INTRODUCTION
In 2013, BRF went through major structural and strategic changes. It was a year in which several seeds were planted: we went through an organizational restructuring and a change of strategic vision, also established total focus on consumers and started a project of integration of areas. 2014 was the year that changes came to life. We started to reap the fruits that were planted last year: we become more innovative, fast and determined. And the results are already being recognized by the market, through the appreciation of our shares and the awards received throughout the year. Today we are an established company, present in 95% of Brazilian homes and one of the 100 most innovative companies on the planet. Moreover, we occupy the seventh world position of the food industry and we are among the leading of global provider of animal protein. |
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KEY INDICaTOrsGRI G4-9
R$ MILLION | 2010 | 2011 | 2012 | 2013 | 2014 |
Net sales | 20,370 | 23,167 | 25,975 | 27,787 | 29,007 |
Brazil | 11,127 | 12,756 | 13,979 | 14,371 | 15,367 |
International | 9,243 | 10,411 | 11,996 | 13,416 | 13,640 |
Gross profit | 5,209 | 6,112 | 5,902 | 6,910 | 8,509 |
Gross margin (%) | 25.6% | 26.4% | 22.7% | 24.9% | 29.3% |
Operating income | 1,499 | 2,026 | 1,360 | 1,896 | 3,478 |
Operational margim (%) | 7.4% | 8.7% | 5.2% | 6.8% | 12.0% |
Ebitda – Continued Operations | 2,254 | 2,914 | 2,295 | 3,009 | 4,709 |
Ebitda margin (%) – Continued Operations | 11.1% | 12.6% | 8.8% | 10.8% | 16.2% |
EBITDA | 2,264 | 2,914 | 2,283 | 3,131 | 4,897 |
EBITDA margim (%) | 10.0% | 11.3% | 8.0% | 10.3% | 15.4% |
Net profit – Continued Operations | 815 | 1,386 | 797 | 1,015 | 2,135 |
Net margin – Continued Operations | 4.0% | 6.0% | 3.1% | 3.7% | 7.4% |
Net profit (losses) – Discontinued Operations | (11) | (18) | (27) | 47 | 90 |
Net income | 804 | 1,367 | 770 | 1,062 | 2,225 |
Net margin (%) | 3.9% | 5.9% | 3.0% | 3.8% | 7.7% |
Market value | 23,853 | 31,776 | 36,810 | 42,969 | 55,350 |
Total assets | 27,752 | 29,983 | 30,765 | 32,375 | 36,030 |
Shareholder’s equity1 | 13,637 | 14,110 | 14,589 | 14,696 | 15,655 |
Net debt | 3,634 | 5,408 | 7,018 | 6,784 | 5,032 |
Net debt/EBITDA | 1.61 | 1.86 | 3.07 | 2.17 | 1.043 |
Earnings per adjusted share - R$2 | 0.93 | 1.59 | 0.92 | 1.17 | 2.46 |
Number of shares | 872,473,246 | 872,473,246 | 872,473,246 | 872,473,246 | 872,473,246 |
Number of treasury shares | 781,172 | 3,019,442 | 2,399,335 | 1,785,507 | 5,188,897 |
1Include continuing and discontinued operations
2Earnings per share consolidated (in R$), excluding treasury shares
3For the 4Q14, we have only considered the results from continued operations (excluding dairy) for calculating the ratio, impacting the ratio of 2014. For other years, the calculations include both continued and discontinued operations
To better reflect the structural changes in the Company, we have changed the terms used from Internal Market, to Brazil, and External Market to International. The results presented bellow refer to the Company’s continued operations, excluding the results obtained from the discontinued operations (Dairy). As the Company announced in December 2014, the dairy division is in the process of being sold to Lactalis
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IN 2014, BRF REVIEWED ITSMATERIALITY, DEEPENING ITSRELEVANTMANAGEMENT THEMESACCORDING TO THE PERCEPTION OF THE PUBLICS WITH WHICH THE COMPANIESRELATES. FIND OUT BELOW A DEACRIPTION OF THE BUSINESS IMPACTS IDENTIFIED BY THESTAKEHOLDERS. BASED ON THE NEWMANAGEMENTMODELANNOUNCED IN JANUARY 2015 (READMORE ON PAGE 30), THE COMPANY WILL IMPROVE THEANALYSIS OF THESE IMPACTS DISCUSSED ON THEMATERLALITY PANEL 2014 (READMORE ON PAGE 70AND 71). SOME TOPICS WIDELYADDRESSED IN THEMATERIALITY PANELARE IDENTIFIED IN THISREPORT BY THESYMBOL OF AMANDALA.GRIG4-19,G4-20,G4-21.
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GRIG4-1,G4-2
The year of 2014 was an outstanding year for BRF. The company advanced in its ambitions and in the definition of a new culture. We consolidated our operating and strategic groundwork, which allowed the company to structure itself as a global organization, bigger and better in what it does, and driven by every one of the more than 100 thousand people who are part of the direct workforce. Bringing together professionals with different backgrounds, aspirations and skills, gave us the opportunity to build a competitive differential. To do so, in 2014 we introduced theViva BRF, a program which aims to create coherence in the organizational environment, bringing well-being and motivation to the employees, and generating “owners’ passion” in them. Focusing on the business´ differential, in addition to the discipline in planning and executing, are virtues which, combined, help accomplish BRF´s results to levels of excellence, satisfying all of our stakeholders, and leading to further development in the productive chain. In an economic scenario of challenges and unstable market conditions, we need not only to be the biggest, but also the best in what we do. | In order to achieve this, we advanced in implementing controls for the socio-environmental aspects of our operations and long-term thinking, investing in innovation, internationalizing the Company and improving the level of service. All of which to ensure that BRF becomes a company even more respected, esteemed and appreciated, standing out as natural choice for our customers and an important partner for clients, employees and investors. In 2014, we approached each one of the main pillars of the BRF-17 strategic plan, establishing priorities and increasing our efficiency and integration. Engaging the teams, encouraging meritocracy, orientation towards the market, segmenting the regions in which we operate and focusing on sustainability in the value chain, were more than just guidelines, they were essential elements that defined our corporate standpoint. We continued working on our plan to add synergies to the operations, by mapping out opportunities to increase our profitability, cost efficiency and margins. We adjusted the support structure and the managerial models of the manufacturing units, making them more agile in their decision-making process. | We initiated a new process of go-to-market (GTM) in Brazil, through the consolidation of our sales force. The purpose of this project is to expand our penetration, reduce redundancies in the sales processes, and improve the productivity per salesperson. We also focused in better servicing our clients, having identified new opportunities to improve our service level – both in terms of delivery deadlines and logistical processes, as well as in inventory management. As part of our strategy of being more market oriented, we reviewed our presence in then roles points, refined the negotiation processes, and implemented a system to monitor inventory in real time, which all together, resulted in a substantial increase in the service level when compared to 2013. Placing the final consumer in the core of our business strategy has proven to be the right choice. We are investing in surveys and studies that allow the company to continuously update its portfolio. The products we launched in 2014 are a testament to that. In total we launched over 120 new products, including the Soltíssimo line of sliced goods, bringing flavor and convenience to the consumer. We are anticipating market trends, and adopting a segmented view adapted to exactly match the profiles of the customers we serve in over 120 countries. |
12Annual and Sustainability Report BRF 2014
In line with our international expansion strategy, we inaugurated the processed foods plant in Abu Dhabi, in the United Arab Emirates, expanding our presence and global service capacity. With the capacity to produce up to 70,000 tons of processed foods per year, this plant was delivered in record time, reflecting our ambitious view to grow stronger in regions such as the Middle East, South and Southeast Asia and Africa. Besides the launch of our manufacturing plant in Abu Dhabi, we also announced the acquisition of three of our main distributors in the Middle East, a region of extreme relevance to the Company, where we already present with a renowned brand for more than 30 years. In line with our strategy of focusing on our Company´s core and most profitable businesses, in 2014 we entered into a strategic partnership with Minerva, passing on our cattle slaughtering plants in exchange for equity shares. Additionally, we signed a contract with Lactalis to sell our dairy operations. Another key element of our business is socio-environmental responsibility which integrates our strategy through the Sustainability Pillars. Eco-efficient projects in the manufacturing units and initiatives | in partnership with the value chain, such as animal welfare and human rights, have been the focal point of our actions in recent years and are demonstrating positive results. Reaffirming our commitment to sustainable development, we are signatories to the United Nations Global Compact and have been part of the Corporate Sustainability Index (ISE) of the BM&FBovespa stock exchange for the last 10 years. Despite a year of structural adjustments in the Company and reduction of international sales volumes, the performance of the businesses and the consolidated results were better than expected. This was mainly due to a significant improvement in profitability of the international market and a shift in strategy, positioning the consumer as the key element for its sustained growth. We registered this year, considering the consolidated results of the Company as well as the results from the dairy operations (discontinued operations), R$31.7 billion of net revenues, 4.0% higher than 2013, R$4.9 billion of EBITDA (56.4% above 2013) and net income of R$2.2 billion, 109.4% higher than 2013. Free cash flow amounted to R$4.1 billion in the year, a considerable improvement of almost three times more of what was generated in 2013. | These indicators are a proof that we have chosen a daring, but solid strategy, to enhance our performance and better positions us to face future risks, converting them into opportunities. We have a robust and increasingly more efficient production structure that will allow us to continue growing in the coming years, investing in mutually beneficial relationships with clients and suppliers in order to meet the demands of the different markets with the BRF quality standard. The year of 2015 starts with new challenges, some being of economic nature, but nevertheless, we will continue to focus on achieving our mission of being a company admired for its results, brands and innovation capacity. We are confident that it will be another year of consistent achievements in our strategic guidelines, focused on growth and profitability.
Abilio Diniz Chairman of the Board of Directors Pedro Faria CEO - Global |
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80 YEARS OF HISTORY, ESTABLISHED BRANDS IN 120 COUNTRIES AND OPERATIONS IN VARIOUS CATEGORIES AND SEGMENTS MAKE THE COMPANY A REFERENCE IN FOOD INDUSTRY. | With a portfolio that includes established brands in Brazil and abroad, such as Sadia, Perdigão, Qualy, Chester, Perdix and Paty, BRF is now the seventh largest food company in the world by market value and the world second largest slaughtering Company.GRI G4-3, G4-4 Through business in segments of meat (poultry and pork), foods processed of meats, | pizzas, pasta and frozen vegetables, it is present in 95% of the brazilian homes and reaches more than 120 countries in Europe, Latin America, Middle East, Africa, Eurasia and Asia.GRI G4-6, G4-8 The operational structure is now composed of 47 factories - 34 meat processing plants and 13 of the discontinued dairy operation plants - 27 logistics centers in Brazil and 10 industrial units abroad - the latest in Abu Dhabi, opened in November 2014. |
16Annual and Sustainability Report BRF 2014
In the end of 2014, BRF totaled R$29 billion in net revenue and R$2.1 billion net revenue on continued operations, which do not take into account the results obtained with the dairy business. These results were achieved thanks to structural changes carried out during the year 2014, with improvements of basis of sales points in Brazil, improvements in service that increased customer satisfaction, growth in regions such as the Middle East and Southeast Asia, and also projects to increase capillarity and distribution capacity. Today, BRF accounts for 1.8% of the Brazilian trade balance and concentrates about 20% | of world trade in poultry, generating almost 115 thousand jobs - 104 thousand direct besides to negotiating with approximately 13 thousand integrated producers.GRI G4-9 The Company is publicly traded since 1980 and has been part of “Novo Mercado” from BM&FBovespa for nine years. In 2014, it completed a decade of participation in the Corporate Sustainability Index (ISE), reflecting its commitment to sustainable development. It also has shares traded on the New York Stock Exchange (NYSE - ADR level III) and in 2014, was listed again in the Dow Jones Sustainability Index Emerging Markets.GRI G4-7 |
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STRATEGYAND BUSINESS MODEL
Increased productivity, enhanced distribution capabilities, customer service, portfolio renewal, international expansion and return on invested capital for shareholders and other stakeholders are essential elements of BRF future vision. In order to consolidate itself as a global company, leader in the markets in which it operates and adapted to the needs of its customers, the organization has since 2013 the BRF-17 a strategic plan that defines actions, goals and priorities by the year 2017.GRI G4-47 In general, BRF-17 seeks to create a leading company focused on business with high return on investment, which owns admired brands, presented in different markets with local identity and oriented to the end consumer and the client. | Built in 2013, reviewed by the entire Company in 2014 and approved by the Board of Directors, the guidelines address the need to increase the company’s value generation, comprising indicators such as revenue and profit, cash flow generation and return on invested capital (ROIC - return on invested capital). Four corporate support guidelines were added in the review, and every year the Company reviewed and adapted its planning. In order to achieve the expected result for shareholders, investors and other stakeholders, the strategic guidelines were structured in regional markets and corporate support areas (platforms), which address the internal processes of the organization and its value chain (see table). | BRF today is structured around business divisions for each region and support areas, responsible for aspects such as Fraud Prevention, Marketing and Innovation, Legal, Risk Management, Human Resources, Sustainability, among others. The execution of the planning is based on goals that directly affect the compensation and evaluation of all leaders.GRI G4-51 The year 2014 represented the challenge to implement the guidelines set forth in BRF-17, focusing on: internationalization and regionalization process with respect and adaptation to markets; the construction of an integrated BRF culture; improvement of the service level, cost efficiency and cash flow, delivering results expected by the market and redirecting efforts to core business.GRI G4-2 |
BRF-17G4-2
How the company intends to address the challenges and opportunities to fulfill its strategy
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IN BRAZIL | ||||
The year was marked by projects that focused on the performance of the company by investing in segments, brands and strategic business. One of the highlights was the expansion of the presence of BRF brands, reaching 159 thousand points of sale. The improvement in the provision of services to domestic customers, measured by the indicator OTIF (On Time In Full), was also a positive point: making progresses when compared with 2013. | During the period, we also entered into a partnership agreement with Minerva in the cattle business, executed on 10.01.14, in which the terms and conditions for the sale of the two slaughter plants in the state of Mato Grosso were established. In exchange, we become a strategic shareholder of Minerva, obtaining a share of approximately 15.2% in its total and voting capital (after full conversion of mandatorily convertible debentures issued by the company), with the right to two seats on the board. In the second | half of 2014, 2000 employees of the slaughter plants were transferred to the company.GRI G4-13 BRF also sold the dairy division - brands Batavo and Elegê - to Parmalat (Group Lactalis) for R$ 1.8 billion, and the expectation is that the conclusion of this business takes place in the end of the first semester of 2015. Such operations reflect an unbundling strategy and maximization of results, focusing on the company’s key business. |
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BRF INTERNATIONAL | ||||
In addition to the good operating performance (read more on pages 47, 53, 55), the Company opened a new plant in Abu Dhabi, United Arab Emirates - a strategic operation to strengthen the presence and production in the region where the brand Sadia is already “Top of Mind “(The most remembered by the consumer). With a capacity to produce 70,000 tons and have 1.7 thousand employees by mid-2017, the plant produces processed meat (breaded products, hamburgers and pizzas, for example) and was executed following efficiency and productivity guidelines, with the latest technology. It is also in line with the economic plan Abu Dhabi 2030*, positively impacting the economy and the local productions.GRI G4-EC8 Another effort was driving global portfolio to processed products with high added value, reinforcing the company’s positioning abroad and reducing the presence of commodities in the mix of products. | With pillars such as: brands, distribution and local production, BRF also advanced in the acquisition of logistics operations abroad. The Company acquired some distributors in the region such as: FEDERAL FOODS:in 2013 had already acquired 49% of interest in Federal Foods, a leading company in the distribution of food in the United Arab Emirates. Continuing this strategy, it announced in 2014 the acquisition of additional economic rights of this company. AL KHAN FOODs (AKF):in early 2014 it acquired 40% of equity interest in AKF, BRF’s product distributor in the Sultanate of Oman and leading distributor of frozen products in the region, covering a broad scope of retail customers, food services and wholesale. ALYASRA:leader in the distribution of food in the State of Kuwait, covering the retail and food services industries, with a presence in frozen, chilled and dry segment. BRF acquired 75% of its business | of distribution of frozen food in retail as part of a larger commitment to this market. In April, the Company announced the closing of the joint venture with Dah Chong Hong Limited and now will seek new opportunities and partnerships in Mainland China region, Hong Kong and Macau. At the end of the year, a signature of the Memorandum of Understanding between BRF and Indofood was announced, seeking to expand business in Indonesia.GRI G4-13 During the year, specific plants in Brazil were also activated in order to expand access and export to the Chinese and Russian markets, with the production of poultry meat in natura and processed poultry (to China) and butters and powdered milk and porky and poultry meat in natura to Russia. In the context of Russia, five poultry units and three pork units in Brazil were also reactivated in order to expand the supply of the region after the embargo of the country to the United States and Europe. | ||
*The strategic plan proposes optimize urban development in order to build infrastructure bases for a socially cohesive and economically sustainable community that preserves the cultural heritage of the Emirates. |
SUSTAINABLEGROWTHGRI G4-2
24Annual and Sustainability Report BRF 2014
COMMITMENTS ANDCOMPACTSGRI G4-15 | ||
•GLOBAL COMPACT:support for the | •NATIONALPACTFOR ERADICATION Of SLAVE | •CDP CLIMATE CHANGE:encourages |
promotion of core values in the areas of | LABOR INsTITUTE (InpACTO):commitment | responsible management of carbon |
environment, human and labor rights and | to action to eradicate slave labor in supply | emissions, climate change, strategy, risks |
fighting corruption. | chains. | and opportunities. |
•MILLENNIUM DEVELOPMENT GOALS: | •“NA MÃO CERTA” PROGRAM:supports | •CDP WATER:addresses the management of |
proposes the eradication of hunger, | the effective combating to the sexual | water resources in organizations and their |
respect for human and social rights and the | exploitation of children and adolescents on | supply chains. |
universal work, among other issues. | Brazilian highways. | •“EMPRESAS PELO CLIMA” |
•BUSINESS COMPACTFOR INTEGRITY AND | •BRAZILIAN GHG PROTOCOL PROGRAM: | (COMPANIESFOR CLIMATE):supports the |
ANTI-CORRUPTION:commitment to ethics | promote transparency of the companies | construction of low-carbon economy in |
in business, following a set of guidelines | on marketing and managing their carbon | Brazil, assessing risks and opportunities and |
and procedures in their relationships with | footprint. | collectively discussing practical solutions |
entities and public officials. | and contributions to the legal milestone in | |
the country. |
RECOGNIZED MANAGEMENT | |||
Efforts to increase the efficiency of its processes | • | CDP Brasil:Ranked 4th in the list of Leading | |
gave to BRF a series of awards that signal the | Companies in Transparency; | ||
ongoing commitments to sustainability. Among | • | “Melhores da Dinheiro”:winner in the | |
them: | category “Social and Environmental | ||
• | “As 50 Empresas do Bem” (The so good | Responsibility”; | |
companies):awarded byIstoÉ Dinheiro; | • | McDonald’s 2014Best Sustainable Supply: | |
• | “Guia Exame de Sustentabilidade” | winner in the category “Waste” with reverse | |
(sustainability guide):one of the 61 leading | logistics project of animal health waste. | ||
companies in sustainability, especially in the | |||
category “Climate Change”; | |||
• | “Award IstoÉ – As empresas + Conscientes” | ||
(more conscious companies:winner in the | |||
category “Environment”; | |||
OTHER INSTITUTIONALAWARDS | |||
• | Award Apex Brasil: Exporter Performance, | • | 50 most innovative companies in Brazil, of |
Apex Brazil | magazineConsumidor Moderno | ||
• | 100 most innovative companies in the world, | • | Best IR Team of food and beverage industry |
awarded byForbes | in Latin America, according toInstitutional | ||
• | Best Agribusiness Company in 2014, magazine | Investor | |
Globo Rural | • | Best Corporate Governance byCapital Abertoe | |
• | “Anuário Época Negócios 360º” (Yearbook), of | Abrasca | |
Época Negócios |
25
CORPORATE GOVERNANCE | ||
BRF incorporates the main international | In 2014, the Statutory Audit Committee was | The structure of collegiate bodies is |
governance practices through a steering and | created, a body that performs audit functions | made up of professionals including skills, |
monitoring system, led by the guidelines of | formerly performed by the powered Audit | requirements, competences and diverse |
shareholders and collegiate bodies, which | Committee. This committee, composed of | experiences, contributing to the decision- |
proposes to increase the market value of | two independent directors and an external | making throughout the complexity of BRF |
the Company, the good relationship with the | financial expert, has two-year terms of office | business model in Brazil and abroad. The |
public and facilitated access to the capital, | and ensures the conduct of audit processes, | criteria for selection and appointment for the |
contributing to the longevity of the business. | fraud prevention and internal controls | senior governance body and its committees |
according to the highest standards required | are technical competence, the unblemished | |
Listed on “Novo Mercado” and signatory | by the international rules of the capital | reputation, the condition of not holding |
to the guidelines established by São Paulo | market.GRI G4-34, G4-38 | positions in competitors or representing |
Stock Exchange (BM&FBovespa) and by | conflicting interests and the appointment | |
New York Stock Exchange (NYSE), BRF seeks | The delegation of responsibility on | by shareholders. The company does not |
to adopt corporate governance practices | sustainability issues occurs through | discriminate on grounds of gender and |
that ensure transparency, equity, ethics, | deliberations in collegiate bodies, involving | culture.GRI G4-40 |
risk management, the balance of strategic | the Board of Directors and the Executive | |
decisions and accountability. | Board, followed up by the management | |
system. The collegiate bodies are evaluated | ||
The main governance bodies are the Annual | by process specially developed by a | |
Shareholders’ Meeting, the Board of Directors, | specialized independent consulting firm, | |
the Supervisory Board the Statutory Audit | and the president does not have executive | |
Committee, advisory committees, areas of | functions.GRI G4-35 | |
Fraud Prevention and Internal Audit and the | ||
Executive Board (see box).GRI G4-34 |
26Annual and Sustainability Report BRF 2014
ROLESANDRESPONSIBILITIES | ||
SHAREHOLDERS’ MEETING– Main | AUDIT COMMITTEE– consists of three | The President of the Board does not have |
recommendation channel of the shareholders | members acting under the US law, and | executive functions, and the evaluation of |
to management, the meetings are held with | may forward the complaints to the Fraud | directors is performed by an independent |
around 70% of shareholders, who have their | Prevention Board, investigate or hire an | consulting firm.GRI G4-39, G4-40, G4-44 |
participation stimulated by direct approach | independent company, and, if necessary, | |
to investors and sending of guidance | mobilize the Board of Directors. | EXEcUTIVE BOARD– by the end of 2014, |
manual, detailing the meeting grounds | executives held positions of Global CEO, | |
and general guidance on the process. The | BOARD Of DIRECTORS– is responsible for | Vice-President of Finance and Investor |
meetings approve the financial statements, | approving the relevant decisions by the | Relations and five Vice-Presidents. During |
mergers, elect the Board of Directors and | Executive Board, the Strategic Long Term | the year, the planned transition of the Global |
the Supervisory Board and approve the | Plan, in addition to the processes and | CEO was announced, and Claudio Galeazzi - |
remuneration of managers, among other | standardizations assigned to resolution by | who took the office in 2013 to promote the |
relevant demands.GRI G4-53 | this body. The relevant resolutions shall be | restructuring of costs and expenses, achieving |
passed by at least 2/3 of the members of the | improved results - was replaced with Pedro | |
SUPERVISORY BOARD– consists of three | Board.GRI G4-42, G4-45 | Faria, who was an International CEO and took |
members, meets on a monthly frequency, | the office of Global CEO on January 1, 2015 | |
at least, and addresses issues related to | The current board was elected in April 2013 | |
supervisory management of the Company’s | for a term that will end in 2015. Directors are | With the function to achieve the results |
business. | selected according to four criteria: technical | and objectives of BRF-17, executives are |
skills; unblemished reputation; not holding | responsible for managing impacts and | |
ADVISORY COMMITTEES– Support the Board | positions in competitors or representing | economic, environmental and social issues, |
of Directors in strategic decision-making, | conflicting interests; and the appointment by | with monthly meetings to monitor the |
through monthly meetings with participation | shareholders.GRI G4-40 | performance and the results. |
of top management representatives. In 2014, | GRI G4-35, G4-36 | |
four committees were active: Strategies and | In December 2014, it consisted of 11 | |
Markets Committee; Finance and Risk Policy | members, 5 of whom were independent* | |
Committee; Governance and Sustainability | (55%), a figure that exceeds the 20% | *The concept of independent director is defined by Novo Mercado rules and the criteria set forth in the Sarbanes-OxleyAct. |
Committee; and People, Organization and | recommended by the rules of BM&FBovespa. | |
Culture Committees.GRI G4-34, G4-36 |
GOODGOVERNANCE PRACTICES | |||
• | Exclusive maintenance of common shares | • | Financial statements follow international |
• | Equal rights and premium on public | accounting principles (IFRS) and | |
offerings | determinations of the Internal Control | ||
• | Investors protection mechanisms | System of Financial Reporting (SCIRF), | |
• | Arbitration for settlemets of conflicts of | guided by the Sarbanes-Oxley Act (SOX) | |
interest | • | Novo Mercado | |
• | Mandatory takeover (OPA) - tag along | • | ADR Level III |
of 100% | • | Technical Notes Process to support the | |
• | OPA with premium to be offered by | decision making of collegiate bodies | |
shareholders or groups of shareholders | |||
who decide to hold over 20% of the | |||
total capital |
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NEW STRUCTURE | ||
In January 2015, BRF announced a new | corporate support in areas such as Quality | The expectation is that the new structure will |
administrative model, in line with its growth | and Management, Innovation and Marketing, | enable BRF to strengthen decision making |
process and globalization. In it, five General | Supply Chain, Legal and Corporate Relations, | considering needs and strategies tailored to |
Managers are to report to the Global CEO, | Finance and IR and People. In Brazil, five | different consumer markets, and encourage |
heading business units by geographic area | regional leaders were created: Northeast | international vocation of the Company and |
(Brazil, Latin America, Europe/Eurasia, Asia | (based in Recife), West/North (GMT), São | the autonomy in management. |
and Africa/Middle East). Everyone will have | Paulo (capital), South (Curitiba) and Southeast | |
(Rio de Janeiro). |
30Annual and Sustainability Report BRF 2014
STATUTORY EXECUTIVE BOARD
31
ETHICALANDRIGHTEOUS BEHAVIOR | ||
GRI G4-56 | ||
All relationships, practices and negotiations | it can reduce financial, environmental and | The monitoring and investigation of |
held by BRF assume compliance with | social impacts, correct the causes with | complaints are under responsibility |
policies, standards and the Company | agility, reduce non-compliance and maintain | of the Fraud Prevention Board, as well |
conduct guidelines. In 2014, the structures | the reputational image of the Company | as the management of the Reporting |
were strengthened to prevent fraud and | Before government and society. These | Channel. The complaints received related |
anti-corruption. The Related Party Policy, | situations are addressed under the Code | to fraud are documented and treated as |
which governs various operations carried | of Ethics and Conduct and the Articles of | in-house investigation process, following |
out with BRF stakeholders - such asjoint | Association. | specific methodology. The mechanisms |
ventures, business partnerships and business | for complaints cover both the external | |
agreements, was also approved. | Main set of guidelines that guides business | (consumers, customers, suppliers etc.) and |
activities, the Code of Ethics and Conduct | internal public (employees and executives), | |
Disclosed to the capital market, the policy | is based on the principles of consistency, | allowing that the demands are taken |
is managed and applied by the Governance | transparency, integrity and respect for | to the Statutory Audit Committee. All |
and Sustainability Committee, reporting | society. The Code is currently undergoing a | matters relating to the prevention and |
