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Enterprise Development Projects of San Miguel Corporation

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    For San Miguel Corporation, integrity, teamwork, respect for others and social responsibility are just a few of its corporate values that guide them every day. Through its corporate social responsibility arm, San Miguel Foundation Incorporated, San Miguel Corporation proactively reaches out to others to bring forth change that will enable communities to live better lives. Social Development Community and Enterprise Development Projects in the Community and Livelihood programs that are implemented in host communities of San Miguel plant facilities.

    These are projects have active community involvement and are implemented with the objective of benefiting a larger number of people. This includes medical missions, community clinics, barangay strengthening and enterprise development. Enterprise Development: Provision of seed capital and training on entrepreneurial skills are the main features of this program. Assistance are given to organized groups in the plant’s neighboring communities. Seed capital are given on interest free loan and usually have a duration of one year.

    Community Clinics: Community clinics were established in host communities, the operation of which is managed by the Foundation. These community clinics address both common and specialized illnesses such as tuberculosis, diabetes and cardiovascular diseases. The consultation and medicines are given free until patients are free from the illness as in the case of tuberculosis. Barangay Strengthening: through qualified resource speakers both from the public and private sector, selected barangay councils are given training on good governance which includes team building, capability building and resource generation.

    The objective of the training is for the barangay officials to know their respective roles and responsibilities and the rights of the council. The training also guide the barangay council to formulate a medium term barangay development plan for their area of jurisdiction. Medical Missions: Residents of host communities are given free consultation and medicines for common illnesses. These are often in partnership with the plant facilities and at times with the city/municipal health office.

    San Miguel Corporation’s overriding objective as a corporate citizen is to make a positive contribution to the well-being of its stakeholders and to the economic, social and environmental sustainability of the communities where it operates. Through its various business groups and its social development arm, the San Miguel Foundation, Inc. , the Corporation implements projects nationwide. Education San Miguel Foundation supports literacy in the Philippines through scholarship assistance, supplemental feeding, book donation and functional literacy programs.

    Supplemental Feeding Program: To heed government’s call to address the malnutrition problem of the country, the “Malusog na Katawan, Matalas na Isipan” supplemental feeding was introduced. Children from 4 to 8 years old are given one full meal a day for five days/week from 4 to 6 months. This project is in partnership with elementary public schools and barangay day care centers wherein teachers and parents assist in the implementation of the program. Scholarship Assistance: This is given to underprivileged students in the communities where San Miguel operates.

    Scholarships are in the field of agricultural and technical courses and each selected scholar are given funding for tuition fees and daily and book allowances. In addition, leadership and communication skills seminars are conducted once a year to help in the holistic development of each scholar. Book Donation: Called “Books for the Barrios”, various reference materials on English, Science and Math are donated to elementary and secondary public schools nationwide.

    These books were sourced from the Foundation’s partner organizations and internally, a book drive campaign is conducted every summer school breaks where thousands of used and new books are donated by employees. Used computers from the San Miguel offices are also donated to public schools nationwide Functional literacy: Teaching basic reading, writing and modern agricultural technologies to indigenous people are the main focus of the functional literacy program. The program has a duration of at least six months and are conducted by local NGOs in the identified areas. Environmental and Other Programs

    The environmental program of San Miguel Foundation Inc. covers the protection of land, water, and air. On a smaller scale, the Foundation conducts tree-planting projects on areas identified by different San Miguel Corporation (SMC) plants. Tree-planting projects are usually scheduled to coincide with plant celebrations. The Foundation advocates the protection of coastal waters through its Coastal Resource Management, which engages in mangrove reforestation, artificial reef installation and regeneration of marine resources. Training on waste management and donation of trash bins through plant facilities are also conducted.

    Disaster Management This project includes relief distribution to calamity stricken areas and rehabilitation activities such as provision of livelihood projects and repairs of school buildings and day care centers. San Miguel Business Units play an active role as well as the employees who answer the call for fund raising campaigns. Local Consumer Activities These are Marketing and Sales projects to support their operation either in areas where SMC have a stronghold or in areas where they want to establish their position. Membership and Contributions

    Aside from directly implementing social development programs, San Miguel Corporation is an active member or a major contributor to the following organizations: Philippine Business for Social Progress League of Corporate Foundations Corporate Network for Disaster Response Philippine Business for the Environment Operation Smile Philippines Social Responsibility Now, more than ever, corporations are guided by values from which it bases its every business decision. For San Miguel Corporation, integrity, teamwork, respect for others and social responsibility are just a few of its corporate values that guide them everyday.

