Corporate Social Responsibility Report 2013

Environmental PolicyCertificationsComplianceConsumptionEnergy Conservation StrategiesSustainable FarmingWater Conservation StrategiesWaste Management StratagiesPackaging EffecienciesChemicalsSocial ResponsibilityHealth & WellbeingOur PeopleEchuca Moama 2035

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True to flavour, and in tune with nature.Kagome Australia is the country’s largest tomato processing company, delivering high quality tomato-based products since 1996.

We are proud to grow, harvest and process our own tomatoes in Echuca, Australia, where we are gifted with one of the country’s sunniest climates.Working closely with growers, producers and consumers we deliver a value-added product “true to flavour and in tune with nature.

This CSR document is a demonstration of our commitment to the environment and the local community.We intend to make it a bi-annual publication to showcase our sustainability initiatives.

Please enjoy reading this document and we trust you will join with us in caring for our people, communities, environment and business.”

Rhiannan Brennan - Environmental Coordinator Graham Williams - Supply Chain Manager

Corporate Social Responsibility

Corporate Social Responsibility Report 2013

Evironmental Policy

Kagome Australia Environmental Policy ……………… We will continuously improve

Kagome Foods Australia fully recognises its corporate responsibilities to ensure that our business activities do not have an adverse effect on the local and global environment.The environmental performance and sustainable development of our business will be facilitated through the development and maintenance of an Environment Management System.

Kagome Foods Australia will:• Comply with all relevant Australian legislation, regulations, authorities and licenses.• Ensure that specific environment responsibilities and authorities are established and understood by directors, management and employees. • Remain aware of and strive to continuously improve our environmental performance through setting and reviewing environmental objectives and targets.• Consider environmental issues in all areas of Kagome Foods Australia’s activities. • Respond quickly to customer, community and regulatory authority concerns regarding the environmental impacts of all aspects of our activities.• Provide our employees with training and resources to encourage their involvement in meeting our environmental objectives.• Encourage the same high environmental standards from our suppliers and site contractors.

John Brady CEO Issue date: September 2012 Effective: September 2000Supersedes Issue Date: December 2010

Corporate Social Responsibility Report 2013Page 4

FSSC 22000 CertificationIn March 2012 Kagome Australia qualified for FSSC 22000 certification. FSSC 22000 contains a complete certification scheme for Food Safety Systems based on existing standards for certification (ISO 22000, ISO 22003 and technical specifications for sector PRPs). The FSSC 22000 certification scheme has been given full recognition by the Global Food Safety Initiative Board of Directors. This follows an extensive benchmarking process using the requirements laid out in the GFSI Guidance Document Version 6.

Muddy Boots CertificationMuddy Boots is a leading international expert in the provision of traceability and quality assurance solutions for food and farming. By 2030 world food production will have to increase by 50% to meet the growing need for food within a growing population. This will have potentially damaging effects on the environment. Unilever, a customer of Kagome Foods, has been working to manage its environmental impact for over a decade. By 2020 Unilever intends to buy all its agricultural raw materials from farms applying sustainable agricultural practices.As part of Unilever’s campaign to highlight its sustainability credentials to consumers, they enlisted the help of Muddy Boots Software in 2007. The Muddy Boots Software is a self-assessment tool that targets Unilever’s fresh produce supply chain and enables Unilever and their suppliers to track and monitor progress and create evidence-based improvement action plans. Kagome Farms and all Kagome Foods suppliers are now fully compliant with the Unilever Muddy Boots program.

Freshcare CertificationFreshcare was originally developed as a stand-alone, HACCP based, on-farm food safety program for the fresh produce industry. Certification to the Freshcare Food Safety & Quality Code of Practice provides an independent (3rd party) verification that a recognised food safety program is followed by Freshcare Certified enterprises. The Freshcare Environmental Code was developed in parallel with the development of the Guidelines for Environmental Assurance in Australian Horticulture, part of the Horticulture for Tomorrow project funded by the Commonwealth Government. The Freshcare Environmental Code was specifically designed to be an ‘implementation ready’ tool for growers to assist them in achieving environmental objectives and outcomes consistent with those sought through the ISO 14001 environmental management process.

