TITAN Cement Group:
A MULTI-REGIONAL
producer
C
ement is arguably the single most important material in the world. It’s certainly the most widely used and, as the ancient Romans would attest 2,000 years after they originally built the Pantheon in Rome, it’s also one of the longest lasting. United States has consumed over 82 million metric tons of cement in 2013. It certainly sounds like a lot. But, if you consider for a moment that, over the past 100 years, American’s gone through over 4.5 billion tons of the stuff, it’s actually been a quiet decade. And if you’re wondering about China right now, well, it’s laid over 6.6 billion tons of this material in the past three years alone. In terms of sheer practicality, cement is arguably the single most important material in the world. It’s certainly the most widely used and, as the ancient Romans would attest 2,000 years after they originally built the Pantheon in Rome, it’s also one of the longest lasting. Such vast production of any one material opens up major questions about sustainability, so TSB Review turned to global cement manufacturer, TITAN, to get some answers. It’s not the largest manufacturer in the world but, as we found out, its significant contribution to the sustainable production of mankind’s most abundantly used material is nothing short of inspiring. Let’s begin by taking a look at the company’s history and how this key player in the construction sector was affected by the recent global economic downturn. TITAN has been in business for over 110 years, employing 5,400 people around the world, owning cement plants in nine countries and sells building materials to 36 countries. The company was founded in 1902, opening its first cement plant in the town of Elefsina, Greece. Some 10 years later, it was listed on the Athens stock exchange and around 15 years after that, it was a major contributor to the country’s gross domestic product (GDP). Even in the 1930s, TITAN was thinking ahead of the curve, offering Christmas and Easter holiday allowance for employees a full 20 years before it was made mandatory by the Greek government. By the 60s and 70s, the company’s considerable success led to cement plants opening in Thessaloniki, Patras and Athens before it expanded overseas to the USA, Bulgaria, FYROM, Serbia, Egypt, Albania, Turkey and finally Kosovo. It went on to become the first company with its HQ in Greece to sign the UN Global Compact Pledge and is a key member of the World Business Council for Sustainable Development (WBCSD). And that was just the beginning of what would turn into an exemplary CSR track record.
The global recession has had major ramifications for most industries, with the construction sector taking a particularly serious hit. That said, it’s no surprise that a cement manufacturer enmeshed in multiple economies around the world had some hard times ahead leading up to the downturn. The recession saw the concurrent collapse of TITAN’s two most important markets, Greece and the United States. Group EBITDA decreased by more than half between 2006 and 2013, TITAN posted net losses in 2012 and suspended dividend for the first time since 1951.
But, with a century of experience spanning multiple recessions, TITAN was one Group that knew how to weather out a storm. By 2013, the diligence and hard work through the tough times started translating into notable improvements. In spite of being in one of the worst affected verticals, solid management and capitalising responsibly on emerging markets combined with the 2012 beginning of the recovery in the US housing market and stubbornly persistent demand from Egypt, TITAN managed to increase sales, generate positive cash flow, and reduce its debt by an astonishing 50%. It expanded capacity by nearly 20% while reducing fixed costs by 16% and SG&A by 24%, all during a time when its home territory was suffering some of the worst economic difficulties ever witnessed by a developed country, and when construction in the US key market was at very low levels. While some companies were making excuses, TITAN was making progress. In spite of the fact that experts believe the sheer longevity of the material usurps the initial carbon production in the long run, (and you can bet there will be modern concrete
structures standing a lot longer than 2,000 years from now) a heavy environmental responsibility lands on TITAN’s shoulders. Fortunately for all of us, the critical nature of the Triple Bottom Line is not lost on this organisation.
The Cement Sustainability Initiative within the WBCSD is a solid pledge to the ethical governance the company pledged when it was first listed over 100 years ago. TITAN integrates its sustainability strategies with its approach to finding partners, readily sharing its hardearned knowledge of best practices. One good example is of TITAN’s local engagement is the Local Advisory Board (LAB) in Kosovo. A local subsidiary established an Independent Local Advisory Board (ILAB) comprised of local stakeholders who evaluate community development programs to be funded and supported by the plant.