to the Board of Directors. Contracts with | revision process in order to put it in line with | investigation of fraud were reported to the |
Related Parties are reported in the Notes to | the new demands and modern issues of the | Audit Committee during 2014 due to the new |
the Financial Statements in accordance with | markets where the Company operates. The | structure.GRI G4-37, G4-50 |
IFRS rule. | document is available on the intranet and | |
the Internet, for employees and investors | By the end of 2015, the Reporting Channel | |
In 2014, the Fraud Prevention Board was | and business partners, in Portuguese, English | will undergo a redesign and continuous |
created in order to strengthen ethical | and Spanish. Among the issues covered are | improvement process to: improve |
behavior inside the organization. The | ethics, behavior and human rights.GRI G4-57 | transparency on reports received, recorded |
area reports to the Board of Directors, via | and treated, besides facilitate to ensure | |
Statutory Audit Committee, and adopted a | During the year, was also published | the integrity of information; speed up the |
contemporary model widely accepted by the | corporate policy on combating bribery and | processing of claims; and generate auditable |
market for risk management of fraud. The | corruption. BRF meets, in its daily practices, | records of investigative activities. |
model proposes identify, document, assess, | international provisions of references such | |
monitor and mitigate the risks of fraud and | as the Foreign Corruption Practice Act (FCPA), | |
corruption to which the Company is exposed. | United Kingdom Bribery Act (UKBA) and the | |
GRI G4-58 | Brazilian Law 12,846 (Anti-Corruption Act). | |
GRI G4-57 | ||
Compliance and righteous aspects are | ||
highly relevant to BRF and its supply chain, | Other policies that guide the actions of BRF | |
involving various social and environmental | is the Code of Conduct for Suppliers, the | |
risks - such as quality of life of the | disclosure and trading policy, the Financial | |
neighborhood, consumer health, food safety, | Risk Management Policy and the company’s | |
business reputation etc. Acting preventively, | by low. |
COMPLAINTSMECHANISMS | ||||
Environmental | Labor | Human Rights | Impacts to society | |
(GRI G4-EN34) | (GRI G4-LA16) | (GRI G4-HR12) | (GRI G4-SO11) | |
2013 | ||||
Settled in 2014 | 100% | 100% | NA | 100% |
2014 | 11.1% | 31.3% | 60% | 51% |
In progress | ||||
2014 | 88.9% | 68.7% | 40% | 49% |
Solved | ||||
Due to the creation of the Fraud Prevention Board and new methodologies to obtain improvements, it is not possible to compare the data in this table with the previous year’s data. |
32Annual and Sustainability Report BRF 2014
OPEN DIALOGUE | |||||
By offering various mechanisms of | for everyone. By the end of the year, it | Corporate Communication is also a channel | |||
communication and dialogue, BRF improves | recorded 3,625 interactions with activations | for issues related to negotiations brought | |||
its relationship with its stakeholders in | in more than 60 locations (plants, branches, | via media such as accidents/incidents and | |||
order to achieve continual improvement | distribution and administrative centers). | complaints from consumers. In addition, | |||
of its products and processes, manage its | In 2014, about 40 ideas received from this | the Consumer/Customer Service (SAC) | |||
risks properly and know more deeply the | channel were implemented.GRI G4-26 | serves as space for inquiries, information, | |||
perception of society regarding the business. | compliments and complaints, and the | ||||
Although not its function, the channel can | operators are able to give direction to the | ||||
Reporting Channel are available on the | also receive complaints. When it occurs, they | demands within five business days. | |||
intranet, internet (http://www.brf-br.com/ | are forwarded to the Fraud Prevention Board. | ||||
brasil/en/customer-service-hotline/ethical- | GRI G4-49, G4-57 | ||||
hotline), national phone numbers (0800- | REASONS TOCONTACT SAC | ||||
702-7014) and international phone numbers | Also for the internal public, there is the | 2012 | 2013 | 2014 | |
(55-11-3466-8510) and mail. For employees, | Corporate TV, which shows the areas of the | ||||
in addition to those channels, there are | company, brings news, addresses issues such | Search for | 39% | 36% | 48% |
other specific means used for internal | as health and safety, allows teams to answer | Information | |||
communication (written and television). | questions and generates approach with | Recipe Requests | 35% | 46% | 27% |
executives, the CEO and President of Board of | Compliments/ | 5% | 5% | 5% | |
The channel “Conta pra Gente”, existing | Directors. This channel has monthly periodicity | Suggestions | |||
in Brazil and abroad (“Tell Us” and | and has a schedule made exclusively by | ||||
“Cuéntenos”), values the internal | employees. All channels such as magazine | Various issues | 15% | 7% | 14% |
communication and pursues dialogue with | “Mundo BRF”, Intranet and local Murals, have | Complaints | 6% | 6% | 6% |
its employees to build a better company | as premise show employees as protagonists. |
COMPLIANCE IN OPERATION | ||
The Company owns systems and tools to assess | In 2014, BRF continued the Control Project of | In April 2014, a Conduct Adjustment |
the level of compliance of the operations in | Operation Obligations. The initiative, under | Agreement was signed with the |
order to identify instances, prevent risks and | implementation, monitors the expiry of | Prosecutors’ Office of the State of Goiás |
improve environmental, work, health and | licenses as well as their constraints, focusing | due to irregularities in ground activity of |
safety conditions for employees and business | on 100% compliance of manufacturing and | approximately 300 tons of solid material |
partners. Several aspects are considered, | agricultural activities. The monitoring is done | without proper treatment, in Rio Verde (GO) |
including environmental management, work | using a system that controls operating and | unit. The Conduct Adjustment Agreement |
environment, operational functioning etc. | environmental permits. | in progress is in compliance with the |
signed agreements and also doing others | ||
improvement actions. |
BRF is committed to the | are set, as well as how to answer the | |
ENVIRONMENTAL | investigation of incidents involving | protester. Actions involve the factories |
COMPLAINTS | social and environmental impacts | and the corporate area of Environment, |
GRI G4-EN34 | of its production chain. Through an | and are linked to the risk mitigation |
internal standard for Environmental | strategy. | |
Communication, flows and heads |
33
RISKMANAGEMENT | ||
Accompanied by the Finance and Risk Policy | •SUPPLY CHAIN– for the extension and | •FOODSAFETY– BRF quality system has |
Committee and validated by the Board of | complexity of its production chain, BRF | specific programs for food safety, such |
Directors, BRF risk management policy | maintains a series of actions and guidelines | as Good Manufacturing Practices and |
is reviewed at least annually, to reflect | that ensure the supply risk management, | Hazard Analysis and Critical Control |
in the strategic planning externalities, | including the Procurement Corporate | Points, with preventive measures to |
challenges and opportunities for the business | Standard, the PRINAD assessment | eliminate biological, physical and chemical |
environment of the organization. | (Probability of Default) and the preparation | hazards. Suppliers have specific clauses |
GRI G4-45, G4-46 | and update of the Strategic Sourcing – a | of quality assurance in their contracts, |
tool used by provisions to analyze the | ensuring traced production to the level of | |
The Company has an area dedicated to the | market, the category, Sourcing strategies | agricultural care and practices (supplied |
subject, responsible for supporting and | and negotiation, as well as the supply risk | food and medicines, for example). |
guiding the various areas in the identification, | of each supplier involved in the chain. These | Additionally invests in cutting-edge |
quantification, communication and treatment | practices are reflected in the Monitoring | equipment such as metal detectors |
of risks, through tools and monitoring of | Program of Supply Chain, which helps | and X-ray equipment to reduce physical |
indicators. The management, however, is | mitigating social and environmental risks, | contamination, certification of production |
effectively done by the areas responsible | such as image and reputation, production | sites and shopping aligned to international |
for potential risks. Among the activities that | downtime, fines etc. (read more on pages | standards (read more on pages 82 to 85) |
the Risk Management department performs | 77 to 81). | |
are the Business, Financial and Market Risk | •COMMODITIES– The policy was revised | |
Management, Internal Controls, compliance | •OPERATING– Operational risk management | in 2014. The risks are associated with |
with SOX and Information Security Act. | program (RMP) has existed since 2010 and | the volatility and seasonality of certain |
proposes the prevention of property claims | inputs and raw materials, considering | |
The management is conducted through | and events that affect the productivity | some that are essential to business, such |
tools and indicators reported to senior | and continuity of operation - such as | as corn, soybean meal, soybeans, pork |
management bodies. They are considered | scarcity and cost of labor, logistics network, | and milk as well as internal and external |
the main issues associated with the industry | factories etc. | market conditions, diseases, sanctions and |
segments in which BRF operates, as well | embargoes that could affect the supply. | |
as geographies met and the economic, | In BRF, the precautionary principle affects | Faced with the challenge of dealing with |
regulatory and social and environment. | investments in the development, design, | price changes, inventory and movement of |
manufacturing and distribution and sale of | products and raw materials, the company | |
The activities are monitored by the Board of | products. According to the principle, scientific | focuses on optimization of freight costs, |
Directors and the Advisory Committees and | uncertainties are considered sufficient reason | production efficiency and intelligent use |
the Executive Board, to validate the identified | to avoid certain projects, initiatives and | of available resources, and has recently |
risks, quantify them and criticize the actions | practices of organizations, preventing the | invested in the unbundling of chain, with |
taken by the Company to mitigate them. | threat of serious or irreversible damage to | the transfer of cattle and dairy operations |
GRI G4-46, G4-2 | human health and the environment.GRI G4-14 | (read more on pages 23, 46, 47, 52, 54, 55). |
The main risks monitored by the company are: | In addition, there is insurance against damage | •IMAGE AND REPUTATION– BRF has a |
and events involving their physical assets and | strong image related to solid corporate | |
•FINANCIAL– BRF has a Financial Risk | the Operational Control Center, since 2012 | governance and is seen as a company |
Management Policy, revised in 2014, | implemented in Curitiba (PR), which allows | aligned with values such as trust, ethics and |
whose monitoring is performed by the | the integrated management of operations. | transparency, which are the images that |
management committee of same name. | the Company seeks to maintain. A clear | |
The guidelines allow the veto of proposals | •SANITARYCONTROL– - Measures to mitigate | image, a risk and reputation policy and a |
considered inadequate and the definition of | these risks are linked to quality principles | responsable marketing policy supports all |
standards for transactions and operations, | adopted in the factories, in the production | business segments are maintained by the |
as well as ways to mitigate the impact of | chain and distribution process. In slaughter | Company, and its business standards cover |
exchange rate volatility. | plants, for example, there are specific | the domestic and foreign market relations. |
practices to meet and also overcome the | ||
health laws of markets served and avoid | ||
possible international embargoes to a | ||
specific region. |
34Annual and Sustainability Report BRF 2014
•LEGAL/TAX– Regulatory and legal aspects | The main risks identified by BRF relate are to | Among the measures to minimize the mapped |
are monitored in different markets in order | physical aspects, such as extreme changes | risks and ensure competitiveness in costs are: |
to reduce the risk of exposure to penalties | in temperature and rainfall, affecting | the monitoring of inventories in purchase of |
for non-compliance and bring more safety | agricultural productivity, animal welfare | grain and the constant monitoring of climate |
and predictability to the operation. | and availability of energy - as hydroelectric | on agricultural regions to guide purchasing |
predominate in the Brazilian energy matrix. | decision and anticipate price fluctuations in | |
•ENVIRONMENTAL– Monitoring involves | These changes can directly impact the | the commodities market; the development of |
the reduction of environmental incidents/ | Company’s costs by several factors, from the | energy efficiency projects; and technological |
accidents in the production chain, from | rise in the price of agricultural commodities to | innovation in agricultural facilities in order to |
suppliers to the end consumer, passing | the need to search for other energy sources, | improve the ambience and acclimatization |
through the plants and agricultural | in view of the risk of rationing electricity | and ensure animal welfare. |
operations. The insurance policies provide | because of water scarcity. | |
for limited coverage for environmental | Further information can be found at website | |
damage in the Company’s units. | In mapping climate related the regulatory | of CDP - Climate Change Program, where the |
aspect was also considered, monitoring | company reports its management in climate | |
•CLIMATECHANGE– With the theme included | the changing trends in licensing laws that | change (www.cdp.net -> reports&data). |
in its strategic pillars of sustainability, BRF | incorporate management of GHG emissions | GRI G4-EC2 |
strategy considers the aspects related | in the national and international scene; | |
to climate risks, assessing and managing | and reputational aspect, as developed | |
potential impacts on the operations and | markets are more demanding in relation to | |
supply chain, recognizing the vulnerability | environmental aspects of the product, mainly | |
of natural resources and agricultural inputs | carbon emissions. | |
critical to its productive activity. |
Uberlândia Plant
DURING THE YEAR, WE PRIORITIZE | To leverage the sales results and meet | Valuation fronts of intellectual capital |
REVIEW OF THEGLOBAL PORTFOLIO, | its strategic direction, BRF has increased | inside BRF involve not only innovation in |
WERETHINKAND WE TAILOR OUR | investment in innovation. In line with BRF-17, | end products, but also improvements in |
PLANTSAND LAUNCH INNOVATIONS | more than R$190 million was invested in | operations, new technologies and production |
THATANTICIPATE CONSUMER | research and development of new products | of scientific knowledge. In 2014, the strategy |
TRENDS. | and processes, as well as in agricultural | ofprofitable portfoliodirected several |
researches, in order to anticipate consumer | decisions at the national and international | |
trends, expand market share, achieve greater | markets, in order to invest in high value- | |
efficiency and ensure the leadership of the | added products and develop key categories in | |
Company’s brands. | each area of operation. |
38Annual and Sustainability Report BRF 2014
Through it, innovations, launches and further | ||
studies are planned from current, future and | ||
expected market trends, in line with strategic | INNOVATION | |
planning. | AWARDED | |
During the year, we invested also in | ||
direct process innovation in the products, | GLOBAL VISION | For the third consecutive |
generating important launches for closer | year, BRF was elected one | |
ties with the consumer (see table). The | The international market was another focus | of the 100 most innovative |
innovations are developed with support | of innovation for BRF. Through market | companies in the world, |
of the various Research, Development and | intelligence studies and understanding of | according to theForbes |
Innovation (RD&I) teams, which are present | consumer habits in each country, RD&I, | magazine ranking. The award |
in all stages of the production chain of BRF, | Marketing and Quality teams aimed at | evaluates the growth in value |
with units located in Carambeí (PR), Curitiba | understanding the “local taste” - that is, | of the companies according to |
(PR), Jundiaí (Innovation Centre BRF, SP) and | what the consumer expects of BRF products | market expectations related |
São Paulo (SP), in Brazil. | and competitors - and translate it into | to its capacity for innovation in |
unique products for the markets served by | products, services and markets | |
The input of consumers has been | the Company, as the case of the Middle East | served. |
strengthened by reviewing BRF action plan. | and Europe. |
39
TOTAL INVESTMENT INRESEARCH, DEVELOPMENTAND INNOVATION DURING 2014.
In addition to earnings from opening of | EFFICIENCY IN | The project involves the allocation of funds |
new markets, it identified the opportunity | OPERATION | and the intelligent meeting of demand: more |
to enter in regions that were not served by | competitive plants and with access to more | |
similar products or with BRF brands. Thus, | attractive markets will have increased their | |
the direction for the international marketing | Another important line of action is the search | production, generating more profitability. |
in 2014, continuing in 2015, is to focus on | for efficiency in logistics and operation | Thus, one of the main fronts is the industrial |
the presence and quality of the relationship, | processes. A task force from different | automation - which will be doubled in the |
causing BRF brands to be increasingly present | areas was made to create synergies in | coming years. In addition to changes in plants, |
in the consumers’ lives. | manufacturing operating structure and | there were improvements in procurement |
generate speed in production. The initiative | processes and inventory. | |
to review the manufacturing footprint began | ||
in 2014 and will positively impact future | ||
financial income, with cost savings and | ||
profitability gains. |
MOSTREMEMBERED BRANDS | |
Result of the positioning work in the market and | |
product quality, Sadia and Qualy are among the | |
brands most remembered by the Brazilian people, | |
according to the survey Top of Mind, released by | |
Instituto Datafolha in 2014. |
40Annual and Sustainability Report BRF 2014
LAUNCHESAND CAMPAIGNS | ||
In 2014, there were 123 national and | meals, dairy andfood service. About 70% of | Convenience, flavor and healthiness are among |
international launches in various categories | innovations are for the Brazilian market: 55 | the attributes of the new items that BRF offers |
of products, such in natura and celebratory, | were national launches, 36 in international | to the end consumer. Some highlights: |
margarine, cold cuts, sausages, breaded, ready | markets, 04 in dairy and 28 in segment offood | |
services. |
SLICEDMEAT LINE “SOLTÍSSIMO” | FOOD SERVICES |
Available in five options, slicing cuts are made in rooms | The discipline of execution of the FS teams ensured increase in |
with filtered air, their easy open packaging eliminates the | sales for the networks of fast food, industrial kitchens and small |
need for trays and handling at the point of sale. The S-Fresh | businesses throughout Brazil. |
technology ensures thinner slices and a fresher and durable | Examples of some launches: |
product. | Baked Sausage for Barbecue |
Perdigão and Breaded Chicken | |
NEWSMOKED TURKEY BREAST | Fillet Sadia. |
With Sodium reduced by 25%. | |
“Frango Fácil” | |
Assa Fácil Sadia platform added value to the category of | |
products in natura. The line brings practicality and flavor to | |
the consumer in the choices of chicken (whole, drumsticks, | |
thighs and chest) and salmon (fillet and slices). The | |
products come already seasoned in bag bakes easy. | |
NEWSAUSAGES | |
The sausages have two presentations: frescal, with less fat | |
(30% and 40% for Toscana sausage and chicken sausage), | |
and smoked, ready for consumption. | |
“QUALY AÉRA” | |
The market leader in the category margarine was launched in | |
an aerated and creamier version, 25% lighter. |
CAMPAIGNSANDSPONSORSHIPS | ||
Based on the attributes of quality and | SADIA | PERDIGÃO |
responsibility for production, relationship | In 2013, BRF signed a sponsorship contract | As determined by the Brazilian anti-trust |
actions with BRF’s consumers have | with the Brazilian Football Confederation | authority (CADE) in the merger process, |
invested in an approach that increases the | (CBF), effective in 2014, and announced | BRF removed from the market, for periods |
convenience and safety of the manufacturing | support for the Olympic and Paralympic | between three and five years, some products |
process of some products, such as “Qualidade | Games Rio 2016. | and categories of Perdigão brand. These |
Total” (Total Quality) Sadia campaign, | include lasagne, pizza, meatballs, salami, | |
created by DPZ, which provides information | In 2014, during the FIFA World Cup, the | hams/pressed hams and sausages. |
on the non-use of hormones in animals, | campaign “Joga pra Mim” (Play for me) was | |
and the “Frango Fácil” campaign, which | launched, strengthening its approach to the | In 2014, a new institutional campaign was |
addresses how the consumer’s life can | end consumer through sports. | launched with the slogan “Perdigão - Viver dá |
become more practical with BRF innovations. | uma fome”(Live gaver hungry). And in 2015, | |
some categories begin to return the shelves, | ||
creating new opportunities and alternatives | ||
for the consumer. |
41
policies that can bring effects of medium and | ||
Strategy Go-to-Market, zero- based budgeting, logistics efficiency and in service level, growth in retail, synergies in operations and revision of portfolio generated a positive performance | The year 2014 was marked by different | long term, indicate a contraction scenario |
challenges in domestic and international | of consumption combined to relatively high | |
markets - in which BRF seeks to develop in a | inflation rates. | |
balanced way business in order to minimize | ||
risks and maximize its results. However, it | According to Focus survey, conducted by | |
was mainly the international scenario that | the Central Bank of Brazil and published in | |
leveraged the end result of the company, | January 2015, the GDP growth expected in | |
achieving a performance above expectations. | 2015 is 0.5%, combined with an inflation of | |
6.56%. Already in 2014, the consolidated | ||
In Brazil, the slow growth of Gross Domestic | inflation reached 6.41%. The retraction of the | |
Product (GDP) remained as an obstacle for the | internal market is related to lower Consumer | |
industry. The projections for the coming years, | Confidence Index (CCI) and slowing sales | |
regardless of the reviews of federal economic | growth in various sectors of industry. |
44Annual and Sustainability Report BRF 2014
higher than the R$550 million (2013). As for | ||||
In relation to Brazil, the shipments of chicken | the margarine market in 2014 were R$2.7 | |||
meat in natura totaled US$6.892 billion, | billion in revenue, above R$2.6 billion the | |||
slightly below the previous year (-1.6%), due | previous year. | |||
to the decrease in the average price of the | ||||
The trade balance in 2014 was the worst | protein. However, the volume exported by | For 2015 to be a year of continued growth | ||
result in 16 years and the first annual deficit | Brazil was 2.4% higher than in 2013. In pork, | acceleration program, BRF focuses on | ||
since 2000. Under the influence of the fall in | there was record in revenue, an increase of | increased capillary sales programs, the Go-to- | ||
the prices of commodities and international | 17.8% and US$1.446 billion of result. The jump | Market strategy, in improvement programs | ||
scenario, Brazil had a trade deficit of US$3.93 | was influenced by the average price of pork | and efficiency of plants, continued zero-based | ||
billion, compared to a surplus of US$2.384 | protein and lower supply worldwide. | budgeting (ZBB) and international expansion, | ||
billion in the previous year. | in addition to innovation and maintaining | |||
Based on data reported by A.C. Nielsen | high quality standards. | |||
Despite the unfavorable scenario, the | research institute for food retail in Brazil, the | |||
food industry, specifically, recorded good | processed food market recorded revenues | |||
indicators in 2014, driven by growth in global | of R$11.8 billion in 2014, compared to | Agency | Rating | Outlook |
demand and the devaluation of the real | R$9.7 billion in 2013. However, frozen food | Fitch | BBB- | Negative |
against the dollar. The most representative | recorded R$ 3.1 billion in 2014, above R$2.7 | Standard & Poors | BBB- | Stable |
consumer markets for Brazilian exports are | billion in 2013. The pizzas with stuff totaled | Moody’s | Baa3 | Stable |
the Middle East, Asia and Latin America. | R$594 million revenue in 2014, slightly |
45
OPERATION | ||||
With the transfer of BRF slaughter units to | SLAUGHTERINGGRI G4-FP9 | |||
Minerva, in 2014 there was a reduction in the | 2013 | 2014 | Ch. % | |
number of slaughters; however, the Company | Poultry slaughter (million heads) | 1,796 | 1,664 | -7.4 |
had an increase in slaughter of pork in | ||||
comparison to last year. | Hog/ cattle slaughter (thousand heads) | 9,744 | 9,621 | -1.3 |
For the year, the slaughter of poultry was | PRODUCTION (THOUSAND OF TONS)GRI G4-FP9 | |||
7.4% lower and the pork/beef was 1.3% below | 2013 | 2014 | Ch. % | |
2013. For the production, in 2014, the volume | ||||
was 6.4% lower than in the previous period. | Meats | 4,089 | 3,825 | -6.4 |
Other processed products | 506 | 482 | -4.9 | |
Feed and premix (thousand of tons) | 11,036 | 10,360 | -6.1 |
BraZIL | ||
In the Brazilian market, the year was of | Another important point, productivity was | with a slight increase in volumes (+2.4%) |
earnings in the aspects of service level, | worked through improvements in logistics | and average price (+4.9%). For next year, |
logistics and scope and coverage of points | and Sales Execution program, with regular | the expectation is to register leverage in the |
of sale. The focus on the Go-to-Market | meetings to measure the results and | results - not necessarily in volume production, |
(GTM) strategy, which proposes to increase | observe the necessary improvements in field | but in productivity, market presence and |
the Company’s penetration in areas not yet | operations. Aspects such as frequency of | efficiency. |
served or not directly served by increasing | sale, items per order and increase in volume | |
the number of customers, productivity of | are monitored by the teams to optimize the | Market Share(VaLUE - %) |
the seller and cross-selling between brands, | business process and the distribution mesh of | 2014 - by category |
brought positive results. | the product. | |
The number of customers on average in | A project for reduction of approximately | |
2014 grew 22% over the average of 2013 and | 35% in the number of SKUs in Brazil was | |
the cross-selling increased from 53% at the | implemented also, in order to simplify | |
end of 2013 to 77% in the same period 2014. | processes, together with service level | |
For this it was necessary to focus attention | improvement actions. | |
on regional markets, adapting the flow of | ||
deliveries and the service mode according to | For the year 2014, Net Operating Revenue | |
customer profiles, eliminating redundancy in | (NOR) in Brazil reached R$13.9 billion, up 6.8% | |
operations. | compared to the same period last year, driven | |
mainly by higher average prices obtained due | ||
The capillarity and guarantee of supply - | to transfers made in the first two quarters of | |
which were among the main complaints | the year. Volumes increased by +1.9%. | |
about the service level - for example, were | ||
worked by means of a system, implemented | Excluding the various sales in this comparison, | |
in 2014, allowing sales teams negotiate with | the NOR Brazil in the year reached R$13.0 | |
points of sale viewing the inventory in real | billion, an increase 7.5% compared to 2013, | |
time. |
46Annual and Sustainability Report BRF 2014
BRF INTERNATIONAL | acquisitions in regions such as the Middle | reached R$13.3 billion, up 1.5% compared to |
East, Latin America and Asia. | 2013, even with volumes 12.3% lower. The | |
Guided by the strategy of consolidating itself | improvement was due to a more efficient | |
as a global company, with knowledge of local | In 2014, exports accounted 46.8% of net | operation and higher average prices, both real |
markets and targeted business approaches, | operating revenue of the company, with a | (+15.7%) and dollar (+6.2%). |
BRF advanced in acquisitions and investments | total of 12.3% less volume than in 2013, due | |
in local distributors and opened a new | to the volume reduction strategy in certain | |
manufacturing plant - Abu Dhabi, United Arab | regions to suit local inventories and increase | |
Emirates - as well as updating the marketing | profitability. For the year 2014, Net Operating | |
model and innovation to meet the demands | Revenue (NOR) in international markets | |
of global consumers. |
The price volatility, political and regulatory | |
instability in different markets - for example, | |
Russia, Ukraine, Egypt and Argentina - and | |
the more competitive environment remained | |
as challenging aspects. However, the | |
devaluation of the real and the increased | |
demand driven by Asian and the Middle East | |
markets boosted international business. | |
In addition to the acquisition of logistics | |
operations and the new plant in Abu Dhabi, | |
BRF will bet in the medium and long term, | |
in a model of growth guided by negotiations | |
beneficial to the distribution network, | |
reduced inventory levels and selective |
FOOD SERVICES | DAIRY |
In 2014, we continued the strategy to ensure the | BRF dairy businesses totaled R$2.7 billion net operating |
competitiveness of the business division, considering | income 0.5% below 2013. The segment has approximately |
the importance of food away from home in the Brazilian | 10.7% of market share and we invested in recent years in |
market. The sales team was 100% unified throughout | innovations that reduce dependence on UHT milk. During |
the year and the portfolio has undergone revision, with | the year, the transfer of the operation to Parmalat was |
specific products for the segment. | announced, which should be completed during 2015 (read |
more on pages 23, 52, 53, 55). The results of this business | |
In total, net operating revenue increased by 8.8%, | will be presented as discontinued operations in the analysis |
reaching R$1.7 billion, and volume was 9.7% higher than | and financial statements. |
2013 and average prices remained in line with the previous | |
period (-0.8%). |
47
49
50Annual and Sustainability Report BRF 2014
51
FINANCIAL INCOMEGRI G4-EC1
(The income presented below refer to the continued operations of the Company, excluding the income in discontinued operations - Dairy Products - which, as announced in December 2014, is under process of sale to Lactalis).
