Annual Report 2011 - 2012 - United Breweries Limited

Your Company is implementing several operational improvement projects that will ensure that it remains competitive, inthe market place and in costs, and will manage the business even more dynamically.In view of the positive prospects, your Company is setting up Greenfield Breweries in Patna (Bihar) and Nanjangud(Karnataka). The brewery at Nanjangud is expected to be commissioned shortly and the brewery in Bihar is likely to beoperational sometime during the financial year ending March 31, 2014. In addition, your Company will continue toinvest towards increasing capacity and upgradation of its existing breweries.Through these actions, your Directors are hopeful that your Company would achieve a sustained leadership position,grow ahead of the market and realize a structural improvement in profitability in the years to come.SUSTAINABILITY & SUSTAINABLE GROWTHReport of the Directors (contd.)There are four facets of sustainability that United Breweries Limited has built initiatives around:1. Reduction in carbon footprint, to ensure a better planet for the generations to come2. Water conservation, critical in a country that is listed as drinking-water deficient3. Positively impacting stake-holders that reside around our breweries4. Helping farmers who are part of the value chain get better net remuneration for their produceCarbon footprint reductionYour Company has set itself an aggressive target on reducing specific energy consumption (as well as controlling energycost). The manufacturing team continues to reduce energy by 5 -10% in use through efficiency improvement andinnovative solution/technologies. Your Company is now proud to mention that all but a couple of its breweries usebiomass/agri-waste boilers for generating steam, as part of if its campaign to progress renewable energy. The newerbreweries have already installed solar energy based street lighting and lower carbon generating LED lights. Severalbreweries have now begun recovering heat from wort boiling.Water conservationAfter ensuring that all breweries now consume less than 5 kl/kl water, your Company has embarked on an aggressiveinitiative to bring water consumption down to a world class level of 3.5 kl/kl. Contemporary waste water treatmentsystems have been installed, to allow recycling of water into designated parts of the brewery. Several breweries havenow touched levels of 4 kl/kl in consumption and your Company continues to drive water consumption down by almost10% each year. In addition to this, rain water harvesting (RWH) has been taken up in select breweries that use groundwater, so as to minimize depletion of water table.Impacting stakeholders in villagesTwo agricultural universities have now certified that our treated waste water can be used productively for crops. This isthe outcome of a joint effort between the breweries and those universities, with tests being conducted within brewerypremises. This certification will allow us to provide water for growing crops all the year round to villagers. It has beenproven that the productivity of some crops is much higher with this water. At some breweries, your Company initiatedorganic farming as well as testing growing of barley.Helping farmersYour Company has now expanded contract farming activities in Haryana through its associates and has also embarkedon providing its own patented seeds for 6 row barley growing in new states like Uttar Pradesh, traditionally known forgrowing low quality varieties of feed barley. These initiatives not just help us assure availability in our supply chain butalso help farmers increase productivity on their meager lands and assure remunerative prices for their produce.CORPORATE SOCIAL RESPONSIBILITYYour Company views Corporate Social Responsibility not as philanthropy but as a form of sustained partnership with thegoal to generate long term value for all stakeholders. We believe it is our responsibility to contribute to the improvementof the society around us and our breweries, which in a country like India is translated into a focus on basic necessitiesof life. We focus CSR efforts on four areas: Potable Water Management, Contract Farming, Primary Health and Welfare,and Primary Education.6Each of these initiatives aim at creating long-term value and having a deep impact on the lives of those involved. Witheach of it addressing a very specific yet basic need of the communities, it ensures a rise in the overall quality of life ofthe local population in and around our breweries. To ensure better implementation and sustained success of these