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ALCAN SUSTAINABILITY REPORT – 2003
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Introduction
Corporate Sustainability
Alcan has a lengthy history of working alongside stakeholders in pursuit of
common goals. From product stewardship and employee health and safety to improving
systems and living in harmony with our neighbours and the environment, Alcan
is committed to sustainable, profitable growth.
2002
In 2002, Alcan published its first global Corporate
Sustainability Report. This report introduces Alcan's approach to sustainability
and its relationship with Alcan's business strategy and business group priorities.
It provides information on the social, economic and environmental aspects of
our business, and outlines steps the company and business groups are taking
to address them.
Click here to view the 2002 report. (Also available in German and French)
Click here to see our sustainability framework and the process maps for our business as a whole.
2003 New!
The 2003 Alcan Sustainability Report provides information on aspects
of our social, economic and environmental performance for our global operations
for the calendar year 2002. It is an interim report that addresses some of the
core elements and indicators contained in the Global Reporting Initiative Guidelines
on Sustainability Reporting. The data provided in this report as a whole has
not been externally verified by independent third parties. A brochure covering
our sustainability efforts is also available.
Looking Ahead
Throughout 2003, we will work with internal and external stakeholders to identify
and refine long-term sustainability priorities for Alcan and continue to align
the work of our business groups against these priorities. A more comprehensive
sustainability report will be produced in 2004, which will share the progress
we made in implementing sustainability and provide a more detailed summary of
our performance across a broad range of sustainability indicators.
(Also available in German and French)
CEO Message
"Sustainability Makes Good Business Sense."
Profitable growth and sustainability are in my experience complemetary goals
that gain strength from each other.
Through our governing objective of Maximizing Value, we challenge the way we do things in all aspects of our business, from operations to administration, in an effort to incorporate best practices and continuous improvement throughout Alcan. Correspondingly, through our focus on sustainability, we see ever more clearly the contribution that our economic, environmental and social efforts have on the Company's long-term license to operate and grow. These concepts are clearly mutually supporting and joint drivers in ensuring the success of today's enterprise.
We've set some important near-term goals that reflect the intersection between sustainability and profitable growth:
In 2002, we took some important steps towards meeting those goals. For example, we signed an innovative recycling agreement with a key customer in the automotive sector that reduces costs and risks to both parties while also minimizing the environmental impacts associated with our businesses. Internally, a "Call to Action" on safety triggered important improvements in reducing workplace accidents, injuries or incidents, while our TARGET program resulted in greenhouse gas emission reductions of an average 1.45 million tonnes in 2001 and 2002, far surpassing our original objectives. We continued the development of our integrated EHS FIRST system. And our business groups continued to work closely with key stakeholders on efforts to reduce energy consumption, eliminate waste, improve employee health and safety, and make the best use of the unique properties of our products.
In addition, we worked cooperatively with external organizations to develop recognized, industry-wide, sustainability indicators. This includes an initiative with the International Aluminium Institute, a project with the Wuppertal - European Aluminium Association and my personal involvement as co-chair of the accountability and reporting working group of the World Business Council on Sustainable Development. These efforts reflect a common concern and interest within Alcan and amongst our stakeholders in establishing useful, effective and transparent metrics that support the implementation of sustainability in companies today.
During the coming year, we will remain focused on building a continuous improvement and sustainability culture and mindset at Alcan. We will continue our efforts to help our executives, managers and employees understand the link between Maximizing Value, Continuous Improvement and Sustainability, work with stakeholders to determine long term priorities for our sustainability efforts, and refine our capacity to measure, manage and report on the various aspects of our performance across all fields of activities.
Sustainability makes good business sense. As we progress in this direction with our stakeholders we become stronger and more adaptive and responsive to change. Ultimately, the connection between the economic, environmental and social dimensions of sustainability will enable us to go from strength to strength and differentiate ourselves as a truly value-based and performance driven company.
Travis Engen
President and CEO
Alcan Inc.
2002 Highlights
To learn more about our 2002 efforts in key corporate sustainbility-driven areas of focus, please see Making Progress on Key Initiatives, Managing for Sustainability, and Awards and Recognition.
Making Progress on Key
Initiatives
Managing for Sustainability
Awards and Recognition
For specific Business Group highlights please go to Business Group Priorities.
Making Progress on Key Initiatives
Maximizing Value
Alcan's strict financial discipline and rigour in assessing current and future
business initiatives are key building blocks in developing and implementing
the Company's sustainability framework. (More)
Reducing Greenhouse Gas Emissions (TARGET)
The results of TARGET, our Greenhouse Gas (GHG) reduction program, surpassed
expectations in 2001 and 2002 with average annual GHG emission reductions of
1.45 million tonnes. (More)
Enhancing Safety
A Safety Call to Action in early 2002 contributed to a Company-wide reduction
in fatalities from eight in 2001 to two in 2002 and also helped to significantly
decrease accidents, injuries and incidents. (More)
Integrated EHS Management System
In 2002 an Environment Health and Safety Council Taskforce recommended the immediate
development and implementation of an integrated EHS management system. (More)
Making Progress on Key Initiatives
Maximizing Value
Developing a strategy for long-term sustainability is complementary to Maximizing Value at Alcan where the Company's resources are aligned with those opportunities that have the greatest value creation potential.
In 2002, a thorough review of all Alcan business units continued to identify opportunities for Maximizing Value and this remains an ongoing component of the Company's drive for continuous improvement. As a result of this disciplined approach to decision-making and a focus on execution, the Company's operating cash flow in 2002 was $1.6 billion, up nearly 16% over the previous year despite the fact that the price of aluminum declined by more than 6%.
Value-based initiatives in 2002 included:
Details on these and other value-based initiatives can be found in the Sustainability Actions section of this report. In addition, the Company disengaged from activities that were not supporting the value-based agenda in 2002, including the specialty chemicals business in Europe and the molded glass operations in North America and Europe. Understanding and integrating sustainability into Alcan's business is key to Maximizing Value over time, growing the business in a way that will be sustainable over the long term while enhancing value in the short term. Improvements in earnings per share, cash flow and returns on investment through 2006 are the anticipated results. |
Sustainability — A Return on Investment
Creating wealth provides us with the means to contribute to the economic, environmental
and social dimensions of our corporate sustainability. Increased awareness of
these issues is fundamental to identifying new business opportunities, further
maximizing value within our business.
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Making Progress on Key Initiatives
Reducing Greenhouse Gas Emissions (TARGET)
Addressing the issue of climate change presents Alcan with new realities that must be faced together with our stakeholders - our investors, competitors, customers, suppliers, communities and government and non-government organizations. In 2002, Alcan continued its cooperative efforts to address climate change concerns and, more specifically, to establish a standardized approach for tracking and reporting greenhouse gases (GHGs). This included work with the International Aluminium Association to establish a standard set of GHG measurement methodologies. These were then adapted for use in the emerging GHG Protocol - a greenhouse gas management and inventory guide - under development by the World Resources Institute (WRI) and the World Business Council on Sustainable Development (WBCSD). Alcan is also active in developing the ISO climate change standard.
By 2000, prior to the implementation of TARGET (our greenhouse gas reduction program), Alcan had reduced absolute annual GHG emissions by over three million tonnes of carbon dioxide equivalents (CO2e). This is approximately a 10% reduction over the levels of ten years ago, measured on the basis of current holdings.
In 2001, with TARGET in place, Alcan's global operations reduced greenhouse gas emissions by some 1.1 million tonnes in the first year of the program, or 5% from 1999 levels on a growth adjusted basis. This achievement far surpassed the four-year 500,000 tonne GHG reduction goal and, by the end of 2002, this performance improved with a further 1.8 million tonnes of GHG reductions. This significant accomplishment includes both direct and indirect emissions and was largely due to several initiatives that were already under way such as investments in technology and the realization of process and operating changes. The TARGET rolling objective was extended in 2002 to include a further 0.5% reduction by 2005 (approximately 125,000 tonnes of CO2e).
Furthermore, in 2002 the Company conducted an audit of key components of the TARGET system with the assistance of an independent, external auditor. No significant flaws or weaknesses were found with the TARGET systems or procedures and several recommendations are being studied for follow-up implementation. It is anticipated that the GHG reduction challenge will become increasingly difficult as the first-phase reductions are made. By using a near-term, rolling, four-year target, Alcan gives form and substance to the long-term nature of a GHG reduction effort by requiring ongoing focus, effort and rigour in managing GHG emissions.
Click here to view Alcan's TARGET report for 2001-2002.
Graphs
Climate Change
Making Progress on Key Initiatives
Enhancing Safety
Following eight fatalities in 2001 and the release and roll-out of an integrated environment, health and safety policy in January 2002, Alcan's Office of the President initiated a Safety Call to Action in February 2002. This complemented a full review of significant causes of all major incidents including fatalities at Alcan over the past ten years and added further weight to ongoing business group efforts to improve environment, health and safety systems in facilities worldwide.
The aim of the Safety Call to Action was to emphasize an ongoing senior-level commitment to proper safe behaviour and the implementation of best practices. Actions included placing EHS at the top of the agenda in all business reviews conducted throughout the year.
The renewed focus accentuated the need for changes in behaviour and business culture towards excellent EHS performance at all levels of the organization. Strong employee support for the Safety Call to Action was visible in all business groups where discussions and working sessions produced hundreds of comments and suggestions within each group. Suggestions included more accountability for safety performance, more frequent and focused training on practices, standards and auditing, in addition to better identification and management of the risks associated with equipment and automated processes. Along with also identifying a need for better communications of our safety achievements and performance, the Call to Action revealed significant facility-level support for creating a sustainable safety culture with the ultimate goal of zero accidents.
By the end of 2002, fatalities at Alcan sites were reduced to two (compared to eight in 2001 including contractors) and performance improvements were also noted in the key indicators of recordable cases (reduced from 4.89 to 3.95) and days lost due to injuries and illnesses (reduced from 1.72 to 1.33).
With these results, it is evident that the changes are moving in the right direction, however, we must continue to do everything possible to achieve and maintain our goal of zero workplace accidents, injuries or incidents in 2003.
Making Progress on Key Initiatives
Integrated EHS Management System
With the roll-out of an integrated environment, health and safety policy in January 2002, the Company's Environment, Health and Safety Council Task Force recommended the next step - an integrated EHS management system. The EHS Council consists of senior-level EHS professionals from around the world.
