oil Palm Smallholder Showcases

Two Best Practise demo-

farms in place using a Nestl

approach of integrating

conventional and holistic

approaches to oil palm

growing, particularly suited

for smallholders

Innovative experimentations

on creating additional

income from the conducive

canopy cover afforded by

their matured oil palm trees


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In Conclusion

.

.

.

There is no conclusion,

because sustainability is not

about concluding,

but about continuing
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While we are still a long way fromsolving all shared problems, SAI has

shown us that if the food industry

unites around sustainable agriculture

issues, it can be an effective catalystfor change. As we look ahead to the

next decade or so, it seems wrong to

talk about the future of sustainable

agriculture because simply put, there

is no future without sustainable

agriculture!

CO-AGR

Peter Brabeck-Letmathe,

Chairman, Nestl

S.A.


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after the last grain is harvested and consumedafter the last fish is caught and eatenonly then will man realise that he cant eat money...THANK YOU

Documents

Paper 6_Nestle_ARCoFS 2013.pdf