    Through its corporate social responsibility arm, San Miguel Foundation Incorporated, San Miguel Corporation proactively reaches out to others to bring forth change that will enable communities to live better lives. San Miguel Foundation, Inc. has crafted various programs and projects that address contemporary issues on livelihood, health, education, the environment and disaster relief following its overall direction of Enterprise, Education and the Environment. The San Miguel Foundation Team Camille B. Buenaventura Executive Director Jennifer E. Rodriguez Ken B. Reston Program Officers

    Rona Mei Y. Tanchico Program Assistants Vision To take the lead in realizing San Miguel Corporation’s commitment to social development in the Company’s effort to contribute towards the improvement of life in the communities in which it operates and the public it serves. Mission San Miguel Foundation, Inc. is committed to the empowerment of San Miguel host communities and various stakeholders by harnessing corporate social responsibility among the various San Miguel businesses in pursuing mutually beneficial programs that lead to self-reliance and sustainability. Goals San Miguel Foundation, Inc.

    will initiate, manage and support social development initiatives that: Promote education to youth from low income families through scholarships, literacy classes and support programs like supplemental feeding, book donations, etc. Strengthen communities through capability building activities and the provision of basic social services; Support local enterprises that bring livelihood opportunities to community groups, dependents, San Miguel retirees and other stakeholders; Provide assistance to disaster-stricken communities through relief and rehabilitation programs; and protect, preserve and regenerate the environment.

    Education San Miguel Foundation supports literacy in the Philippines through scholarship assistance, supplemental feeding, book donation and functional literacy programs. Supplemental Feeding Program: To heed government’s call to address the malnutrition problem of the country, the “Malusog na Katawan, Matalas na Isipan” supplemental feeding was introduced. Children from 4 to 8 years old are given one full meal a day for five days/week from 4 to 6 months. This project is in partnership with elementary public schools and barangay day care centers wherein teachers and parents assist in the implementation of the program.

    Scholarship Assistance: This is given to underprivileged students in the communities where San Miguel operates. Scholarships are in the field of agricultural and technical courses and each selected scholar are given funding for tuition fees and daily and book allowances. In addition, leadership and communication skills seminars are conducted once a year to help in the holistic development of each scholar. Book Donation: Called “Books for the Barrios”, various reference materials on English, Science and Math are donated to elementary and secondary public schools nationwide.

    These books were sourced from the Foundation’s partner organizations and internally, a book drive campaign is conducted every summer school breaks where thousands of used and new books are donated by employees. Used computers from the San Miguel offices are also donated to public schools nationwide Functional literacy: Teaching basic reading, writing and modern agricultural technologies to indigenous people are the main focus of the functional literacy program. The program has a duration of at least six months and are conducted by local NGOs in the identified areas. Membership And Contributions

    Aside from directly implementing social development programs, San Miguel Corporation is an active member or a major contributor to the following organizations: 1) Philippine Business for Social Progress 2) League of Corporate Foundations 3) Corporate Network for Disaster Response 4) Philippine Business for the Environment 5) Operation Smile Philippines Doing Well, Doing Good A Commitment to Social Responsibility Social issues permeate almost all aspects of business. How a corporation manages such issues has much to do with how seriously it takes its social responsibility to heart.

    Today, it is not enough to claim leadership as a profi table business. Good companies are also good citizens and proactively assist communities where they do business. The San Miguel Group’s corporate citizenship goes beyond its commitment to its consumers, employees, and key stakeholders in government and the communities where it operates. Past and current programs focus on specific projects where it makes a difference. Making A Difference For San Miguel, every day is morning in the Philippines.

    The country’s biggest cheerleader and the Filipino’s partner in progress are one and the same. One of the Philippines’ most diversified conglomerates, San Miguel contributes 5% to the Philippines’ GDP through its highly integrated operations in beverages, food, oil refining, energy, power, and infrastructure. In its long history, the company’s operations have always been strongly supportive of national development—in particular, the regional dispersal of industries and employment, providing livelihood and business opportunities in virtually every local community.