In support of the integrated system, the Task Force also recommended the development of management processes, operating protocols, and performance measures as well as the preparation of an audit framework. The company-wide system is based on the standards of ISO 14001 and OHSAS 18001 and is central to our strategy to encourage, report, reward and review EHS performance. This integrated EHS management system, known as EHS FIRST will be part of Alcan's overall business management framework. Implementation of the integrated EHS system is sponsored by the Alcan Executive Committee, which includes all business group presidents. The integrated EHS FIRST management system will increase consistency in EHS activities and more closely align these actions with the Company's global business objectives.
Initiatives under way in 2002 in the different business groups included continued implementation of Behaviour Based Safety, a new centrally-managed EHS database for more consistent and accurate tracking and a Best Practices Council. Critical to success is building an internal network of EHS champions who, in turn, are supported by functional professionals in the business groups.
Graphs
EHS performance
Managing for Sustainability
Senior Management Support
In 2002 Alcan illustrated its senior level commitment to sustainability in a
number of internal initiatives. (More)
Business Group Implementation
Alcan's six business groups have full responsibility for implementing key strategic
objectives, including those that support the Maximizing Value/Sustainability
linkage. (More)
Values and Culture
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Alcan Values Employee Perceptions of Sustainability Office of the Ombudsman |
Employee Recognition and Development
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Global Employee Survey Results Employee Recognition Personnel Development |
Stakeholder Engagement
Alcan continued building relationships with stakeholders by initiating two-way
dialogue that supports the goal of long-term sustainability. (More)
Managing for Sustainability
Senior Management Support
Alcan's senior level commitment to sustainability in 2002 was illustrated in a number of internal initiatives, including the following:
EHS Council:
An EHS Council is in place consisting of senior-level Alcan EHS professionals
from around the globe and is headed by the senior vice president, corporate
and external affairs and the corporate director EHS.
Integrated EHS System:
Following the early 2002 roll-out of the Company's new EHS Policy and the related
commitment to fully integrate EHS into business management systems, the Council
established a Task Force to develop the implementation plan for an integrated
EHS management system. This is part of the continuous improvement of our EHS
practices, and includes the standardization of management processes, operating
protocols, performance measures and the EHS audit framework. This initiative
led to the development of EHS FIRST at the end of 2002, our new integrated
EHS management system based on the ISO 14001 and OHSAS 18001 standards. EHS
FIRST will be implemented in all Alcan business groups in mid-2003.
The Alcan executive committee, which includes all business group presidents, sponsors the integrated EHS management system and the implementation plan has been developed with extensive operations management participation.
Call to Action on Safety:
Following eight fatalities in 2001, Alcan's Office of the President established
a Call to Action on Safety across all business groups.
The Call to Action emphasized an ongoing senior-level commitment to proper safe behaviour and encouraged further implementation of best practices. As part of this Call to Action, EHS was placed at the top of the agenda in all business reviews conducted throughout the year. Active involvement of employees and management at all facilities produced numerous suggestions that were implemented as a result. Despite the progress made, two fatalities were recorded in 2002 - an improvement over 2001, but an unacceptable result none-the-less.
Graphs
EHS Management
Greenhouse Gas Emissions Reduction:
Independent of any voluntary industry initiative or mandatory program, Alcan
developed and implemented the TARGET program as an ongoing company-wide greenhouse
gas reduction objective. Full senior-level endorsement is provided through a
senior management Steering Committee responsible for the program mandate and
high-level guidance and support. In addition, all organizational levels are
involved with implementation, including full engagement at the facility level.
Graphs
Climate Change
In 2002, the Company also negotiated and signed a landmark voluntary agreement with the Quebec provincial government in Canada (some 55% of Alcan's smelter activity is in Quebec) to reduce greenhouse gas emissions by an average of 285,000 tonnes from 1995 levels before the end of 2003.
Managing for Sustainability
Business Group Implementation
Alcan's six business groups operate within a corporate framework that recognizes sustainability as an ongoing goal that will help to improve performance and reduce the environmental footprint of our operations. Given the broad scope of the Company's interests, coupled with the nature of operations from mining to end-use products and product recycling, each business group is responsible for individual action plans in pursuit of the Company's strategic objectives. In our Corporate Sustainability Report - 2002, several key goals relevant to sustainability were highlighted:
A review of value-at-stake issues in all business groups was conducted in 2002 and plans have been submitted to senior management as to how to increase the value of those businesses over the next five years. Once the plan is put into action, the specific business unit's progress will be reviewed each year and strategies and financial plans will be modified as required.
All business groups are actively involved in the implementation of TARGET. Full engagement at the facility level includes on-site GHG (greenhouse gas) coordinators to execute policies, procedures and guidelines as set by the program administrators. In 2002, all business groups continued their ongoing efforts to reduce GHG emissions through the implementation of best practices and new technology. In the first year of reporting program results, a 1.1 million tonne reduction of GHGs was achieved in 2001 -- equivalent to a five per cent reduction from 1999 levels on a growth-adjusted basis. In 2002, the reductions totaled 1.8 million tonnes - another exceptional indication of the Company-wide commitment to greenhouse gas emission reductions.
The pursuit of business unit certification to the individual environmental and health and safety standards noted in the 2002 business priorities now has a new perspective as the Company moves to implement an integrated EHS management system. The number of plants certified to recognized international standards continues to increase; for example, some 46% of facilities are now certified to the environmental management standard ISO 14001 or equivalent. Similarly, in the area of health and safety, approximately 8% (13 out of 170) of Alcan sites worldwide achieved or were working towards the OHSAS 18001 certification in 2002.
Effective implementation of an integrated EHS management system requires leadership at every level of the Company. Support was quickly evident as business groups were proactive in implementing site-specific EHS recommendations in 2002, ahead of the release of the global integration strategy. A continued emphasis on health and safety was a focus in all business groups, with overall performance improvements noted in recordable cases, lost time injuries and illnesses and days lost rates.
Managing for Sustainability
Values and Culture
In 2002, we took several actions to further integrate sustainability into our core business values, understand employee perceptions of sustainability and implement our Code of Employee and Business Conduct.
Alcan Values
Increasingly, a company's value is measured externally by looking at its sustainability
"vital signs". In Alcan's case, these include, among others, our corporate
governance practices, our ability to minimize environmental impacts, our efforts
at increasing recycling both within and outside our facilities, our cooperative
efforts with the communities where we operate and our ability to provide a safe
and rewarding work environment for our employees.
It is also about maximizing the values that make up our corporate culture -- our values of integrity, accountability, trust and transparency, and teamwork. It is our corporate culture and values that continue to guide us on our journey towards sustainability. With the ultimate goal of being a partner of choice for all stakeholders, in 2002 Alcan continued to pursue business objectives through implementation excellence, which requires recruiting and retaining the best talent and performing among the best-in-class in all areas.
In a global employee survey conducted in 2002, a high level of employee pride was noted, with 73% of respondents indicating they were proud to work for Alcan and some 83% believing that Alcan has high quality products and services. Results clarified strengths and identified areas where action is required, such as in improving the general perception of Alcan's employee value proposition. As an initial response, the Company instituted a global employee recognition program to honour exemplary individual and team accomplishments and new Human Resource processes for posting staff positions were deployed throughout the organization.
Employee Perceptions of Sustainability
The commitment of employees to sustainability issues as outlined by management
is well illustrated in the achievements recorded in the Sustainability Actions
section of this report. In addition, overall acceptance of strategic issues
such as an integrated EHS management system or Maximizing Value is clearly supported
by employees as substantiated in our Global Employee Survey and illustrated
in initiatives such as Behaviour Based Safety in North America or CLEAN in Europe.
A key finding in the 2002 global employee survey was that 77% of employees identified sustainability and EHS performance as essential priorities for the Company. Survey results include responses from all employee levels representing functional as well as operational positions. Across the organization, action plans related to the survey have/are being put in place in 2003 to capitalize on the strengths and to address apparent gaps or shortcomings outlined in the survey results.
Employee commitment was also a key factor in the achievement of numerous plant records and awards related to environment, health and safety as well as in the certification of facilities to ISO and OHSAS or equivalent standards in 2002.
Office of the Ombudsman - Worldwide Code of Employee
and Business Conduct
With the release of our Worldwide Code of Employee and Business Conduct
in 2002, an extensive global roll-out was undertaken to ensure that all employees
understand the complexities and importance of issues such as bribery and corruption,
confidentiality, use of company resources, sexual harassment and workplace security.
The Code was published in ten languages and included on the Company's internal
and public Web sites. By mid-2003 over 200 trainers around the globe had completed
face-to-face training and information sessions.
A distinguishing feature in our Code of Conduct is the creation of an Office of the Ombudsman, which provides employees with an additional avenue to report breaches to the Code. The Office serves as a resource to answer questions, resolve uncertainties and clarify ambiguities around corporate ethics and conduct. This office is also responsible for monitoring overall compliance with the Code and its uniform application across functions and business groups.
The Office of the Ombudsman consists of a senior-level Corporate Ombudsman and representatives from each Alcan business group. The Office of the Ombudsman is developing incident management processes, in addition to reporting to management and the Audit Committee of Alcan's Board of Directors.
Managing for Sustainability
Employee Recognition and Development
Global Employee Survey
As stated in the 2002 Sustainability Report, "Our success depends on having
a highly skilled, committed, innovative and productive workforce". Recognizing
the importance of understanding employee goals and perceptions, in 2002 Alcan
conducted its third global employee survey since 1996, which will be used as
a baseline for future global employee surveys including one scheduled for 2003.
Employee perceptions of Company performance were polled in key areas such as: corporate sustainability, environment, health and safety, our values and principles, communications, reputation, innovation/improvement, work/life balance, development opportunities, recognition, leadership and Maximizing Value.
With some 25,000 respondents (52% response rate), the findings are representative of each business group and geographic area. Survey results pointed to a positive perception of the Company and our products, but it also highlighted a need to do a better job at focusing on employee recognition. As an initial response, a company-wide employee recognition program was put in place at the end of 2002.
Although some 80% of respondents worldwide viewed EHS and sustainability as essential Company priorities, the survey also revealed that only 60% believe that safety is the number one priority of all employees where they work. Following a review of the findings by management of each business group/unit in late 2002, this type of gap between goal and reality will become an action plan with objectives that will be followed through to completion. Some 200+ action plans from Alcan locations worldwide were prioritized by senior management in early 2003.
Employee Recognition Program
The Nathanael V. Davis Award is an annual program to recognize exemplary individual
or team performance. Mr. Davis was Alcan's president and chief executive officer
from 1947 to 1979 and chairman from 1972 to 1986. He was a staunch advocate
of the value of employee contributions and this award is the highest corporate
recognition that an Alcan employee can receive. It pays tribute to outstanding
effort, achievement, contribution and involvement either at Alcan or within
the community. Award categories include:
In the first year of the awards, over 120 detailed nominations were submitted in the last quarter of 2002 and four winners were selected. Nominations ranged from inventions and productivity improvements to long-standing support of community initiatives. In addition to a trophy, each award (individual or team) receives a US$25,000 prize. In the case of a team effort, each member will receive no less than $5,000.