Government ComplianceAs part of our environmental awareness and obligations, since 2008-2009 we have been annually reporting to three government organisations (now two as one is obsolete):

EREP - Environment and Resource Efficiency Plan NPI - National Pollution Inventory. The data that is generated from these reports is used to analyse our yearly situation in terms of how much energy and resources we have consumed in comparison to how much raw material we processed.

EPA ComplianceEPA compliance – Environment Protection Agency

Late 2012 we utilized a government funded Sustainability Audit performed by ACERT (Assessing Compliance & Environmental Risk Training). The aim of the audit was to determinate our liability and risk. From this, two recommendations were given; Stormwater management (Bunding) Documentation of the Environmental Management System. Both recommendations were

promptly resolved and we have now achieved full compliance.

Carbon FootprintIn October 2013 we contracted the services of Beyond Green to assess our energy consumption and calculate our carbon footprint.

Though this project is currently in its intermediate stage, upon completion it will assist in establishing environmental objectives and targets, while developing some operational control measures. The completed report will be available in November 2013.

Farm & Factory Sustainability Teams

The Sustainability Teams are responsible for all operational sustainability initiatives and improvements across the company. Our teams include staff from all levels of operation; from upper management to production personnel and everything in between.

The Teams meet at least bi-monthly; often monthly in the off season. Our teams oversee Kagome, Australia’s sustainability initiatives including strategic planning, staff engagement activities, and

coordination and implementation of strategies and plans.

Certifications Compliance


Consumption

Echuca is situated close to the junction of the Goulburn, Campaspe and Murray Rivers and is serviced by the Goulburn-Murray Water irrigation system. As Echuca is in a temperate climate, water availability and efficiency are always of paramount concern.

Kagome Australia plans to incorporate more water saving initiatives in the near future, most notably with a water treatment plant.

We endeavour to process more tomatoes while using less energy, and have a number of initiatives which will target greater processing efficiency for the 2013-2014 harvest season.

This year Kagome Australia erected a new cooling tower called the ‘Apollo”. The Apollo will show a marked decrease in the amount of natural gas consumed per tonne of processed tomatoes in 2013-2014.


Apollo EvaporatorKagome Foods Australia has nearly completed the installation of a new generation Mechanical Vapour Recompression Falling Film Evaporator known as the ‘Apollo’, which will reduce the amount of energy consumed in its tomato paste evaporation process.The project is expected to reduce the carbon emissions intensity of the process by 20% and will result in savings of $444,000 in energy costs per year.

LED LightingKagome Foods has upgraded existing lighting with modern LED lights.The project is expected to reduce carbon emissions intensity of lighting by 69% and will result in savings of $11,000 in energy costs per year.

Steam PeelerKagome Foods Australia replaced two old steam peelers with a modern energy efficient Steam Peeler. The project is expected to reduce the carbon emissions intensity of the steam peeler process by 32% and will result in savings of $31,000 in energy costs per year.

Boiler UpgradesKagome Foods have fit economizers and variable speed drives to both 20MW and 19MW boilers and upgraded the control system on the 20MW boiler. The project is expected to reduce the carbon emissions intensity of the process by 9% and will result in savings of $120,000 in energy costs per year.

Energy Conservation Strategies


Spray DiariesSpray diaries are records of agrochemical applications to the tomato field during the growing season. Spray diaries from every tomato grower, in every paddock, will have their own subtle variations. Spray diaries are detailed records that identify;the crop to be treatedthe target pest/disease/weed the chemical(s) to be used the frequency of use (including limitations on the use frequency per crop/season) the name of the person or that documented the programany withholding periods for particular chemicalscrop pest and disease monitoring Spray diaries are a valuable record of the history of a crop, and are a necessity for all compliance programs.

Sustainably Sourced FertiliserAs food safety and sustainability awareness grows, we are now researching environmentally friendly fertilisers as part of our continuous improvement program towards sustainability. We have already begun applying some sustainably sourced fertilsers, and substituted them in our spray programs where possible.