NET OpERATINg REVENUEs (NOR)
The accumulated NOR for 2014 was 4.4% higher than the previous year, amounting to R$29.0 billion compared with R$27.8 billion in 2013. This increase in revenues was due to better average prices in the period both in Brazil and internationally, also due to the growth of volumes in Food Services.
COST Of GOODS SOLD (COGS) | OPERATING EXPENSES | with the employee profit-sharing plan and |
In accumulated terms for 2014, COGS totaled | Operating expenses remained relatively | provisions, equivalent to R$217.6 million and |
R$20.5 billion, registering a slight drop of | stable in accumulated terms, showing a | R$50.0 million, respectively. |
1.8% over 2013. This was mainly due to a | slight rise of 1.1%, mainly due to higher | |
fall in corn price for the period, which was | expenditure in marketing and in trade | The accumulated figures for the year showed |
partially offset by an increase in soybean | marketing, which was in line with the | a negative net result equivalent to R$438.1 |
meal price. In 2014, COGS represented 70.7% | Company´s strategy of having a greater | million, representing a reduction of 4.4% |
of NOR compared to 75.1% in 2013. | focus on the customer and strengthening | over 2013. The main revenues that impacted |
our brands. In percentage terms, given the | this result were the net gains from the share | |
GROSS INCOME | Company´s growth, operating expenses | swap with Minerva, as mentioned previously, |
In 2014, BRF increased the efficiency | fell over the year and reached 15.9% of NOR | along with net gains from the disposal of |
of its operations, which translated into | compared to 16.4% in 2013. | property, plants and equipment that totaled |
more robust earnings as a result of the | R$111.4 million in 2014. | |
strategies implemented in Brazil and in | OTHER OPERATING RESULTS | |
the International front. The Company´s | We had a compensation in our operational | On the other hand, the main expenses in the |
accumulated gross income for the year was | results line in the 4Q14, mainly due to | period included the employee profit- sharing |
R$8.5 billion, 23.1% higher than the previous | the capital gain from the sale of the beef | plan which amounted to R$356.5 million, |
year, with a gross margin of 29.3% in 2014 | assets to Minerva, which was equivalent to | R$214.7 million of restructuring expenses |
compared to 24.9% in 2013. | R$179.3 million, which, combined with the | and higher provisions for tax and civil/labor |
other revenues earned in the quarter, more | risks equivalent to R$91.2 million and R$72.4 | |
than compensated for the higher expenses | million, respectively. |
52Annual and Sustainability Report BRF 2014
OPERATING RESULT (EBIT) | US$700.0 million), without the creation of | INVESTMENTS | ||||
The accumulated EBIT for the year was | a hedge, it is therefore subject to currency | The Company´s investments in the year | ||||
R$3.5 billion, 83.4% higher when compared | adjustments until the conclusion of this | totaled R$1.5 billion and were in line with the | ||||
with 2013 and the margin rose from 6.8% | transaction. | guidance provided, directed towards growth, | ||||
in 2013 to 12.0% in 2014. This result shows | support and improving efficiency. We are also | |||||
that the Company not only benefitted | On December 31, 2014, the non-derivative | considering in this amount R$517.5 million of | ||||
from the positive market conditions but, | financial instruments designated as hedge | investments in biological assets. This figure | ||||
above all, managed to capture gains from | accounting for currency protection of | did not include R$514.4 million directed at | ||||
the structural improvements that were | the cash flow, amounted to US$ 600.0 | acquisitions and others, R$ 67.8 million in | ||||
implemented in Brazil, as well as in the | million. Furthermore, the derivative | leasing, which altogether would add up to | ||||
International markets, during the year. | financial instruments designated as hedge | R$2.0 billion for the year of 2014. | ||||
accounting, in the cash flow hedge concept | ||||||
Accumulated EBIT - Brazil - amounted to | for covering highly likely exports, totaled | |||||
R$1.8 billion thereby, registering an increase | US$716.0 million, €82.0 million, £42.0 | |||||
of 39.5% over 2013, with a gain of 3.1 p.p. in | million and ¥16,993.0 million, in their | |||||
the margin. | respective currencies. These instruments | |||||
also directly contributed to the reduction | ||||||
EBIT from the International operations was | in the currency exposure. In both cases, | |||||
R$1.4 billion in accumulated terms for the | the unrealized result from the currency | |||||
year. This was an impressive improvement | variation was accounted for in the other | |||||
of 259.3% compared to 2013, representing | comprehensive income. | |||||
a gain of 7.8 p.p. in margin, which rose from | ||||||
3.0% in 2013 to 10.8% in 2014. | DEBT | |||||
The Company´s net debt reached R$5.0 | ||||||
Finally, EBIT from Food Services came to | billion, 25.8% lower than registered in | |||||
R$203 million in the year, compared to R$177 | the end of 2013, resulting in a net debt to | |||||
million for 2013, an expansion of 14.9% | EBITDA ratio (last twelve months) of 1.04x. | |||||
which translated into a gain of 0.6 p.p. in | ||||||
margin for 2014. | ||||||
NETFINANCIAL | R$DEBTmillion | |||||
This line showed an accumulated net | 12/31/2014 | 12/31/2013 | ||||
financial expense for the year of R$990.7 | Non | |||||
million, which corresponded to an increase | Debt profile - R$ Million | Current | current | Total | Total | Ch. % |
of 32.5% over 2013. The main elements | Local currency | (2,541) | (1,452) | (3,993) | (4,073) | (2.0%) |
that impacted this result were the premium | Foreign currency | (455) | (7,399) | (7,854) | (6,466) | 21.5% |
paid in carrying out the buyback of bonds in | Gross debt | (2,996) | (8,850) | (11,847) | (10,538) | 12.4% |
the second quarter and the adjustment to | Cash investiments | |||||
present value for the year. | Local currency | 2,043 | 177 | 2,220 | 1,091 | 103.6% |
Foreign currency | 4,594 | - | 4,594 | 2,663 | 72.5% | |
Total cash investments | 6,638 | 177 | 6,815 | 3,754 | 81.5% | |
The use of non-derivative and derivative | Net debt | 3,641 | (8,673) | (5,032) | (6,784) | (25.8%) |
financial instruments for coverage of foreign | Exchange rate exposure - US$ Million | - | - | 567 | (87) | - |
exchange exposure allows for significant | The Total Gross Debt, as shown above, amounting to R$11,847.0 million, accounts for the total financial debt, plus other financial | |||||
reductions in the net currency exposure in | liabilities, which add up to R$257.4 million, as stated in Explanatory Note 4.1.f of the Financial Statements of 12.31.2014. | |||||
the balance sheet. We highlight that we | ||||||
moved from a currency exposure impacting | ||||||
the result of US$36.0 million “long” in | ||||||
3Q14 to US$567 million “long” in 4Q14. This | ||||||
increased long-term currency exposure | ||||||
in the balance sheet resulted from the | ||||||
signing of the contract with Lactalis over | ||||||
the sale of our Dairy business in December | ||||||
2014. As the amount of the transaction had | ||||||
been previously agreed at a total of R$1.8 | ||||||
billion, and then fixed in dollar terms upon | ||||||
the signing of the contract (approximately | ||||||
*For the 4Q14, we have only considered the results | ||||||
from the continued operations for calculating the ratio | ||||||
(excluding Dairy). For the other quarters, the calculations | ||||||
include both continued and discontinued operations. |
53
SIMPLIFIED CASH FLOW | SIMPLIFIED CASH FLOW - LTM* |
Simplified Free cash flow (EBITDA – Change in | (EBITDA -change in working capital - CAPEX) |
Working Capital – Capex) for the year reached | |
R$4.1 billion, an increase of 170.9% when | |
compared to 2013, reflecting the Company´s | |
better operational performance in the period, | |
both in terms of EBITDA performance as well | |
as in the management of our Financial Cycle. |
EQUITY INCOME RESULT | DISCONTINUED OPERATION | The Company’s total net income, considering | ||
The equity income result showed a total | RESULTS (DAIRY) | continued and discontinued operations, | ||
gain of R$25.6 million in accumulated terms | As mentioned previously, due to the sale of | reachead R$2.2 billion. This represent on | ||
for the year. This represented an increase of | the Dairy operations to the Lactalis group, | increase of 109.4% compared with the some | ||
98.1% over 2013. | the results of these activities are presented | period of the previous year, leading a gain of | ||
as discontinued operations. The result | 3.5 p.p. in net margin. | |||
From the last quarter of 2014, BRF started to | of discontinued operations accumulated | |||
consolidate the proportional result of their | throughout the year was of R$89.8 million, | EBITDA | ||
participation in Minerva via equity. | 90.4% higher if compared to 2013. | The accumulated EBITDA for the year for the | ||
continued operations amounted to R$4.7 | ||||
INcOmE TAX AND SOcIAL | NET INcOmE | billion, an increase of 56.5% over 2013. There | ||
CONTRIbUTION | The result of the Company´s operational | was a gain of 5.4 p.p. in margin, that rose | ||
The accumulated income tax and social | improvements can be seen in the Company´s | from 10.8% in 2013 to 16.2% in 2014. | ||
contribution in the year showed a total | net income for the period. The accumulated | |||
expense of R$352.6 million compared with | net income for the year obtained from | In the accumulated results for 2014, EBITDA | ||
R$129.1 million in 2013. This was an increase | continued operations totaled R$2.1 billion, on | for the continued operations combined with | ||
of 173.1% on an annual comparison and | increase of 110.3% compared to 2013, with | the discontinued operations, was R$4.9 | ||
represented an effective rate of 14.2%, | the net margim expanding from 3.7% in 2013 | billion. This represented an increase of | ||
whereas the effective rate obtained in | to 7.4% in 2014. | 56.4% in comparison with 2013, a gain of 5.1 | ||
2013 was 11.2%. This increase was mainly | p.p. in margin. | |||
due to the improvement in the Company´s | ||||
results in the year, both in Brazil and in the | EBITDA | |||
International market. | R$ Million | |||
2013 | 2014 | Ch. % | ||
NON-CONTROLLINg SHAREHOLDERs | Net income | 1,015 | 2,135 | 110.3% |
In the accumulated of the year, the attributed | Income tax and social contribuition | 129 | 353 | 173.1% |
results to the non-controlling shareholders | Net financial expenses | 748 | 991 | 32.5% |
represented a revenue of R$159.0 thousand, | Depreciation and amortization | 1,117 | 1,230 | 10.1% |
against an expense of R$4.4 million in 2013. | EBITDA (continued operations) | 3,009 | 4,709 | 56.5% |
EBITDA margin (%) | 10.8% | 16.2% | 5.4 p.p. | |
EBITDA Total | 3,131 | 4,897 | 56.4% | |
EBITDA margin (%) | 10.3% | 15.4% | 5.1 p.p. |
54Annual and Sustainability Report BRF 2014
SHAREHOLDER EQUITY | established the terms and conditions for | NET OPERATING REVENUES (NOR) |
Shareholder´s Equity reached R$15.7 billion, | the sale of the plants in our dairy segment, | FROM DISCONTINUED OPERATIONS |
on December 31, 2014, compared to R$15.4 | including the corresponding assets and | The accumulated NOR for the year from |
billion on September 30, 2014. This was | brands dedicated to the segment. We also | this segment reached R$2.7 billion and was |
mainly due to higher net result obtained in | announced in December of this same year | stable in comparison with 2013 (-0.5%). |
the quarter. | that we had signed the definitive sale | The increase of 11.2% in the average prices |
contract for this operation. | compensated the fall of 10.5% in volumes | |
INTEREST ON EQUITY | registered in the period. | |
AND DIVIDENDS | In line with the prevailing regulations and | |
During the year of 2014, a total of R$737.8 | legislation now in order, we reclassified | OPERATING RESULT (EBIT)FROM |
million was distributed, relative to the interest | the assets and liabilities related to the sold | DISCONTINUED OPERATIONS |
on equity, and R$86.5 million relative to | operations in a line in the balance sheet called | The accumulated EBIT for the year for this |
dividends, totaling a sum of R$824.3 million in | “Non-current assets maintained for sale and | segment reached R$120.2 million compared |
distribution. | discontinued operations” within the current | to R$63.3 million in 2013 (+89.8%). This rise |
assets and “Liabilities related to non-current | was mainly due to the increase in average | |
RESULTFROM DISCONTINUED | assets for sale and discontinued operations” | prices in the period, as previously described, |
OPERATIONS (DAIRYPRODUCTS) | within the current liabilities. | along with the greater efficiency and better |
As already mentioned in this document, in | dilution of expenses. | |
September 2014, we announced the signing | In the Financial Statements, we are | |
of a binding memorandum of understanding | separating the results from the Company´s | VALUE ADDED DISTRIBUTION |
with Parmalat S.p. A., a company belonging | continued operations, as described in this | The value added, reflects the wealth |
to the Lactalis Group. This document | report, and the results from the discontinued | generated by the consolidated business |
operations relative to the Dairy operations | activity, totaled R$13.7 billion, 21% higher | |
that we describe below. | than registred in the previous year. |
55
CASH FLOW (CONTINUED OPERATIONS) | |||
R$ Million | |||
2014 | 2013 | Ch.% | |
Operating Activities | |||
Result for the fiscal year | 2,135 | 1,015 | 110.3% |
Adjustments to the result | 2,314 | 2,607 | (11.2%) |
Changes in assets and liabilities | |||
Accounts receivable from clients | 459 | (188) | - |
Inventory | 369 | (111) | - |
Biological assets | 75 | 165 | (54.4%) |
Interest on shareholders’ equity received | 55 | 22 | 145.3% |
Suppliers | 203 | 402 | (49.5%) |
Payment of contingencies | (259) | (285) | (8.9%) |
Interest payments | (619) | (568) | 8.9% |
Payment of income tax and social contribution | (6) | (2) | 138.1% |
Salaries, social obligations and others | 115 | 156 | (26.1%) |
Net cash provided by the continued operating activities | 4,842 | 3,213 | 50.7% |
Net cash provided by the discontinued operating activities | 160 | 105 | 51.8% |
Net cash provided by operating activities | 5,002 | 3,319 | 50.7% |
Investment Activities | |||
Financial investments | 0 | 125 | (100.4%) |
Investments in restricted cash | (16) | (6) | 157.6% |
Goodwill on acquisition of non-controlling shareholders | (1) | - | - |
Acquisition of companies | (373) | - | - |
Increase in capital subsidiaries | - | (18) | - |
Other Investments | (54) | (55) | (3.6%) |
Acquisition of fixed assets/ investments | (1,021) | (1,181) | (13.5%) |
Acquisition of biological assets | (517) | (502) | 3.1% |
Revenue from the sale of fixed assets | 171 | 266 | (35.8%) |
Intangible investments | (50) | (55) | (7.6%) |
Net cash provided by the continued investment activities | (1,862) | (1,425) | 30.7% |
Net cash provided by the discontinued investment activities | (51) | (88) | (41.7%) |
Net cash provided by investment activities | (1,914) | (1,513) | 26.5% |
Financing activities | |||
Loans and financing | 409 | (153) | - |
Interest on shareholders’ equity and dividends | (726) | (579) | 25.4% |
Acquisitions of treasury shares | (351) | (79) | 346.3% |
Disposal of treasury shares | 100 | 53 | 87.7% |
Net cash provided by financing activities | (568) | (757) | (25.0%) |
Effect of exchange rate variation on cash and cash equivalents | 359 | 148 | 142.2% |
Net increase (decrease) in cash held | 2,879 | 1,197 | 140.5% |
Cash and cash equivalents at the beginning of the period | 3,128 | 1,931 | 62.0% |
Cash and cash equivalents at the end of the period | 6,007 | 3,128 | 92.1% |
56Annual and Sustainability Report BRF 2014
SALES - BRAZIL | |||||||||
R$ Million | Thousand tons | Average price - R$ | |||||||
Brazil | 2014 | 2013 | Ch. % | 2014 | 2013 | Ch. % | 2014 | 2013 | Ch. % |
In natura | 2,653 | 2,439 | 8.8% | 446 | 407 | 9.6% | 5.95 | 6.00 | (0.8%) |
Poultry | 1,826 | 1,492 | 22.3% | 339 | 275 | 23.2% | 5.39 | 5.43 | (0.7%) |
Pork/ beef | 827 | 947 | (12.6%) | 107 | 132 | (18.8%) | 7.74 | 7.20 | 7.6% |
Processed food | 10,361 | 9,670 | 7.2% | 1,509 | 1,502 | 0.5% | 6.87 | 6.44 | 6.7% |
Others sales | 921 | 941 | (2.1%) | 320 | 324 | (1.2%) | 2.87 | 2.90 | (1.0%) |
Total without other sales | 13,014 | 12,109 | 7.5% | 1,955 | 1,909 | 2.4% | 6.66 | 6.34 | 4.9% |
Total | 13,935 | 13,050 | 6.8% | 2,275 | 2,233 | 1.9% | 6.12 | 5.84 | 4.8% |
SALES - INTERNATIONAL | |||||||||
R$ Million | Thousand tons | Average price - R$ | |||||||
International | 2014 | 2013 | Ch. % | 2014 | 2013 | Ch. % | 2014 | 2013 | Ch. % |
In natura | 10,190 | 10,159 | 0.3% | 1,788 | 2,019 | (11.4%) | 5.70 | 5.03 | 13.3% |
Poultry | 8,339 | 8,262 | 0.9% | 1,579 | 1,750 | (9.8%) | 5.28 | 4.72 | 11.9% |
Pork/ beef | 1,851 | 1,897 | (2.4%) | 208 | 268 | (22.3%) | 8.89 | 7.08 | 25.6% |
Processed foods | 3,085 | 2,917 | 5.8% | 424 | 447 | (5.2%) | 7.28 | 6.53 | 11.6% |
Others sales | 51 | 56 | (9.9%) | 0 | 55 | - | - | 1.03 | - |
Total | 13,325 | 13,132 | 1.5% | 2,211 | 2,520 | (12.3%) | 6.03 | 5.21 | 15.7% |
SALES - FOODS SERVICES | |||||||||
R$ Million | Thousand tons | Average price - R$ | |||||||
Food Services | 2014 | 2013 | Ch. % | 2014 | 2013 | Ch. % | 2014 | 2013 | Ch. % |
Total | 1,747 | 1,606 | 8.8% | 238 | 217 | 9.7% | 7.35 | 7.41 | (0.8%) |
BRFS3 - BM&F BOVESPA | BRFS - NYSE | |||||
2014 | 2013 | 2014 | 2013 | |||
Closing prices - R$ * | 63.44 | 49.25 | Closing prices - US$ * | 23.35 | 20.87 | |
Stock trading volume | ADR trading volume | |||||
(Millions) | 569.5 | 524.6 | (Millions) | 373.7 | 359.1 | |
Performance | 28.8% | 16.7% | Performance | 11.9% | (1.1%) | |
Bovespa index | (2.9%) | (15.5%) | Dow Jones index | 7.5% | 26.5% | |
IGC | 2.3% | (2.0%) | * closing | |||
ISE | (1.9%) | 1.9% |
57
Improvements were mapped and | ||
Cultural integration, qualification of talents and appreciation of meritocracy make up the strategic horizon of the manag ement of Company’s personnel. | Build a single, integrated and cohesive | implemented in order to reduce entropy and |
culture for the organization is one of the | duplicate functions within the corporate and | |
corporate support guidelines (platforms) | operational structures. The Company changed | |
of BRF-17, along with other aspects related | its management model: in 2014, each plant | |
to human capital, as meritocracy and | now has a general manager in charge - before | |
talent management. In 2014, the cultural | there were managers for production line. Thus, | |
integration presented advances, resulting in | decision-making levels were reduced by half, | |
a global nature BRF not only in business but | giving greater autonomy to the leadership and | |
also in the internal relations (see box). | generating greater professional motivation. |
60Annual and Sustainability Report BRF 2014
Along with the new trainee program of the | ||
Company (Jovens de Impacto) andPonto de | ||
Partida, program focused on the development | ||
of supervisors and coordinators, Fast Track is | ||
greater integration of these activities with | part of the effort to establish an leadership | |
movimento “Viva BRF” (see box). This process | aligned with BRF future vision. A total of 796 | |
resulted in the meeting “Viva RH”, in which 110 | leaders were trained in the first cycles of this | |
In May 2014 the new talent management | HR leaders of BRF brought their contributions | system. In 2015, BRF intends to expand this |
project started, which mapped the main | and also gave voice and represented | impact. |
strengths and company needs in people | approximately 1.4 thousand professionals that | |
management issue. More than 11 thousand | make up the overall HR framework of BRF. | Another important initiative related to |
employees in Brazil and internationally, | human capital management in 2014 was | |
including teams from the commercial, | As part of strengthening talent management, | the restructuring of the sales agreement, |
distribution and operations teams, were | in 2014 the first global program of selection, | which brought together 700 people in São |
engaged in this process, either through online | acceleration and developing of global | Paulo (SP), for three days. The aim was to |
surveys, personal interviews or focus groups. | leaders, called “Fast Track” was launched. | plan the 2014 year-end sales and address the |
The initiative aims to collaborate with the | sales management model. As a result, there | |
The result of this mapping was systematized | integration of the company’s teams and | was revenue growth in all segments, even |
and supported the RH joint planning for | the search for innovation and improvement | in a challenging Brazilian and international |
migration to a new form of performance and | opportunities. | economic scenario. |
61
PEOPLEMANAGEMENTGRI G4-10 | ||
By the end of 2014, nearly 115 thousand people | section Annex, p. 109), one of the sensitive | A Salary and social negotiations occur every |
made up BRF workforce (direct employees, | points in this context concerns the turnover | 12 months (according to the base date), |
contractors, trainees and apprentices). As one | of the Company. For this reason, there is a | with regular meetings during the term of |
of the largest agribusiness employers in the | specific committee to monitor and analyze | the Agreement or Collective Agreement. For |
country and have a presence nationally and | the indicators related to the turnover of | such, BRF maintains relationships with over |
abroad in small towns, the Company’s policy | employees. In 2014, the dismissal was 2.25% | 80 trade unions, with 72 agreements and 15 |
is to prioritize the hiring of local professionals. | less than in 2013* .GRI G4-LA1 | collective agreements. At the end of 2014, |
To take leadership vacancies, since 2013 the | the lowest salary paid was 11% above the | |
Internal Recruitment Program strengthens | The benefits and recovery and recognition | national minimum wage. |
professional recognition. In 2014, 79% of | programs of professionals are extended to all | |
those offices were taken by employees of the | employees and are guaranteed and provided | In Brazil, 100% of employees are covered by |
Company. | for in internal rules of the company. They are: | agreements and represented by the Labor |
transportation costs, food stamps voucher or | Union. Abroad, labor laws of each country | |
The policy for attraction and selection of | internal restaurant, health insurance, dental | are met and, where there is a workers’ |
people in BRF is under review, and it is expected | insurance, outpatient care, private pension, | representative body, the coverage of |
that the updated version will be published | educational assistance, life insurance, daycare, | collective agreements is 100%.GRI G4-11 |
in the first half of 2015. The main change is | shop of the company’s products, maternity/ | |
related to meritocracy and streamlining of | paternity leave and delivery of gifts for | *Considering only Brazil employees, for comparative analysis, due to the beginning of monitoring abroad in 2014. Total employees in the country: 100,718. |
processes of internal opportunities, with more | children up to 10 years old. BRF also offers all | |
autonomy for the Human Resources teams. | employees a recovery program for company’s | |
length. Only the inventory purchase plan is | ||
Despite more than 30 thousand hires in 2014 | restricted and optional at the executive level. | |
(see hiring tables, dismissal and turnover in | GRI G4-LA2 |
PROFILE Of BRF EMPLOYEESGRI G4-10 | |||||||||||
Region | |||||||||||
Latin | |||||||||||
Type of employment | Total | North | Northeast | West | Southeast | South | America | Asia | Africa | Europe | Middle East |
Indefinite term | 100,341 | 316 | 4,087 | 23,581 | 16,850 | 55,507 | - | - | - | - | - |
Definite term | 377 | 4 | 45 | 12 | 247 | 69 | - | - | - | - | - |
Outsourced | 8,502 | 4 | 248 | 2,148 | 1,105 | 4,997 | -�� | - | - | - | - |
Trainees and apprentices | 1,676 | 58 | 39 | 484 | 141 | 954 | - | - | - | - | - |
Employees abroad | 4,059 | - | - | - | - | - | 2,639 | 27 | 10 | 465 | 918 |
Total | 114,955 | 382 | 4,419 | 26,225 | 18,343 | 61,527 | 2,639 | 27 | 10 | 465 | 918 |
63
frame. BRF entered into an agreement with | EMPLOYEESBYGENDERGRI G4-10 | |||
DIVERSITY, EQUITY | the Ministry of Labor that determines the | |||
AND INCLUSION | percentage to be achieved by the Company | Gender | ||
of people with disability on its staff by the | Type of employment | Male | Female | |
BRF does not make distinction | end of 2015 and established several actions | Indefinite term | 59,623 | 40,718 |
of gender, race or religion in hiring, daily | to address the issue, such as conference calls | Definite term | 218 | 159 |
relationship and pay of its employees, and | with plants, communication materials, terms | Trainees and | ||