Personnel Development
Recognizing that the governing objective of Maximizing Value is only possible
by employing and retaining talented and motivated personnel, a more rigorous
human resource management approach was introduced in 2002 with the creation
of a Talent Management Model. This strengthens Alcan's capabilities to meet
current and future global business needs by identifying personnel requirements
and the potential for advancement of internal candidates. The Model provides
all employees with a value proposition that fosters their professional aspirations
with respect to vision and values, working environment, recognition and opportunities
for personal growth.
A new Leadership Competency Profile is a pivotal component of the Model in addition to key Human Resource processes such as "People Reviews" for succession planning, and an internal online job posting system -- Jobs Online. The latter was initially introduced at the professional and management levels in late 2002.
The "People Review" is a multi-level process to ensure that the Company has the right people in place to ensure current success and to support strategic objectives and sustainable growth in the future. The identification of key jobs, key personnel and high-potential leaders begins at the individual performance assessment stage and continues through the business unit people plan. The results of these "People Reviews" are consolidated by business group and presented to Alcan's Executive Committee and the six business group presidents for review and action plans. A final presentation and discussion at the Personnel Committee level of the Alcan Board of Directors completes the overall process.
All personnel development activities are aligned in support of business objectives with the underlying principle that the employee and manager have a shared responsibility for individual development. Ongoing corporate training efforts include the Corporate Leadership Program, the Corporate Management Development Program, the International Master in Practicing Management and specific functional excellence programs.
For example, the roll-out of the Worldwide Code of Employee and Business Conduct in 2002 was supported by a major training campaign that involved face-to-face sessions in all locations worldwide. With the introduction of Maximizing Value, an intensive company-wide training and information program was also launched in 2002. The first phase involved the training of 300 senior managers, which was then followed up by practitioner training for those employees extensively involved in value-at-stake issues. In addition, specialized programs were targeted at financial and marketing personnel.
Managing for Sustainability
Stakeholder Engagement
Alcan continued building relationships with stakeholders by initiating dialogue that supports the goal of long-term sustainability.
Customer engagement
All Alcan business groups are dedicated to building and maintaining strong customer
alliances. For example, our automotive partnerships made history again as Jaguar
introduced its aluminum-intensive XJ sedan built with Alcan technology. Alcan
engineers and researchers worked alongside the Jaguar design team throughout
the developmental process. The stamped aluminum sheet structure is some 40%
lighter than an equivalent steel body and some 60% stiffer. All the closures
and fenders are also produced in aluminum sheet, further contributing to weight
reduction, improved performance and increased fuel economy. The XJ follows more
than two decades of pioneering work by Alcan in developing products and technology
in concert with stakeholders to lessen the environmental impact of automobiles
by lightweighting.
Also in the transportation sector, Alcan Mass Transportation Systems collaborated with other suppliers and customers to maximize the benefits of aluminum and composites in the design of eco-efficient commuter trains and buses. Advantages include considerable weight savings over conventional tramcars and buses as well as reduced labour costs due to the use of pre-fabricated components.
Community engagement
Many of Alcan's community efforts focus on encouraging aluminum beverage can
recycling as a means of generating revenue for charitable organizations. In
the U.S., the Company launched a recycling contest as part of America Recycles
Day (ARD). The contest challenged six Alcan locations to encourage their communities
to gather aluminum cans for the benefit of the Habitat for Humanity Homes Program.
The winning community was in Henderson, Kentucky. Alcan also sponsored the construction
of Habitat homes in Oswego, (New York) and Cleveland (Ohio), both of which were
built with the help of Alcan volunteers.
In the U.K., an Alcan-initiated advertising and direct mail campaign encourages the collection of aluminum drink cans and foil in 20 different localities, a new web site was launched to promote consumer recycling and some 220 schools registered for a recycling competition. In Iceland, an Open Woodlands project is co-sponsored by Alcan to increase public access to forests and, in British Columbia, Canada, a Wilderness Awareness Program was developed following two fatalities on a local mountain. Many Alcan facilities also work with local fire departments both in education/awareness sessions and to assist with firefighting as required.
On the operations side, stakeholder dialogue includes actions such as at our Engineered Products facility in Valais, Switzerland, where environmental information meetings were held with local authorities as well as with Greenpeace and World Wildlife Fund representatives. Similarly, at the new Alma smelter in Quebec, all public monitoring commitments were met and the community was kept up to date on the plant's environmental performance including details of a study on electromagnetic fields near the power lines to the smelter.
Industry Engagement
In refining these internal tracking mechanisms, we continue to benefit from
our cooperative efforts with several external organizations to develop recognized
sustainability indicators. This includes our involvement with the International
Aluminium Institute's sustainable development indicator project, the Wuppertal
- European Aluminium Association project and the participation of Alcan's president
as co-chair of the accountability and reporting working group of the World Business
Council on Sustainable Development. These efforts reflect a common concern and
interest of companies and stakeholders in establishing useful, effective and
transparent metrics that support the implementation of sustainability in companies
today.
External engagement
In the belief that sustainability efforts are linked to Maximizing Value, Alcan's
president and chief executive officer delivered an address
to the investment community as part of an executive seminar sponsored by the
Conference Board of Canada.
The core message emphasized that the benefits of embracing sustainability can be substantial and are directly related to the fundamental imperative of creating value. The investment community will benefit by working with companies that are transparent and have senior-level mechanisms in place to monitor decision-making and report on performance beyond traditional parameters.
In 2002, the Company also continued its voluntary participation in the World Resources Institute, the World Business Council for Sustainable Development and in the Global Reporting Initiative to develop sustainability measurement standards.
Public Policy
In 2002, Alcan promoted corporate sustainability in numerous government policy
forums, including the Canadian Democracy and Corporate Accountability Commission.
The mandate of this Commission was to address a growing public concern with
regards to the existing degree of responsibility that corporations have to the
communities where they operate.
At the regional level, a submission was also made to the Quebec Committee on Public Finance regarding corporate social responsibility and socially responsible investment. In addition, the Company acted independently and with industry partners in discussions related to greenhouse gas emissions and, more specifically, with regard to the Kyoto Protocol on greenhouse gas emissions.
Awards and Recognition
Dow Jones Sustainability World Index
Alcan was selected to be part of the Dow Jones Sustainability World Index in
2002. (More)
ICC/UNEP Award
Alcan's school-based Micro-Business Network wins the United Nations sustainability
award. (More)
Sustainability Report Ranked with International Leaders
Alcan's 2002 Corporate Sustainability Report ranked among the top 30 international
sustainability reports. (More)
Chartered Accountants of Canada/National Post Corporate Reporting
Awards
Alcan's annual report and the Corporate Sustainability Report honoured with
prestigious awards. (More)
Awards and Recognition
Dow Jones Sustainability World Index
In September 2002, Alcan was once again selected to be part of the Dow Jones Sustainability World Index (DJSI World) – a business index that tracks the performance of sustainability-driven organizations worldwide. This ranking by DJSI World places Alcan as one of the top ten percent of companies in the aluminum-steel sector assessed for the Index. Alcan joins over 300 companies from 23 countries that lead their respective industries in sustainability issues.
Awards and Recognition
ICC/UNEP Award
In August 2002, at the Earth Summit in Johannesburg, South Africa, Alcan was honoured with an award for excellence in sustainable development. The award was sponsored by the United Nations Environment Program (UNEP) and the International Chamber of Commerce (ICC). The award honours the Company's long-standing development and support of the International Micro-Business Network, a recycling/entrepreneurship program that helps primary students understand the link between sustainability and sound business principles. Alcan started the program at a single school in Quebec over ten years ago and it has now expanded to an international effort reaching more than 30,000 young people each year.
The ICC/UNEP award competition received over 120 partnership nominations from nearly 37 countries in 2002, with ten awards being granted. The nominations came from business, industry sector associations, labour, non-governmental organizations, governments and international agencies and institutions. The focus of the award is on partnerships (multi-stakeholder) and sustainable development impacts (environment, social and economic).
Awards and Recognition
Sustainability Report Ranked with International Leaders
In November 2002, SustainAbility, a private sustainability consulting group, in conjunction with the United Nations Environment Program, ranked our first Corporate Sustainability Report in the 28th spot among the top corporate reports. This was the third edition of the biennial international benchmarking exercise, known as the 'Global Reporters' Survey'.
Over a period of six months, SustainAbility reviewed some 200 reports. The most promising 100 were selected using a range of criteria that assessed the companies' commitments to sustainable development, their current and future performance and the integrity of their reporting processes. The 100 were then narrowed down to the top 50 for the final ranking.
Awards and Recognition
Chartered Accountants of Canada/National Post Corporate Reporting
Awards
The CICA (Canadian Institute of Chartered Accountants) Corporate Reporting Awards is organized by the CICA in association with National Post. For over 50 years, this awards program (formerly known as the Annual Report Awards until 2001) has recognized excellence in financial and corporate reporting in Canada. The aim is to recognize leaders in corporate governance, and environmental and sustainability reporting.
Awards are given to companies who have shown leadership in Annual Reporting, Electronic Disclosure, Corporate Governance Disclosure and Sustainable Development Reporting. Alcan won a silver medal for our 2002 Annual Report and a bronze medal for our first-ever Corporate Sustainability Report.
Business Group Priorities
Alcan is a global leader in aluminum and specialty packaging with operations divided among six independent business groups. In working towards sustainability, each business group has identified its main business priorities and issues, challenges and opportunities for 2002. Practical examples of progress in each business group are included.
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Bauxite, Alumina |  |
Rolled Products | |||
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and Specialty Chemicals | |
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Europe | ||
| Issues and Priorities | Issues and Priorities | |||||
| Practical Examples | Practical Examples | |||||
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Business Group Priorities/Bauxite, Alumina and Specialty Chemicals/Issues
and Priorities
For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.
Bauxite mines/deposits: 7
Alumina refineries: 5
Specialty Chemicals production: 3
Countries represented: 6
Pursuit of the Company's governing objective of Maximizing Value remains the
top priority in all business groups.
Maximizing Value: The overall strategy for the Bauxite,
Alumina and Specialty Chemicals group (BASC) is to maximize value through asset
optimization, expansion and/or acquisition of cost-advantaged assets. These
efforts to maximize value will, simultaneously, contribute to sustainability
by minimizing the environmental footprint through initiatives such as resource
conservation, increased efficiency and reduced waste. Challenges include the
availability of high-quality bauxite and how to best optimize the use of existing
reserves. Several efforts were under way in 2002 to identify opportunities in
these areas.