    Today one of the nation’s largest employers with a workforce of over 17,000 in seven countries; for each job created within the San Miguel system, many thousands of additional jobs are created through suppliers, distributors, retailers and other business partners. The company’s recent scaling up and scaling out will mean involving a wider range of people in its growth. “We are very proud of our heritage and our long history of being a part of our nation’s growth. Affirming these values is integral to who we are today, while at the same time we’re making sure that our business is fit for today’s competitive challenges,” says Ramon S.

    Ang, SMC President and Chief Operating Officer. San Miguel Group Vision Making Everyday Life A Celebration San Miguel will be among the largest food, beverage and packaging companies in the Asia-Pacific. We will carry into new markets our over a century-old tradition of quality and integrity. Consumers will take pleasure in reaching for our products and services because they are the best value for money. Our food and beverage brands will be in every household and every retail outlet.

    We will meet our consumers’ everyday needs, delighting their every taste. Through our products and services, every occasion to drink and eat will bring enjoyment …a celebration. Environment Corporations that go beyond regulatory compliance are rated favorably by most government offices. They are recognized for taking proactive measures in preventing negative environmental, health and safety impacts. Recycling and recovery are key factors which cut waste disposal costs. Reducing gas emissions that contribute to global climate change also lower costs.

    Pollution prevention is a discipline practiced in SMC plants which eliminates the generation of waste at the source. SMC has pioneered a number of so-called trend-setting practices in its environment program. It was the fi rst Filipino company that published an Environmental Update in 1996, a report which was well received by the local business community and its stakeholders, as well as by business and environment groups abroad. The uniqueness of SMC’s environment program is its dual focus on both the external and internal environment.

    The Corporation not only takes care of the natural environment, but also of its own people and domain. Linis Ofis Program Translated as “clean office”, this internal program is an integrated approach to solid waste management in support of the Philippine Government’s Ecological Solid Waste Management Act (RA 9003). It deals with waste segregation by instilling in SMC employees the 4R discipline – Reduce, Reuse, Recycle and Recover. It aims to educate its workers to value their environment by practicing segregation, collection, reuse and recycling of disposable waste in the workplace.

    SMC’s Head Office Complex located in the Ortigas Center hub provided three waste receptacles placed in strategic spots for food scraps or compostable waste, recyclable items (such as plastic bottles and aluminum cans), and nonrecyclable items or disposable waste (such as plastic and tetra-pak containers). This is also being implemented in SMC’s other facilities nationwide. A separate chest of drawers is provided in each department for solid waste with market value, such as used bond paper, magazines, newspapers and empty ink cartridges.

    The program generated P26,000 from the sale of recyclable materials on its first month, and an average of P12,000 per month. It has also helped in reducing the amount of solid waste, which normally finds its way to landfills and dumpsites, and easing up on manpower in the collection of waste. Emission Profiling Corporate Technical Services-Environmental Management Group (CTS-EMG) has been conducting stack emission sampling in SMC-owned plants throughout the country since 1999 even before the promulgation of the Philippine Government’s Clean Air Act (RA 8749) in 2001.

    The sampling measures the quality of the fl ue gas emission of fuel combustion from boilers, furnaces, and power generator sets using the fully automated Napp-Baldwin Isokinetic sampler. Its fl ue gas analyzer, Testo350, a high-tech instrument, is also used to obtain quick results in air emission quality measurement. The emission testing determines the compliance of a plant with the Clean Air Act. Plants which fail the test are directed to improve the quality of their emission to comply with the law.

    The testing carried out in the plants generates savings for the Corporation since it does not need to spend for the services of testing contractors. More importantly, it improves the performance and effi ciency of air pollution source equipment. Task Force Hangin Task Force Hangin is responsible for helping plants comply with the Clean Air Act. The word “hangin” means “air”. The Task Force is composed of representatives from CTS-EMG, CTS-Engineering, Corporate Planning and Development, and Corporate Purchasing Unit. It is tasked to pinpoint the best available fuel and control technology for the plants’ fuel burning equipment.