Mulching of Harvest StubbleThere are general community perceptions that the carbon (C) component in stubbles is lost by burning and that the process of burning stubbles even occasionally, seriously affects the organic carbon levels of the soil. Kagome Australia is attempting to greatly reduce the need to burn harvest residues by mulching crop stubble back into the soil where possible. Benefits include;improving the fertility and health of the soilconserving moisturepreventing burning and the loss of organic CThe photo (left) shows a freshly planted crop of tomato seedlings in soil that has crop stubble mulched through it.

Crop RotationsCrop rotation is the practice of growing a series of dissimilar/different types of crops in the same area in sequential seasons. Our tomatoes are rotated with both wheat and canola. Crop rotation gives various benefits to the soil. A traditional element of crop rotation is the replenishment of nitrogen through the use of cereals and other crops. Crop rotation also mitigates the build-up of pathogens and pests that often occurs when one species is continuously cropped, and can also improve soil structure and fertility by alternating deep-rooted and shallow-rooted plants.It greatly reduces our need to burn stubble, as on alternate rotations it can be mulched back in to soil.

Transplants & Direct SeedThe two key technologies that have been introduced to Australian growing are direct seed and seedling transplants. Kagome Farms (and contract growers) use both seeds and seedlings from approved suppliers. The varieties chosen are determined by the applications and attributes required in the end product. For example; some seeds are developed as dice varieties for their shape integrity, others for paste as they produce high colour and viscosity. Seedlings are transplanted over Sept-Oct according to a set plan to deliver a consistent volume of

paste and dice fruit to the factory that will span the whole harvest season.

Dust MinimisationAs the season occurs over the dry, dusty months of summer, water is sprayed on laneways and farm bin pads to minimize dust and inherent air pollution. This makes our farms safer, and neighboring farms much happier.

Reduce Transportation and Fossil Fuel Consumption

Hungry BoardsHungry boards are extra strips of metal that were welded onto the top of 120 fruit bins for season 2013. Loads increased on average from 36t to 41t, which saved approximately 100k in freight.From a total of 4682 loads of tomatoes delivered to the factory in 2013, there were 499 loads saved.This effectively results in a Reduction in Greenhouse Gas (GHG) emissions from all logistics including; truck movements, and forklift movements down both ends. Another advantage is the amount of “buffer” fruit the factory has on store at any one time -if 8 full trailer sets (with 3 bins each) are on site, they can now hold 328t instead of 288t, giving the factory 42t more in stock, and about 20 minutes more of fruit, with less chance of running out . Cost: $80k (capex). The capex had a one year pay back which is exceptional as three years are permitted.

Precision FarmingKagome Farms will soon be adopting the Case IH Advanced Farming System (AFS), giving us the ability to control the entire crop production cycle. The Case IH AFS technology includes;Fully automated guidance and precision steeringApplication control and adjustable application ratesMachine and implement controlYield and moisture monitoring and mappingFuel consumption monitoringThese efficiencies lead to reduced fuel & labour costs, and increased control.

RFID TagsAll fruit bins will also be equipped with RFID tags, which will lead to a reduction in paper waste and correction time (human error). The purpose is to record field bin movements and eliminate the paper trail from the harvest operation, as well as making harvest data live with minimal human interaction.

Sustainable Farming


Conservation Strategies Water Conservation Strategies

Reduce Water Consumption

Drip IrrigationThe investment in using drip irrigation in the industry (beginning in 2010) was $15.97million as a result of the On-Farm Irrigation Efficiency Program funded through the Australian Government’s Water for the Future initiative. This has enabled Kagome Farms and contract growers to install new irrigation systems on previously furrow irrigated ground. Our farming operations now use 100% drip irrigation, with the life expectancy of drip tape 10 to 15 years. The depth of the tape ranges from 8-10 inches under the ground.. 20-25cm in metric..Smartphones & iPads for Irrigation • Introduced early to mid-season for the purpose of irrigation scheduling and reconciling.• Saved time delivering the schedule and also stopped any miscommunication.• Major win was the earliness of reporting from irrigation staff. Instead of reconciling • information at the end of the day it can be done at an earlier stage and any losses or gains

assessed.• There are definite time management gains from increased production.Water savings for drip range from 15% to 55% depending on ground conditions, location etc. A good average to work on for tomato production would be around 40% water saving from drip to flood if not better. It must be kept in mind that the benefits of drip are not just water saving as you increase yield and production anywhere from 18 to 55% based on varies studies. Other benefits include greater control of fertilisation with timing, precision and multiple applications.