A key priority is to maximize the potential of the Gove complex in Australia following the Company's acquisition of a 100% ownership position in 2001. A cleaner production system has already been implemented as a result of Alcan's management systems and expertise. In 2002, plans were put in motion to assess the opportunities for expansion of the 2-million tonne capacity alumina facility and related bauxite mine. This included consultation with key local stakeholders.
By adding value through operational synergies and Alcan expertise, the Gove complex will become one of the lowest-cost alumina producers in the world while contributing to economic, environmental and social sustainability.
Environment, Health and Safety: As in all business groups,
Environment, Health and Safety (EHS) is a constant business priority in BASC.
Achievements in 2002 include the development of an EHS Performance Matrix that
focuses on continuous improvement in all three areas.
In employee health and safety, each site has action plans in place to minimize employee exposure to industrial contaminants and to improve personal health. In addition to objectives for reducing accident and injury rates, all sites are committed to implementing Behaviour Based Safety by 2004. In pursuit of last year's objective for all facilities to seek registration to the OHSAS 18001, the group initiated plans in 2002 that will lead to three sites to be registered by the end of 2003 and, by the end of 2004, all facilities will be certified to this standard.
The process of continual EHS improvement relies on employee commitment as the group works towards the Company goal to develop an integrated EHS management system. For 2003, each BASC site will conduct a gap analysis related to the implementation of the integrated EHS system and action plans will be established with the goals of full compliance by the end of 2004.
Resource management is another top business priority. In 2002 the group decreased energy consumption and greenhouse gas emissions. Targets for emission, waste and energy reductions ranging from 5-10% have been set for each facility by 2004. Fundamental sustainability issues include safeguarding indigenous species and the rehabilitation of exhausted mine sites.
Stakeholder engagement: In Gove, Australia, the group
worked alongside federal and state governments and a local aboriginal company
to initiate a training program for the area's indigenous people. The school
teaches important trade skills such as equipment operation, road construction,
earthworks and mining; certain life skills are also part of the program. Click
here to view the Alcan Gove 2002 Environment, Health, Safety and Community
report PDF.
Early in 2002, the Company announced its intent to divest the Burntisland specialty chemicals plant in the U.K. When no buyer stepped forward, Alcan initiated a closure consultation process in September with employee and union representatives that was successfully concluded in mid-November.
See Practical Examples for details on select Bauxite, Alumina and Specialty Chemicals achievements in 2002.
Business Group Priorities/Bauxite, Alumina and Specialty Chemicals/Practical Examples
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 Kaïzen
reduces injuries and builds valueat Vaudreuil
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Business Group Priorities/Bauxite, Alumina and Specialty Chemicals/Practical
Examples
Business Issue: Maximizing Value; Improved EHS Performance;
Resource Conservation
Kaïzen reduces injuries and builds value at Vaudreuil and Gove
The Kaïzen management approach is aimed at eliminating or reducing activities with no added value. A Kaïzen project generally lasts about a week and always starts with a one-day training session for the team. Under a rigorous methodology, it emphasizes implementing solutions with creativity instead of capital.
At Vaudreuil Works in Quebec, Kaïzen is applied extensively in the production area as well as in environment, health and safety. In 2002, a Kaïzen project zeroed in on musculoskeletal injuries (MSI), which then accounted for 40 percent of injuries in one part of the facility. An eight-member Kaïzen team was given the challenge of defining appropriate postures and motions for safely activating angle valves and identifying corrective action where necessary in order to eliminate these injuries. The improvements have brought about a 45 percent reduction in musculoskeletal risk factors.
In Australia, the Gove alumina plant carried out its first-ever Kaïzen project in August 2002. A team of 12 people representing various sectors of the facility met for six days. The initiative started with the training session involving a Kaïzen specialist. The purpose was to eliminate hydrate leaks on conveyor No. 7, which feeds the calcining furnaces with hydrate in order to produce alumina. The team identified a total of 27 sources of leaks and implemented a number of innovative ideas to significantly increase production output and to reduce dust emissions. Thanks to these solutions, the Gove facility now expects to recover 3,600 tonnes of hydrate per year, compared with the initial target of 2,000 tonnes.
Kaïzen is a very powerful technique that the Bauxite, Alumina and Specialty Chemicals group will continue to use as a way to meet its business objectives of excellence in EHS and Maximizing Value.
Business Group Priorities/Bauxite, Alumina and Specialty Chemicals/Practical
Examples
Business Issue: Reduce Environmental Impacts;
Stakeholder Engagement
Land rehabilitation continues in Ghana
Company land rehabilitation efforts continued in 2002 at the Ghana Bauxite Company (GBC) with another three hectares of land being reforested. This is part of a pilot scheme for agro-forestry where farming activities can take place alongside land rehabilitation and follows the 2001 reforestation of three hectares of land farmed by GBC workers. In 1994, about six hectares of former farmland was similarly reforested with indigenous species and today it cannot be differentiated from the surrounding virgin forest.
The total "environmental footprint" area of the GBC operation encompasses approximately 1,800 hectares with some 300 hectares used for permanent infrastructure. Part of the previously mined areas in the concession area have already been rehabilitated and/or revegetated.
Future reforestation plans include the mining area at Ichinisio, an area of about 78 hectares although only part of this is currently mined. The goal is to begin concurrent rehabilitation as areas of the pit are mined out. An anticipated 20 hectares will require reforestation by the end of life of the existing pit. In addition, part of the tailings dam area (approximately 20 hectares) has already been decommissioned and is being used as a farming area for workers and local residents.
The original GBC mining area at Kanayerebo is no longer being mined, although there is still bauxite present. The area covers approximately 45 hectares and has been allowed to revegetate naturally. At this point it is not planned to do any formal reforestation until a decision is made as to whether the area will be re-opened for mining.
Business Group Priorities/Bauxite, Alumina and Specialty Chemicals/Practical
Examples
Business Issue: Stakeholder Engagement
Stakeholder partnership benefits aboriginal community
In a remote part of northern Australia, our Gove bauxite mining and alumina facility has spearheaded a unique partnership to help ensure future employment opportunities for indigenous people of the region.
For thirty years Alcan's bauxite mining and alumina processing operation (operating as Nabalco) in the Northern Territory has bridged the gap between industry, community and the environment by pioneering relationships with aboriginal people to ensure equity and continued access to regional resources.
In partnership with Yirrkala Business Enterprises (YBE), a local aboriginal company, and with 50% funding from both the federal and state governments, the YBE Nabalco Operator Training School was born. The training school provides indigenous students with nationally accredited, practical training in equipment operation, road construction, earthworks and mining. In addition, the school offers educational modules in life skills, work routines, health and safety, and financial management.
Alcan provides administration offices, equipment, training school facilities and instructors, as well as the remaining funding of the program. Annual program costs are approximately AUS$917,000. The 50% government financial support has been secured for two years.
Of the 30 original program participants, 19 graduated in February 2002 with a Certificate in Mining and Civil Plant Operations. The graduates also gained employment in a range of businesses including YBE, the Department of Infrastructure Planning and Environment, and various community organizations. A second 30-week session began in April 2002 with another 24 trainees.
The successful debut of the training school aptly proves that a balance can exist between conservation and development, and that mutually beneficial partnerships between aboriginal people and industry are possible and worthwhile.
Business Group Priorities/Primary Metal/Issues and Priorities
For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.
Smelters worldwide: 16
Total primary capacity: 2.4 Mt per year
Countries represented: 7
Pursuit of the Company's governing objective of Maximizing Value remains the
top priority in all business groups. For 2002, the Primary Metal group also
established a series of strategic recommendations for the treatment of spent
potlining, increased efforts related to the preservation of natural habitats,
and improved safety practices. The group achieved a 17% improvement in its recordable
case rate for injuries and illnesses. By the end of 2002, five out of 27 sites
had earned OHSAS 18001 certification.
Maximizing Value: Several initiatives in 2002 marked the
Primary Metal Group's progress towards Maximizing Value:
Environment, Health and Safety: As in all business groups,
Environment, Health and Safety (EHS) is a constant business priority in the
Primary Metal group with improvement in all three areas being a continuous goal.
Certification of the Alma smelter to ISO 14001 in 2002 completed the group's
objective to have registered environmental management systems in all facilities.
In British Columbia, a new agreement was reached with the native Haisla band council to reduce PAH emissions. The group also received a Habitat Stewardship and Conservation Award from the Government of Canada, Department of Fisheries and Oceans, for the protective management of potential flow problems on the Kemano River.
In Quebec, an agreement was signed with the provincial government to reduce greenhouse gas emissions (GHG) by an average of 285,000 tonnes from 1995 levels before the end of 2003. This agreement is in line with the Company's TARGET program. A study on exposure to Beryllium in the smelters showed generally very low levels of the metal, well below recommended maximum exposure limits. A small proportion of employees were found to have higher than recommended exposures and have undergone tests to ensure that no health effects have occurred. While not yet completed on all employees concerned, the tests have detected no health problems to date.
Plant safety milestones were achieved at Gande-Baie (Quebec) – two million hours without a lost-time accident and at the Lochaber smelter (U.K.) – one million hours without a lost-time accident. The Aratu smelter in Brazil won the World Safety Award from the International Aluminium Institute.
Stakeholder engagement: Community efforts continue in
all group locations. For example, in Kinlochleven, Scotland, remediation of
the old smelter site is now completed including closure of the spent potlining
landfill site. The first phase of the Alcan-funded woodland regeneration scheme
also got under way in 2002.
As part of the Kinlochleven Land Development Trust (established as Alcan handed back land to the community for other types of development), projects such as the proposed microbrewery operation have come to fruition as well as a community recreation/sports centre built on Alcan-donated land. Broader community benefits include community independence and reduced unemployment for the area to 4%, compared with 12% unemployment during the last few years of smelter operations.
See Practical Examples
for details on select Primary Metal achievements in 2002.
Business Group Priorities/Primary Metal/Practical Examples
Business Group Priorities/Primary Metal/Practical Examples
Business Issues: Maximizing Value; Improved EHS Performance
Energy efficiency, electricity production and air quality
improved at Lynemouth
Improved thermal efficiency at the Lynemouth Power Station in the U.K. is a result of a series of major engineering and cultural changes. The plant is now the most thermally efficient, coal-fired power station in the U.K.