the salaries are based on industry standards, | of technical cooperation for professional | apprentices | 813 | 863 |
performance and length of service. | rehabilitation, employment of expert | Employees abroad | 3,310 | 749 |
consultancy, benchmarking and training. | ||||
In diversity, BRF has invested in the inclusion | Total | 63,964 | 42,489 | |
of people with disabilities, one of its greatest | At the end of 2014, was published a | Total of Outsourced* | 8,502* | |
challenges (see diversity indicators in section | corporate standard for Program of Inclusion | * For outsourced employees there is no segregated control | ||
Annex, p. 110). In 2014, the number of | of People with Disabilities, which addresses | by gender. | ||
1,857 people with different disabilities has | issues such as awareness of employees and | |||
been reached, representing 1.84% of Brazil | managers, infrastructure adaptation and | |||
responsibilities of the involved areas. |
64Annual and Sustainability Report BRF 2014
TRAINING | •Training Programs (internal): 189,674 | •TV Logistics: Communicates projects and |
participations, with 159,110 in internal | other news related to the operations of | |
In addition to the learning programs focused | training and 30,564 in training in the | BRF distributions centers and provides |
in leadership, training activities and training | workplace (TLT). | training to more than 5000 direct |
of employees was also carried out, reaching | •Educational Incentive: 580 employees, | employees and 8 thousand drivers and |
all levels and areas of BRF. In addition to | were included with 299 specialized, 149 | helpers throughout Brazil. |
collective actions, there are specific programs, | with languages and 130 with technical | •Sales training (in classroom): 4,693 sales |
courses, conferences and other activities | course. | and merchandising leaders were trained to |
that meet individual needs. In total, in 2014 | •Distance Education (EAD): 9,500 | multiply training for staff with experiential |
R$23.3 million was invested in training for the | participants developed functional skills | methodology. The trainings aim to |
workforce. Some highlights of training and | of the commercial area through access | enhance care and techniques necessary |
capacity performed are: | to tools, techniques and knowledge in | for the handling of products at point of |
•Qualification and Development Programs | distance education programs, communities | sale - inside the quality project in POS - |
(external): reached 12 thousand employees, | and virtual library. | develop functional skills of the area and |
with the objective to develop, qualify and | •Sales TV: Reaches 22,750 employees. With | train the team in argumentation for sale of |
expand the technical and behavioral skills. | standardized broadcast, quickly transmits | commemorative products. |
monthly information of each sales channel, | ||
in order to contribute to the training | ||
process and increase results. |
65
HEALTHANDSAFETY |
To ensure the integrity and well-being of | injuries without lost time, the rate was 9.57, | Additionally, 1,774 members of 109 Internal |
employees and communities, BRF keeps | below the rate of 10.29 in 2013 (see table). | Commissions for Accident Prevention (CIPA) |
the SSMA Program (Health, Safety and | Other impacts related to health and safety | are present in all units of the company in |
Environment), with actions that since | issues are medical expenses, compensations | which the regulatory standard is mandatory. |
2006 enable safe behavior and valuing | and claims management fees, in addition | In cases of non-mandatory, there is at least |
life in operations. This process has been | to indirect costs from damaged equipment | one employee who actively participates in the |
consolidated in Brazil and in 2014, was | and property, loss of production and quality, | prevention of accidents. |
intensified in Argentina, whose execution will | interruption of processes, loss of revenue, | |
extend by 2016. | replacement of labor, overtime, disputes and | Two other important mechanisms are: |
damage to the relationship with customer | •Specialized services in occupational safety | |
Aware of the exposure of some employees | and the public image.GRI G4-LA6 | and health: provided by 573 professionals |
to the risks inherent in the operation of | in the areas of safety, health, nursing, | |
agribusiness, which represents the major | More than 10,000 people - 10% of employees, | occupational health and speech therapy |
occupational risk in BRF, there is a continuous | representing 100% of the workforce - are | and others. Today, approximately 4% of |
work of mapping, analysis and monitoring | involved in HSE Management System, | the workforce is trained to incidents and |
as well as operational and administrative | covering all organizational levels, with | emergencies.GRI G4-LA5 |
controls in place to eliminate or minimize | monthly meetings. The management system | |
risks.GRI G4-LA7 | is composed of 16 levers (see section Annex, | •Health, Safety and Environment Dialogues |
p. 110) and 90 tools that are continuously | (HSED): program that disseminates | |
The elimination of accidents, diseases related | applied to identify, assess and manage risk | information to engage employees in the |
to work environment and fatalities is among | with the potential for accidents. Leaders such | subject. Weekly tips and guidance are given |
the management priorities. The main impact | as Vice President of Quality and Management, | in person to employees and third parties |
that they bring to the Company is the human | Benefits Officer, Union Relations and HSE and | encourage safe behavior, the maintenance |
impact related to fatalities. In 2014, the | Manufacturing Regional Officers have targets | of health and the preservation of the |
frequency rate of lost-time injuries was 1.69, | linked to performance in health and safety. | environment. Besides them, the HSED |
below the rate of 2.00 the previous year. For | GRI G4-35 | has a mural in the plants, a moment of |
knowledge at the opening of meetings and | ||
is present in Corporate TV. |
66Annual and Sustainability Report BRF 2014
Since 2013 has been accompanied the | approximately 95% include health and safety | In 2014, BRF became a signatory to the |
implementation process of Regulatory | issues - such as provision of uniforms and | memorandum of understanding signed with |
Standard 36 for Safety and Health at Work | personal protective equipment (PPE), OHS | the Regional Labor Court of the 12th Region. |
in Slaughter and Meat Processing and | Committees (CIPA) and training and health | The term of agreement signed formalizes the |
Derivatives Companies. Currently, BRF has | standards in general.GRI G4-LA8 | creation of an interagency committee, aiming |
87 agreements and conventions, of which | at the execution of regional programs and | |
actions to prevent accidents at work. |
INJURY TYPES AND RATESGRI G4-LA6 | ||||||||||||||||
2013 | 2014 | |||||||||||||||
Gender | Region | Gender | Region | |||||||||||||
M | F | Total | North | Northeast | West | Southeast | South | M | F | Total | North | Northeast | West | Southeast | South | |
Lost Time Injury | 245 | 117 | 362 | - | 22 | 98 | 112 | 130 | 223 | 112 | 335 | 4 | 30 | 57 | 66 | 178 |
Rate | 1.35 | 0.65 | 2 | - | 13 | 1.63 | 3.32 | 1.52 | 1.8 | 1.48 | 1.69 | 6.23 | 3.57 | 1.15 | 1.88 | 1.68 |
Injuries without Lost | ||||||||||||||||
Time | 1,387 | 476 | 1,863 | - | 20 | 1,089 | 107 | 647 | 1,369 | 545 | 1,914 | 5 | 32 | 654 | 436 | 787 |
Rate | 7.66 | 2.63 | 10.29 | - | 11.82 | 18.11 | 3.17 | 7.56 | 11.02 | 7.2 | 9.57 | 7.78 | 3.81 | 13.25 | 12.84 | 7.43 |
Rate of occupational | ||||||||||||||||
diseases | 0.05 | 0.09 | 0.14 | - | 0 | 0,13 | 0 | 0.2 | 0.04 | 0.16 | 0.09 | 0 | 0 | 0 | 0.09 | 0.12 |
Days lost | 10,846 | 9,278 | 20,124 | - | 1,637 | 4,834 | 4,403 | 9,250 | 20,388 | 7,182 | 27,570 | 19 | 1,066 | 3,709 | 5,142 | 17,634 |
Absenteeism rate | N/A | N/A | - | 0.92 | 1.14 | 4.4 | 3.25 | 2.89 | N/A | N/A | N/A | - | 0.94 | 4.37 | 4.11 | 3.26 |
Deaths | 5 | 0 | 5 | - | 1 | - | 1 | 3 | 2 | 1 | 3 | 1 | 0 | 0 | 0 | 2 |
67
BRF is committed to narrow ties with its stakeholders, adding their demands, needs and expectations to business | Since 2009, panels, interviews and | through a multi-stakeholder meeting |
consultations are conducted periodically | held with employees, investors, suppliers, | |
by the company with internal and external | experts, financial institutions, customers and | |
stakeholders in order to update the strategy | consumers.GRI G4-24, G4-25 | |
and the management according to the | ||
perception of the value chain. In 2014, BRF | Divided into groups, participants identified | |
directly performed a review and discussion | the main impacts for each material issue of | |
of its most important issues of management | BRF, its origin (reason why they occur), where |
70Annual and Sustainability Report BRF 2014
Board and validated by the collegiate bodies. | ||
The complet annual report is reviewed and | ||
management by the company. A total of | validated by the Board of Directors and the | |
2,249 respondents in Brazil and worldwide. | Advisory Committees.GRI G4-48 | |
they occur in and affected stakeholders. | Both the in person panel and the online | |
The result was the deepening of the most | questionnaire serve as the basis for this | The list of updated material issues had |
significant impacts of each issue and its | report, reflecting the wishes of BRF publics | not significant changes, however, in the |
connection with the aspects of the reporting | as well as to support the construction and | consultation process, two new GRI aspects |
guidelines of the Global Reporting Initiative | enhancement of long-term continuous | were included: “Combating Corruption” and |
(GRI) and the value chain axes (see box with | strategy in sustainability.GRI G4-26 | “Unfair Competition”, both in the category |
this correlation on p.10,11).GRI G4-26 | Company (OS) of GRI-G4. The GRI sectorials | |
The materiality process is formally approved | aspects “Market Presence” and “Species and | |
In addition, an online questionnaire | at a meeting of the Governance and | breed of the animals” were not mentioned in |
was sent to employees to understand | Sustainability Committee. The relevant | the panel and they could be excluded from |
their perceptions on relevant issues and | aspects are also evaluated by the Executive | materiality.GRI G4-27 |
71
BRF VaLUE CHaIN
Links involved in the dialogue process and engagement
72Annual and Sustainability Report BRF 2014
COMMUNITY | ||
BRF aims to share more and more its values | In total, the actions of social and | |
with society, considering the complexity | infrastructure investment reached 53 | |
and the overall size of its business. To do | municipalities in Brazil in 2014 (see tables | |
this, it feeds the link with the communities | with coverage of BRF operations in section | |
surrounding industrial plants, administrative | Annex, p. 111). A challenge for the coming | |
offices and distribution centers worldwide. In | years is to expand the role of BRF Institute | |
practice, we aim to positively impact the lives | and the Committees in international markets. | |
of people, generating employment, income | ||
and local development and minimizing | MaNagINg ImPaCTs | |
negative externalities of operation - such | ||
as generating traffic and pollution and | GRI G4-SO1, G4-SO2, G4-EC8 | |
competition for water use in the surrounding | To enhance its social, economic and | |
of plants. | environmental impacts and the actions | |
taken to address them, BRF Institute has | ||
Instead, the Company wants to be a stimulus | quantitative and qualitative evaluation | |
for raising industry quality standards in the | methodologies. | |
markets where it operates, and to promote | ||
reference working conditions, stimulate | Strategic decisions on investments and | |
local economies, increase food availability | projects are influenced by these discussions, | |
in different countries and raise levels of | and data platforms and indexes such as ISE | |
employability, income and qualification | (BM&FBovespa), Dow Jones Sustainability | |
of the population. Support structures for | Index and Census Gife. Another important | |
surrounding communities, investments | tool is the Corporate Social Investment | |
and support for implementing projects are | Benchmarking (BISC), which directs the | |
among the actions in order to promote the | practices according to positive trends and | |
development of the territory and engage | experiences in the market. In 2015, a more | |
people in the positive transformation of its | structured tool for capture of data will be | |
environment.GRI G4-SO2 | implemented, allowing gathering more | |
efficient results. | ||
To develop this work, the company counts on | ||
the performance of BRF Institute and the 37 | In 2014, there were improvements in | |
Local Development Committees - including | several fronts, especially: the increase in | |
seven of dairy units - whose job is to identify | community leadership in resolving problems | |
opportunities, assets and requirements and | in 25% of municipalities impacted by Local | |
plan and jointly develop initiatives aimed at | Development Committees; the greater | |
quality of life. This work is part of the social | intersectoral action - involving business, | |
investment strategy of the company and is | civil society and public authorities - in | |
directly reflected in relationships with the | 100% of municipalities with committees; | |
general public and business reputation.GRI | improvement of infrastructure for local | |
G4-26 | communities of 53 cities; improvement | |
of service of support organizations in all | ||
About 400 employees participate in these | municipalities with presence of the Institute; | |
committees, which now cover 65% of BRF’s | the inclusion of quality of life and balanced | |
operations in Brazil and involve regular | nutrition in all the cities with committees; | |
meetings at these locations. There is also | and community mobilization, which reached | |
a corporate working group, composed of | 13 municipalities. | |
representatives from areas such as labor | ||
relations, HSE, Insurance and Sustainability, | With Inspira, for example, BRF contributes to | |
which monitors the impact of social | the improvement of the work of organizations | |
investment of projects and community | providing social services for the populations | |
relations.GRI G4-SO1 | in 30 municipalities, expanding the scope of | |
these qualitative and quantitative services | ||
and improving the physical and technical | ||
conditions of work. |
73
The premise of the operational model of BRF | significant reduction of waste accumulated | of technical cooperation with international |
Institute is to strengthen the role of partners | outdoor, an increase of over 400% in the | governmental agency (US Environmental |
and improvement of the quality of life of | volume of waste for recycling (12 ton/year), | Protection Agency), the enhancement of |
communities; so, the actions taken contribute | increased popular participation with the | self-esteem and increased pride and sense |
to provide opportunities for education | expansion of the provision of environmental | of belonging of the residents, with the |
and recreation, promoting occupation and | education and local mobilization (70 in total), | improvement of living conditions in the |
transformation of collective public spaces | the increase in operating collection team | community |
and the transfer of knowledge (including | (hiring one collection agent and 1 assistant), | |
technical/specialized), seeking positive | participation in events and seminars as | |
change in habits and focusing on improved | successful experience of community | |
services. | leadership and waste management, the | |
establishment of an international partnership | ||
The managers of social projects meet | ||
monthly with BRF Institute, by conference, | ||
to monitor the indicators of work and take | ||
decisions in a participatory manner. The | ||
Council of BRF Institute is composed of | ||
company leaders, and local managers are | ||
involved in the processes and governance | ||
structures. | ||
The impacts go beyond the direct ones. | ||
Among the indirect economic impacts | ||
identified by BRF are encouraging the | ||
construction industry, via PROHAB program; | ||
business development with inclusive purpose | ||
(such as ReciclAção); the reduction of imports, | ||
in the case of plants in other countries | ||
(such as Abu Dhabi, United Arab Emirates); | ||
increased production and purchases; and the | ||
development of third parties in the supply | ||
chain, among others. | ||
The “Reciclação”, environmental education | ||
project, community mobilization and solid | ||
waste management, aims to eradicate | ||
social and environmental risks in Morro dos | ||
Prazeres, located in Santa Teresa (RJ), through | ||
a partnership between government, private | ||
sector and civil society. | ||
The actions proposed a change in behavior, | ||
with expansion of environmental awareness | ||
and engagement of community residents | ||
through educational processes and | ||
mobilization, for them to make the correct | ||
management of their waste and promote | ||
recycling. Waste sent for recycling are sold to | ||
partner recycling and generate resources that | ||
the community reinvests in local projects, | ||
promoting improvement in living conditions. | ||
In the second year of the project, there is a |
74Annual and Sustainability Report BRF 2014
VOLUNTÁRIO BRF PROGRAM (VOLUNTEERS BRF) | |
Part of the Institute’s scope of work, | “Voluntários BRF” Action. Each action is |
“Voluntários BRF” Program involves | proposed by the unit committee from |
approximately 3000 employees in | corporate guidelines, and therefore satisfy |
voluntary actions of participation and social | the knowledge and local demands. |
transformation. | |
The program’s operational methodology, | |
led by the Local Development Committees, | |
involves a mapping in the chosen city, the | |
identification of potentialities and building | |
partnerships with organizations that | |
promote local development. | |
In 2014, the committees, along with its | |
volunteers, promoted activities with the | |
themes “Healthiness” and “Green Economy” | |
in public spaces, schools and program | |
partner organizations in the 6th and 7th |
HIGHLIGHTS Of BRF INSTITUTEGRI G4-SO1, G4-EC8 | |
Programs focus in 2014 | Impact |
•ProgramaInspira: work of strengthening of NGOs in partnership with the | •50NGOs in 30 municipalities |
International Social and Environmental Fund (FICAS) | |
•ComunidadeAtiva: program involving communities in 10 plants in Brazil (South, | •110people involved in the CDCs |
Southeast, West and Northeast) | |
•ProjectEstação Digital (PE) | •Morethan 300 students graduated by Estação Digital |
•ProjetoReciclAção (RJ) | •About8000 benefited people from the project ReciclAção |
•70education activities and local mobilization carried out by ReciclAção |
INVESTMENT IN INFRASTRUCTURE AND DEVELOPMENTGRI G4-EC7 | |||||
Investment | Current or expected impacts on local | Type of | |||
Program | Location | Description | (R$) | communities and economies | investment |
“Programa | Morrinhos, Itumbiara, Castelândia, | Support to NGO management | R$ 1,680.000 | Improvement of NGO community | In kind |
Inspira” | Rio Verde, Uberlândia, Campo Verde, | strengthening through | service | ||
Lucas do Rio Verde, Cuiabá, Glória | improved structure projects | ||||
do Goitá, Vitória de Santo Antão, São | (purchase of equipment) and | ||||
Lourenço da Mata, Carambeí, Dois | management improvement | ||||
Vizinhos, Francisco Beltrão, Nova | |||||
Esperança do Sudoeste, Paranaguá, | |||||
Ponta Grossa, Toledo, Lajeado, Marau, | |||||
Passo Fundo, Capinzal, Chapecó, | |||||
Concórdia, Ipira, Xanxerê, Faxinal | |||||
dos Guedes, Joaçaba, Videira and | |||||
Fraiburgo | |||||
“Voluntários | Campo Verde, Capinzal, Carambeí, | Revitalization of squares, | R$ 135,962 | Improvement of services offered | In kind and free |
BRF” | Faxinal dos Guedes, Herval D´Oeste, | courts, amusement parks | by NGOs and schools; Improvement | ||
Itajaí, Jataí, Rio Verde, Tatuí, Várzea | and nature trails; reform in | of quality of green spaces and | |||
Grande and Videira | kindergartens; adequacy of | recreational areas; Realization of | |||
libraries, toy libraries and | shared projects of local development | ||||
video room, etc. | |||||
“Comunidade | Campos Novos Concórdia, Serafina | Support to the strengthening | R$ 347,609 | Increase participation and | In kind and free |
Ativa” | Corrêa, Uberlândia, Lucas do Rio | and network management | engagement of strategicstakeholders | ||
Verde, Nova Mutum, Chapecó, Dois | through community groups | to the operation of BRF local units | |||
Vizinhos, Francisco Beltrão,Toledo, | that dialogue, define | to carry out social development | |||
Vitória de Santo Antão | priorities and implement | projects relevant to the municipality; | |||
social solutions to the | decreased economic dependence | ||||
surrounding communities | of local players on local units BRF; | ||||
performance of shared projects of | |||||
local development | |||||
“Prohab” | Mineiros (GO) | Construction of housing for | R$ 398,084 | Benefits the entire family of the | Investments |
�� | employees | employee and tends to leverage | brought with | ||
the reduction in cost of rents in the | the program | ||||
city, thus facilitating the migration | are financial | ||||
of workers. This allows an increase | (invested in the | ||||
in income, in addition to foster the | local/regional | ||||
entire local economic chain and | economy) | ||||
promote the attraction and retention | |||||
of staff. |
76Annual and Sustainability Report BRF 2014
In the area of industry relations, BRF prioritizes | •Instituto Brasileiro dos Executivos de | |
GOVERNMENTS, | participation in discussions related tocore | Finanças – Ibef (Brazilian Institute of |
INSTITUTIONSAND | business, occupying management positions | Finance Executives) |
INDUSTRY | or acting in a consultative manner. The | •Instituto Brasileiro de Governança |
commitment to sustainability also encourages | Corporativa – IBGC (Brazilian Institute of | |
In line with the Code of Ethics and Conduct, all | participation in organizations such as the | Corporate Governance) |
officers and employees of BRF are prohibited | Brazilian Business Council for Sustainable | •Instituto Brasileiro dos Profissionais |
from participating in acts of bribery and/ | Development (CEBDS) - in which BRF | de Relações com Investidores – Ibri |
or corruption, whether passive or active, | participates in sectoral chambers on issues like | (Brazilian Institute of Investor Relations |
directly or indirectly. It is also forbidden from | climate change, biodiversity and water. | Professionals) |
frustrating, defrauding, deceiving, preventing | Additionally, the organization has signed | •Committee of Pronouncement of Best |
or disturbing public or private bidding | several compacts and voluntary initiatives | Practices and Technical Committees of |
procedures.GRI G4-SO4 | Capital Market (Codim) | |
that propose the improvement of | •Associação Brasileira de Indústrias da | |
industry practices, focusing on corporate | ||
BRF strives to maintain a close relationship | sustainability. In 2014, BRF participated in a | Alimentação – Abia (Brazilian Association of |
with the entities and associations representing | pioneering initiative in the world to create an | Food Industry) |
its segment in order to ensure the continuity | integrity compact in the sponsorship of sports | •Associação Brasileira das Indústrias de |
of the business and its contribution to the | in Brazil, unifying rules of management, | Queijo – Abiq (Brazilian Association of |
development of markets in which it operates. | integrity and transparency. | Cheese Industries) |
•Associação Brasileira das Indústrias | ||
Under strict legal, ethical and moral standards, | Exportadoras de Carne – Abiec (Brazilian | |
following Brazilian and international rules, | Association of Meat Exporters) | |
such as the American FCPA Foreign Corrupt | NETWORK OF INDUSTRY | |
Practices Act and Sarbanes-Oxley (SOX), | AND BUSINESSGROUPS | •Alimentação Sindicato Nacional Animal da – Indústria Sindirações de (National |
BRF contributes to the electoral process by | GRI G4-16 | Union of Animal Feed Industry) |
making donations to political campaigns | ||
in order to help Brazilian democracy. In | •Conselho Empresarial Brasileiro para o | |
•Associação Brasileira da Indústria Produtora | Desenvolvimento Sustentável – CEBDS | |
the 2014 elections, BRF made donations | e Exportadores de Carne Suína – Abipecs | (Brazilian Business Council for Sustainable |
totaling R$18.1 million, and the company | (Brazilian Association of Meat Industry | Development) |