    It conducted numerous studies and came up with recommendations to utilize low sulfur fuel oil (LSFO) and scrubbers as the most effi cient options for solving the problem, and maintain the level of sulfur content in its fuel to about 0. 7%S. It also studied the range of fuel cost that determines when LSFO fuel is advantageous to use versus scrubbers, and when a plant needs to shift from LSFO to scrubbers. The study enabled the Task Force to guide the plants in their compliance efforts. All SMC-owned plants are expected to institute the necessary actions congruent with the Clean Air Act.

    The use of electric heaters at the Mandaue Glass Plant’s furnace reduced the consumption of bunker fuel oil and the generation of combustion flue gas. PET Recycling SMC is setting up a P6. 7-billion recycling project to produce environment-friendly packaging materials for the local food and beverage industries using PET or polyethylene terephthalate. PET is that soft plastic or polymer popularly used for containers of mineral water, and various food and household items. It is the preferred packaging because of its light weight, clarity, and shatter resistance. It also ranks as the most recyclable packaging material in the world today.

    The main processing plant being constructed in San Fernando, Pampanga, is nearing completion. It will have conversion operations in Batangas, Cebu, Misamis Oriental, Davao, and Pampanga. The plant is scheduled to operate commercially in May 2004. PET is already being recycled abroad into second-generation products, such as T-shirts, windbreakers, sleeping bags, carpets and athletic shoes, among other things. Collection of PET bottles is an ongoing nationwide campaign with the support of existing bottle collectors and SMC’s subsidiary, Coca-Cola Bottlers Philippines, Inc.

    , on the crest of its successful “Mission P. E. T. ” project launched in 2000. The first of its kind in Asia, SMC’s PET recycling plant will open doors of opportunity in the community through direct employment and contracting services in line with the Corporation’s economic and environmental thrusts. Biogas Recovery SMC’s breweries in Mandaue, Davao and Polo, and Distileria Bago, Inc. treat their wastewater employing the anaerobic biological process. A by-product of this process is biogas, which contains methane gas. The simple molecular structure of methane gas makes it the cleanest gas in use today.

    The gas is recovered by the breweries and used as fuel for their boiler units. A total of 25,940,173. EMS Trainor/Auditor The Environmental Management System (EMS or ISO 14001) represents a universal blueprint in managing the environmental impact of a plant or organization. Minimizing the environmental impact translates into savings through improved effi ciency and cost reduction, particularly in production. The principal role of an EMS Auditor is to conduct audits in plants to ensure that they satisfy all the requirements of EMS certification. The auditors undergo training with local agencies or abroad.

    CTS-EMG, together with the plant manager, is responsible for the implementation of the EMS in SMC’s five breweries and Mandaue Packaging Products Plant. CTS-EMG recommends that every facility be certifi ed in the EMS, assuring adequate maintenance of the system through secondparty audit and surveillance visits. EMS Implementation in SMPP The EMS implementation at San Miguel Packaging Products Mandaue Plant resulted in signifi cant savings worth P4,140,032 and minimized the use of virgin raw materials. The plant utilizes the treated wastewater originating from the Mandaue Brewery for its production process.

    Part of the wastewater from the production process is recycled after undergoing oil-water separation. The water used at the cullet conveyor is also collected and reused. This scheme reduces the use of raw water and the volume of wastewater discharged to the environment. There are other energy-reduction initiatives at the plant. An automatic shut-off controller is installed in the air-conditioning unit of the offi ces to cut down on power consumption. Transparent plastic roofi ng in the production section also improves illumination and saves energy.

    The plant has a central segregation area for solid waste and used oil. Used oil collected from the oil-water separation process in wastewater and from the fuel combustion engines is reused as fuel for power generation at the power plant. Recyclable/reusable solid waste is sold to recyclers. In 2002, 12,777 metric tons of solid waste sold generated an income of P4,061,965. Best Practices Applied Color Labeling (ACL) Recovery – The previous method for dealing with misprints on bottle labels was water intensive due to the thorough washing of the bottles.

    To correct this, a cleaner and better technology was devised through ACL recovery by manually scraping the misprints, collecting and melting the paint, then adding it to virgin raw materials for producing labeling paint. The practice of this alternative method resulted in the reduction of raw water use and the amount of virgin materials for paint production. The end results are considerable savings. Mandaue Glass Plant and San Miguel Yamamura Asia scrape Applied Color Label waste from misprinted glass bottles and mix it again with virgin material.