Key to this achievement is the ability of the workforce to accept change and a plant commitment to coaching and team building. Through identifying areas of improvement and encouraging point-of-execution decision-making by the workforce, the Power Station has achieved improved power generation levels, reduced process emissions, and increased efficiencies of about $4 million per year.
The neighbouring Lynemouth smelter also benefits from the Power Station's improved thermal efficiency by having a low-cost, reliable source of energy. A related £28 million high amperage project involves the construction of a new anode forming facility that will allow both Lynemouth and Lochaber smelters to increase production by some 16,000 tonnes. Benefits include reduced energy consumed per tonne of aluminum produced, a 10% reduction in anode changing, reduced CO2 emissions and reduced anode scrap.
Controlling air quality is also a key issue at the Lynemouth Power Station. The thermal efficiency improvements noted above were just one factor in reducing emissions at the coal-fired power plant. Through a customized Process Information (PI) control system, linked with a computerized ambient air monitoring system in the surrounding community, the plant is now able to adjust the process in response to weather patterns to minimize sulphur emissions. In 2002, sulphur emissions were reduced from 10.3 g per kilowatt in 1996 to 9 g per kilowatt. Dust has also been significantly cut from 0.7 grams per kilowatt to under 0.1 grams per kilowatt.
Business Group Priorities/Primary Metal/Practical Examples
Business Issues: Reduce Environmental Impacts;
Stakeholder Engagement; Maximizing Value
Kitimat wharf investments reduce environmental impact
Investments over the last two years in specialized wharf equipment at our operations in Kitimat, British Columbia, have improved working conditions for employees in addition to reducing our impact on the environment.
At an estimated cost of CAN$17 million, a state-of-the-art K3 alumina unloader was commissioned in March 2001 and has since unloaded all alumina vessels in port. The unloader replaces the two 50-year-old Simons unloaders and the Kangaroo crane for unloading alumina. The Kangaroo crane continued in use for unloading green coke shipments until March 2002, at which time a new mobile harbour crane and hopper were commissioned.
The alumina unloader is computer controlled and operates automatically, as opposed to the fully manual Simons unloaders. At its peak, the K3's two blowers draw 40,000 cubic feet of air per minute, allowing it to unload 600 tonnes of alumina per hour. In comparison, the two Simons unloaders and Kangaroo crane unloaded about 500 tonnes per hour. The major benefit of the new unloader, however, is in reducing alumina losses, estimated at 4,000 - 4,300 tonnes per year. This demonstrates a 'win-win-win' situation, by conserving resources, improving the working conditions for wharf employees and reducing the smelter's impact on the environment.
The new mobile harbour crane and hopper went into operation on March 3, 2002, at an estimated cost of about $4 million. Both the custom-made hopper and the harbour crane are unique to the wharf's needs as they are mobile and operate in tandem to unload green coke using a "clam" bucket.
Improved operational control of the new crane minimizes spillage from the bucket and the small amount of spillage that does occur is caught by the integral spill skirt and collector mechanism on the hopper.
Unlike the old Kangaroo Crane, these two pieces of equipment can be driven off the wharf when barge or ship unloading is completed, thus increasing the amount of usable space for wharf operations. The Kangaroo crane will be de-commissioned later this year, freeing up valuable space and leaving the wharf area unobstructed.
Business Group Priorities/Primary Metal/Practical Examples
Business Issue: Stakeholder Engagement
Alcan accredited to Renewables Obligation plan in U.K.
The U.K. has placed renewable energy at the forefront of its low carbon program, setting targets for 10% of the nation's energy needs to be met by renewables by 2010, increasing to 20% by 2020.
The government's renewable energy strategy, in the form of the Renewables Obligation, came into effect in April 2002. The Obligation requires licensed electricity suppliers to buy an increasing percentage of their supply from eligible renewable resources. They do this by buying Renewables Obligation Certificates (ROCs) from accredited generators of renewable power and presenting them to the U.K.'s energy regulator as proof of having met their obligation.
Alcan's heavy investment ($14.7 million) in new hydropower turbines and generators at Kinlochleven means that its renewable energy is now available to the public electricity supply network in Scotland.
Recognition of this commitment to renewable energy came in April 2002, when Alcan was accredited under the terms of the Renewables Obligation and became eligible to supply ROCs to electricity suppliers.
At the end of 2002, 20% of the 500+ megawatts of power Alcan generates in the U.K. was from renewable sources. Having been accredited under the Renewables Obligation, Alcan is now pursuing the development of further renewable power from its significant Scottish Highland Estates and its large landholding in Northumberland, England. In doing this, Alcan will work closely with all stakeholders in contributing to sustainability in the wider sense.
Business Group Priorities/Rolled Products Americas and Asia/Issues and Priorities
For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.
Number of facilities: 16
Countries represented: 6
Pursuit of the Company's governing objective of Maximizing Value remains the
top priority in all business groups.
Maximizing Value: The Rolled Products Americas and Asia
group (RPAA) is focused on meeting the ever-changing needs of global and regional
fabrication customers through the rapid transfer and adoption of best technology
and management practices. This includes providing superior quality and service
while respecting rigorous cost and process controls. In particular, the group
aims to employ business concept innovations to develop new business options.
Specifically for 2002, by emphasizing manufacturing excellence and reliability over the past two years, our Korean operations achieved customer qualification of its can body stock with can customer facilities in Australia, China, Korea, Malaysia, Singapore, Taiwan, Thailand and Vietnam. Higher sales volumes resulted in response to a growing demand.
Recycling of both used aluminum beverage cans and process scrap also continues as a priority in all regions. In Brazil, the group will capitalize on recycling investments and the modernization and expansion of the rolling mill in Pindamonhangaba.
Environment, Health and Safety: As in all business groups,
Environment, Health and Safety (EHS) is a constant business priority in Rolled
Americas and Asia with an emphasis on continuous improvement in all three areas.
In 2002, the group achieved the best performance company-wide in the EHS indicators of recordable case rate, lost time due to injuries or illness and days lost. Generally, the results were better than targeted for the group in each geographic region, continuing a healthy downward trend.
No major environmental events occurred in 2002 and the group increased the number of facilities certified to ISO 14001 to 81% of all plant sites.
In health and safety, 50% of the group's plants reported zero lost time injuries and illnesses (LTII) for the year and only two "serious" injuries were experienced as compared to nine in 2001. South American rolling operations collectively surpassed two million working hours without an LTII while also reducing the total number of accidents by 57% and minor environmental incidents by 50% in the year.
All sites are committed to implementing Behaviour Based Safety and, in 2002, active BBS implementation efforts improved from 70% to 73% of RPAA facilities.
In the group's North American operations, two ongoing environmental non-compliance issues were resolved in 2002. Oswego Works (U.S.) completed the installation of a biological treatment facility for used oil processing waste water while Saguenay Works (Can.) eliminated cooling tower overflow from draining into the storm sewer.
Stakeholder engagement: The Rolled Americas and Asia group
continued its support of community-based projects in 2002 such as the Habitat
for Humanity Homes program in the U.S. and Project Smiles in Brazil.
Various recycling initiatives were also supported both at the plant and business group level and the group further developed relationships with all stakeholders. Cooperative efforts with customers, particularly beverage can customers and automotive producers, continue to build value and improve our progress towards sustainability.
See Practical Examples
for details on select Rolled Americas and Asia achievements in 2002.
Business Group Priorities/Rolled Products Americas and Asia/Practical Examples
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| Recycling
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| Brazil
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Recycling Contest benefits community |
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Business Group Priorities/Rolled Products Americas and Asia/Practical Examples
Business Issue: Reduce Environmental Impacts;
Stakeholder Engagement
Recycling achievements include automotive scrap agreement
During 2002, Alcan continued to be the world's leader in the recycling of used aluminum beverage cans (UBCs).
In the U.S., Rolled Products Americas and Asia operations recycled 24 billion UBCs, representing an estimated 45% of all aluminum cans recycled. In Alcan's Berea (Kentucky) recycling facility, the largest UBC recycling facility in the world, production increased by nearly 22% as a result of improved manufacturing efficiencies. In South America, with an impressive 87% recycling rate, Brazil was recognized as the worldwide UBC recycling leader among countries where it is not legally mandated.
Improved scrap recycling also continues both in our rolling operations and with our customers. In our operations, for example, the group's Ulsan plant in Korea increased scrap recovery by adding a new aluminum recycling furnace to process scrap from its own operations and from customers. The 30-tonne capacity furnace uses Alcan technology.
On the customer side, in 2002 Alcan signed an innovative recycling agreement with the Ford Motor Company — the North American automotive industry's first "closed-loop" recycling program for aluminum sheet scrap.
Under this program, Ford recovers aluminum process scrap from its Chicago Stamping Plant and returns it to Alcan for recycling directly back into autobody sheet. Nearly 1.3 million automotive hoods are stamped at the plant annually, generating about 13 million pounds of process scrap. Previously, the recovered aluminum scrap was sold into the general market in combination with other metals, thus diminishing both its quality and value and making it unsuitable for re-use in autobody applications.
The new "closed-loop" process provides significant economic and environmental benefits for both Alcan and our customer.
Business Group Priorities/Rolled Products Americas and Asia/Practical Examples
Business Issue: Maximizing Value; Stakeholder Engagement;
Improved EHS Performance
Brazil becomes world UBC recycling leader
With Alcan's help, Brazil is now the worldwide leader in recycling used aluminum beverage cans (UBC) in countries where recycling is not mandatory. Brazil's 87% recycling rate surpassed the Japanese recycling rate of 83.1% to achieve top spot.
Alcan, as the largest aluminum recycling company in South America, accounted for some 62% of the total UBCs processed, or approximately 76,000 tonnes of aluminum cans, in addition to what is recycled from internal and customer process scrap. This is up from 29% of all UBCs collected in 2001. Alcan represents the biggest individual purchaser of aluminum can scrap in Brazil.
Recycling reduces mineral and power consumption and is a way of life for many in Brazil, with approximately 150,000 people relying on it as their means of livelihood. One kg of aluminum cans is worth more than 33 times the equivalent in steel cans, 39 times more than coloured glass and 6 times more than PET containers.
The Alcan Recycling Centre, in Pindamonhangaba (São Paulo) has an 80,000-tonne annual processing capacity. Recycling plays a strategic role for Alcan in Brazil, as it accomplishes a social, economic and environmental function.
Business Group Priorities/Rolled Products Americas and Asia/Practical Examples
Business Issue: Stakeholder Engagement
Can Recycling Contest benefits community
As part of Alcan's efforts to promote the benefits of recycling, in November 2002 the Company sponsored the annual America Recycles Day (ARD) celebration. ARD is a national effort in the U.S. that brings together a coalition of corporations, government and non-profit organizations focused on creating and maintaining awareness for recycling and its benefits.