engagement of governments, civil society, the private sector, and the United Nations...” Alexandros Katsiamboulas, is Environment, Quality & Sustainable Development Senior Manager, Cement Division Greece was keen to have a say, too, stating that “the capacity to build consensus and engagement with key stakeholders is fundamental to turn current and future challenges into opportunities.” Wise words, and clear indication of a business ethos that takes accountability very seriously indeed. TITAN has used this approach for many years and, while initiatives such as LAB in Kosovo attest to this fact, there are more examples besides. Improved water management systems, quarry rehabilitation practices that safeguard biodiversity, and actions focused to reduce the consumption of extracted non-renewable raw materials and fuels can be added to the list. The Group monitors biodiversity trends, is an active participant in the European Cement Association (CEMBUREAU) and co-chairs the Biodiversity & Land Stewardship inside WBCSD. It even promotes the use of relevant KPI’s to determine what gets classified as areas with high biodiversity value in the first place, encouraging more stringent standards to ensure less ethical organisations don’t take advantage of this fledgling sector of legislation. Sustainability inherently necessitates measures based on forward thinking. Mankind’s strive for progress has resulted in a lot of environmental damage over the past few hundred years, and measures such as these taken by TITAN are critical if we’re to catch up. The idea of a “circular economy” is popular these days, and with good reason. High-street consumerism has very much caught up with us and the fact that it’s not okay to have an end-of-life stage of production that results in excessive dumping of waste is now all too obvious.
The project was awarded the European CSR Award by the European Commission in 2013 and is just one example of a forward-thinking initiative. The future is something that TITAN certainly has its sights focused on. We spoke with Maria Alexiou who is the Group Corporate Social Responsibility Senior Manager. As Alexiou points out, “globally, the greatest challenge is the implementation of sustainable development goals. This requires global partnerships for sustainable development and active
Cyclical processes have been adopted by a minority of more responsible companies in the technology sector, but few in the construction industry have caught on. Perhaps not surprisingly when you dig into the Group’s history, TITAN is one of them. A key tenet of the Group’s environmental policy is reusing and recycling materials, recovering energy and waste in cement production is facilitated by alternative raw materials and fuels to name just a couple of their strategies.
TITAN GENUINELY TAKES SUSTAINABILITY INITIATIVES TO INSPIRATIONAL
NEW HEIGHTS.
Contributes significantly to sustainability.
This approach is just one reason why TITAN was recently awarded the first Award in Greece in the Process category of the national leg in the 2013-2014 European Business Awards for as well as an award for the Biodiversity. TITAN genuinely takes sustainability initiatives to inspirational new heights. It’s an incredibly impressive organisation that contributes significantly to sustainability. Over a century of operation, a long history of innovative thinking and a tireless commitment both to the environment and society have produced results from which we can all learn a great deal. TITAN doesn’t just produce the very substance upon which our society is built, it demonstrates a serious commitment to looking after it.
IRELAND’S
Sustainable
Food Production Grows With
Origin Green
According to the Organisation for Economic Cooperation & Development (OECD), three billion more people worldwide will join the middle classes in the next two decades. That’s 150 million more people per year, most of whom will be looking to purchase more protein-based, healthy food and drink products.
Couple this trend with the expanding demographic of longer living and healthier senior citizens globally and the associated new consumer emphasis on health and wellness and we begin to see the opportunity for incremental growth in food as a source of health and nutrition. Over the same time period competition for resources and inputs into food production will increase and their provision will be volatile. This will drive a need, the scale of which we will not have seen before, for the smart use of resources. Food production systems and supply chains will need to innovate and respond to be more sustainable – meaning less resource intensive, less impactful on the environment more socially aware and able to deliver healthy and nutritional foods to consumers. Ireland is working towards becoming a leading source of sustainably produced food and drinks products through a unique government programme called ORIGIN GREEN.
This will DRIVE A NEED, the scale of which we will not have seen before, for the
SMART USE OF
RESOURCES
THE SUSTAINABLE BUSINESS REVIEW
IRELAND HAS TWO MAJOR NATURAL ADVANTAGES WITH REGARDS TO FOOD PRODUCTION – A TEMPERATE CLIMATE, RICH SOIL AND ABUNDANT WATER SUPPLIES. Here weather and rich soil contribute to the growth of naturally healthy grasslands, perfect for raising grass-fed dairy cows, cattle, sheep, pigs, and edible crops. With such natural resources supporting the programme, Origin Green and its participants are turning Ireland into a leading producer of healthy, sustainable food to European countries and beyond. Developed by Bord Bia (the Irish Food Board) and launched, in partnership with industry, in 2012, Origin Green is the first sustainability programme of its kind anywhere in the world. Working with the entire food production chain, from crops and animals to manufacturer output, Origin Green is a voluntary programme that measures current practices, promotes sustainability best practices, and evaluates the effects of those practices for feedback and continuous improvement. The programme is already seeing results: • Over 70,000 carbon assessments have been undertaken on farms to date. • 90% of beef production (around 45,000 farms) is covered by the programme. • All of Ireland’s dairy farms (25 dairy cooperatives representing 18,000 enterprises) are going through their first audit cycle. • 380 food and drink manufacturers have signed up. • Work is extending to the lamb, poultry, pig, and grain industries.