    San Miguel Yamamura Ball Corporation uses water-based paint for their two-piece aluminum cans, thus eliminating emission of volatile organic solvents. Rightpak’s printing cylinders employ mechanical etching instead of chemical etching to avoid generation of hazardous wastewater. Both San Miguel Rengo and Mincorr use lead-free printing ink for their cartons, making them safe to use and recycle. Vermicomposting of Mandaue Brewery – Vermicomposting is a method of composting where cultured worms eat and partially digest the organic material in organic solid waste.

    The composting site is a roofed concrete housing in a dark environment conducive to worms. The resulting product or vermicompost is made up of partially digested waste and the excreta of worms. The vermicompost is applied to a soil conditioner, and is of a more superior quality than ordinary compost. The variety of worm Mandaue Brewery uses is the African Night Crawler. Recycling Practices at Manila Plastics Plant – Recycling has been part of the Manila Plastics Plant’s regular operations for 30 years. From the very start, the plant was already recycling its in-house rejects in the form of plastic.

    The rejects are put through a grinding machine then added to virgin raw material at a ratio of 10% recycled crates and 90% virgin raw material. The practice reduces manufacturing cost and contributes to a cleaner environment. Crates rendered defective through handling and usage are condemned, crushed, reduced to pellet size, and now recycled to make San Miguel Beer green crates. The plant is on a continuous improvement journey as it studies and develops new technology for achieving the ideal shades of crate colors by adjusting pigment strength and formulation.

    It has gone up to 50% in the recycled material ratio to produce plastic pallets, the containers used to hold bottled beverages. It is looking into making productive use of plastic waste and trimmings with the goal that nothing goes to waste. Rightpak also recycles its waste laminates as components of plastic pallets. Cullet Recovery at Glass Plants – Broken bottles or cullets are given a second life at the Mandaue Glass Plant, Manila Glass Plant, PrimePak, and SM Yamamura Asia Corporation, where glass bottles for beverages, liquor and other products are manufactured.

    In these glass plants, cullets are used as raw material for production. The cullets originate from in-house rejects and from plant-accredited glass buyers. The cullets collected undergo a segregation process. Amber is for Beer, green is for Sprite, and fl int is for transparent bottles. The bottles are ground, mixed with virgin raw material, and fed into the furnace for melting. Cullet recycling reduces the amount of virgin raw material used in production. Cullets contain silica, limestone, feldspar, and soda ash. The plants were able to cut down on their power consumption since cullets melt faster than raw materials.

    Cullet recycling also decreases the volume of glass bottles disposed to the environment. SM Yamamura Asia Corporation also produces GLASSLite bottles that are lightweight, using less raw materials. These lightweight bottles have the same quality and strength as their heavier counterparts. Waste Ink Reuse at San Miguel Rengo Packaging Corporation – In the printing of corrugated carton boxes, the ink formulated purposely for a specifi c requirement usually has leftovers, which can be used only for the same type of job. When reorders come far apart, the leftover ink is rendered useless and wasted.

    In March 2003, the plant developed a method to reformulate or reconstitute the leftover ink to approximate the same or a different color shade. Since mid-August 2003, the plant has reused 5,779 kg. of waste ink, and has saved P650,000 in substituted raw material cost. This helped the plant avoid expensive waste treatment and disposal costs. Using Waste for Feeds – Distileria Bago, Inc. reuses its fermentation sludge for fertilizer. SMC breweries also have a recovery system where spent grain and bagasse from the production process are collected and used for fertilizer by B-Meg.

    Coca-Cola’s “Mission P. E. T. ” – Coca-Cola Bottlers Philippines Inc. established the groundwork for this project as early as 1999. The acronym PET stands for Pinoy Environment Team. The project promotes the recognition, collection, segregation and recovery of postconsumer PET containers and aluminum cans in support of CCBPI’s marketing of its products in one-way containers. CCBPI set up recovery centers in selected supermarkets to rescue post-consumer PET soft drink bottles with monetary value to encourage consumers to participate in the collection.

