Flour Mills of Nigeria Plc recently unveiled its sustainability report to the capital market community, showing its commitment to the environment and delivery of value to stakeholders, writes Goddy Egene
Companies operating in Nigeria face many challenges given the weak infrastructure, high inflation and dwindling consumer demand for products and services.
It is always difficult for companies to break-even and then begin to make profit. Even then, sustaining profitability is a bigger challenge. Consequently, there is the tendency of some companies to cut corners in order to sustain profitability and deliver returns to shareholders.
In the process, it is possible for some of the companies to focus only on their operations and ignore the negative impact their operations could be having on their environment.
However, in order to in order to ensure sustainable practices by companies listed on the Nigerian Exchange Limited introduced ‘Facts Behind the Sustainability Report (FBSR) in 2019.
The FBSR is designed to further promote the adoption of Environmental, Social and Governance (ESG) practices, reporting, and disclosure and encourage responsible long-term approaches to investment.
It provides a platform for listed companies to address stakeholders with in-depth analysis of their sustainability initiatives, as well as spotlight stakeholder engagements, materiality, standardisation and overall disclosures.
Flour Mills of Nigeria (FMN) Plc recently took advantage of the platform to present its sustainability report.
Highlights of the report include: FMN’s multifaceted stakeholder engagement strategy which helps the group build strong relationships with mapped stakeholders as well as better understand and address key concerns and expectations; FMN’s Backward Integration program which acts as a strategic imperative to create value in its supply chain and reduce dependence on imported raw materials.
It also highlighted various programmes and initiatives within FMN’s operations and operating areas nationwide directed to adding value to society; FMN’s leadership structures and procedures which help to maintain strong corporate governance across the business and translate strategy into action; FMN’s responsibility towards the environment including our operational ecosystem which covers sustainable packaging solutions, waste management, and energy efficiency and THE Group’s trade sustainability strategy based on an empowered workforce achieved through diversity, inclusion, employee engagement, workplace protections, and adherence to all labour practices.
Speaking at the event, the Chief Executive Officer (CEO), Nigerian Exchange Group, Mr. Oscar Onyema, said at the exchange, they counted it a great success for the global capital market system when companies publish reports on their performance on key ESG indicators as well as their commitment to creating a sustainable future.
“We are, therefore, pleased that FMN has chosen to leverage the FBSR series and must commend the board and executive management for leading the charge to advance sustainability in the food and agro-allied sector. For us at the exchange, sustainability reporting is at the core of our sustainability journey and we will not renege on this commitment even as we transition to a new era,” he said.
In his presentation, the Group Managing Director/CEO of FMN, Mr. Omoboyede Olusanya, explained that the 2019/2020 report was developed with input from stakeholders and in line with Global Reporting Initiative (GRI) covering the group’s progress in each of its focus areas, as well as commitments to contribute to global efforts in order to combat climate change and promote a more prosperous and inclusive future.
According to him, sustainability is an integral part of their operations, noting that “as a socially responsible organisation, we are guided by our sustainability statement of contributing to the preservation of biodiversity and reducing water consumption, waste and greenhouse gas (GHG) emission and the livelihood, health and welfare of our employees and local communities.”
“Our vision becomes reality by putting into action programmes and practices that optimise the use of natural resources, by developing energy efficient products and technologies, and by fostering innovations and creative solutions adding value for our clients, communities and the environment,” he added.
Speaking on the area of raw materials, Olusanya said volatile commodity prices arising from unpredictable changes in global supply and demand, exchange rate fluctuations and punitive tariffs and import barriers, had made their reliance on imported raw materials risky, expensive and unsustainable.
“The need to create value further back in the supply chain and reduce dependence on imported raw material has been identified as a strategic imperative for our group in the years ahead. The investment of the next N150 billion will, therefore, focus on a strategy of backward integration to main-tain growth and sustained profitability. “Raw materials will be produced locally wherever possible to ensure that good quality, fair value products are developed through the full supply chain from growing to final consumer consumption – from farm to fork,” he said.
On the FMN’s ecosystem, the GMD said they had continued to advance their ecological commitment through sustainable design, innovation and energy efficiency.
“FMN strives to improve the working environment for our employees, communities and other stakeholders.
Sustainable packaging and waste management our food packaging serves a multitude of purposes, from informing consumers about our products to keeping our food safe and preventing food waste. It is also designed to optimise logistics and helps with portion sizes. However, packaging, in particular plastic packaging, has been in the spotlight because of its environmental impact. Poor management of recycling or disposal of plastic packaging can result in plastic leaking from the waste management cycle into oceans, threatening the lives of sea birds and marine animals, and disrupting ecosystems,” he said.