Time Lapse CameraIn the 2013 harvest season we installed a time lapse camera to observe and record the growth cycle of a Kagome tomato field 10km out of Echuca. The purpose of the camera was to create a video for use in promotional material as well as document the plants as they grow and respond to different water cycles and temperatures, including the effects of rain & drought on water use.The full video is available to watch on our website www.kagome.com.au

Water Harnessing & TreatmentDuring the evaporation process at Kagome Foods, water is captured and piped offsite for irrigation. Local farms use this water to irrigate their pasture and crops.In this way we are eliminating the waste of otherwise sending the captured water down the drain. Aside from the evaporator-captured water, all other factory water is treated before discharge. Our clarifier system separates the mud sediment, which is then carted offsite as a paddock spread.

Spray DiariesSpray diaries are records of agrochemical applications to the tomato field during the growing season. Spray diaries from every tomato grower, in every paddock, will have their own subtle variations. Spray diaries are detailed records that identify;• the crop to be treated• the target pest/disease/weed • the chemical(s) to be used • the frequency of use (including limitations on the use frequency per crop/season) • the name of the person or that documented the program• any withholding periods for particular chemicals• crop pest and disease monitoring

Spray diaries are a valuable record of the history of a crop, and are a necessity for all compliance programs.

Sustainably Sourced FertiliserAs food safety and sustainability awareness grows, we are now researching environmentally friendly fertilisers as part of our continuous improvement program towards sustainability. We have already begun applying some sustainably sourced fertilsers, and substituted them in our spray programs where possible.

Mulching of Harvest StubbleThere are general community perceptions that the carbon (C) component in stubbles is lost by burning and that the process of burning stubbles even occasionally, seriously affects the organic carbon levels of the soil. Kagome Australia is attempting to greatly reduce the need to burn harvest residues by mulching crop stubble back into the soil where possible. Benefits include;improving the fertility and health of the soil, conserving moisture, preventing burning and the loss of organic C.


Waste Minimisation Strategies

Eco-Friendly OfficesOur offices are now using 100% sustainably sourced paper, with a 100% recycling rate of used paper. A number of paper-reduction initiatives have been distributed to employees with the aim of sig-nificantly decreasing our paper use each year – most notably, our paperless meetings. 20% Paper Use Reduction.In comparison to the same period last year (January-June), we have reduced our paper use/person by 20%.

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RecyclingReusing and recycling of any waste has been very successful at Kagome Australia this year. The following list shows all the things we have been able to reuse or recycle, rather than send to waste.

FARMDrip Tape Mainlines Vehicle and machinery tyres Used chemical drums Scrap metals Batteries OilFACTORY Skin, seed and vine waste Scrap metals Goodpack containers Wooden pallets Old fibre drums Fibre drum lids Steel Conicals Water by-product from evaporators Foam drinking cups Canteen Recyclables Paper from offices Printer cartridges


Chemicals

Chemical Bunding & HandlingBunding is the tool used to manage chemical spills and stormwater drainage. In fiscal 2012-2013 we saw a major improvement in our bunding infrastructure on farm and at the factory.An in-house risk assessment identified the need for a consultant whom identified a series of improvement opportunities that we could employ.A TPM Team established consisting of a mix of senior management, environmental and maintenance staff. As a team all nonconformities were soon corrected and the sheds are 100% compliant.All chemical handlers on farm and in the factory are now 100% certified through GOTAFE in Shep-parton.

Drum MusterDrumMUSTER provides Australian agricultural users with a recycling pathway for eligible empty chemical containers. Working hand-in-hand with local councils and other collection agencies, DrumMUSTER has established collection facilities all over Australia and since its inception in 1998 the program has recycled over 20 million containers.Once emptied and rinsed containers have been collected, they are recycled into re-usable products such as wheelie bins, road signs, fence posts and bollards. The DrumMUSTER service benefits both the user, the environment, industry and the wider community by providing a reliable, cost effective and sustainable option for the recycling of empty eligible chemical containers.