Aidan Cotter, CEO Bord Bia
By 2016 all Irish food and drink exports from farms and food businesses, will have verified sustainability commitments ensuring the objective of Ireland becoming a world leader in sustainable food production. It is already well on its way. According to Bord Bia’s Chief Executive, Aidan Cotter, “Interest in the programme from Irish companies has been strong, with 90% of exports now emanating from Origin Green participants and 75% of exports are from fully verified Origin Green members.”
The Origin Green Model
In 2009, Bord Bia conducted a research project that explored the international view of Ireland with regard to sustainability. Building on Ireland’s green reputation, Bord Bia developed Origin Green with three main operational
practices are logged in a central Bord Bia database via handheld GPS devices. Programme software then measures the carbon footprint of each farm and uses the data to calculate their relative performance in relation to output levels, grazing season length, fertiliser usage, feed consumption, manure management, and resource use and conservation figures. Each farmer is then provided with advice to see where they can modify practices to improve the sustainability of their enterprises. For the dairy industry Origin Green developed a Sustainable Dairy Assurance Scheme that is operated to the ISO 17065 standard. It defines best practices on Irish dairy farms in animal health and welfare, resource efficiency, biosecurity, farming safety, and the production of safe milk.
Sustainable Food Processing
Food and drink manufacturers make their commitment to sustainability via the Origin Green Sustainability Charter. Under the charter, each company devises a comprehensive development plan with ambitious targets related to raw material sourcing, energy use,
Origin Green
objectives: Farming sustainably from the ground up, improving the efficiency of food processing practices, and positioning Irish producers as among the world’s leading sustainable food and drink suppliers.
Helping Ireland deliver on its promise of becoming a world leader in sustainably produced food and drink.
Sustainable Farming
Bord Bia initially teamed up with the Carbon Trust in the UK to develop carbon footprint calculation models for beef, dairy, lamb, poultry, and pig production farms. By the end of 2014, almost 45,000 beef farms had been assessed. Close to 18,000 of all of Ireland’s dairy farms will have undertaken a similar assessment by the end of 2015. It then began to address its first objective by compiling comprehensive sustainability and carbon footprint figures. Farms across the nation are now routinely assessed and data about their farming and animal management
GHG emissions, waste reduction, water efficiency, product improvement, and employee health and safety. They then report each year on their progress to Origin Green and those figures are independently verified. Industry commitments include: Saving tens of millions of litres of water and millions of kWH of energy per year, reducing landfill waste to close to zero, and encouraging both suppliers and local communities to become more sustainable.
Positioning the Industry
Central to an industry’s credibility in the marketplace are facts and figures to back up claims. With independent verification provided by SGS, a participating food supplier can differentiate its products and better penetrate the export market. To assist with this objective Origin Green’s Ambassadors, ten carefully chosen masters’ degree students majoring in Business Sustainability, help promote the sustainability of Irish food and drink. Each ambassador studies best practice across a range of sectors in the international marketplace, and shares the experience and messaging of Origin Green through a series of six month placements in some of the top Global influencers in sustainability including Abbott, Coca-Cola, M&S, Mars, Nestle, PepsiCo, Tesco, Unilever, WWF and Walmart. In a December 2014 personal interview, Chief Executive Aidan Cotter clarified that Origin Green does not measure its progress purely in terms of statistical success, but sees it as a ‘journey of continuous improvement.’ This guarantees that the programme will continue well beyond 2016, with goals that grow as the programme grows.
ORIGIN GREEN “Helping Ireland deliver on its promise of becoming a world leader in sustainably produced food and drink.�
TITAN CEMENT GROUP Head Quarters Address: 22Α Ηalkidos Str. P.O. 111 43, Αthens, Greece Tel : +30 210 2591 111 Fax : +30 210 2591 205 http://www.titan.gr/en/home
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