Olusanya explained that FMN was determined to ensure that none of its packaging, including plastic, ends up in landfills or as litter.
He said: “To facilitate this goal, the packaging material used are general petrochemical-based polypropylene, woven and coded for our special purposes. With the average product pack-out of 986,000 metric tons(Mt), a total average of 2,500Mt of packaging material was used during the reporting period. Furthermore, an average of 1.56kg packaging material waste was generated per week across the 50 packaging plants.
“This recyclable waste is often collected by the designated unit for shredding and compacting. The only non-renewable material in use for the general production of flour is the raw wheat and water. 25-30 Mt of raw wheat is consumed on a weekly average with two to three per cent water supplied for cleaning and conditioning of the wheat grain. Flour operations form a large part of the FMN food production spectra, with over 9,000 MT installed capacity per day. In FY 2019, at 48 per cent plant utilisation, an average of 1.12 per cent of fine plant input (generated as process by product) was recycled for offals production.”
“This helps in sustaining the economies of raw material provision for the secondary product (offals/pallets) while minimising losses in the primary production processes. For about 1.5Mt flour production in 2019, 0.01 per cent process waste was recycled for pellet productions. This, of course, translated to more foreign exchange and more nourishment for livestock around the globe.
“For the reporting year, the total volume of water used to manufacture our products was 219,913.34m3. This was measured using installed flowmeters. To ensure duty of care in waste management and environmental protection, we installed a wastewater treatment plant (WWT), with a capacity of treating 250 cubic meters of effluent per day at Golden Penny Pasta, Iganmu, Lagos. For the reporting year, we complied with all environmental regulations, and as such, did not receive any fines or sanctions.”
The GMD explained that non-hazardous waste disposal is being handled by the state government’s waste disposal Private Sector Participation (PSP) vendors, while hazardous wastes are evacuated by certified vendors from appropriate government agencies.
“An asset disposal committee drawn from different departments handles and determines the disposal methods based on the existing asset disposal standard operating procedure which defines responsibilities and methodologies for waste disposal. The relevant certificates are provided by the waste disposal contractors and verification of the certificates and sites for recycling are also verified by FMN.
“However, defaults are mostly about expiration of certificates and untimely renewal. When this happens, the vendors are delisted from evacuating until the certificates are renewed, an exercise that is repeated yearly,” the CEO said.
On energy energy efficiency, Olusanya said FMN recognised that investing in energy efficiency initiatives helped them to minimise their environmental impacts while also reducing costs.
“To enhance our energy efficiency, the two 15 megawatts dual fuel turbines used for power generation at our plants, are equipped with heat recovery steam generation (HRSG) capability which saves energy by channeling the heat it produces through the heat exchanger into boilers which then produces steam used for processing at our sugar plant. This heat would otherwise have been released into the atmosphere. The scope of our energy disclosure only covers energy consumption within the organisation’s operations; offices and facilities. The source of conversion used is from the analysis carried out on gas sample and standards obtainable from the Association of Energy Engineers (AEE),” he said.
Olusanya added that FMN recognises the need to create quality and safe products because consumers, regulators, investors and other stakeholders seek information about their products and processes.
“Consumers want to know what is in their food, where it comes from and how it is prepared.
They also want assurance that food has been grown and harvested in a responsible and sustainable manner that respects people, animals and the environment. It is in this regard that we introduced the ‘Gold Standard’ of manufacturing for most of our wheat-based products, including bread flour and Semovita. The introduction of the Gold Standard essentially means that we now have in place the highest and most stringent manufacturing processes to ensure the superiority of production for Golden Penny products in line with global best practices and the desires of our consumers,” he said.
“Our continuing focus on quality resulted in our accreditation by Bureau Veritas, a world leader in testing, inspection and certification, with the Food Safety System Certification (FSSC 22000), a Global Food Safety Initiative (GFSI) standard.Furthermore, all ingredients used in our products are selected under strict procedure guided by our quality assurance systems such as the ISO 9001 and Hazard Analysis and Critical Control Point (HACCP) System installed within our company. This is in full compliance with local and international legislation. Material Safety Data Sheets (MSDSs) and detailed technical specifications are evaluated, tested and tried before implementing it to our products.
“We also provide useful, fact-based information on packaging to help consumers make informed dietary choices. Therefore, labeling of our products is completed through close cooperation with local authorities for approval. Additionally, in order to acquire a NAFDAC registration number, the labeling of packaging is audited and inspected. As part of our quality policy, only ingredients with the highest quality are used for the benefit of the health and wellbeing of our consumers. All our products are fortified with the necessary vitamins and minerals backed by research. We have also not been identified to have flouted rules nor have we had any feedback on non-compliance concerning products and services information and labelling from our regulatory bodies,” he added.