In addition to the national sponsorship, Alcan launched a unique recycling contest — reaching out to select locations where Alcan has a facility. The contest challenged Alcan employees and their communities to collect used aluminum beverage cans, recycle the cans, and use the proceeds generated from their recycling efforts to assist the Aluminum Cans Build Habitat for Humanity Homes program.
Led by local volunteers, over 200,000 cans were collected during the contest. The Company's Sebree smelter in Henderson, Kentucky, emerged as the winner by collecting and recycling 62,040 UBCs. Other Alcan facilities involved were Oswego (New York), Berea (Kentucky), Cleveland (Ohio), Greensboro (Georgia) and Russellville (Kentucky).
Alcan matched all dollars raised in this charitable effort. In addition, the Company raised the stakes for all of its participating locations by offering a $5,000 grand prize Habitat donation for the participating community collecting the most cans.
Aluminum is the perfect material for a project like this because it is the most valuable recycled beverage packaging material, earning more than 30 times the collection value of certain other types of packaging.
Business Group Priorities/Rolled Products Europe/Issues and Priorities
For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.
Number of facilities: 13
Countries represented: 4
Pursuit of the Company's governing objective of Maximizing Value remains the
top priority in all business groups.
Maximizing Value: In Rolled Products Europe, a Value Added
Manufacturing System (VAMS) is now in place as a key tool in Maximizing Value.
This system facilitates "excellence standardization" within the group
and complements the Maximizing Value objective by allowing for larger scale
standardization opportunities and by focusing the group on value-adding, segment-specific
differentiation in manufacturing, sales and marketing.
Environment, Health and Safety: As in all business groups,
Environment, Health and Safety (EHS) is a constant business priority at Rolled
Products Europe with improvement in all three areas being a continuous goal.
The enhancement and further standardization of the monitoring, auditing and
reporting system for environment, health and safety performance — an
integrated EHS management system — was a business priority in 2002.
As a component of our EHS approach, we continue to implement the concepts of
Behaviour Based Safety in our Rolled Products' sites.
In response to the objective set in 2001 that all sites work towards certification to the OHSAS 18001 standard, two of the 13 sites have achieved this goal and eight sites are aiming for certification in 2003. Environmental, health and safety impacts are continually assessed and improvement programs benefit the respective stakeholders, including the achievement of a number of health and safety milestones within the group.
Despite these safety efforts, our Rolled Products Europe group suffered two fatalities in 2002 at our Norf rolling complex in Germany. Intensive investigation followed to assess causes and initiate remedial action. The results of the investigation were shared with all Alcan companies.
Training: In 2002, Rolled Products Europe established
a communications program for employees that explains the group's vision and
values pertaining to Alcan's global governing objective of Maximizing Value.
Also gaining momentum in 2002 was a comprehensive training program that focused
on linking critical capabilities with personnel competencies. This allows the
Rolled Products Europe group to maintain a highly trained production workforce,
including in-house process and product development expertise.
Stakeholder engagement: The group continues to work with
all key stakeholders. This includes developing products that are designed to
take advantage of aluminum's properties such as light weight, corrosion resistance,
durability and recyclability. Recycling is a high value-at-stake issue for the
group and we are searching out every opportunity to utilize recycled material
in our operations and to identify new ways to maximize our products' contributions
to sustainability.
See Practical Examples
for details on select Rolled Products Europe achievements in 2002.
Business Group Priorities/Rolled Products Europe/Practical Examples
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Integrated process-orientedmanagement
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Added Manufacturing Systems streamlineinventory
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Business Group Priorities/Rolled Products Europe/Practical Examples
Business Issue: EHS Integration, Maximizing Value
Developing Integrated process-oriented management systems
The requirements of the international standards on quality, environmental and health and safety management systems are very similar. Adopting the process approach of the revised ISO 9000:2000 standard will facilitate the integration of the three systems into one comprehensive management system. The Rolled Products Europe VAMS team (Value Adding Manufacturing Systems) is coordinating the management system integration projects.
An integrated management system will benefit the plants by facilitating continual improvement and ensuring conformity to customer and legal requirements, thereby also adding value to the system. Although it is vital that the management system fits the individual plant and its culture, the coordinated approach will ensure a common understanding throughout the group.
Electronic document management at the majority of our locations ensures compliance with international standards on document control in addition to clarifying responsibilities and maximizing employee involvement at the site. At Norf and Göttingen (Germany), documents are distributed by e-mail directly to employees on the shop floor. This ensures that the right information is available in the right place and at the right time. Göttingen already has a process oriented integrated system certified to ISO 9001, ISO 14001 and OHSAS 18001. As part of continual improvement, further work is under way to model all the processes. Innovative approaches also include those at our Nachterstedt plant (Germany) where work instructions are now supplemented with actual photographs of employees performing the task.
Benefits of the integrated management system include enhanced transparency, a uniform approach and a better understanding of how the plant does business. In addition, increased employee awareness of day-to-day quality issues and EHS factors contribute to smooth operations, which result in customer satisfaction and workforce commitment.
Business Group Priorities/Rolled Products Europe/Practical Examples
Business Issue: Maximizing Value; Stakeholder Engagement
Value Added Manufacturing Systems streamline inventory management
In early 2000, Rolled Products Europe established an integrated approach to quality systems, EHS and lean manufacturing. A central VAMS (Value Added Manufacturing Systems) team provides training and workshops at the plants and facilitates supply chain projects with customers. Critical to success is an open exchange of information for both parties in these projects. Two VAMS success stories from Göttingen (Germany) follow:
Agfa-Gevaert
A project with Agfa-Gevaert, a lithographic customer, has shortened lead-times,
reduced inventories, simplified administrative procedures, and increased flexibility.
Additional benefits for the customer include reduced transport damage and harmonized
material flow.
Alcan provides a consignment stock service to Agfa-Gevaert but, prior to VAMS, the right material wasn't always available at the right time as last minute customer changes often altered the specifications. Apart from the customer service implications, this meant high inventory costs for Alcan and last minute adjustments to production schedules.
A joint project team analyzed the current process and identified our top-selling item to the customer (the "fast-seller"). Today we plan our production on the basis of the customer's daily information on the amount of material taken out of inventory in relation to pre-determined minimum and maximum levels. As a result, inventories are lower and the consignment stock turn has increased. The customer also saves in administration and planning efforts.
Ball Packaging Europe
At Ball Packaging Europe, a can stock customer, cooperative efforts improved
delivery lead-times from eight to four weeks. For this project, two "fast
sellers" were also identified and Alcan was designated as main supplier
for both. The new system allows the customer to enter inventory information
directly into a common database, making our order preview more precise. The
reduction in delivery time is advantageous for the customer and Alcan. Shorter
reaction times mean lower inventories and, as with Agfa-Gevaert, consignment
stock turns significantly increased.
In addition, supply chain projects are now under way with an important foil stock customer supplied by Norf (Germany) and with General Electric Tungsram Lighting in Hungary, a customer of our Nachterstedt plant (Germany).
Projects like these ensure more satisfied customers and are excellent examples of Maximizing Value.
Business Group Priorities/Rolled Products Europe/Practical Examples
Business Issue: Improved EHS Performance
New databases improve EHS management
EHS data for regular reporting
The accurate and consistent measurement and evaluation of EHS performance is
one of the key processes on the way to EHS excellence. In response, Rolled Products
Europe created a centrally managed EHS Database in 2002 to replace a number
of unsynchronized data gathering tools.
On-line entries can be made by each plant in critical areas such as main and ancillary material flows, energy consumption, air and water emissions, waste, as well as environment, health and safety events.
Powerful evaluation and reporting tools generate EHS indicators, tracking both the plant and the product-related EHS performance. Customized performance evaluations satisfy a broad variety of needs including internal EHS management reports, stakeholder-oriented reports and process-related benchmarking or product-related life cycle analysis.
Complete functionality of the EHS Database is planned for 2003.
Standardized platform for incident reporting
Rolled Products Europe recognizes the need to provide a uniform method for systematically
reporting accidents and environmental incidents. A "workflow" database
that runs on our company-wide messaging platform was developed and launched
at the beginning of 2002.
In order to meet the requirements of our various sites, internal EHS specialists agreed on common terminology and the layout of the report form. In addition to automated notification, information related to lost time accidents and other high risk incidents can be shared among line management and specialists by just taking a look at the database. Using common keywords, the database can be accessed for evaluation of high risk potentials on a day-to-day basis.
At the end of 2002, the Health and Safety section of the database contained the total lost time accidents for Rolled Products Europe. Evaluation of cases by injury revealed that finger/hand/arm injuries and bruises/fractures are the most frequent injury. The group's response was to immediately implement a "Don't touch!" program in all Rolled Products Europe plants.
After a full year of successful reporting in RPE, the database application has now been modified for use in our Engineered Products business group.
Business Group Priorities/Engineered Products/Issues and Priorities
For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.
Number of facilities: 47
Countries represented: 17
Pursuit of the Company's governing objective of Maximizing Value remains the
top priority in all business groups.
Maximizing Value: At Engineered Products in 2002 we moved
ahead in implementing the concept of Maximizing Value and in achieving manufacturing
excellence at all our facilities. We continued our cooperative efforts with
customers to develop innovative applications based on the unique properties
of our extrusions, composites, and cable. One of our most important markets
is transportation, where we have adopted a multi-materials approach to mass
transportation systems and where our efforts with automobile manufacturers has
accelerated the development of lighter, more energy efficient, aluminum-intensive
vehicles.
Environment, Health and Safety: As in all business groups,
Environment, Health and Safety (EHS) is a constant business priority at Engineered
Products, with improvement in all three areas being a continuous goal. One of
the key components of our efforts is to build upon the group's significant achievements
over the past 20 years in reducing emissions. This will involve developing reduction
plans for waste as well as water and energy consumption in 2003.
As well, steps towards the integration and standardization of an EHS management system gained prominence in 2002 with a continued emphasis on strengthening safe behaviour practices in all our facilities. With respect to the group's goal for all facilities to seek certification to OHSAS 18001, some 15% of our sites have already achieved compliance in 2002 and 60% more are expected to receive certification in 2003. With regard to the environmental management system ISO 14001, 50% of our sites were certified by the end of 2002 and over 90% site certification is planned by the end of 2003.
And, to better monitor our performance, we have worked with the Rolled Products Europe group in creating and implementing a standardized data management system where powerful reporting tools can help us better manage our EHS performance.