Enviro-DrumsWith stringent occupational health and safety regulations for chemical storage and handling, there is now a very real necessity to implement a safe chemical handling system.Enter the Enviro Drum, a use-and-recycle container system which has helped to banish the mounds of old drums and used chemical containers that built up behind the farm shed or ended up in the local rubbish tip.The Enviro Drum is a sealed tank and requires a pump and metering system to transfer the chemical. The whole system is extremely versatile, and can also be used as a chemical mixing and transfer units.

Packaging Efficiencies

Reduce Packaging MaterialReusable & Recyclable PackagingAll packaging (except the aseptic packaging) we use at Kagome Australia is easily reusable or recyclable.

PackagingGoodpack Bins 100% reusable (refurbishment may be required)Goodpack Lids Reused in each subsequent yearFiber Drums Reusable and where unable, fully recyclableSteel Conicals Reusable and where unable, fully recyclable

Reduction in Liner Bag ThicknessOur Goodpack bins have historically had liners with thickness 100µ. Last year we performed trials to decrease the liner bag thickness, which had very promising results.This season in 2013, we officially saw a reduction in Goodpack liner bag thickness to 75µ, which had a chain of very positive savings.

Cost Saving - $1.25 per bagFiscal Saving - $25,000 for 2013 seasonWaste Saving - 25% less plastic.


This past year we have seen a marked increase in our visibility around the community.

World Environment Day (June 6)On World Environment Day (Wednesday, 6 June 2013) every sector of the company stopped work for an hour to collect rubbish in and around our sites. Along the front of Moon’s Shed on the Rochester-Kyabram road, about 5km of road was covered and a large skip-full of rubbish collected! As the cleaning initiative was so well received, there are plans now in place to continue doing the collect at periodic intervals throughout the year.

National Landcare WeekDuring the week of 2nd – 6th September 2013, the staff of Kagome Australia took a break of either ½ or 1 hour from their hectic schedules to collect rubbish. We covered over 2.5km on both sides of the road, plus inside the factory grounds. A lot of enthusiasm paved the way for a very successful collect, with many thanks coming from the Council. The project was a great initiative to give back to the community, while helping to maintain a clean environment in our local area.

Social Responsibility

Corporate Social Responsibility

Native Tree Plant During National Landcare Week (as above) there was also a small team that planted some native Callistemon along the driveway. Once grown the plants will act as a screen, provide habitat for small birds (such as the native Blue Wren), and be more aesthetically pleasing for our guests.

School Tour GroupsDuring the 2012-2013 period there have been a number of school groups that have toured our farms and factory.Some groups were from the nearby community, and others came from as far as Melbourne.Group guide gave up their time to tour the students through different areas, and many schools have shown such enthusiasm that they want to bring different classes back in consecutive years.

ICT Careers DayThe ‘Upload Your Future’ Information Communication Technology Forum is an initiative run by Youth Central, Victoria.Representatives from the Kagome Australia QA/HR Department went to Echuca College to demon-strate some of our basic processes to Year 9 school students as part of their careers expo.Our site ran an interactive workshop that included taste testing, using different laboratory equip-ment, and speaking on the benefits of technological advancements in industry.Kagome Australia will be participating in the same event in November, 2013.


“We want to help our employees achieve a healthy work life balance”

Health & Wellbeing CommitteeOur new Health & Wellbeing Committee has been selected to implement some new activities in our workplace.The Health & Wellbeing Committee is a new committee intended to encourage and support Kagome Staff members in their efforts to maintain their own physical and mental well-being in the face of the many stresses of modern times. The committee believes that the wellness of our people is critical to achieve a positive work-life balance, and to achieve the most productive workforce possible. We intend to periodically assess the professional satisfaction, wellbeing and health needs of our Staff, provide wellness resources, and promote a culture which respects wellness and “health seeking behavior” as essential elements of a happy working team.

Movember During November each year, Movember is responsible for the sprouting of moustaches on thousands of men’s faces in Australia and around the world. The aim of which is to raise vital funds and awareness for men’s health, specifically prostate cancer and men’s mental health.As the humble tomato – with its skin full of lycopene – is thought to be the power fruit for fighting prostate cancer, Kagome Australia plans to run a large Movember fundraiser in 2013. Brad Free, Process Improvement Manager, is set to be the Kagome face of Movember in the local competition run by the Riverine Herald.