defines its support to political parties (not | ||
people) based on internally established | Producers and Pork Exporters) | •Group of Institutes, Foundations and |
criteria, which have the transparency in their | •Associação Brasileira de Proteína Animal | Companies (GIFE) |
relationships, trustworthiness of candidature | – ABPA (Brazilian Association of Animal | •Comunitas / BISC |
and support to government projects aimed | Protein) | •RedEAmérica |
at the development of agribusiness. The | •Associação Brasileira das Companhias | |
contribution of funds complied with | Abertas – Abrasca (Brazilian Association of | |
provisions of the Brazilian electoral law, | Public Companies) | |
disclosed at the Superior Electoral Court’s | •Ethos Institute | |
website (TSE).GRI G4-SO6 |
SUPPLIERMANAGEMENT |
Highly complex, BRF supply chain is now | Asia. The change allowed for a more efficient | In 2014, the percentage of international |
global, resulting in purchasing, quotation | management in a global scenario of recession | negotiations was 16% and the 2015 target is |
and negotiations processes at national and | and pressure suffered by the change in | to raise the percentage to 22.7%. This increase |
international level, seeking not only to | commodity prices. | dialogues directly with the strategy outlined |
reduce costs, but also the risk control and | for Supplies in the search for efficiency in | |
profitability gains, efficiency and reduction of | Under the new strategy, regional purchasing | cost reduction and improvement in the |
impact and environmental risk. | teams were established, trained based | quality of services/products, following the |
on synergy and speed of local purchase | Company’s new model of globalization and | |
In 2014, it was consolidated a global | negotiation, to enable the expansion of the | prioritizing the analysis of strategic purchase |
management that has unique processes and | number of categories traded, and improve | categories by region. The influence that the |
aligned strategies for buying in five regions: | commercial and service gains. | organization can have on the economy goes |
Brazil, Middle East, Argentina, Europe and | beyond the creation of jobs and payment of |
77
wages and taxes. By supporting the chain | At the end of the year, approximately 50 | and environmental performance, quality, |
of local suppliers, BRF can indirectly attract | thousand producers and companies supplied | competitive cost and delivery time that can |
investments that streamline the economies | to BRF, divided into five large categories | minimize inventory. |
of the regions affected by the business.(Read | (see table). To select its business partners, | |
more on Annex, p.116) | the company considers four criteria: social |
BRFSUPPLYCHAINGRI G4-12, G4-FP1 | ||||
Type of | Number of | Volume purchased in accordance | ||
business | Profile and categories | partners | Regions of suppliers | with purchase policy |
Agricultural | Pork suppliers are partnership, purchase and sale, lending, | 12,929 | GO, MG, MS, MT, PR, RS, SC | 100% |
while producers of poultry and eggs suppliers are a partnership | ||||
Supplies | Direct | 19,255 | AL, AM, BA, CE, DF, ES, GO, | 95.9% |
MA, MG, MS, MT, PA, PE, | 4.1% spot purchases | |||
Indirect | PI, PR, RJ, RN, RS, SC, SP | |||
Freight | ||||
Partnerships | ||||
Grains, meals | Farmers: direct purchase of the crop for BRF (representing 89% | 3,427 | EC, GO, MG, MS, MT, PA, | 100% |
and oils | of the number of partners) | PR, RS, SC, SP, Singapore, | ||
Cereal companies: Small businesses which are intermediates in | Paraguay | |||
the commodities market (grain) | ||||
Tradings: Large businesses which are intermediates in the grain | ||||
market | ||||
Cooperatives: civil/commercial non-profit organization, | ||||
formed by groups of farmers. | ||||
Logistics | Transfer operation CD and direct sales operations (factory- | 1,250 | Northeast, West, North, | 100% |
client), containing the long-distance road transport, container | South and Southeast | |||
and multi-modality (rail and coastal shipping). Urban | ||||
distribution operation, through the operational management | ||||
of CDs, transhipments (TSPs) and urban transport delivery. | ||||
Dairy | Direct suppliers and third parties | 13,079 | GO, MG, MS, PE, PR, RS, SC | 100% |
CHAIN MONITORING PROGRAM
GRI G4-EN32, G4-LA14, G4-SO9, G4-HR5, G4-HR6, G4-SO10, G4-HR10, G4-HR11, G4-EN33, G4-LA15
To track the impacts and promote social, | The importance of monitoring environmental | sure that all standards, policies and laws are |
environmental and economic development | issues is the impact that the mapped risks may | being followed. Consultations are made in |
of its suppliers, BRF keeps the Supply Chain | cause, ranging from image and reputation, | the process of new contracts and existing |
Monitoring Program, covering in 2014 the | the stop of production, fines and, in critical | contracts. |
areas of grains, meals and oils; logistics; | cases, a possible devaluation of the company | |
agriculture; supplies and dairy. The goal is | in the capital market because of serious | Direct materials suppliers - such as inputs, raw |
to mitigate social and environmental risks, | complaints. Therefore, to reduce them, BRF | materials and packaging - are also audited on |
enhance quality attributes and contribute to | has documents such as the Code of Ethics and | aspects related to quality, having its items |
the development of the chain, with shared | Conduct, the Code of Conduct for Suppliers and | monitored in the production process in order |
and ongoing generation of value. | the purchase agreements and contracts, which | to ensure compliance with the requirements |
include social and environmental clauses. | agreed with BRF. | |
The monitoring of suppliers is carried out | The Company is also a signatory to various | |
according to priorities such as those that are | compacts and agreements on the subject (read | The program goes beyond monitoring |
in the most critical business categories, which | more on p. 25), encouraging adhesion of the | and evaluating aspects of quality and risk, |
are in sensitive locations to environmental | suppliers. | contributing to the commitment to leverage |
issues - such as the Amazon biome and areas | the sustainability issue at the Company’s | |
of high biodiversity - or companies with | BRF periodically consults the public lists | chain, in line with BRF-17. One of the indicators |
high trading volume and risk of forced labor | of embargoed areas and violation of labor | provided for in the strategic planning is the |
analogous to slave and child labor. Also the | rights, provided by agencies Brazilian | monitoring of acceptance of the Code of |
soybean crushing componies are considered | Institute of Environment and Renewable | Conduct for suppliers, where suppliers know |
critical suppliers. | Natural Resources (IBAMA) and the Ministry | and agree on principles such as: non-use of |
of Labor and Employment (MTE), to make | child or slave labor, the correct environmental |
78Annual and Sustainability Report BRF 2014
management and the quality of goods and | These other tools support the monitoring, | in relation to social and environmental |
services. From this base indicator other | adapting to the reality of each operation and | criterias, considering self-evaluation, visits on |
complementary customized indicators are | business. By 2014, about 17,000 suppliers were | site and other specific mechanisms. |
structured by each of the five fronts. | evaluated in potential and/or actual impacts |
Environment | Society | Labor practices | Human rights | |
Actual and potential | •Non-compliancewith environmental | •Indigenousrights; | •Legalcompliance with | •Diversity; |
negative impacts | legislation; | •Disseminationof odors | labor laws, social security | •Sexualexploitation of |
mapped in the chain | •Environmentallicensing; | from plants | laws and rights of children | children and adolescents; |
and worked for BRF1 | and adolescents. | |||
•Illegaldeforestation by the supplier; | •Forcedor slave labor; | |||
•Useof the biome areas, absence of legal | •Childlabor. | |||
reserve; | ||||
•Notpreserving biodiversity; | ||||
•Emissionsof greenhouse gases; | ||||
•overlapof the protected areas such as parks; | ||||
•Treatmentand disposal of solid waste. |
GRI G4-EN32, G4-EN33, G4-SO9, G4-SO10, G4-LA14, G4-LA15, G4-HR10 E G4-HR11
1Each board is in a phase of implementation and maturation of the Monitoring Program. 100% of new suppliers of BRF follow the criteria of the Suppliers Code of Conduct, being contractual purchase or spot in 69% of suppliers i.e. 3,532 suppliers answered the evaluation. For cases in which disagreements with some requirements of the Suppliers Code of Conduct are identified, depending on the severity improvement plans cattle, supplies and logistics are performed, or the supply contract is canceled cattle. The main irregularities causing of contractual termination are the presence in IBAMA List of Environmental Notices and Embargoes and in the Black List of the Ministry of Labor and Employment
79
ANIMAL WELFARE | ||
The Company believes that the animal | and international principles and standards, | In management system, the five animal |
welfare enables the improvement of the | both for poultry and pork farms, as well as | freedoms are implemented in the process, |
working environment, increased productivity, | for integrated farms - BRF suppliers adopt | focusing on the elimination of unnecessary |
reduced losses of quality of the final product, | the internal standards and practices of the | suffering - that is, today, one of the golden |
compliance with standards of international | Company. BRF’s animal welfare good practices | quality rules of the Company. BRF keeps teams |
and Brazilian markets, minimization of | manual and standard have as reference the | dedicated to the theme in all slaughtering |
risks and compliance with ethical principles | five freedoms: animals free from hunger and | units and defines strategies, guidelines |
involving human-animal relationship. | thirst; free from environmental discomfort; | and policies in the Internal Committee for |
free from pain, injury and disease; free to | Animal welfare, led by Agriculture and Quality | |
Major value chain axes, the creation and | express their natural behavior; and free from | boards and the Sustainability Management. |
the slaughter of animals follow national | fear and stress. |
80Annual and Sustainability Report BRF 2014
All employees, whether direct or suppliers, | legislation to that theme. With regard to | checklist and audits. In case of non |
dealing with the handling, transport or | antibiotics, the Company monitors possibilities | -compliance, adequacy action plans are set |
production of live animals undergo periodic | of gradual reduction of its use in the chain.GRI | which are regularly monitored by BRF teams, |
training. | G4-FP10, G4-FP12 | and the contract may be terminated for |
failure to comply with the plan. Monthly data | ||
It is also in line with global recommendations | Technical, legal and also religious provisions - | from slaughter plants are reported to high |
of the World Animal Protection (WAP), | such as Halal Slaughter Standards, mandatory | management. |
European Food Safety Authority (EFSA), | for the slaughter of animals used in food | |
World Organization for Animal Health (OIE), | preparation for the Islamic community - are | The Company’s Corporate Committee of Living |
American Meat Institute (AMI) and Bristol | incorporated into the day-to-day of farms, | Cargo Transportation regularly monitors |
University, among others, and is continuously | involving creation, shipping, transportation, | agricultural transport indexes in order to |
updated through studies, carried out in | landing, slaughter and stunning. | evaluate the practices adopted and how |
partnership with NGOs, entities and bodies | this process can be improved continuously, | |
such as Embrapa, University of São Paulo (USP) | Both for poultry and pork, animal welfare | proposing and implementing from structural |
and the Ministry of Agriculture, Livestock and | indicators are monitored daily such as bruising, | to functional improvements. Some examples |
Supply (MAPA). | contact dermatitis, fractures and mortality, | of indicators evaluated by this Committee are: |
among others. | injuries and mortalities, number of animals by | |
BRF does not use hormones in cutting livestock | transport, type of truck, mileage driven etc. | |
. Drugs, antibiotics and vaccines are handled | Monitoring of these key indicators helps | One of the improvements was the installation |
only on the advice and recommendation of | the management of processes in aspects | of trackers in transport trucks from the feed |
a veterinarian, in line with the legislation. In | of compliance. The evaluation of suppliers | to the live animal sent to slaughter. |
some markets, there is restrictive and specific | and business partners considers these | |
requirements, including through regular |
81
82Annual and Sustainability Report BRF 2014
FOODQUALITYANDSAFETY | ||
GRI G4-PR1 | ||
Having quality as competitive advantage in | also has BRC, IFS, Global GAP, AloFree, ISO | The rules of BRF Quality System were |
many of the markets it serves, BRF invests | 17025:2005 certification standards and is | revised to adapt to new producers markets |
in ongoing assessment of the impact of its | audited externally by different markets | while maintaining the necessary safety |
products on health and safety of consumer. | and customers, and by Brazilian competent | requirements and the excellence of the |
For this, the main reference is the internal | authorities (Mapa and ANVISA). | brands. The system, reviewed annually, had |
policy of Food Quality and Safety. | 100% approval by external auditors | |
In 2014, one focus was to expand the | ||
For control and management it is applied the | recognition of product quality, by reducing | |
“Hazard Analysis and Critical Control Points | complaints and cases of non-compliance | |
Program” (HACCP), through which pass all | of inputs and materials of suppliers, and | |
BRF products, ensuring a safe production and | improving communication practices that | |
free from health and legal risks. The company | reinforce the attributes of BRF brands. | |
HEALTHIER PRODUCTSGRI G4-FP6, G4-FP7 | ||
Aware of the challenges related to nutritional | Since 2013, by ABIa, BRF is committed to the | The RD&I team conducted 214 projects to |
improvement of industrial products, BRF | Ministry of Health to gradually reduce sodium | reduce sodium and fat in different food |
has invested, directly or sectorally, via the | levels in the meat products (hams, sausages, | categories, seeking technological alternatives |
Brazilian Association of Food Industries | burgers, chicken nuggets and mortadella). | of ingredients, processes and packaging to |
(ABIA), in studies, assessments and policies | The goals were established for 2015 and 2017, | ensure the taste and quality expected by |
to increase healthful attributes in its products | updated in 2020. | consumers. |
and brands. | ||
The sodium reduction is a major challenge, | In addition to reductions, in 2014 BRF | |
Since 2008, BRF works to eliminate the use | considering its importance for the | launched enriched and fortified products, |
of trans fats added to its formulations. The | definition of flavor and quality assurance, | intended primarily for children, in order to |
action demanded intensive research, sensory | which stimulates the studies of Research, | nutritionally enhance the feed of consumers. |
testing, food performance and safety in all | Development and Innovation areas. | |
product categories. |
IMPROVEMENTS IN BRFPORTFOLIO - 2014GRI G4-FP6 | |||
Categories | Total fat | Saturated fat | Sodium |
BRAZIL (RETAIL) | |||
Yogurts | Launch of 2 SKUs with 0% total fat | - | - |
Margarine | Reduction of 28.6% in 23% of the portfolio | Reduction of 33% in 23% of the portfolio | Reduction of 21.7% in 15.4% of the portfolio |
Hams | - | - | Reduction of 22% in 11% of special cold sliced |
meats portfolio; and 16% in 10% of the cold | |||
sliced meats portfolio | |||
Sausages | Launch of 2 SKUs with reduction of 40% | - | Reduction of 4.7% in 22.6% of the portfolio of |
(sausage frescal Toscana) and 30% (Chicken | cooked sausages | ||
sausage) | |||
Breaded | - | - | Reduction of 25%, 21.4% and 31% of sodium, |
meats | respectively, in 16.7% of the portfolio of breaded | ||
meats |
INTERNATIONAL (RETAIL) | |||
Margarine | - | Reduction of 4.4% of saturated fats in SKU of | Reduction of 16.7% in two SKUs of portfolio of |
the portfolio of Chilean margarine | Chilean margarine | ||
MORE NUTRITIOUS ANDFUNCTIONALFOODSGRI G4-FP7 | |||
Portfolio with increased nutritional or functional ingredients (by category) | |||
Vitamins | Children’s line nuggets - 3 SKUs (source B2 and B6) | ||
Margarine Line Aera - 2 SKUs (enriched in Vitamin A) | |||
Minerals | Children’s line nuggets - 3 SKUs (source of iron and zinc) |
84Annual and Sustainability Report BRF 2014
From the field to the point of sale, | In 2014, BRF has enhanced its efforts to | control systems. Resources are targeted based |
comply with requirements, internal and | on Environmental Policy. | |
external standards and policies related to | ||
environmental management. From direct | To ensure the quality of management, there | |
operations to the value chain, initiatives | are specialized technical teams in operations, | |
cover issues such as emission of effluents, | which follow the Corporate Standards (NC) on | |
solid waste generation, energy and water | issues such as emissions, waste and energy | |
consumption and greenhouse gas emissions. | efficiency. The guidelines that make up these | |
internal standards overcome the law in many | ||
During the year, more than R$208.4 million | cases. Monitoring considers the Environmental | |
were invested by the company in research, | Compliance Indicator (ICA), which consists | |
projects and operations of environmental | of effluent, solid waste, licensing, grants, air |
88Annual and Sustainability Report BRF 2014
emissions, odor and noise aspects. The Vice- | INVESTMENTS AND EXPENSES ON ENVIRONMENTALPROTECTION | |||
Presidency of Supply Chain has targets linked | (R$ million)GRI G4-EN31 | |||
to the Company’s environmental performance. | 2012 | 2013 | 2014 | |
Prevention and management1(cost of | ||||
In recent years, advances focus on | prevention and environmental management) | 60.2 | 52 | 64.07 |
understanding the size, extent and criticality | Destination, treatment and mitigation | |||
(waste disposal, emissions treatment, and | ||||
of its environmental impacts. The agricultural | remediation costs) | 61.2 | 126.72 | 120.16 |
chain and logistics processes, for example, | Investments in forests | 35.5 | 33.3 | 24.18 |
account for a significant part of the carbon | ||||
footprint, which has encouraged management | Total | 207.6 | 212 | 208.41 |
and monitoring initiatives that go beyond | 1Includes investment of units abroad. | |||
the plants of BRF in Brazil and abroad. In the | 2The difference in values occurs at the change of scope in accounting of values of “Destination, treatment and | |||
mitigation” in relation to 2012. According to the new metric, the company considers in 2012 R$ 111.9 million as | ||||
energy aspect, the priority has been to reduce | total investment and expenses on environmental protection measures. | |||
the levels of consumption, valuing renewable | ||||
sources and reducing greenhouse gases | ||||
emissions. |
89
WATER |
Especially critical issue in 2014, the | |
availability of water resources was worked | |
internally by the Company, focusing on the | |
reduction of losses, in efficient use and the | |
reduction of dependence of operations. | |
Water scarcity can significantly affect the | |
production processes and the financial | |
income of BRF. Among the impacts related | |
to business and water the aspect is the | |
concurrent use of water - that is, capture in | |
the same sources used for population supply, | |
irrigation and other industries. Besides its use | |
in industrial production, also highlights the | |
importance of water resources for the animals | |
production and agricultural commodities. | |
BRF makes the exploitation of surface and | |
groundwater resources always observing the | |
availability, impact and costs associated with | |
management practices in order to reduce its | |
dependence. Another ongoing challenge is | |
the level of water reuse: currently, there are | |
options under study to improve reuse and | |
reduce the water withdrawal. In addition, BRF | |
is involved in environmental preservation | |
actions and has representatives in the | |
Watershed Committees of the regions where | |
its operations are. | |
Among the successful projects of conscious | |
management of water are the capture of | |
rainwater, awareness about the responsible | |
use of the resource and efficiency | |
improvements in industrial production, as | |
the Lean philosophy (see box). Through such | |
these improvements, BRF reduced the specific | |
water consumption related to production in | |
industrial plants by 4.2%. | |
For the year 2015, a reduction target of | |
consumption was set in industrial activities | |
of 2.62%, associated with specific water | |
consumption per production volume. | |
Another way of performance monitoring is | |
the analysis in the supply chain. The water | |
issue is among the Agricultural sustainability | |
indicators evaluated on site and reported to | |
the senior governance (Board of Directors). |
WATERCONSUMPTIONPERSOURCE (m3)1GRI G4-EN8 | |||||
Variation % | |||||
Type of source | 2011 | 2012 | 20132 | 2014 | (2013 x 20114) |
Superficial | 42,251,876 | 38,732,576 | 38,828.985 | 36,544,505.98 | -6.25% |
Underground | 18,143,816 | 20,597,104 | 24,646.055 | 21,410,123.38 | -15.11% |
Public supply | 1,903,745 | 1,868,339 | 2,024.728 | 1,592.281 | -27.16% |
Rains | - | 40,563 | 55,122 | 92,300 | 40.28% |
Total | 62,299,437 | 61,238,582 | 65,554,890 | 59,639,210,36 | -9.92% |
1The data do not include the consumption of water in distribution centers, restricted to the factories, administrative buildings and | |||||
agricultural activities. | |||||
2Scope Expansion in analysis of data of 2013. |
90Annual and Sustainability Report BRF 2014
EFFLUENTSGRI G4-EN22, G4-EN24 | ||
To reduce the generation of wastewater, BRF | BRF maintains a complex system of effluent | During the year, the Company recorded two |
has invested in reducing the use of water in | treatment, with steps that include separation | accidents with leaks in two locations, with a |
its processes, focusing on industrial steps of | of solids and physic-chemical and biological | total volume of 13 tons. The main impact of |
intensive consumption, such as cleaning - | treatment. The technical teams of the plants | the effluents leaks was the contamination |
which accounts for 20% of use. Furthermore, | are responsible for the treatment process, | of soil and water bodies. The Company has |
there are projects for waste collection of the | receiving periodic training. In 2014, there was | standards to research, assess, classify and |
process without using water, reducing the | a total reduction of 6% in total wastewater | report to the responsible bodies for such |
organic load and the volume of effluent. | generation. | accidents and, in all cases, mitigated the |
potential impacts immediately after the | ||
occurrence. |
EFFLUENT DISPOSAL (m3)GRI G4-EN22 | ||||||
2011 | 2012 | 20131 | Var % | 2014 | Var % | |
Surface source | 54,843,866 | 54,285,284 | 57,845,094 | 6.60 | 54,053,549.09 | -7% |
Solo | 846,238 | 1,402,034 | 1,063,861 | -0.24 | 1,207,563.66 | 12% |
Public Network | - | 54,843 | 510,877 | 832¹ | 569,848.38 | 10% |
Total | 55,690,104 | 55,742,161 | 59,419,832 | 6.60 | 55,830,961.13 | -6% |
Quality (kg DQO/year) | 5,744,631 | 5,102,859 | -11.2 | 4,290,685.13 | -19% | |
1The increase in this indicator reflects the greater number of activities incorporated into the data. |
92Annual and Sustainability Report BRF 2014
One of the main commitments of BRF | improvements in factories, distribution | and grains operations, and indicators |
today is the use of renewable energy. In the | centers and agricultural operations in a total | relating to the management of fleets of BRF |
case of indirect energy, renewable sources | of 200,000 GJ of saving. | (see full tables in section Annex,p. 113 to 115). |
accounted for 90.52% and in the case of | GRI G4-EN3 | |
direct energy, reached 96.3%. For 2015, the | In total, energy consumption inside the | |
company plans to achieve at least 95% of | organization was 35,014,928.67 GJ, 6.4% below | |
direct energy from renewable sources. | the previous year. This data considers the | |
In 2015, the expectation is also achieve | agricultural, logistics, administrative |
93
EMISSIONS | ||
Atmospheric and GHG emissions are | In transportation, the main impacts are related | In 2011, the 1st consolidated inventory of BRF |