Stakeholder engagement: Several examples of our cooperative
efforts with stakeholders, especially with customers, came to fruition in 2002
as we demonstrate how to take full advantage of our materials throughout the
product life cycle. In the mass transportation area, our innovative, energy-saving
solutions were found in a new generation of European commuter trains as well
as in buses incorporating the patented Alcan Hybrid System. This technology
combines aluminum extrusions, composite panels and plates, all joined by welding,
bolting and bonding. We need to increase awareness and understanding of the
full life cycle benefits that are possible, and reinforce the economic, environmental
and social value of these efforts with other stakeholders.
Product Stewardship: At Engineered Products we encourage
recycling and design our products and internal processes accordingly. We also
look for new ways to minimize resource use and we continually address how to
best minimize our environmental impact. In 2002 we defined energy water and
waste minimization plans in order to build on our successes.
A significant achievement in 2002 was the fast growth of automotive components, in particular noting the positive impacts in terms of consumer safety, corrosion resistance, recyclability and fuel savings through light weighting.
See Practical Examples
for details on select Engineered Products achievements in 2002.
Business Group Priorities/Engineered Products/Practical Examples
| Aspects of Sustainability involved |
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| Innovative
automotive bumper system |
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| Continuous
improvement saves energy and reduces waste |
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| Quick
action in Decin, Czech Republic |
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Business Group Priorities/Engineered Products/Practical Examples
Business Issue: Maximizing Value; Stakeholder Engagement;
Product Stewardship
Innovative automotive bumper system
Designed with the goal of sustainability in mind, the extrusion-based aluminum automotive bumper systems developed by Engineered Products have proven to have positive economic, environmental and social impacts.
Economic: The extrusion-based concept enables the cost-effective production
of the bumpers while achieving a 40% weight reduction when compared to a conventional
steel design. Since the start of bumper production at our Gottmadingen plant
(Germany) in 2000, more than three million bumpers have been produced. The market
share for aluminum bumpers is expected to double up to 2006, and Alcan's share
of the market is expected to grow significantly.
Our success with the bumper system has reinforced our position as a preferred partner for development and supply of safety systems to the Volkswagen/Audi group, Daimler Chrysler, GM (Opel), Ford (Jaguar), BMW and PSA (Peugeot, Citroen).
Environment Health and Safety: Manufacturing the bumpers using the extrusion
process minimizes process scrap (eliminating cutting scrap) and eliminates air
and effluent emissions in the production process. In addition, the high volume
automated production lines are completely encapsulated for noise protection
and worker safety. Due to aluminum's excellent corrosion-resistant properties,
the patented extruded bumper system doesn't require any surface treatment. This
in turn results in the elimination of related process emissions and waste.
When compared to a conventional steel bumper, the Alcan-designed unit results in a weight saving of a minimum 2 kg in smaller models and up to 4 kg in the larger, luxury vehicles. The bumper is easily disassembled, making it highly compatible with the recycled aluminum material waste stream.
Social: The concept allows for tailor-made solutions for each car model
in terms of minimizing weight and material usage while the revolutionary multi-chamber
profile offers optimum energy absorption characteristics to protect the car
and its occupants. Significant secondary benefits include reduced automobile
body damage due to the bumper's energy absorption capabilities, which leads
to considerable savings in insurance costs for drivers. Studies in Germany point
to insurance savings of up to 100 Euros per year.
Not only is passenger safety maximized, the lightweight bumpers also contribute to improved vehicle handling and braking performance.
Business Group Priorities/Engineered Products/Practical Examples
Business Issue: Reduce Environmental Impacts; Maximizing Value
Continuous improvement saves energy and reduces waste
Continuous improvement efforts implemented in all Engineered Products' facilities have resulted in reduced waste, improved fuel efficiencies and reduced emissions.
Williamsport: At our Williamsport cable facility in Pennsylvania (USA),
an innovative process has led to a 75% reduction in the amount of polyethylene
waste from the extruders compared to 2001 levels.
Rather than sending this waste to the landfill, some 81% of the 2002 disposal volume was used in a fuel blending initiative with coal to create a fuel briquette that burns like coal, but cleaner and with a comparable BTU. This has resulted in savings of approximately $10,867.
| 2001 volume | = | 160.47 tonnes of polyethylene 'bleedout' waste sent to landfill |
| 2002 volume | = | 162.22 tonnes of polyethylene 'bleedout' waste but only 29.81 tonnes sent to landfill |
Roseburg: The drawbench in-line annealer installed at the end of 2002 in
our Roseburg, Oregon (USA) cable facility has increased plant efficiency and
added a new dimension to our employee knowledge base. When manufacturing electrical
cable, aluminum rod is run through a drawbench to make smaller diameter wire.
Many individual wires are then stranded together to make a flexible conductor
cable. If additional flexibility is required in the stranded cable, it is usually
placed into a gas-fired furnace and heated to soften the aluminum. This process,
known as batch annealing, requires temperatures up to 600°F and can take
up to 24 hours to complete.
The new technology eliminates the need for batch annealing when preparing wire for stranding. Wire for stranding is immediately annealed by heating it with electrical current at the end of the drawing process. The wire is then stranded without the extra handling and time required by batch annealing. The in-line annealer has several benefits for Roseburg:
Chelmsford: Engineered Products composites plant in Chelmsford, U.K., initiated
a program in 2002 to convert all gasoline-powered vehicles to diesel powered.
This was coupled with a transport efficiency program that monitors vehicle use.
The results of the two initiatives were fewer trips (contributing to less traffic
in the community) and a more than 50% reduction in fuel consumption, which leads
to reduced greenhouse gas and other emissions to the atmosphere.
Koper, Markt Schwaben and Jonquière: Engineered Products' shaped
products facilities in Koper (Slovenia) and Markt Schwaben (Germany) as well
as the cable facility in Jonquière (Canada) replaced Sulphur Hexafluoride
(SF6) in their processes. SF6 is a highly persistent greenhouse
gas that contributes to global climate change.
Ongoing efforts to reduce GHG emissions are pursued in all our facilities.
Business Group Priorities/Engineered Products/Practical Examples
Business Issue: Stakeholder Engagement; Maximizing Value
Quick action in Decin, Czech Republic
When severe flooding hit the area around our Decin facility in the Czech Republic in August 2002, both the plant and the community were threatened. Floodwaters in the area rose to some 10.5 metres above normal, a height not seen since the late 1800s.
Quick action by employees of the newly expanded, extruded products plant was instrumental in protecting key equipment and avoiding environmental damage. In the community, there was one fatality and about 60 Decin residents were temporarily evacuated from their homes.
At the October inauguration of the plant's bar production centre, Alcan officials presented a cheque for CZK1.5 million ($50,000) to the area's relief effort. The new $8 million bar production centre at Decin reflects Engineered Products' commitment to invest in its community and to further develop its capabilities and product range.
Business Group Priorities/Packaging/Issues and Priorities
For a complete description of this business group, please refer to the Corporate Sustainability Report 2002 or the Alcan Facts 2003 brochure.
Packaging plants: 90
Countries represented: 18
Pursuit of the Company's governing objective of Maximizing Value remains the
top priority in all business groups.
Alcan Packaging's growth strategy includes investments in Pharmaceutical and Tobacco packaging applications, selective expansion in foil and film-based Flexible Packaging applications and the development of higher value-added applications in Personal Care/Cosmetics. The group is also looking at vertical integration to sustain an advantage in core conversion markets through innovation and differentiation. Success in these priorities will lead to strengthened relationships with stakeholders and increased economic, social and environmental benefits over the short and long term.
Maximizing Value: The Packaging group reinforced its global
position in 2002 by focusing on low-cost, highly efficient manufacturing systems,
superior customer service and innovative customer-based solutions.
Maximizing Value requires building upon knowledge and core strengths and assessing everything from product and process changes to technology impacts and new markets. A Best Practices Council was established in 2002 to improve revenue growth by reducing costs and improving productivity through the innovative use of proven resources. Best Practices also help to reduce lost time rates, decrease project cycle times, and increase communications efficiency, knowledge transfer and organizational learning. The group implemented a Best Practices sharing strategy, compiled a list of functional and technical experts and encouraged the application of best practices to achieve 2003 qualitative goals.
At the end of 2002, Alcan reached a definitive agreement to acquire FlexPac, the packaging arm of VAW. Regulatory approval is anticipated by mid-2003. With the addition of FlexPac's 14 high-quality plants, Alcan Packaging will have a worldclass presence in Europe, Asia and the Americas.
Environment, Health and Safety: As in all business groups,
Environment, Health and Safety (EHS) is a constant business priority at Alcan
Packaging, with improvement in all three areas being a continuous goal.
In 2002, Alcan Packaging further developed its EHS strategy and established EHS Baselines that describe the minimum, non-negotiable standards for each plant. With a goal for all facilities to be certified to OHSAS 18001, some 75% of the requirements are currently being met group-wide and approximately 25% of Packaging plants were either certified or in the process of certification at the end of 2002.
The group's CLEAN program, in place since 1998, contributes to a high operating standard at each facility and reflects the group's commitment to sustainability. Approximately 50% of all Packaging sites have achieved CLEAN status and on-site accidents have dropped dramatically. The goal for 2003 is to have 90% of facilities validated as CLEAN by the EHS audit team.
Alcan Packaging recognizes that EHS is an essential part of the decision-making process, whether it involves the planning and construction of a new installation, the development of a new product or a modification to existing machinery or processes.
See Practical Examples
for details on select Packaging achievements in 2002.
Business Group Priorities/Packaging/Practical Examples
| Aspects of Sustainability involved |
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reductions continue |
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Sigma reduces material consumption and costs |
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product security feature protects consumers |
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Business Group Priorities/Packaging/Practical Examples
Business Issue: Reduce Environmental Impacts; Improve Safety
VOC reductions continue
In 2002, improvements were recorded in reducing emissions related to the group's use of Volatile Organic Compounds (VOC) — chemicals that might contribute to the production of ground-level ozone. Many of the solvents used in the inks and lacquers found in Alcan Packaging plants contain VOCs.
Following the $27 million investment in abatement technology reported in our previous Corporate Sustainability Report, in 2002 the Packaging group installed two new thermal afterburners, one at Alcan Packaging Dublin and one at Alcan Packaging Singen. The Singen one is a second generation installation to meet more stringent emission limits.
On a smaller scale, improvements were also made in solvent consumption through more efficient processes. Benefits were derived from new technology and process changes including automatic delivery and dosage control.
Additional benefits include:
In 2002, Alcan Packaging maintained its level of VOC emission despite its increased rate of production.
Business Group Priorities/Packaging/Practical Examples
Business Issue: Reduce Environmental Impacts
Six Sigma reduces material consumption and costs
Adopted by many world class organizations, including some companies in Alcan Packaging, Six Sigma is a process improvement initiative that focuses on dramatically improving business performance.
