Tiger Brands: Integrated annual report 2019

Chief executive officer's statement

"This year, as part of our comprehensive review and update of Tiger Brands' five-year growth strategy, we clarified the nature of our strategic commitment to promoting a sustainable future, one of the company's four strategic growth pillars." Lawrence Mac Dougall  CEO

It gives me pleasure to introduce Tiger Brands' second annual Sustainability Report. Publication of this report reflects our commitment to enhanced transparency on our performance.

This year, as part of our comprehensive review and update of Tiger Brands' five-year growth strategy, we clarified the nature of our strategic commitment to promoting a sustainable future, one of the company's four strategic growth pillars. In doing so, we have set ourselves ambitious targets in three priority focus areas: health and nutrition, enhanced livelihoods, and environmental stewardship. These are the three areas where we believe Tiger Brands can make the most meaningful difference, through its activities as Africa's largest food producer, in addressing some of the significant socio-economic and environmental challenges facing our markets and contribute to the UN Sustainable Development Goals.

As outlined in more detail throughout this report, we have already seen some pleasing initial results in each of these strategic focus areas.

As part of our drive to address some of the significant nutritional challenges in our markets, we have revived the Eat Well Live Well Nutrition Standards that create visibility of the nutritional profile and value of our products. In addition to ensuring full compliance with the regulated targets for sodium reduction, we achieved a 37% reduction in sugar across our sugar sweetened beverages, and a 1 505 ton reduction in Bakeries and Milling. Through the Tiger Brands Foundation's in-school breakfast programme, we continue to make a direct positive contribution to vulnerable learners and schools across the country, providing nutritious meals and investing in school kitchens to provide safe cooking facilities to the beneficiary school.

With more than half of the South African population living in poverty, and with the current low levels of economic growth and high unemployment rate, we recognise the urgent need to promote greater economic and social inclusion. As part of our commitment to provide meaningful opportunities for inclusive economic participation across our value chain, this year we set up a "market access accelerator". The accelerator has already successfully supported seven black-owned enterprises in securing logistics opportunities, trained more than 50 aspiring black entrepreneurs, and provided 58 smallholder farmers with both financial and non-financial support, including agronomics and agrarian advice, business mentorship and interest-free loans, helping them to participate within our procurement value chain.

We also launched the Dipuno Enterprise and Supplier Development Fund to support smallholder farmers and other emerging suppliers and enterprises to transform our supply value chain. The fund will be managed as an independent entity with its own board. It will be used as a vehicle through which Tiger Brands will execute its enterprise and supplier development projects and drive job creation and procurement spend with black-owned enterprises.

We have seen some positive initial results in addressing our most material environmental impacts: improving energy and water efficiency, reducing greenhouse gas emissions, and reducing operational and packaging waste.

The effective delivery of each of these three priority focus areas is dependent on continuing strong performance in various strategic enablers, such as good governance, effective internal processes, product quality, occupational health and safety, and stakeholder responsiveness. Our activities in each of these areas are reviewed in more detail in this report. In my opening comments I wish to focus in particular on the issues of food safety and quality, and employee safety.

In response to last year's tragic national listeriosis outbreak, we have placed a particular priority this year on driving the food safety and quality agenda across the company, investing in ensuring that we have well trained and talented people integrated across functions, a robust and integrated set of processes and tools, and a culture and passion for quality that permeates across the organisation. We have strengthened our internal and external audit and assessment processes, improved supplier quality assurance measures, and reinforced Hazard Analysis and Critical Control Points (HACCP) training for all high-risk sites. Through our various quality initiatives, this year we achieved external certification for all our manufacturing sites. These measures are only a start. We will continue to build on this focus on quality, with the aim of delivering a step-change improvement, accompanied by full transparency on our performance.

On employee safety, I am saddened to report that this year one of our employees was killed in a work-related incident. In April 2019, Mr Aubrey Tornado Skosana, a driver at Albany Pretoria, died following a multi-collision vehicle accident while on a delivery. I extend my sincere condolences to the families and friends of Mr Skosana. We will continue to focus our efforts on managing the concerning number of violent route to market incidents; all our delivery routes are risk assessed, and tailored response measures will continue to be developed and implemented.

As one of our stakeholders reading Tiger Brands' Sustainability Report, I encourage you to please give us your feedback on this report, both in terms of the quality of our disclosure and the nature of our performance. Your feedback is hugely helpful as we strive to ensure continuous improvement in our performance, and deliver on our core purpose of nourishing and nurturing more lives every day.

LC Mac Dougall
Chief Executive Officer

21 November 2019