Workhealth Checks 2012WorkHealth Checks were a government-funded program run by WorkSafe Victoria in 2012.The WorkHealth checks were a convenient, easy and confidential health assessments conducted in our own workplace for all of our staff. Each check took around 15 minutes and participants received immediate feedback and advice based on their results. The program was very well received with a lot of people becoming more conscious of their own health and wellbeing.

Health and Well Being

Healthy Options Vending MachinesOne of the early demands noted by our Health & Wellbeing Committee, was to include some healthy food choices in our vending machines.As Kagome, Australia staff often work very long hours (particularly during the harvest months), there was a noticable absence of food options abailable to them during night and weekend hours. Now both the factory and workshop sites have a well-stocked vending machine each, with any earnings going back into the Health & Wellbeing Committee.


Employee EngagementHere at Kagome Australia we endeavor to engage people through workforce planning to ensure we attract the right people for the right job – Our people are central to everything we do. Our employees live locally, and our business is a significant contribution to the local economy.

Code of ConductTeam members are to perform any duties associated with their position diligently, impartially and conscientiously, to the best of their ability in line with Kagome Australia’s core values.In the performance of their duties, team members are to:Treat members of the public, contractors and other team members with courtesy and sensitivity to their rightsTreating all people justly, irrespective of gender, sexual orientation, race, disability, religion, marital status, age, political conviction or other attributesActing in ways that support the reputation of team members, customers or other stakeholdersProtecting the privacy of others and maintaining appropriate confidentiality regarding personal and commercial mattersAvoiding behaviour which might reasonably be perceived as harassment, discrimination, bullying or intimidationProvide all necessary and appropriate assistanceComply with any relevant legislative, industrial or administrative requirements, and all Kagome values, policies and proceduresMaintain adequate records to support any decisions madeConform with the principles of sustainability, as defined in the Kagome’s valuesMaintain the confidentiality of official information in accordance with Kagome’s Privacy PolicyAvoid undertaking any activity that could potentially compromise the performance of their dutiesComply and adhere to this Code

Our People

ApprenticeshipsApprentices are trained within a work environment in areas where specific skills are required. Kagome Australia sees the value in employing young apprentices at our business, with four young apprentices currently working in the harvest workshop, and two more to be employed at the factory in the coming months.“Skilled staff are the drivers of performance”


Echuca Moama 2035: A Blueprint For Our Future

C4EM – Committee for Echuca Moama

C4EM is a member-based, self-funding, independent and apolitical organisation that brings together the broad cross-section of the area’s private, public and not-for profit organisations (across all sectors) to advocate for the issues and initiatives that will make Echuca Moama a better place to live, work and play.KAGOME Australia has a seat on the C4EM Board and CEO John Brady is Chair of the C4EM ‘Economy’ Working Group. This small team (working with Professor Trevor Budge, La Trobe University, (Bendigo) developed a strategic document on the future of the local area and published it in November 2013, named Echuca Moama 2035.

Four Pillars are central to the Echuca Moama 2035 blueprint and critical to its success;

Key Initiatives - The Four Pillars

There are four key pillars that will underpin Echuca Moama’s future growth and prosperity.

PILLAR ONE: Establish a single entity brand “Echuca Moama”

PILLAR TWO: Support and plan for sustained population growth

PILLAR THREE: Develop new and unique product offerings

PILLAR FOUR: Strengthen agriculture and related industries

The Four Pillars, once delivered will enable activity supporting short, mid and long-term objectives six Strategic Platforms:

1. Grow economic investment

2. Nurture a sustainable business environment

3. Enhance new infrastructure developments

4. Foster the area’s natural and competitive advantages

5. Support improvements in social services, community amenity and sustainable living

6. Promote education and employment initiatives

7. C4EM will now use the Echuca Moama 2035 blueprint to engage with elected leaders and

community groups to ensure that priority is given to adopting the Four Pillars and that

measurable actions are taken to achieve progress against the six Strategic Platforms.

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Kagome Australia 54 Cornelia Creek Rd

PO Box 81 Echuca Victoria Australia 3564+61 3 5482 0700

www.kagome.com.au

Corporate Social Responsibility Report 2013

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