The pharmaceutical and cosmetics packaging sectors of Alcan Packaging have been fully immersed in the Six Sigma process since early 2001. This methodology delivers value to customers by systematically defining, measuring, analyzing, improving and controlling the way companies work to reduce or eliminate errors/defects.
With extensive team training and gradual experience with these new concepts, tools and techniques, the results have been tremendous. Sixteen teams are well on their way to providing savings of over $2 million.
For example in 2002:
Chart for Pharmaflex example
| Month | Percentage scrap |
| Nov 2001 | 16.9% |
| Jan 2002 | 14.4% |
| Mar 2002 | 11.9% |
| Sept 2002 | 10.6% |
| Goal | 13.9% |
Business Group Priorities/Packaging/Practical Examples
Business Issue: Stakeholder Engagement; Consumer Safety;
Process and product Innovation
Innovative product security feature protects consumers
Counterfeiting is a multi-billion-dollar problem, affecting a broad range of products. But the threat posed by counterfeit pharmaceuticals is particularly serious — not only large sums of money but also the lives of unwitting consumers may be at stake.
With the customer and societal need in mind, Alcan Packaging specialists worked closely with the Company's research centre in Neuhausen, Switzerland to develop the innovative features similar to those found in bank notes, passports and other security documents. The Alcan N'CRYPT® system incorporates a variety of sophisticated, high-security printing techniques for products such as blister foils. It is applied as an addition to the usual blister-foil designs and requires no change to the packaging process on the part of the customer.
This proprietary N'CRYPT® technology provides the group with a competitive advantage in assisting customers and the consumer in the fight against counterfeiters.
Sustainable Data
Economic
Impact by Country
Financial Performance
Revenues by Sector
Financial Metrics
EHS
EHS Management
Emissions, Air-Climate Change
Emissions, Air-Business Group
Emissions, Land
Resource Stewardship
Product Stewardship
Health and Safety
Economic
Impact by Country
| Number of Employees Year ended December 31 (in thousands) |
Payroll/Benefits Year ended December 31 (in millions of US$) |
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2002 | |
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2002 | ||
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| Canada | 11 | Canada | 649 | |||
| United States | 8 | United States | 591 | |||
| Brazil | 3 | Brazil | 45 | |||
| United Kingdom | 5 | United Kingdom | 271 | |||
| Germany | 8 | Germany | 404 | |||
| Switzerland | 3 | Switzerland | 239 | |||
| Other Europe | 6 | Other Europe | 264 | |||
| Australia | 1 | Australia | 55 | |||
| Asia and Other Pacific | 2 | Asia and Other Pacific | 46 | |||
| All Other | 1 | All Other | 11 | |||
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| Total | 48 | Total | 2,575 | |||
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| Capital Expenditures and Business Acquisitions Year ended December 31 (in millions of US$) |
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2002 | |
2001 | |
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| Canada | 477 | 399 | ||
| United States | 96 | 196 | ||
| Brazil | 78 | 61 | ||
| United Kingdom | 77 | 94 | ||
| Germany | 85 | 73 | ||
| Switzerland | 43 | 45 | ||
| Other Europe | 113 | 124 | ||
| Australia | 58 | 416 | ||
| Asia and Other Pacific | 33 | 79 | ||
| All Other | 13 | 27 | ||
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| Total | 1,073 | 1,514 | ||
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Click here to consult Alcan's 2002 annual report.
Economic
Financial Performance
| Consolidated Balance Sheet Items Year ended December 31 (in millions of US$) |
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2002 | |
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| Operating working capital | 1,503 | |
| Capital assets and goodwill (net) | 12,921 | |
| Total assets | 17,538 | |
| Total debt | 3,867 | |
| Preference shares | 160 | |
| Common shareholders' equity | 8,465 | |
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Business Group Profit (BGP)* |
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2002 | |
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| Bauxite, Alumina & Specialty Chemicals | 249 | |
| Primary Metal | 858 | |
| Rolled Products Americas and Asia | 367 | |
| Rolled Products Europe | 132 | |
| Engineered Products | 96 | |
| Packaging | 347 | |
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| 2,049 | ||
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| Per Common Share Year ended December 31 (in US$) |
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2002 | |
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| Net income | 1.15 | |
| Dividends paid | 0.60 | |
| Common shareholders' equity | 26.33 | |
| Market price (NYSE close) | 29.52 | |
Economic
Revenues
| 2002 Revenues: $12.5 Billion | ||||
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Alcan's 2002 Revenues |
Alcan's 2002 Revenues by Business Group As a result of the algroup merger, Alcan's revenues by product reflect a new distribution, with increases in engineered products and in packaging. |
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Economic
Financial Metrics
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Return on Capital Employed |
Research and Development Investments |
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In 2002, the Company decided to focus its fabrication R&D in two locations, Kingston, Canada and Neuhausen, Switzerland, and is therefore closing its laboratories in Banbury, U.K. R&D expenses were $115 million for 2002 compared to $135 million in 2001 and $81 million in 2000. Most of the increase from 2000 was due to the integration of algroup and its dedicated research and development in the engineered products and packaging sectors. |
Cumulative Total Return*
| * | Based upon an initial investment of $100 on
December 31, 1997 with dividends reinvested |
Environmental Protection
Financial Requirements
| * | In 2001, the Company increased its environmental provisions to cover treatment costs for stored spent potlining (SPL) in Quebec and British Columbia, Canada, as well as to cover remediation costs relating to red mud disposal at other sites in Canada and the U.K. |
EHS
EHS Management
Environmental Incidents
Minor Environmental Incident result in minor or no harm or injury to any person, minor or no harm to wildlife, or insignificant damage to habitat. The impacts, if any, are temporary in nature, with total restoration occurring in a short period of time.
Major Environmental Incident are incidents which result in harm or injury to a person, harm to wildlife, or significant and long lasting damage to habitat.
Increased levels from 2000 to 2002 are related to increased reporting diligence and awareness mostly in Business Groups where those issues were not required in the past.
| * | Definition of a minor event was changed in 1999. |
| ** | Integration of Alcan and algroup facilities in 2000 affected data quality in that year. |
Registered Environmental Management Systems
President's Safety and Environmental Award (PSEA)
In our North American rolling facilities, we have incorporated an award process since 1993 to drive continual improvement in occupational safety and health. The award sets standards, identifies quantifiable measurements, assesses performance, and recognizes achievements related to safety and health management. Environmental issues were integrated into the process in 2001. Over the nine-year history of this program, overall scores on the PSEA audit have risen, while accident rates have shown a favourable trend.
EHS
Emissions, Air-Climate Change
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Greenhouse Gas Emissions |
Reductions Realized versus Reduction Objectives |
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Base year emissions are adjusted for acquisition and divestiture, as well as material changes in equipment utilization and installed capacity. |
Demonstrates reductions from baseline versus reduction objectives. Performance represents the difference between baseline and actual performance for each year. |
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Emissions |
Greenhouse Gas Emissions 1990 - 2002* |
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Includes direct and indirect emissions from bauxite, alumina and smelting operations related to producing one tonne of aluminum. |
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Perfluorocarbon (PFC) Emissions |
Direct versus Indirect Greenhouse Gas Emissions 2002 |
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Improvement in smelting process control technology and introduction of new state-of-the-art capacity has significantly reduced the occurrence of anode effects (process inefficiency) which contributed to PFC emissions. |
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EHS
Emissions, Air-Business Group
Alcan Packaging Volatile Organic Compound (VOC) Emissions
In the last five years, businesses in the Packaging Group have invested $27 million in VOC abatement technology. The combination of this investment with other efforts, such as switching to water-based inks and lacquers or recovering solvents, has resulted in the Packaging Group achieving a reduction of more than 50% in the volume of VOC solvent emissions between 1994 and 2001.
North America Rolled Products Hazardous Air Releases (lbs/yr)
NARP Air Toxic Releases*
The positive downward trend is a combination of new technological processes and improved systems controls. Major efforts continue towards further reductions.
| * | The data for this chart is current as of our publication date. The 2002 data will be available in 2004. |
| ** | Fugitive releases are emissions not associated with a specific process. |
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Primary Metal |
Primary Metal Polycyclic Aromatic Hydrocarbon (PAH) Emissions per Tonne of Aluminum Produced |
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The improvements related above are a combined result of investments in state-of-the-art technology in new capacity installations as well as process improvements at existing operations. |
PAH reductions in 2002 were primarily a result of the introduction of Alcan developed low-tar pitch. |
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Primary Metal Dust* |
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The improvements related above are a combined result of investments in state-of-the-art technology in new capacity installations as well as process improvements at existing operations. *PM10 - Particulate Matter smaller than 10 Microns |
EHS
Emissions, Land
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Spent Pot Lining |
Hazardous Waste |
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The volume of Spent Potlining (SPL) processed in any given year may exceed that generated due to the disposal/treatment of SPL stored from previous years. Offsite treatment of SPL from Canadian operations resulted in increased volumes of landfilled and recycled Spent Potlining in 2002. |
Alcan closely monitors hazardous waste levels throughout its operations. |
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Red Mud Disposal* |
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EHS
Resource Stewardship
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2001 Energy Mix* |
2002 Energy Mix* |
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Alcan - Historical Energy Consumption
Alcan smelters
Despite increased capacity, energy consumption is decreasing due to improved efficiencies, especially as a result of the 400,000-tonne capacity Alma smelter in Quebec where more energy-efficient potlines replaced older technology at the closed Isle-Maligne smelter in 2001.
Land Disturbed and Rehabilitated*
| * | Reflects most recent data available |
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Alcan Water Use* |
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EHS
Product Stewardship
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Customer and Post Consumer Recycled |
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The decrease in 2001 and 2002, relative to prior years, is due to increased primary production. |
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EHS
Health and Safety
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Injury/Illness |
Lost Time |
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Data from the former algroup included as of 2000. |
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Days Lost Rate
Data from the former algroup included as of 2000.
Fatalities
Social
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Community Investment* |
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* One example of Alcan's community involvement is in Canada where the Company participates in the Imagine Program of the Canadian Centre for Philanthropy. Under Imagine, Alcan has committed to contribute at least 1% of pre-tax Canadian profits in the form of donations and sponsorships within Canada. The above chart illustrates how Alcan's participation significantly exceeds Imagine program Guidelines. |
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Practical Examples
Alcan's continued progress towards sustainability was evident in all business groups in 2002. Listed below and categorized by major issues or benefits are the Practical Examples included in the Business Group Priorities section of this report.
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