managed in line with environmental legislation | to greenhouse gas emissions by burning fuel, | was made. We seek to improve and make a |
and good practices applicable to the markets in | with effects such as the contribution to global | more complete calculation and, from the |
which BRF operates. In the case of GHG, emission | warming and the emission of atmospheric | inventory of 2013, we calculated the 1st Global |
levels inside the organization is not considered | pollutants that cause harm to human health | inventory, including the company’s overseas |
significant, due to the high proportion of | and air quality, the generation of waste such as | operations. |
renewable energy use, energy efficiency | oils, batteries and tires, and the spills and leaks. | |
projects and the Environmental Management | The monitoring of greenhouse gas emissions | |
System. | The management of impact in logistics is | is made on a quarterly basis through a |
done through various initiatives, including | specific indicator (kg CO2/ ton produced). In | |
With respect to atmospheric emissions, the | the adoption of different modes, such as rail | 2013 and 2014, direct emissions recorded an |
Company keeps a Corporate Standard for | and coastal shipping; optimizing the loading | increase when compared to the base year, |
management of pollutant emission in its | of cargos and reducing the waiting time of | due to adjustments in the anaerobic effluent |
plants. In the present scenario, there are no | loading and the cost of daily fees, led to a | treatment system and replacement of cooling |
limits / targets of GHG emissions imposed by | significant reduction in miles traveled with | gases in some distribution centers. Emissions of |
regulatory authorities in the regions where | empty vehicle; the change in the profile of the | Scope 1 in 2014 were lower compared to 2013, |
BRF operates. The goal is to anticipate a future | fleet, with vehicles with higher load capacity; | due to the revision of the calculation variables |
scenario with regulations or even taxation by | the implementation of reverse logistics | of biomass emissions and also the change in |
emissions. Among the initiatives implemented | models, optimizing the return loading of | organizational limits. |
to reduce impacts are the use of biomass | vehicles; improvement in routing of milk in | |
(renewable energy) and the conservation of | natura; and the renewal of the fleet, giving | The inventory of the Company follows the |
energy and heat in equipment and processes. | preference to vehicles that use cleaner diesel | guidelines of the Brazilian GHG Protocol |
(S50). Such initiatives have led to a reduction | Program, which in 2013 recommended the | |
The highest carbon impact is concentrated | of 51,000 tCO2e. | change of the GWP (global warming potential) |
in the value chain, particularly in the axes | of greenhouse gases for the calculation of | |
of agriculture and logistics. Environmental | In agriculture, with integrated producers, | inventories as of this year. Thus, inventories |
impacts caused by transportation systems | the 3S Program - Sustainable Hog Farming | from this period considered these new factors, |
have a wide reach, from global warming to | System supports integrated producers in the | which also influenced the significant increase |
air and noise pollution, and complex supply | alternative treatment of wastes through | of GHG emissions for Scope 1. Considering the |
operating companies such as BRF, should invest | biodigesters with flaring system or use as an | revision of factors used in the calculations and |
in efficiency in the distribution of inputs, raw | energy source. In 2014, the emission reduction | also the future planning of the Company, in |
materials and final products. | achieved 327,709 327.709 tCO2e.GRI G4-EN19 | the year 2015 inventory will be recalculated |
and the reduction target of direct GHG | ||
emissions reviewed. |
94Annual and Sustainability Report BRF 2014
Emissions related to the acquisition of energy | The details of GHG emissions by BRF, by type of gas and | |
and steam increased in 2013 and 2014 mainly | emission sources can be found in the Brazilian GHG Protocol | |
impacted by the increase in the emission factor | Program and the CDP Climate Change | |
of the Brazilian electricity. | Read more in Annex, p.113 to 115 |
SCOPE 1 - DIRECT EMISSIONS (tCO2e)GRI G4-EN15 | ||||
20111 | 2012 | 2013 | 2014 | |
GHG Emissions | 346,935.40 | 327,123.85 | 359,559.21 | 352,422.69 |
Biogenic emissions of CO2 | 2,557,312.87 | 2,797,109.23 | 2,892,186.26 | 2,304,715.27 |
Gases included in the calculation | All were mapped, but BRF only emits CO2, CH4, N2O and HFCs. | |||
SCOPE 2 - INDIRECT EMISSIONS (tCO2e)GRI G4-EN16 | ||||
20111 | 2012 | 2013 | 2014 | |
Purchase of electricity and steam2 | 101,344.51 | 185,034.60 | 265,031.29 | 350,180.19 |
Gases included in the calculation | CO2, CH4, N2O | |||
1For having set 2011 as the base year for emissions of Scope 1 and 2, it was necessary to incorporate the 2011 emissions of Argentina, which were estimated. In 2013 the first Inventory was made Global | ||||
BRF, including operations in Europe and other continents. | ||||
2The emission factors of electricity acquired in the countries considered in the inventory are collected in the websites of the responsible bodies in each country. For example, in Brazil, the emission factor | ||||
used is that provided by MCT - Ministry of Science and Technology. | ||||
SCOPE 3 – OTHER INDIRECT EMISSIONS1(tCO2e)GRI G4-EN17 | ||||
2011 | 2012 | 2013 | 2014 | |
Total of sources inventoried | 521,652 | 1,046.914 | 1,000.437 | 938,298.26 |
Gases included in the calculation | CO2, CH4, N2O | |||
Biogenic emissions of CO2 | 16,196.67 | 17,896.93 | 16,799.80 | 16,678.57 |
1IIn 2011, the sources included in the calculation of scope 3 were inland logistics and business air trip. From 2012 the waterway logistics and business overland trips were included and in 2014, externally | ||||
treated waste (landfill and composting) were added. |
MATERIALSAND PACKAGING | ||
BRF invests in waste reduction, recycling and | The Company invests in presenting innovations | Through participation in the Brazilian |
reuse of materials during the life cycle of its | that result in less use of materials and greater | Packaging Association (Abre), the main |
products and industrial processes, with a view | durability. Another highlight of 2014 was the | representative body of the industry, the |
to greater cost efficiency and reduction of | beginning of the use of plastic cages with | Company has improved processes, such as the |
impacts. However, there is no standard for | recycled material. In the new system, the | inclusion of symbols on their packages. The |
use of raw materials or recyclable or reusable | supplier purchases cages to be discarded by | action, intensified in 2014 with the inclusion |
packaging in the company, taking into account | BRF and produces new cages for transport of | of new products and packaging that have |
the regulatory barriers to the use of these | poultries, with 60% recycled materials | undergone review, helps to increase the |
resources in the food industry. | participation of consumers in the execution | |
BRF and the industry in general are challenged | of PNRS, separating the waste between dry | |
Monitoring the consumption of materials, both | to fully tailor its operations to the National | (recyclable) and humid (not recyclable). |
by product and by category, is an important | Solid Waste Policy (PNRS), which involves a | Gradually, all packages will be suitable for the |
mechanism for monitoring the efficiency and | number of improvements in operating axes, | new symbology. |
cost of materials flows used by the Company, | supply chain and distribution processes, sale | |
since these are directly related to overall | and post-consumer. | In 2014, BRF continued its partnerships from |
operating costs. | the previous year - with companies specializing | |
in technical support and post-consumption | ||
management in recycling cooperatives |
95
(WiseWaste and Cempre) - that promoted | Other important actions are in the building | Currently, the coalition is awaiting approval |
training in 16 cooperatives in the regions of | program of centers of recovery of recyclable | from the federal government on the reverse |
Porto Alegre, São Paulo, Rio de Janeiro and | materials in Paraná, with approximate | logistics proposal designed to service its |
Cuiabá. The focus was to improve screening | investments of R$ 120 thousand between | determination, which provides for 22% |
processes and packaging identification | 2013 and 2014; and participation, via the | reduction in the percentage of recyclable dry |
with compositions similar to those of BRF in | Brazilian Association of Food Industry (ABIA), | waste deposited in landfill by 2015. |
cooperatives, in order to increase its recycling | the Business Coalition coordinated by the | |
rate. The monitoring of trained cooperatives | Business Commitment to Recycling (Cempre), | |
will be held for 12 months. The completion of | bringing together other associations of | |
the visits is scheduled for the 1st quarter 2015. | various sectors of industry. |
PACKAGINGPROJECTSCONDUCTED IN 2014GRI G4-EN27 | RESULT |
Reduction of aluminum in packaging structure of BRF’s portfolio products | For 1 million units of packages less 164kg of aluminum is consumed and a |
reduction of 29.5 tons of aluminum per year is achieved, which, by the extraction | |
process, is equivalent to 132.75 tons of bauxite ore | |
Change in: | Consumption reduction of 215 tons of paper/cardboard per year |
•Packaging model | |
•Shipping boxes | |
•Board | |
Recyclable Film1 | •Useof 1,454 tons of packaging recycled in 2013, a reduction of 2,224.62 tCO2e. |
•Reductionof 1,773,260 liters of oil. | |
•Reductionof 7931.36 MW of electricity consumption | |
•Reductionof 1599.4 tons of plastic waste in landfills. | |
Change in polymeric film thickness for internal transport | With the change in thickness of the film, the consumption of polymeric film will |
decrease 30% and 44 tons of polymeric resins will no longer be used | |
Standardization of the structure and size of feedstock bags | Reduction of 361 tons of polymeric resins |
Replacement of chlorinated resins with thermoplastic resins in packages of | The packages of BRF’s portfolio product no longer consumed 85.4 tons of |
BRF’s portfolio product | chlorinated resins in 2014 |
Change in device in package of BRF’s portfolio products | Reduction of 6.4 tons of polymeric resins in 2014 |
Reduction of the weight of the BRF’s portfolio products | Reduction of 31 tons of card/year |
1The data refer to 2013. The project generates environmental impact in that it allows recycling of the material, reducing greenhouse gas emissions, oil consumption, electricity and quantity of plastic | |
waste in landfills. Quantitative data are measured by the supplier of the material, and the data for 2014 will be calculated in July 2015. |
WASTEMANAGEMENT | ||
One of the environmental priorities of | In administrative units, the separation for | In addition, environmental staff conducts |
BRF, waste management involves from | the disposal of organic waste, recyclable | audits of third parties that dispose the waste. |
the adequacy and provision of materials in | and non-recyclable is promoted. There are | The main actions to reduce the volume of |
suppliers, factories and offices to the stage | also collectors of batteries, and in some of | waste were the performance improvement |
of post-consumer. | the buildings are performed cooking oil and | industrial process, dry material collection and |
electronic waste collection. All distribution | use of specific waste such as an alternative | |
Due to the complexity of the chain, the | centers have sorting waste collection | fuel supplementary to biomass. |
company develops initiatives to minimize | structures. | |
losses, improve control of integrated producers | In every integrated farm (approximately | |
and find more suitable destination for each | Due to the characteristics of the waste | 13,000 suppliers) of BRF is implemented |
type of waste. Management references are | generated by BRF, the main method of | Reverse Logistics of Animal Health Waste |
the Solid Waste Management and Health Solid | disposal is composting, which allows for | Program. In 2014, we collected 410 tons |
Waste Management plans. For effluent and | organic fertilizer waste processing. In 2014, | of hazardous waste in the field and in the |
waste, other corporate standards are directed | 50.6% of the total generated by the company | company’s hatcheries. |
- such as the Agricultural Environmental | had that destination. | |
Management and Sustainable Hog Program | The goal for 2014 to reduce by 3% the total | |
The disposal of Class I and II waste is carried | volume of waste generated by BRF, was | |
out only by properly licensed companies and | overcome with a decrease of 7.46% - the | |
accompanied by destination certificates. | equivalent to 33,751 tons of waste. |
96Annual and Sustainability Report BRF 2014
WASTEBY TYPE AND DISPOSALMETHODGRI G4-EN23 | ||||||||||||||
2012 | 2013 | 2014 | ||||||||||||
Total by | ||||||||||||||
Disposal | Total (t) | % | Class i | Class ii | Total (t) | % | Class i | Class ii | Class i (t) | Class ii (t) | destination | % | Class i | Class ii |
Soil | ||||||||||||||
incorporation | 20,089 | 3.74% | 55,077 | 12.18% | - | 60,828,290 | 60,828,290 | 14.5% | ||||||
Landfill | 44,480 | 8.29% | 59,531 | 13.16% | 599,870 | 62,947,370 | 63,547,240 | 15.2% | ||||||
Recycling | 68,467 | 12.76% | 0.08% | 0.9992% | 60,238 | 13.31% | 0.10% | 99.90% | 289,920 | 81,704,741 | 81,994,661 | 19.6% | 0.22% | 99.78% |
(4.27 t) | (536,053 t) | (435 t) | (451,928 t) | (900.17t) | (417,712 t) | |||||||||
Incineration | 55 | 0.01% | 85 | 0.02% | 10,380 | 258,320 | 268,700 | 0.1% | ||||||
Composting | 403,389 | 75.19% | 277,432 | 61.33% | - | 211,973.21 | 211,973.21 | 50.6% | ||||||
Total | 536,480 | 100% | 452,363 | 100% | 900,170 | 417,711.9 | 418,612.1 | 100% |
HAZARDOUS WASTE TRANSPORTED (t) | GRI G4-EN25 | |
2013 | 20142 | |
Hazardous transported1 | 435 | 900.17 |
Hazardous treated | 435 | 900.17 |
1Class I waste transported and that do not go beyond the state borders. | ||
2Significant increase due to the inclusion of animal health waste transport and destination for | ||
treatment data |
BIODIVERSITY | ||
BRF recognizes the importance of preserving | decision to adjust the impact analysis scope, | In agriculture chain, integrated producers |
biodiversity and, despite not having a specific | is inevitable also to review the deadline for | are evaluated monthly with the percentage |
policy on the subject, seeks to control | completion of this work.GRI G4-EN12 | indicator of the environmental license |
potential or actual impacts situated in its | of properties. The licensing control of | |
own operations and in the value chain. | To better understand and assess its | suppliers is done through the Agricultural |
environmental externalities, in 2014, BRF | Environmental Management Standard, of the | |
In potentially polluting activities, such | joined the initiative TeSE of the Center for | integration contract and checklist of Rural |
as hatcheries, feed mills and own farms, | Sustainability of Fundação Getulio Vargas | Extension (which evaluates the routines of |
significant impacts on protected areas or | (GVces), which proposes to develop strategies | extension, responsible for implementing the |
high biodiversity value are not identified. | and tools for the management of impacts, | compliance index in integrated producers, |
From the survey of geographical locations | dependences, risks and opportunities related | focusing on environmental issues). |
of the Company’s activities and mapping | to ecosystem services. | |
of areas, a more detailed study of the | ||
impact of operations on biodiversity | All areas of BRF applicable to the New | |
was started. However, as much as the | Forest Code are following the schedule set | |
evaluation progressed, aspects not initially | by the Brazilian Institute of Environment | |
mapped were found - for instance, the | and Renewable Natural Resources (IBAMA) | |
complexity of industrial areas where they | to fit the georeferencing process and the | |
are inserted, having to consider the different | Rural Environmental Registry (CAR). The | |
anthropogenic occupations. Thus, it was | company monitors the impacts and the | |
necessary to revise the previously defined | scope of its area covered by conservation and | |
strategy for conducting the study. From the | environmental protection policies (read more | |
in the section Annex, p. 112, 113). |
97
SOCIALREPORT IBASE
1. Calculation basis | 2014 (Value in R$ million)* | 2013 (Value in R$ million) | ||||
Net revenue (NR) | 31.727 | 30.521 | ||||
Operating income (OR) | 2.609 | 1.960 | ||||
Payroll (FBP) | 4.549 | 4.475 | ||||
Value (R$ | Value (R$ | |||||
2. Internal social indicators | million) | % on NR | % sobre RL | million) | % on FPB | % on NR |
Food | 290.38 | 6.38% | 0.915% | 174,54 | 3.90% | 0.572% |
Compulsory social charges | 951.78 | 20.92% | 3.000% | 894,11 | 19.98% | 2.929% |
Private pension | 17.39 | 0.38% | 0.055% | 16,98 | 0.38% | 0.056% |
Health | 139.66 | 3.07% | 0.440% | 128,16 | 2.86% | 0.420% |
Health and safety at work | 10.24 | 0.23% | 0.032% | 7,96 | 0.18% | 0.026% |
Education, training and professional development | 23.30 | 0.51% | 0.073% | 29,45 | 0.66% | 0.096% |
Transportation | 117.08 | 2.57% | 0.369% | 109,35 | 2.44% | 0.358% |
Culture | 68.49 | 1.51% | 0.216% | 0,00 | 0.00% | 0.000% |
Day care or day care allowance | 4.42 | 0.10% | 0.014% | 4,22 | 0.09% | 0.014% |
Profits or income sharing | 67.90 | 1.49% | 0.214% | 5,20 | 0.12% | 0.017% |
Others | 54.30 | 1.19% | 0.171% | 37,67 | 0.84% | 0.123% |
Total - Internal social indicators | 1,744.94 | 38.36% | 5.500% | 1,407.64 | 31.46% | 4.612% |
Value (R$ | Value (R$ | |||||
3. External social indicators | million) | % on OR | % on NR | million) | % on OR | % on NR |
Education | 0.06 | 0.00% | 0.000% | 0,10 | 0.01% | 0.000% |
Culture | 0.69 | 0.03% | 0.002% | 0,42 | 0.02% | 0.001% |
Health and sanitation | 0.00 | 0.00% | 0.000% | 0,00 | 0.00% | 0.000% |
Sport | 80.99 | 3.10% | 0.255% | 47,69 | 2.43% | 0.156% |
Fighting hunger and food safety | 56.17 | 2.15% | 0.000% | 0,00 | 0.00% | 0.000% |
Others | 3.90 | 0.15% | 0.012% | 2,62 | 0.13% | 0.009% |
Total contributions for society | 141.87 | 5.44% | 0.447% | 50,83 | 2.59% | 0.167% |
Taxes (excluding social charges) | 3,304.92 | 126.67% | 10.417% | 3.202,28 | 163.38% | 10.492% |
Total - External social indicators | 3,446.79 | 132.11% | 10.864% | 3.253,11 | 165.98% | 10.659% |
Value (R$ | Value (R$ | |||||
4. Environmental indicators | million) | % on OR | % on NR | million) | % on OR | % on NR |
Investments related to production/operation | 208,41 | 7.99% | 0.66% | 212.00 | 10.82% | 0.69% |
Investments in programs and/or external projects | 0,00 | 0.00% | 0.00% | 0.00 | 0.00% | 0.00% |
Total investments in environment | 208,41 | 7.99% | 0.66% | 212.00 | 10.82% | 0.69% |
Regarding the establishment of "annual goals" to minimize | ( ) Has no targets | ( ) Has no targets | ||||
waste, general consumption in production/operation and | ( ) achieves 0-50% | ( ) achieves 0-50% | ||||
increase eciency in the us e of natural resources, the company | ( ) achieves 51-75% | ( ) achieves 51-75% | ||||
(X) achieves 76-100% | (X) achieves 76-100% |
100Annual and Sustainability Report BRF 2014
5. Indicators of the staff (thousand) | 2014 | 2013 | |
Number of employees in the end of the period | 104,777 | 110,138 | |
Number of admissions during the period | 32,136 | 32,581 | |
Number of apprentices | 1,321 | 1,211 | |
Number of outsourced employees | 8,502 | 9,395 | |
Number of trainees | 355 | 373 | |
Number of employees over 45 years of age | 15,824 | 15,434 | |
Number of women working in the company | 41,622 | 43,251 | |
% Of management positions held by women | 18.0% | 19.9% | |
Number of black people working in the company | 4,793 | 4,666 | |
% Of management positions held by black people | 1.38% | 1.30% | |
Number of people with disabilities or special needs | 1,856 | 1,801 | |
6. Relevant information relating to the exercise of corporate citizenship | 2014 | 2013 | |
Ratio between the highest and lowest salary in the company | 44 times | 44 times | |
Total number of work accidents | With lost time: 335 | With lost time: 362 | |
Without lost time: 1.914 | Without lost time: 1.863 | ||
Death: 3 | Death: 5 | ||
Social and environmental projects developed by the company | ( ) officers (X) officers and managers ( ) all of the | ( ) officers (X) officers and managers ( ) all of the | |
were defined by: | employees | employees | |
The safety and health standards in the workplace were defined | ( ) officers and managers ( ) all of the employees (x) | ( ) officers and managers ( ) all of the employees (x) | |
by: | all + Cipa | all + Cipa | |
As for freedom of association, the right to collective bargaining | ( ) Does not get involved ( ) follows the ILO standards | ( ) Does not get involved ( ) follows the ILO standards | |
and internal representation of workers, the company: | (X) encourages and follows ILO | (X) encourages and follows ILO | |
The private pension plan covers: | ( ) officers ( ) officers and managers ( X) all of the | ( ) officers ( ) officers and managers ( X) all of the | |
employees | employees | ||
The share of profits or income includes: | ( ) officers ( ) officers and managers ( X) all of the | ( ) officers ( ) officers and managers ( X) all of the | |
employees | employees | ||
When selecting suppliers, the same ethical and social and | |||
environmental responsibility adopted by the company: | ( ) Are not considered ( ) are suggested (X) are required | ( ) Are not considered ( ) are suggested (X) are required | |
As to the participation of employees in volunteer programs, the | ( ) Does not get involved ( ) supports (X) organizes and | ( ) Does not get involved ( ) supports (X) organizes and | |
company: | encourages | encourages | |
Total number of complaints and criticism from consumers: | in the company: private | In the company: ND | |
at Procon: Private | at Procon: 10 | ||
in court: Private | in court: 100% | ||
% Of complaints and criticisms answered or solved: | In the company: 99% | In the company: 100% | |
at Procon: 100% | at Procon: 30% | ||
in court: 100% | in court: 100% | ||
Total added value to distribute (in R$ millions): | 13,753 | 11,675 | |
Distribution of Value Added (DVA) | Employees: 30% | Employees: 38% | |
Government: 25% | Government: 32% | ||
Third-parties: 23% | Third-parties: 20% | ||
Shareholders: 15% | Shareholder: 9% | ||
7. Other information 2014 | |||
Internal social indicators of food: In value reported in 2013, it was not considered a basic basket, one of the most representative and that comes close to 100 million. For 2014, these | |||
data are being considered. | |||
Internal social indicators of education, training and development: Used the book value of the account courses + 30% of the estimated value for travel + 10% with other expenses | |||
such as materials, space rentals, coffee and snacks. | |||
Other internal social indicators In the year 2014 used the accounting accounts valuation employee, benef. To retirees, life insurance in group, other benefits, quality of life, school | |||
allowance and expatriates. | |||
*The reported numbers include dairy operation, but to analyze the data it should be considered according to financial statements and information below: | |||
Net Revenue Continued operations: 2014 - R$29,007 | |||
Dairy Net Revenue: 2014 - R$2,720 | |||
Operating Revenue Continued operations: 2014 - R$2,488 | |||
Operating Revenue - Dairy: 2014 - R$121 |
101
GRI SUMMARY
GENERAL CONTENT | ||||
Global | Millennium | |||
Aspect | Description | Page/response/omission | Compact | Goals |
Strategy and | G4-1 Message from CEO | 12, 13 | ||
Analysis | ||||
G4-2 Description of key impacts, risks and opportunities | 12, 13, 22, 24, 34 | |||
Organizational | G4-3 Organization name | 16 | ||
profile | ||||
G4-4 Primary brands, products and/or services | 16 | |||
G4-5 of headquarters | Headquarters | |||
Rua Jorge Tzachel, 475 | ||||
88301-600 Itajaí – SC – Brasil | ||||
Corporate Office | ||||
Rua Hungria, 1.400 – 5º andar | ||||
01455-000 São Paulo – SP – Brasil | ||||
G4-6 Countries where the main operating or more relevant | 16 | |||
units for the aspects of sustainability of the report | ||||
G4-7 Type and legal nature of property | 17 | |||
G4-8 markets where the organization operates | 16, 18, 19, 47 | |||
G4-9 Size of the organization | 6, 17, 18, 19 | |||
G4-10 Profile of employees | 18, 19, 63, 64 | 6 | ||
G4-11 Percentage of employees covered by collective | 63 | 3 | ||
bargaining agreements | ||||
G4-12 Description of the organization's supply chain | 78, | |||
The estimated monetary value of payments | ||||