    The project’s continuing implementation has proven to be a viable contribution towards the reduction of the solid waste volume. At the same time, collection of PET and aluminum containers provides livelihood opportunities, helps in the conservation of oil and bauxite resources, and communicates the value of proper waste management. Project Blue Sky SMC’s Polo Brewery pioneered the anti-smoke belching campaign within its premises by requiring all vehicles entering the plant to submit a certifi cate of compliance (COC).

    This initiative by a private company preceded the much lauded Project Blue Sky of the Department of Environment and Natural Resources’ Clean Air Campaign launched in 1994. Now more than 120 companies are implementing the “no COC, no entry” policy in their facilities, including SMC’s Mandaue and San Fernando Breweries. The project is spearheaded by the Center for Corporate Citizenship of the Philippine Business for Social Progress. Environmental Forum CTS-EMG organizes the quarterly Environmental Forum, which started in 1998.

    The forum is designed for SMC staff responsible for pollution management and control, particularly the Pollution Control Offi cer. Its purpose is to broaden knowledge of environmental laws, technology updates, waste management, and operation of waste treatment facilities. The speakers in the forum most often come from government agencies involved in the enforcement of environmental laws, experts in the fi eld of environmental engineering and waste management, and staff of CTS-EMG. The forum also serves as a venue for the staff of different plants to interact and exchange ideas.

    For the past years, it has helped build an environmental network within the San Miguel Group. Human Resources SMC’s strong social responsibility commitment contributes to better employee retention, resulting in a considerable reduction in turnover and training costs. Employees normally remain working with the Corporation because of their feeling that SMC cares. Employee programs that help reduce absenteeism actually save the Corporation money as they encourage increased productivity. On the home front, programs that address employee welfare instill a sense of pride in the people for being part of the San Miguel Group.

    Employee Relations • Sports and Recreation – The program aims to nurture camaraderie and unity among the employees through various sports activities, such as basketball, bowling, aerobics, street dancing, gym workout sessions, volleyball, etc. The Corporation tries to meet the employees’ varied sports preferences. There are also interest clubs being formed for enthusiasts of golf, running, taekwondo, etc. • Summer Outing – The Corporation provides a yearly venue for employees and management of each division to interact with one another’s families in an informal environment marked by fun and games.

    • Songfest – This is an annual nationwide search for employees who have exceptional talent for singing, a common trait among Filipinos. • Employee Service Awards – The annual recognition program honors employees for their years of service to the Corporation. • Baratillo – The monthly event allows employees to purchase various San Miguel products at discounted prices. The venue is the Head Office Complex, and employees from other SMC units and offices come to take advantage of the reasonable offers.

    • Christmas Tiangge – Employees are given the opportunity to develop their entrepreneurial spirit by selling various products during the two-day event. It is held regularly at the Head Office Complex in November before the onset of the Christmas season to allow employees and their families and friends to purchase their Christmas presents early. • Health and Safety – The Corporation ensures that its employees work in a healthy and safe environment. The health of every employee is a main concern. SMC has an in-house clinic at the Head Office Complex to take care of employees’ medical needs. Each facility also has its own clinic.

    It is mandatory for employees to undergo an annual medical examination. In case of emergency situations, such as SARS and dengue, a task force is created to respond to the immediate concern to protect the health of the employees. Benefits Program • Employee Protection – Employees are entitled to sick leave benefits that will provide financial security even if they have lost the ability to earn in times of sickness or injury. • Time Off With Pay – Employees are also entitled to leave benefits that will allow for the continuity of their wage earnings even if they are on vacation or have to attend to emergency matters requiring their presence.

    • Health Care – The Corporation provides a comprehensive medical program for employees and their dependents to protect them against the financial burden that comes with illness or injury. • Flexible Loan Facilities – The Corporation offers an interest free loan facility that is tailored to address the various financial needs of the employees. Its flexibility lies in the loan purpose, amount, and guidelines. • Educational Program – This helps meet the financial requirements of employees who desire to pursue further studies.

    It includes loan facilities for the educational needs of employees’ dependents. • Rice and Clothing Allowances – The Corporation provides a monthly sack of rice to each rank-and-file employee. Employees also receive a clothing allowance for their proper work attire. • Insurance and Death Benefits – Financial assistance is extended to the bereaved family to help defray expenses incurred as a result of the demise of the employee or an immediate family member of an employee. • Retirement Benefits – The Corporation provides a noncontributory fund to assist the employee in preparin

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