made is strategic information to BRF, it opens | ||||
to the market the trading methodology of | ||||
purchase areas. | ||||
G4-13 Significant changes regarding size, structure, | 23, 24 | |||
ownership interest and supply chain | ||||
G4-14 description about how the organization adopts the | 34 | 7 | ||
approach or the precautionary principle | ||||
G4-15 Letters, principles or other externally developed | 25, 77 | |||
initiatives | ||||
G4-16 participation in associations and organizations | 77 | |||
Aspectos materiais | G4-17 Entities included in the consolidated financial | 99 | ||
identificados e | statements and entities not covered by the report | |||
limites | ||||
G4-18 report content definition process | 99 | |||
G4-19 List of material issues | 10, 11 | |||
G4-20 limit, inside the organization, of every material | 10, 11 | |||
aspect | ||||
G4-21 limit, outside the organization, of every material | 10, 11 | |||
aspect | ||||
G4-22 Restatements of information provided in previous | 99, | |||
reports | The continuous process of adopting IIRC | |||
guidelines for Integrated Reporting and the | ||||
improvement in the GRI G4 guidelines can | ||||
affect the comparability of data in reason of | ||||
concepts. Other reasons are the scope changes, | ||||
like some environmental indicators and HSE. | ||||
Another change that may affect comparability | ||||
is the change of concept adopted, as the case | ||||
of Complaints mechanisms due to internal | ||||
restructuring. All reformulations are indicated in | ||||
footnotes. | ||||
G4-23 Significant changes in the scope and limits of material | 99 | |||
respects in relation to previous reports | ||||
Engajamento de | G4-24 List of groups of stakeholders engaged by the | 70 | ||
stakeholders | organization | |||
G4-25 Base used for the identification and selection of | 70 | |||
stakeholders for engagement | ||||
G4-26 approach to engage stakeholders | 32, 33, 62, 70, 71, 73, | |||
In addition to the consultation and engagement | ||||
processes there are actions developed by | ||||
BRF Institute in neighboring communities. | ||||
These include monitoring visits, meetings and | ||||
negotiations with partners and stakeholders, | ||||
dissemination actions, internal and external | ||||
communications, public events of mobilization | ||||
and service, corporate voluntary, participatory | ||||
diagnosis, training, seminars and qualifications. | ||||
G4-27 Key issues and concerns raised during the | 71 | |||
engagement by group of stakeholders | ||||
Report Profile | G4-28 Reporting period | 98 | ||
G 4-29 Date of most recent previous report | 98 | |||
G4-30 Reporting cycle | 98 | |||
G4-31 Contact for questions about the report or its contents | Doubts about this document: (55 11) 2322-5052 / | |||
5061 / 5048 or e-mail acoes@brf-br.com. | ||||
G4-32 option of applying the guidelines and location of the | 98 | |||
GRI table |
102Annual and Sustainability Report BRF 2014
Global | Millennium | |||
Aspect | Description | Page/response/omission | Compact | Goals |
Governance | G4-33 Policy and current practice with regard to seeking | 99 | ||
external assurance for the report | ||||
G4-34 governance structure of the organization | 26, 27 | 1 a 10 | ||
G4-35 Process of delegation of senior governance body for | 26, 27, 66 | |||
economic, environmental and social issues | ||||
G4-36 positions and executive functions responsible for | 27 | |||
economic, environmental and social issues | ||||
G4-37 consultation processes between stakeholders and | 32 | |||
the senior governance body in relation to economic issues, | ||||
environmental and social issues | ||||
G4-38 composition of the senior governance body and its | 26 | |||
committees | ||||
G4-39 President of the senior governance body | 27 | |||
G4-40 criteria for selection and appointment process for the | 26, 27 | 3 | ||
senior governance body and its committees | ||||
G4-41 Process prevention and management of conflicts of | These situations are addressed under the | |||
interest | Code of Ethics and Conduct and the Articles of | |||
Association. | ||||
G4-42 Paper of the senior governance body and the | 27 | |||
executive in policy development and impact management | ||||
goals | ||||
G4-43 measures taken to increase awareness of the senior | Wide Disclosure of Annual and Sustainability | |||
governance body on economic, environmental and social | Report, communication in website and disclosure | |||
issues | of social and environmental programs in the | |||
regions of operation. | ||||
G4-44 self-assessment processes of the senior governance | 27 | |||
body's performance | ||||
G4-45 Responsibilities for implementing economic, | 27, 34, 62 | |||
environmental and social policies | ||||
G4-46 role of governance in analyzing the effectiveness of | 34 | |||
the organization's risk management processes for themes | ||||
G4-47 frequency with which the senior governance body | 22 | |||
analyzes the impacts, risks and opportunities | ||||
G4-48 Senior responsible for formally adopting the | 71 | |||
sustainability report and ensure coverage of all material | ||||
respects | ||||
G4-49 process adopted to communicate critical concerns to | 33 | |||
the senior governance body | ||||
G4-50 Nature and total number of critical concerns | 32 | |||
communicated to the senior governance body and solutions | ||||
adopted | ||||
G4-51 Linkage between compensation and the | 22, | |||
organization's performance, including social and | The total compensation paid to executive officers | |||
environmental | and directors in 2014 (salaries, participation | |||
in profits payments and benefits) was R$ 42.7 | ||||
million. The composition of the remuneration | ||||
includes fixed values and profit sharing, and | ||||
benefits; in 2014, a benefit was also paid to | ||||
former executive officers (in line with note | ||||
24.2.4 of BRF Financial Statements). Since 2006, | ||||
the adopted methodology relates the to profit | ||||
sharing with a multiple of the monthly salary | ||||
of the officer, considering various financial | ||||
indicators, such as Value Added, EBITDA and | ||||
annual budget, providing a ceiling for the | ||||
amount paid to executives. | ||||
G4-52 Participation of consultants (internal and | BRF determines the remuneration of all its | |||
independent) in determining remuneration | jobs through international and independent | |||
consulting methodology. The compensation | ||||
consultants support the Committees attached to | ||||
the Board of Directors and the HR team. | ||||
G4-53 Consultations with stakeholders on compensation | 27 | |||
and its application in the organization's policies | ||||
G4-54 proportional ratio between the highest salary and the | The highest paid individual receives 44 times | |||
overall average of the organization, by country | more than the average salaries of all other | |||
employees. | ||||
G4-55 proportional ratio between the increase of highest | In Brazil, the highest paid individual received an | |||
salary and the overall average of the organization, by | increase of 53.85%, while the average increase | |||
country | for all other employees stood at 14.0%. | |||
Ethics and integrity | G4-56 values, principles, standards and organizations | 17, 32 | 10 | |
performance standards | ||||
G4-57 internal and external mechanisms of guidance on | 32, 33 | 10 | ||
ethics and compliance | ||||
G4-58 internal and external mechanisms to communicate | 32 | 10 | ||
concerns about unethical behavior |
103
SPECIFIC CONTENT | |||||
ECONOMICCATEGORY | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
G4-DMA Management approach | 77, 78, 79, 80 | ||||
Outsourcing and | G4-FP1 Percentage of purchased volume of suppliers in | 78 | 8 | ||
purchase | accordance with the organization purchasing policy | ||||
G4-FP2 Percentage of purchased volume which is in | annex 111 | 8 | |||
line with internationally recognized standards and | |||||
certifications, described by type of certification. | |||||
Economic | G4-DMA Management approach | 44, 45, 52 - 57 | |||
performance | |||||
G4-EC1 Direct economic value generated and distributed | 52 - 57 | X | 8 | ||
G4-EC2 Financial implications and other risks and | 35, 94 | X | 7 | 8 | |
opportunities from climate change | |||||
G4-EC3 Coverage of the benefit pension plan | The benefits of income paid by the Plan are funded | X | 8 | ||
directly by the reserves already established in the | |||||
Plans. In 2014, BRF made a total of R$ 13,998,776.42 | |||||
in contributions. Participants effected a total of R$ | |||||
17,415,697.85. | |||||
The contribution percentage defined in the Plans I, | |||||
II and III follows the following criteria: for Plan I the | |||||
contribution specified in the Regulation is 0.70% on the | |||||
portion of the wage of up to 10 URBF (Reference Unit | |||||
Brazil Foods, which today is equivalent to R$ 4,158.80) | |||||
and 3.70% on the surplus portion of the salary, if any. | |||||
The sponsor’s contributions are made on the basic | |||||
contribution of the participants and according to the | |||||
following scale: up to 50 years, 100% of the participant’s | |||||
basic contribution; 51 on 200% of the participant’s basic | |||||
contribution. | |||||
The contribution percentage defined in the Plans I, | |||||
II and III follows the following criteria: for Plan I the | |||||
contribution specified in the Regulation is 0.70% on the | |||||
portion of the wage of up to 10 URBF (Reference Unit | |||||
Brazil Foods, which today is equivalent to R$ 4,158.80) | |||||
and 3.70% on the surplus portion of the salary, if any. | |||||
In both plans (II and III) the sponsor’s contribution | |||||
corresponds to 100% of basic contribution made by the | |||||
participants. | |||||
G4-EC4 Significant financial assistance received from | Tax incentives are confidential information. BRF enjoys | X | |||
government | fiscal and financial incentives at the federal, state and | ||||
local levels, as production incentives or local marketing | |||||
and socioeconomic development of the regions, and | |||||
normally in return for investments in generation of | |||||
direct and indirect jobs. | |||||
Indirect economic | G4-DMA Management approach | 73 - 76 | |||
impacts | |||||
G4-EC7 Impact of infrastructure investments offered for | 75, 76 | 1,8 | |||
public benefit | |||||
G4-EC8 Description of significant indirect economic | 24, 73, 76 | 1,9 | |||
impacts | |||||
Purchasing Practices | G4-DMA Management approach | 77, 78 | |||
G4-EC9 Policies, practices and proportion of expenses | annex 116 | ||||
with local suppliers | |||||
ENVIRONMENTAL CATEGORY | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
Materials | G4-DMA Management approach | 95, 96 | |||
G4-EN1 Materials used, described by weight or volume | annex 115 | 7,8 | 7 | ||
G4-EN2 Percentage of materials used from recycling | annex 115 | 8 | 7 | ||
Energy | G4-DMA Management approach | 92, 93 | |||
G4-EN3 energy consumption inside the organization | 93, annex 114 | 7,8 | 7 | ||
G4-EN4 Energy consumption outside the organization | annex 114 | 8 | 7 | ||
G4-EN5 Energy intensity | 92 | 8 | 7 | ||
G4-EN6 Reduced energy consumption | annex 115 | 8,9 | 7 | ||
G4-EN7 reductions in energy requirements of products | In 2014, BRF began development of tools to assess the | 8,9 | 7 | ||
and services | environmental impact of products, prioritizing aspects | ||||
water and carbon, also considering the energy issue. | |||||
Water | G4-DMA Management approach | 90, 91 | |||
G4-EN8 Total water withdrawal by source | 90 | 7,8 | 7 | ||
G4-EN9 Water sources significantly affected by | 91, annex 112 | 8 | 7 | ||
withdrawal of water | |||||
G4-EN10 Percentage and total volume of water recycled | 91, annex 112 | 8 | 7 | ||
and reused |
104Annual and Sustainability Report BRF 2014
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
Biodiversity | G4-DMA Management approach | ||||
G4-EN11 Location and size of area owned | 8 | 7 | |||
G4-EN12 Significant impacts on biodiversity of activities, | 97, annex 113, | 8 | 7 | ||
products and services | BRF is conducting an impact study on biodiversity, which | ||||
G4-EN13 Habitats protected or restored | suffered schedule and scope change | 8 | 7 | ||
G4-EN14 Total number of species included in the IUCN | 8 | 7 | |||
Red List and other conservation lists | |||||
Emissions | G4-DMA Management approach | 94, 95 | X | ||
G4-EN15 Direct emissions of greenhouse gases | 95 | X | 7, 8 | 7 | |
G4-EN16 Indirect emissions of greenhouse gases from | 95 | X | 7, 8 | 7 | |
energy acquisition | |||||
G4-EN17 Other indirect emissions of greenhouse gases | 95 | X | 7, 8 | 7 | |
G4-EN18 Intensity of emissions of greenhouse gases | annex 113 | X | 8 | 7 | |
G4-EN15 Reduction of emissions of greenhouse gases | 94 | X | 8,9 | 7 | |
G4-EN20 Emissions of substances that deplete the ozone | annex 113 | X | 7, 8 | 7 | |
layer | |||||
G4-EN21 Emissions of NOx, SOxand other significant air | 94, annex 113 | X | 7, 8 | 7 | |
emissions | |||||
Effluents and waste | G4-DMA Management approach | 92, 96, 97 | |||
G4-EN22 Total water discharge, described by quality and | 92 | 8 | 7 | ||
destination | |||||
G4-EN23 Total weight of waste by type and disposal | 97 | 8 | 7 | ||
method | |||||
G4-EN24 Total number and volume of significant spills | 92 | 8 | 7 | ||
Transported G4-EN25 Weight of waste deemed | 97, | 8 | 7 | ||
hazardous | BRF conducts collection of hazardous waste, | ||||
transporting them and allocating them according to | |||||
environmental legislation. Partners who receive these | |||||
residues are constantly audited to ensure they are with | |||||
processes and documentation updated. | |||||
G4-EN26 Protection and biodiversity index of water | All receiving waters where effluents are discharged | 8 | 7 | ||
bodies and habitats | have depuration conditions controlling impacts and | ||||
occurrences. Data of effluent emissions are weighted in | |||||
Environmental Compliance Index (ICA), and analyzed | |||||
monthly. | |||||
Products and | G4-DMA Management approach | 95, 96 | |||
services | |||||
G4-EN27 Initiatives to mitigate environmental impacts | 96 | 7, 8, 9 | 7 | ||
G4-EN28 Percentage of products and packaging | BRF does not have the control of percentage of returned | 8, 9 | 7 | ||
materials reclaimed by product category | containers,since the projects of Reverse Logistics of | ||||
Solid Waste in early stage. Annually it will be reported | |||||
the development of initiatives and possible quantity for | |||||
the data. | |||||
Compliance | G4-DMA Management approach | 32, 33 | |||
G4-EN29 value of fines and total number of sanctions for | The lawsuits are considered significant when the | X | |||
noncompliance with laws | amounts involved are greater than R$ 250,000 or when | ||||
the matter may expose the image of BRF and/or create | |||||
relevant precedents. | |||||
In 2014, two police investigations were initiated due | |||||
to environmental events, the first resulting in R$ | |||||
2,966,396.14 in significant fines and 11 non-monetary | |||||
sanctions. There was an increase in the number of events | |||||
recorded in units during the year, with a reduction in the | |||||
severity, compared with 2013. Most non-compliance was | |||||
related to compliance with environmental regulations | |||||
and the effluent emissions standards. The cases were | |||||
promptly resolved and are currently on trial. | |||||
Transportation | G4-DMA Management approach | 79 | |||
G4-EN30 Significant environmental impacts related to | 79 | 8 | 7 | ||
transportation of goods and workers | |||||
General | G4-DMA Forma de gestão | 88, 89 | |||
G4-EN31 Total de investimentos e gastos com proteção | 89 | 7, 8, 9 | |||
ambiental | |||||
Environmental | G4-DMA Management approach | 78,79, 80 | |||
assessment of | |||||
suppliers | |||||
G4-EN31 Total investments and spending on | 78, 79, 80 | 8 | 7 | ||
environmental protection | |||||
G4-EN33 Impactos ambientais negativos significativos, | 78, 79 | 8 | 7 | ||
reais e potenciais, na cadeia de fornecedores | |||||
Mechanisms of | G4-DMA Management approach | 32, 33 | |||
complaints regarding | |||||
environmental | |||||
impacts | |||||
G4-EN34 Number of complaints related to environmental | 32, 33 | 8 | |||
impacts |
105
SOCIALCATEGORY - LAbORPRACTICES AND DECENT WORK | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
Employment | G4-DMA Management approach | 60, 61, 63 | |||
G4-LA1 Total number of new hires and employee and | 63, annex 109 | 6 | 3, 5 | ||
turnover rates | |||||
G4-LA2 Comparison of benefits to full-time and | 63 | 3, 5, 6 | |||
temporary employees | |||||
G4-LA3 rates of return to work and retention after a | 63 | 6 | 3, 5, 7 | ||
maternity/paternity leave | |||||
Health and safety at | G4-DMA Management approach | 66, 67, annex 110 | |||
work | |||||
G4-LA5 Percentage of employees represented in formal | 66 | 6 | |||
safety and health committees | |||||
G4-LA6 Rates of injury, occupational diseases and lost | 66, 67 | 6 | |||
days | |||||
G4-LA7 Employees with high incidence or high risk of | 66 | 6 | |||
diseases related to their occupation | |||||
G4-LA8 Issues related to health and safety covered by | 67 | 6 | |||
formal agreements with trade unions | |||||
Training and | G4-DMA Management approach | 65 | |||
education | |||||
G4-LA10 Programs for skills management and lifelong | 65 | ||||
learning | |||||
Diversity and equal | G4-DMA Management approach | 64 | |||
opportunities | |||||
G4-LA12 Composition of governance bodies and | annex 110 | 6 | 3 | ||
discrimination of employees per employee category | |||||
Evaluation of | G4-DMA Management approach | 78, 79, 80 | |||
suppliers in labor | |||||
practices | |||||
G4-LA14 Percentage of new suppliers selected based on | 78, 79, 80 | 6 | 3 | ||
criteria related to labor practices | |||||
G4-LA15 significant, actual and potential negative | 78, 79 | 6 | 5 | ||
impacts to labor practices in the supply chain | |||||
Mechanisms of | G4-DMA Management approach | 32, 33 | |||
complaints related | |||||
to labor practices | |||||
G4-LA16 Number of complaints related to labor practices | 32 | ||||
recorded through formal mechanism | |||||
SOCIALCATEGORY - HUMAN RIGHTS | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
Child labor. | G4-DMA Management approach | 78, 79, 80, | |||
Integrated producers represent very low risk in terms of | |||||
measures and procedures to minimize this condition of | |||||
the social aspect. | |||||
G4-HR5 Operations and suppliers with risk of occurrence | 78 | 5 | |||
of child labor and measures taken | |||||
Forced or slave labor; | G4-DMA Management approach | 78, 79, 80, | |||
Integrated producers represent very low risk in terms of | |||||
measures and procedures to minimize this condition of | |||||
the social aspect. | |||||
G4-HR6 Operations and suppliers identified with forced | 78 | 4 | |||
labor risk or compulsory labor and measures taken | |||||
Supplier evaluation | G4-DMA Management approach | 78, 79, 80 | |||
in human rights | |||||
G4-HR10 Percentage of new suppliers selected based on | 78, 79, 80 | 2 | |||
criteria related to human rights | |||||
G4-HR11 significant, actual and potential negative | 78, 79 | 2 | |||
impacts in human rights in the supply chain and | |||||
measures taken | |||||
Mechanisms for | G4-DMA Management approach | 32, 33 | |||
complaints to | |||||
human rights | |||||
G4-HR12 Number of complaints related to impacts on | 32 | 1 | |||
human rights recorded, processed and resolved |
106Annual and Sustainability Report BRF 2014
SOCIALCATEGORY -SOCIETY | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
Local communities | G4-DMA Management approach | 73, 74, 75, 76 | |||
G4-SO1 Percentage of operations with the local | 73, 74, 75, 76, annex 111 | 1 | 1, 2, 4, 5, 6, 8 | ||
community engagement programs, impact assessment | |||||
and local development | |||||
G4-SO2 Operations with significant, actual and potential | 73, 74 | 1 | 1, 2, 4, 5, 6, | ||
negative impacts, in local communities | 8, 9 | ||||
Fighting corruption | G4-DMA Management approach | 32, 77, | |||
G4-SO3 units analyzed for risks related to corruption | Having been identified as material only along the | 10 | |||
multistakeholder consultation in 2014, because of the | |||||
G4-SO4 Percentage of employees trained in anti- | structuring of the Fraud Prevention Board, the indicators | 10 | |||
corruption policies and procedures | related to this aspect will be enhanced for disclosure | ||||
SO5 G4-confirmed cases of corruption and measures | in the next cycle. In this report, we present essentially | 10 | |||
taken | forms of management. | ||||
Public policies | G4-DMA Management approach | 77 | |||
G4-SO6 Policy of financial contributions to political | 77 | 10 | |||
parties, politicians, institutions | |||||
Unfair competition | G4-DMA Management | BRF condemns all forms of unfair competition, as | |||
approach | provided for in its Code of Ethics and Conduct and the | ||||
G4-SO6 Policy of financial contributions to political | Code of Conduct for suppliers. In 2014 there was no | 10 | |||
parties, politicians, institutions | lawsuit for unfair competition, trust and monopoly | ||||
practices and their outcomes. | |||||
Compliance | G4-DMA Management approach | 32, 33 | |||
G4-SO8 Monetary value of significant fines and total | R$ 7.7 million in penalties have been applied as a result | X | |||
number of non-monetary sanctions | of noncompliance with laws and regulations. Regarding | ||||
sanctions, there was interdiction Strechaderias in Marau | |||||
(RS) unit and a ban on poultry packaging sector and | |||||
pork slaughterhouse. Fines and penalties related to | |||||
beginning of effectiveness of NR36 of the refrigerators in | |||||
2013, with intensification of surveillance in 2014. | |||||
G4-DMA Management approach | 78, 79, 80 | ||||
Supplier evaluation | G4-SO9 Percentage of new suppliers selected with | 78, 79, 80 | |||
on impacts on | criteria of impacts on society | ||||
society | |||||
G4-S10 significant, actual and potential negative impacts | 78, 79 | ||||
in human rights in the supply chain in society and | |||||
measures taken | |||||
Mechanisms | G4-DMA Management approach | 32, 33 | |||
of complaints | |||||
regarding impacts on | |||||
society | |||||
G4-SO11 Complaints related to impacts on society | 32 | ||||
recorded, processed and resolved through formal | |||||
mechanism |
107
SOCIALCATEGORY - LIABILITYFOR THEPRODUCT | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
Customer health and | G4-DMA Management approach | ||||
safety | 82 - 85 | 1, 4, 5 | |||
G4-PR1 Assessment of impacts on health and safety | |||||
during the product and services life cycle | 84 | ||||
G4-PR2 Non-compliance related to the impacts of | In 2014, BRF received five reports/assessments of | X | |||
products and services | problems related to consumer health and safety, | ||||
but none resulted in payment of a fine or warning. | |||||
In addition, BRF signed 01 conduct adjustment term | |||||
with Sedecon due to problems in the distribution and | |||||
marketing of skimmed UHT milk, brand Elegê, in Rio de | |||||
Janeiro. Among other obligations BRF paid a fine in the | |||||
amount of R$ 150,000.00. | |||||
G4-FP5 Percentage of production volume manufactured | Annex 111, | X | |||
in sites certified by third parties in accordance with | In 2014, we requested accreditation to ISO 17025 for | ||||
internationally recognized standards | scope of Microbiology and Physical Chemistry in the | ||||
laboratories of Uberlândia, Marau, Capinzal, Carambeí, | |||||
Videira, Chapecó, Concordia and Toledo, and the units | |||||
of Uberlândia and Marau have already been assessed | |||||
and are waiting for the process to finish; the others are | |||||
awaiting evaluation. For 2015, we intend to forward the | |||||
accreditation application in ISO 17025 for the rest of | |||||
Brazil laboratories, totaling 100% of laboratories with | |||||
accredited scopes. | |||||
G4-FP6 Percentage of total sales volume of consumer | 84 | ||||
products, by product category, which have reduced | |||||
saturated fat, trans fat, sodium and added sugars | |||||
G4-FP7 Percentage of total sales volume of consumer | 84 | ||||
products, by product category, that contain increased | |||||
nutritious ingredients and food additives such as fiber, | |||||
vitamins, minerals, phytochemicals and functional. | |||||
Labelling of products | G4-DMA Management approach | 82, 83 | |||
and services | |||||
G4-PR3 Type of information about products and services | 83 | 8 | |||
required by procedures | |||||
G4-PR4 Non-compliance related to the labeling of | Because of a decision by PROCON/MG, which kept the | X | |||
products and services | tax delinquency notice due to alleged defects of quality | ||||
and information on the labeling of the product Biofibras | |||||
a lawsuit seeking the annulment of the administrative | |||||
decision was filed. The action is in the initial/instruction | |||||
phase. | |||||
G4-PR5 Research Results measuring customer | 85, annex 116 | ||||
satisfaction | |||||
Compliance | G4-DMA Management approach | 32, 33 | |||
G4-PR9 Fines for non-compliance concerning the | In 2014, there were no significant fines (convictions) | X | |||
provision and use of products and services | or non-monetary judicial sanctions in Civil Litigation, | ||||
due to non-compliance related to supply and use | |||||
of products. In the year, BRF suffered public civil | |||||
action filed by Procon due to news in the media about | |||||
Elegê milk supposedly unfit for consumption; police | |||||
investigation for determination of pension crime; and | |||||
public civil action (collective damages) for alleged | |||||
product unfit for consumption, which discusses | |||||
incidence of water and formaldehyde in milk in May | |||||
2013. | |||||
ANIMAL WELFARE - SECTOR SUPPLEMENT | |||||
External | Global | Millennium | |||
Aspect | Description | Page/response/omission | verification | Compact | Goals |
G4-DMA Management approach | 78, 79, 80, 81 | ||||
Breeding and | G4-FP9 Percentage and total of animals raised and/or | 46 | |||
genetics | processed, by species and breed type | ||||
Breeding | G4-FP10 Policies and practices, by species and breed, | 81 | |||
related to physical changes and use of anesthetics | |||||
G4-FP11 Percentage and total of animals raised and/or | annex 116 | ||||
processed, by species, breed and type of | |||||
housing | |||||
G4-FP12 Policies and practices regarding the use of | 81 | ||||
antibiotics, anti-inflammatory, hormones and/or | |||||
treatments for growth, by species and breed | |||||
Handling, transport | G4-FP13 Total number of incidents of significant non- | In 2014 there were 13 cases of assessments, 3 with | X | ||
and slaughter | compliance with laws and regulations and adherence to | fines totaling R$ 6,816.03. The assessments are due | |||
voluntary standards related to transport, handling and | to problems in transportation and related to animal | ||||
slaughter practices of terrestrial and aquatic animals | welfare. |
108Annual and Sustainability Report BRF 2014
ANNEX
PEOPLE - HIRINGAND DISMISSALSGRI G4-LA1
HIRING AND DISMISSALSBY REGION | ||||||
2013 | 2014 | |||||
Hiring | Dismissals | Hiring | Dismissals | |||
North | 74 | 85 | 96 | 77 | ||
Northeast | 1,140 | 840 | 1,042 | 966 | ||
West | 13,390 | 13,689 | 11,365 | 12,220 | ||
Southeast | 5,506 | 7,095 | 5,269 | 6,194 | ||
South | 12,471 | 15,065 | 15,563 | 16,488 | ||
Abroad | N/A | N/A | 828 | 1,106 | ||
HIRESBYGENDER | ||||||
20131 | 2014 | |||||
Male | Female | Male | Female | |||
Total number | 19,314 | 13,267 | 19,808 | 14,355 | ||
Rate (%) | 18.20% | 12.50% | 18.90% | 13.70% | ||
Dismissals (total number) | 21,840 | 14,934 | 22,040 | 15,011 | ||
1For 2013, information from abroad were not recorded. | ||||||
HIRESPER AGE | ||||||
2013 | 2014 | |||||
Less than | Less than | More than | ||||
30 years | 30 - 50 | More than | 30 years | 30 - 50 | 50 years | |
old | years old 50 years old | old | years old | old | ||
Total number | 22,738 | 9,532 | 311 | 25,177 | 8,723 | 263 |
Rate (%) | 21.40% | 9.00% | 0.3% | 24.03% | 8.33% | 0.25% |
TURNOVER RATE | ||||||
2012 | 2013 | 20141 | ||||
Number of dismissals | 35,385 | 36,774 | 37,051 | |||
Turnover rate | 2.34% | 2.36% | 3.53% | |||
1New scope: In this date information from abroad are being considered, which were not covered in 2012 and 2013. |
TURNOVERPER AGE | ||||||
2013 | 2014 | |||||
Less than | More than | Less than | More than | |||
30 years old | 30 - 50 years old | 50 years old | 30 years old | 30 - 50 years old | 50 years old | |
Total number | 21,747 | 13,993 | 1,034 | 22,747 | 13,257 | 1,047 |
PEOPLE - DIVERSITYGRI G4-LA12
STAFFPERGENDER, AGE,MINORITIES AND OTHER DIVERSITY INDICATORS | ||||||||||||
2013 | 2014 | |||||||||||
More | More | |||||||||||
Up to 30 | 30 - 50 | than 50 | Up to 30 | 30 - 50 | than 50 | |||||||
Total | Women | Men | years old | years old | years old | Total | Women | Men | years old | years old | years old | |
Officers | 49 | 6 | 43 | 0 | 33 | 16 | 44 | 4 | 40 | 0 | 39 | 5 |
Managers | 513 | 94 | 419 | 11 | 444 | 58 | 499 | 95 | 404 | 17 | 444 | 38 |
Supervisors and | ||||||||||||
coordinators | 1,946 | 338 | 1,608 | 204 | 1,616 | 126 | 2,274 | 428 | 1,906 | 253 | 1,931 | 150 |
Administrative | 11,322 | 5,237 | 6,085 | 4,628 | 6,173 | 521 | 10,085 | 4,687 | 5,338 | 4,034 | 5,629 | 362 |
Operating | 96,308 | 37,570 | 58,738 | 39,680 | 50,558 | 6,070 | 91,875 | 36,408 | 55,467 | 37,010 | 49,449 | 5,416 |
Total | 110,138 | 43,245 | 66,893 | 44,523 | 58,824 | 6,791 | 104,777 | 41,622 | 63,155 | 41,314 | 57,492 | 5,971 |
Percentage | 100% | 39% | 61% | 40.40% | 53.40% | 6.20% | 100% | 40% | 60% | 39% | 55% | 6% |
PEOPLE – HSE MANAGEMENT SYSTEM
110Annual and Sustainability Report BRF 2014
COMMUNITY RELATIONS
ENGAGEMENTPROGRAMS, IMPACTSMANAGEMENT AND DEVELOPMENTGRI G4-SO1 | ||||
2013 | 2014 | |||
Coverage of the | Coverage of the | Execution in operating Committees | ||
operation | Execution in operating Committees BRF Institute | operation | BRF Institute | |
Inspira | 48% | 54% | 37% | 54% |
Active Community | 17% | 26% | 23% | 35% |
Estação Digital | 2% | 3% | 2% | 3% |
ReciclAção | 0% | 0% | 0% | 0% |
Volunteers BRF | 65% | 100% | 65% | 100% |
Portas Abertas | - | - | 65% | 100% |
Inspira Comunidade | - | - | 4% | 5% |
FOODSAFETY
PURCHASE IN ACCORDANCE WITH INTERNATIONALSTANDARDS ANDCERTIfICATIONS1GRI G4-FP2 | |||||||
2013 | 2014 | ||||||
% of the purchased | |||||||
volume from | % of the purchased | ||||||
suppliers in | volume that is in | ||||||
accordance with | Name of | accordance with | |||||
internationally | internationally | this internationally | |||||
Suppliers | Types of | recognized | Geographical | recognized | recognized | Types of certified | Geographical |
areas | Materials | certifications | origin | certification | certification | products purchased | origin |
Agricultural | Pork, Poultry | 100% | National | 100% | porks and poultry | National | |
Supplies | Direct, indirect | de 80% a 100%2 | National | De 80% a 100%2 | PPE, safety systems, | Nationalized | |
materials and | maintenance | and imported | |||||
services | materials, electrical | ||||||
equipment, etc. | |||||||
Grains, meals | Soybean Meal | 90.10% | MT, GO, MS, PR, | European Biofuels | 88.83% | Soybean Meal | BA, GO, MG, |
and oils | SC and RS | Directive (EU-RED), | MS, MT, PI, PR, | ||||
ISCC (International | RS and SP | ||||||
Sustainability and | |||||||
Soy oil | 65.70% | MT, GO, MS, PR, | Carbon certification) | 73.50% | Soybean oil | BA, GO, MG, | |
SC and RS | HAACCP, ISO 14001, | MS, MT, PI, PR, | |||||
ISO 18001, RTRS, | RS, SP e SC | ||||||
GMP+. | |||||||
Palm Oil | 87.20% | Asia and South | RSPO | 98.70% | Palm Oil | PA, SP e | |
America | Singapure | ||||||
Dairy | Milk | 100% | RS, SC, PR, MG, | MAPA | 100% | In natura milk | RS, SC, PR, MG, |
MS, PE e AL | IN62 | GO, MS, PE e AL | |||||
1The total volume of purchases is considered strategic information because it involves negotiating methodology of purchase areas. | |||||||
2Change from 80% to 100% depending on the category mapped by supply purchase area |
THIRD-PARTYCERTIfICATIONS, ACCORDING TO INTERNATIONALLY RECOGNIZEDSTANDARDS IN fOODSAfETYMANAGEMENTSYSTEM | |||
GRI G4-FP5 | |||
2014 | |||
Domestic | Foreign | ||
Units (Brazil) | market | market | |
Final product certifications: | |||
BRC | Chapecó, Toledo, Concórdia, Serafina Corrêa, Uberlândia, Várzea, Capinzal, Francisco Beltrão, Mineiros, | ||
Marau e Rio Verde | 9% | 13% | |
IFS | Chapecó, Toledo, Concórdia, Uberlândia, Várzea, Capinzal, Mineiros, Marau e Rio Verde | 8% | 12% |
Certifications of raw material: | |||
GlobalGAP | Chapecó e Marau | ||
AloFree* | Capinzal, Marau, Mineiros, Serafina Corrêa, Toledo e Uberlândia | ||
ISO 17025:2005* | Lab. Jundiaí | ||
* they are not food safety audits | |||
** In addition to the food safety-related certifications, some units have certification ISO 9001, ISO 14001, OHSAS 18001, Halal and Kosher (dairy). For 2014, ISO 17025 certification will be extended | |||
to laboratories of Marau, Uberlândia and Carambeí. And already requested certification of laboratories of Videira, Capinzal and Concordia. There is also certified units in Argentina and Europe in BRC | |||
(Martinez, Oosterwolde, Rio Cuarto, Wrexham), IFS (Oosterwolde, Wrexham), ISO 22000 (Baradero) and Dutch HACCP (Lavallol, Villa Mercedes). |
111
ENVIRONMENTALMANAGEMENT - WATER
WATER RECYcLED AND REUSED (m3)GRI G4-EN10 | ||||
Water sources | 2011 | 2012 | 2013 | 2014 |
Total recycled water | - | - | 9,725,337 | 7,705,400.04 |
Total water reused | - | - | 6,508,584 | 7,789,513.78 |
Total water reused/ recycled | 15,486,705 | 15,723,175 | 16,233,921 | 15,494,913.82 |
% of reuse | 19.91% | 20.43% | 19.85% | 20.62% |
WATERSOURCES AFFECTEDBY WITHDRAWAL Of WATER -PER UNIT1GRI G4-EN9 | ||||
Value for local communities | ||||
Source size in ³ | Presence in protected area | Biodiversity value | and indigenous peoples | |
Capinzal (SC) | 13,140,000 | Yes | N/A | N/A |
Marau Alves (RS) | 23,652,000 | Yes | N/A | N/A |
Chapecó (SC) | 14,941,756,8 | Yes | N/A | N/A |
Dois Vizinhos (PR) | 13,400,000 | Yes | N/A | N/A |
Carambeí (PR) | 17,250,192 | Yes | N/A | N/A |
Várzea Grande (MT)2 | 29,802,150,720 | Yes | N/A | N/A |
Concórdia (SC) | 14,065,056 | Yes | N/A | N/A |
Dourados (MS) | does not capture surface source | |||
1Criteria to define this list as sources affected was the withdrawal above 5% of the total flow of the source (River) | ||||
2The unit of Várzea Grande has capture above 5% of river flow and Dourados captures underground source. They were mentioned for being in RAMSAR list. |
ENVIRONMENTALMANAGEMENT - BIODIVERSITY
Position of protected areas in 2014GRI G4-EN11 | ||||||
APP adjacent | Highly | |||||
APP area | areas to the | conserved | ||||
Size of | inside the | area of the | area inside the | |||
Total land | protected | organizations | organization | organizations | ||
State | Activity | area (m²) | area (m²) | area (m²) | (m²) | area (m²) |
Minas Gerais | Dairy, Hatchery, Multiplier of pork, SPL, turkey | |||||
growing, broiler breeders (growing and production), | ||||||
Multiplier of pork, chicken growing and production | ||||||
(grandparents), turkeys Production, Feed Mill, | ||||||
Margarine, Slaughter of pork, Milk Cooling Station | 76,229,178.00 | 10,389,550.52 | 10,005,752.00 | 251,152.00 | - | |
Goiás | Poultry refrigerator, Feed Mill, Reforest, | |||||
Industrialized Food, Hatchery, Dairy,Farms | 44,424,160.00 | 7,920,705.00 | 2,889,970.00 | 7,914,152.00 | ||
Montevidiu(Grain storage) | 126,000.00 | Industrial | ||||
Planalto Verde(Grain storage) | 328,200.00 | Industrial | - | |||
Mato Grosso | Egg Growing and Production, Cut Poultry Creating, | |||||
Cattle/Industrialized, Chickens refrigerator | 24,996,862.00 | 7,004,773.00 | 6.977.240,00 | - | 6,495,140.00 | |
Mato Grosso | Slaughtering of poultry, feed mill, hatchery, dairy | |||||
do Sul | 760,996.52 | 71,000.00 | 70,000.00 | 1,000.00 | - | |
Paraná | Poultry farm, pork farm, Slaughter of Pork/Poultry/ | |||||
Ind. Meat and non-meat, Breeding Farm and chicken | ||||||
Matrices, poultry hatchery, poultry hatchery, | ||||||
Recreation, Fridge/Dairy, Inc. of turkeys, chickens | ||||||
farms, turkey farms, slaughtering of chicken | ||||||
and turkey and Inc. of chickens, Industrialized, | ||||||
reforestation, Fatty Products Plant (margarine), | ||||||
slaughtering of poultry, hatchery internal farms | 59,635,286.70 | 9,571,121.20 | 3,591,535.20 | 40,250.00 | 5,038,248.20 | |
Pernambuco | Dairy, industrialized | 1,563,962.17 | 102,700.00 | 102,700.00 | - | - |
Rio Grande | Milk and derivatives industrialization, Processing of | |||||
do Sul | Milk, Milk Cooling Station, Dairy Industry, Production | |||||
feed poultry/pork, slaughterhouse, Premix Production | 1,543,224.40 | 180,615.12 | 164,618.00 | - | - | |
São Paulo | Industrialized | 159,650.85 | N/A | N/A | N/A | N/A |
Santa Catarina | Slaughter poultry/pork/Ind, Forestry, Animal Feed | |||||
Factory, Poultry and Pork Farm, Hatchery | 47,944,648.80 | 12,237,243.38 | 12,237,243.38 | - | - | |
Total | 257,712,169.44 | 47,477,708.22 | 36,039,058.58 | 292,402.00 | 19,447,540.20 |
112Annual and Sustainability Report BRF 2014
PROTECTED AREAS Of BRFGRI G4-EN11 | ||||
Highly conserved | ||||
APP area inside | APP adjacent areas | area inside the | ||
Total Land | Size of Protected | the organizations | to the area of the | organization›s |
Area (m²) | Area (m²) | area (m²) | organization (m²) | area (m²) |
257,712,169.44 | 47,477,708.22 | 36,039,058.58 | 292,402.00 | 19,477,540.20 |
ENVIRONMENTAL MANAGEMENT - ENERGYAND EMISSIONS
INTENSITY * Of GHG EMISSIONSGRI G4-EN18 | |||
2012 | 2013 | 2014 | |
Absolute emissions - scope 1 | |||
tCO2e | 327,123.85 | 359,559.21 | 352,422.69 |
Related emissions - scope 1 | |||
kgCO2e/t prod | 56.72 | 66.62 | 68.76 |
Absolute emissions - scope 2 | |||
tCO2e | 185,034.60 | 265,031.29 | 350,108.19 |
Related emissions - scope 2 | |||
kgCO2e/t prod | 32.09 | 49.10 | 68.31 |
Absolute emissions - scope 1 + 2 | |||
tCO2e | 512,158.45 | 624,590.50 | 702,530.88 |
Related emissions - scope 1 + 2 | |||
kgCO2e/t prod | 88.81 | 115.72 | 137.07 |
Metric | Emissions are related to production volume. | ||
* The types of GHG emissions included in the intensity rate are: mobile and stationary combustion, wastewater treatment, fugitive | |||
emissions and agricultural waste, for Scope 1; purchase of electricity and steam for Scope 2. Scope 3 was not considered. |
EMISSIONS OF OZONE DEPLETINGSUBSTANCES (ODs)GRI G4-EN20 | ||||
SDO (kg) | 2012 | 2013 | 2014 | |
CFC | Amount (kg) | 2 | 3 | 0 |
Result (kg CFC-11) | 2 | 3 | 0 | |
HCFC | Amount (kg) | 15,457 | 16,652 | 22,542.66 |
Result (kg CFC-11) | 854 | 919 | 1,253.81 | |
Note:The predominant industrial coolant is ammonia, which does not harm the ozone layer and does not cause global warming. | ||||
BRF uses in small quantity, HCFC22 for industrial refrigeration and the rest of this gas is used in air conditioning. The 1,195kg increase | ||||
occurred in 2013 was due to system maintenance, requiring gas replacement. |
SIGNIFICANT ATMOSPHERIC EMISSIONS (t)GRI G4-EN21 | |||
2012 | 2013* | 2014 | |
NOX | 663,48 | 1,421.00 | 1,999.09 |
SOX | 55.46 | 135.57 | 81.59 |
Particulate Material | 1,271.30 | 1,735.58 | 2,309.01 |
CO | 3,202.70 | 5,226.08 | 7,461.40 |
HC | N/A | N/A | N/A |
*In 2013, there was an increase in the indicator database, totaling 100% of the meat units in Brazil. |
113
ENERGY CONSUMPTION INSIDE BRFGRI G4-EN3 | |||||
2013 | 2014 | ||||
Factories,cds, Farming, | Consolidated (Agro, | ||||
administrative | Fleet Management | cds, CIEX, ADM | |||
buildings | (BRF light vehicles) | Buildings and Grains) | Fleet management | ||
Type of use | Source | (consumption in GJ) | (Consumption in GJ) | (Consumption in GJ) | (consumption in GJ) |
RENEWAbLE | |||||
Fuels | Sugar cane alcohol | 14.23 | 157.700,60 | 9,01 | 166.083,82 |
Biodiesel | 17,061 | 26,7154909562 | |||
Wood Briquette | 51,420.80 | - | 22,713.51 | ||
Splinter | 11,401,069.11 | - | 12,084,151.41 | ||
Firewood | 15,306,728.31 | - | 12,944,686.00 | ||
Vegetable or Animal Oil | 308,289.23 | - | 295,919.34 | ||
Lath | 265,412.21 | - | 121,410.61 | ||
Sawdust | 2,923.36 | - | 1,028.15 | ||
Total renewable fuel consumption | 27,335,857.25 | 157.717,66 | 25,469,918.02 | 166,110.53 | |
Electricity | Hydropower | 7,576,638.15 | - | 7,336,128.20 | |
Biomass | 208,341.80 | - | 203,073.05 | ||
Wind | 38,278.81 | - | 49,266.65 | ||
Photovoltaic | 14.4 | - | 22.06 | ||
Total consumption of renewable electricity | 7,823,273.17 | 0 | 7,588,489.96 | 0 | |
Total consumption of renewable energy | 35,316,848.07 | 33,224,518.52 | |||
NON-RENEWAbLE | |||||
Fuels | BPF | 138,026.54 | - | 155,068.11 | |
Diesel | 166,513.99 | 484.61 | 86,229.20 | 664,46 | |
Natural Gas | 353,736.92 | - | 80,407.00 | ||
Gasoline | 891.01 | 210,251.52 | 841.43 | 180,792.30 | |
LPG | 385,226.14 | - | 396,674.69 | ||
Kerosene | 1.58 | - | 3.50 | ||
Shale oil | 98,537.36 | 94,743.17 | |||
Total non-renewable fuel consumption | 1,142,933.54 | 210,736.13 | 813,967.11 | 181,456.75 | |
Electricity | Gas | 404,697.99 | - | 412,786.15 | |
Oil | 160,114.34 | - | 180,679.30 | ||
Nuclear | 95,981.75 | - | 98,855.96 | ||
Coal | 86,705.29 | - | 102,664.88 | ||
Total consumption of non-renewable electricity | 747,499.37 | 0 | 794,986.2 | 794,986.29 | |
Total consumption of non-renewable energy | 2,101,169.04 | 1,790,410.16 | |||
Energy consumption by area (renewable and non-renewable) | 37,049,563.33 | 34,667,361.39 | 34,667,361.39 | 347,540.57 | |
Total consumption of energy (renewable and non- | |||||
renewable) | 37,418,017.11 | 35,014,928.67 | |||
1Considering the fraction 5% biodiesel in diesel. | |||||
2Considering the fraction 5.67% biodiesel in the diesel, as amended in 2014. |
ENERGYCONSUMPTION OUTSIDE THE ORGANIZATIONGRI G4-EN4 | |||
Type of use1 | Source | Consumption 2013 (gj) | Consumption 2014 (gj) |
Non-renewable fuels | Diesel | 6,602,747.80 | 5,711,348.79 |
Renewable fuels | Biodiesel | 232,452.742 | 229,633.623 |
Total | 6,835,200.54 | 5,940,982.41 | |
1All data refers to Category 3 (Transport and Distribution on the transport of grain, livestock, milk, transfer between plants, finished | |||
products to distribution centers and finished products to customers) | |||
2Considering the fraction of 5% biodiesel in diesel | |||
3Considering the fraction of 5.67% biodiesel in the diesel, as amended in 2014. |
114Annual and Sustainability Report BRF 2014
REDUCED ENERGYCONSUMPTIONGRI G4-EN6 | ||||
2013 | 2014 | |||
Outside the Organization | Outside Organization - | |||
Dentro da Organização | - Logistics (land)(GJ) | Inside the organization1 | Logistics (land) (GJ) | |
Energy consumption | ||||
reductions due to | ||||
improvements in | ||||
conservation and | ||||
efficiency | 262,670 | 446,275.56 | 0 | 619,388.73 |
Energy types included | ||||
in the reductions | Electric power consumption | Fuel | Electricity and Steam Plants. | Fuel |
Base used for the | The basis for energy saving was | For energy reduction | The basis for energy saving was | For energy reduction |
calculation | the year of consumption of | analysis data of 2012 and | the year of consumption of | analysis data of 2013 and |
2013 compared to the year 2012 | 2013 were considered. | 2014 compared to the year 2013 | 2014 were considered. | |
consumption, taking into account the | consumption, taking into account the | |||
volume and mix changes, as well as | volume and mix changes, as well as | |||
the installation and removal of new | the installation and removal of new | |||
consumers of the industrial park, | consumers of the industrial park, | |||
because, as a result of TCD, BRF began | because, as a result of TCD, BRF began | |||
to share the facilities with other | to share the facilities with other | |||
companies. | companies. | |||
1In total, energy consumption inside the organization was 6.4% below the previous year but for the changes in production mix with a higher volume of processed products that are more energy-intensive, | ||||
especially direct (steam) the technical indicator of energy increased, i.e., no energy savings. But if we consider only the electric power consumption, we note a reduction of 11,639.41 GJ in 2014. |
ENVIRONMENTALMANAGEMENT -MATERIALSAND PACKAGING
MATERIALS USED - INPUTS AND RAWMATERIAL (TONS)GRI G4-EN1 | |||||||
Direct | Indirect | Renewable | |||||
2012 | 2013 | 2014 | 2012 | 2013 | 2014 | ||
Agricultural inputs | 408,488.00 | 426,101.00 | 396,516.00 | - | - | - | No |
Ingredients/dairy | 320,601.00 | 355,458.00 | 340,762.00 | - | - | - | Yes |
Raw material (poultry, pork, beef)* | 73,106.00 | 48,304.00 | 108,000.00 | - | - | - | Yes |
(Soybean and corn)/soybean meal/vegetable | |||||||
oils | - | - | - | 11,193,742.00 | 10,667,222.00* | 9,746,494.00 | Yes |
*Raw materials and meat cuts that go direct to the product (ex.: beef cuts used in lasagna). |
MATERIALSFORPACKAGING (TONS)GRI G4-EN1 | ||||
DIRECT | RENEWABLE | |||
2012 | 2013 | 2014 | ||
Paperboard | 165,837.00 | 160,746.00 | 170,390.00 | Yes |
Cartridge | 16,820.00 | 14,831.00 | 15,424.00 | Yes |
Glass | 2,143.00 | 2,419.00 | 2,270.00 | No |
Polymers | 6,702.00 | 7,004.00 | 7,704.00 | No |
Long life | 19,587.00 | 17,237.00 | 19,477.00 | Yes |
% Of RECYCLED MATERIALS USEDGRI G4-EN2 | |||
2012 | 2013 | 2014 | |
Cardboard boxes | 40% | 40% | 40% |
Merchandising material | 16% | 16% | 16% |
Plastic cages for transport of poultry* | - | - | 100% |
* Since March 2014, all cages acquired by BRF for transporting poultry, have in their composition 60% recycled material. |
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SUPPLIERS - BREEDING
PERCENTAGE AND TOTAL OF ANIMALS RAISED AND/ORPROCESSED,BYSPECIES,BREED AND TYPE OF HOUSING - FP11GRI G4-FP11 | |||
Turkeys | Poultry | Pork | |
Negative Pressure | 65% | 30% | - |
Positive pressure | 35% | 61% | - |
Dark house | - | 9% | - |
Collective gestation | - | - | 19% |
Individual gestation | - | - | 81% |
SUPPLIERS - PURCHASING PRACTICES
PURCHASESMADE WITH LOCALSUPPLIERS - 2014GRI G4-EC9 | |||
State | Agricultural | Grains, meals and oils | Dairy |
AL | 0.0% | 0.0% | 0.0% |
AM | 0.0% | 0.0% | 0.0% |
BA | 0.0% | 0.0% | 0.0% |
CE | 0.0% | 0.0% | 0.0% |
DF | 0.0% | 0.0% | 0.0% |
ES | 0.0% | 0.0% | 0.0% |
GO | 14.9% | 22.0% | 6.4% |
MA | 0.0% | 0.0% | 0.0% |
MG | 8.6% | 8.0% | 7.3% |
MS | 1.4% | 3.0% | 4.3% |
MT | 17.1% | 26.0% | 0.0% |
PA | 0.0% | 0.0% | 0.0% |
PE | 0.0% | 0.0% | 5.1% |
PI | 0.0% | 0.0% | 0.0% |
PR | 20.9% | 29.0% | 9.3% |
RJ | 0.0% | 0.0% | 0.0% |
RN | 0.0% | 0.0% | 0.0% |
RS | 15.4% | 8.0% | 55.4% |
SC | 21.8% | 4.0% | 12.1% |
SP | 0.0% | 0.0% | 0.1% |
*Information for supplies will not be available because it does not reflect the new reality of this purchase practice. Purchases are made with suppliers through their headquarters and supply made by | |||
subsidiaries. Thus, information of address of purchase/billing versus delivery does not reflect the relationship with local/regional suppliers. |
CUSTOMERSATISFACTIONGRI G4-PR5
2013 | ||||||
Satisfied/exceeded | ||||||
Total | Dissatisfied | expectations | ||||
Quantity | % | Quantity | % | Quantity | % | |
Dairy | 10,131 | 76% | 98 | 0.97% | 10,033 | 99.03% |
Meat | 3,203 | 24% | 11 | 0.34% | 3,192 | 99.65% |
Total | 13,334 | 100% | 109 | 0.66% | 13,225 | 99.34% |
2014 | ||||||
Satisfied/exceeded | ||||||
Total | Dissatisfied | expectations | ||||
Quantity | % | Quantity | % | Quantity | % | |
Dairy | 2,540 | 44% | 94 | 1% | 2,445 | 43% |
Meat | 3,175 | 56% | 93 | 2% | 3,083 | 54% |
Total | 5,715 | 100% | 187 | 3% | 5,528 | 97% |
116Annual and Sustainability Report BRF 2014
CORPORATE INFORMATION | ||
HEADQUARTERS | INVENTORY EXCHANGES | The 2014 results consolidate all the |
TRADING CODE | subsidiaries of BRF S.A. The statements in | |
Rua Jorge Tzachel, 475 – 88301-600 – Itajaí – | this report with respect to perspectives for | |
SC – Brasil | ||
BM&FBOVEspA | the business of the Company, to forecasts | |
BRFS3 – common – Novo Mercado | and result and to the potential for its growth | |
CORPORATE OFFICE | constitute mere predictions and were based | |
Rua Hungria, 1.400 – 5ºfloor | NEW YORK STOcK EXcHANgE – NYSE | on management’s outlook in relation to |
01455-000 – São Paulo – SP – Brasil | BRFS - ADR Level III | the Company’s future. The outlook is highly |
Phone number: (55 11) 2322-5000 | contingent on changes in the market, and the | |
Fax: (55 11) 2322-5747 | OFFICIAL NEWSPAPERS | overall economic performance of the country |
of the sector and the international markets, | ||
INVESTOR RELATIONS | Diário Oficial do Estado de Santa | and for this reason, being subject to change. |
Catarina | ||
AUGUSTO RIBEIRO JR. | Diário Catarinense | On 07.13.2011, the plenary session of the |
Vice-President of Finance and | Valor Econômico | Administrative Council for Economic Defense- |
Investor Relations | CADE approved the Association between BRF | |
and Sadia S.A., contingent on compliance | ||
CHRISTIANE ASSIS | with the provisions in the Performance | |
Investor Relations Officer | INDEPENDENT | |
Rua Hungria, 1.400 – 5º floor – 01455-000 – | AUDITORS | Commitment Agreement- TCD signed |
between the parties. These documents are to | ||
São Paulo – SP – Brasil | ERNST & YOUNG AUDITORES INDEPENDENTES | be found in the website: www.brf-br.com/ir |
Phone number: (55 11) 2322-5048 / 5037 / | ||
5049 / 5051 / 5052 | CREDITS | |
Fax: (55 11) 2322-5747 | ||
E-mail: acoes@brf-br.com | GENERALCOORDINATION OF THEPROJECT - BRF | |
Vice-Presidency of Finance and Investor | ||
Relations | ||
DEPOSITARY BANKS | Vice-Presidency of Legal | |
NO BRAZIL | and Corporate Relations | |
Banco Itaú S/A | ||
Av. Engenheiro Armando de Arruda | CONTENT - WRITING AND EDITING | |
Pereira, 707 – 9ofloor | Sustainability Report | |
04344-902 – São Paulo – SP – Brasil | ||
Phone number: (55 11) 2797-4209 | CONSULTANCY IN GRI | |
Fax: (55 11) 5029-1917 | BSD Consulting | |
IN THE UNITED STATES | Design and Layout | |
The Bank of New York Mellon – | Dragon Rouge | |
Investor Services | ||
P.O. Box 11258 – Church Street Station | IMAGES | |
New York NY 10286-1258 USA | Acervo BRF | |
Phone number: 1-888-269-2377 | Agency Na Lata | |
E-mail:shareowners@bankofny.com | Getty Images | |
iStock |
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