A walk through of the Nestle Malaysia CSR Programme

1. Making A Difference Through CSR:
Meeting the Challenges
CSR as Business Strategy
~ the NESTLÉ perspective
Presented by:
Stephane Alby
Executive Director, Finance & Control
Nestlé (Malaysia) Berhad

2. Making A Difference Through CSR:
Meeting the Challenges
An introduction
An Introduction
Nestlé’s Concept of CSR
Conclusion

3. The NESTLÉ Group
• Founded in 1866 by Henri Nestlé
• Nestlé is present in over 100 countries
• World’s largest food manufacturer,
headquartered in Switzerland
• Employs 253,000 people worldwide
• 511 factories in 86 countries
• Sales of 32 billion individual products
each year
• World’s largest private nutrition
research facility
• 17 R&D Centers worldwide
• RM5 billion investment annually on
R&D
NESTLÉ ~ An Introduction
NESTLÉ MALAYSIA
• Started business operations in 1912
• Public listed on Bursa Malaysia
• Malaysia’s leading halal food
company
• Employs 4,000 employees
• RM3.1 billion in sales turnover in 2005
• 8 Factories; 6 Sales Offices and 1
National Distribution Centre
• World class products & brands:

4. Solid CSR Foundation
- Nestlé was established as the result of the humanitarian act of our
founder, Henri Nestlé. He developed a cereal milk based product in 1866
to save an infant’s life as the baby could not be breastfed.
-CSR is part of Nestlé’s DNA and is inherent in Nestlé’s Management &
Leadership Principles ~ to create long-term value for society
-CSR is built into the Nestlé Corporate Business Principles and is a part of
its business strategy.
-Nestlé supports The UN Global Compact’s Principles which are
incorporated in the Nestlé Corporate Business Principles ~ as a guide for
our business practices.

5. The Role of Business and CSR
Built into Corporate Strategy
Reflects mutually dependent
relationship: business and society
For Business:
• reliable, high quality sourcing
• improved government functioning –
regulatory
• skilled, loyal workforce
• superior products which successfully
compete
For Society:
• improved earnings by suppliers
• improved skills and earnings, job stability –
employees
• higher quality of life – consumers
• greater stability, economic and social
development - whole society

6. Mark Kramer, Senior Fellow, Center for Business and
Government, John F. Kennedy School of Government,
Harvard University and Managing Director, Foundation
Strategy Group (FSG)
The Concept of Shared Value Creation

7. Shared Value Creation
Through Shared Value Creation, a company links its
operations to generating long-term value both for its business
and for society as a whole, and defines its success in terms of
internal financial returns and external social and economic
results. Ultimately, creating shared value acknowledges both
the work that corporations need to do to reduce negative
impacts on society as well as, and more fundamentally, how
they can be part of progress on global challenges.

8. – Create long term value for Business and Society
– Mutually dependent relationship: business and society
– Key part of business strategy
– Value creation through the value chain: Agricultural suppliers, employees and
associates, customers and society at large
– Investments must be good for the country and the company
– Following codes of conduct necessary, but not sufficient
– To create Share value, you have to create Shared Value with society
Shared Value Creation

9. Shared Value is applied across Nestlé's
Value Chain
Agriculture and
Sourcing
Purchasing Practices
Agricultural and Supplier
Development
Raw material access at
specified quality and
foreseeable price
Higher food output using
fewer resources
Value
chain
impact
Growth
context
Nestlé
benefit
Society
benefit
Manufacturing
and Distribution
Environmental, Safety
and Labour Practices
Better Food Safety
Standards and
Workforce Development
Premium food
manufacturer
Higher food production
standards
Products and
consumers
New/renovated products
for nutrition health and
wellness
Increase knowledge and
awareness for healthy
lifestyles
Profitable growth from
superior product
benefits
Wider access to food,
and nutrition and health

10. Each Nestlé market has its own CSR projects – with the
overall umbrella theme of Shared Value Creation which
helps ensure that we meet the U.N. Millennium
Development Goals. Throughout the Group, we
try to ensure that one or more of the following goals are met :
• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empower
women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, Malaria and other
diseases
• Ensure environmental sustainability
• Develop global partnerships
Shared Value Creation

11. • Extensive range of CSR initiatives in Malaysia which focus
on education and improving the quality of lives for less
privileged communities.
• Some of our commitments include :
– Contract farming for the hard-core poor;
– Setting up of kindergartens in rural areas;
– Providing learning resources for the physically and mentally
challenged;
– Bridging the digital divide and promoting the learning of English in
rural schools via ICT;
– Mentoring of SMEs in the food industry;
– Helping to provide sustainable livelihoods for single mothers
OUR CSR WORK IN MALAYSIA

12. Contract Farming of Chillies
– Nestlé works closely with the local farmers association in sourcing for quality
agricultural produce and provide technical expertise to ensure better yields
– Nestlé provides transfer of knowledge and assistance to the farmers on
Good Agricultural Practices and helps them be self-sufficient and
independent.
– Created partnerships for sustainable agriculture.
– Access to raw materials from a reliable source and meeting Nestlé quality
standards.
– Project has won the Prime Minister’s Award for Socio-Economic
Development,
– Farmers were accorded the respected and acknowledged SALAM
accreditation for excellence in farming practices in 2005 – which is the
official recognition that Good Agricultural Practice (GAP) is implemented and
abided by.
Improving Farmers’ Income in Kelantan

13. The Nestle Food Mentoring Programme for SMEs
- The programme was initiated in 1999 to provide assistance to small-
medium companies in the food industry to attain world class standards
through the sharing of knowledge and experience with Nestlé
- Range of mentoring topics covered including halal certification;
HACCP; marketing; legislation; sourcing; etc
- To date, the programme has successfully trained more than 2000
participants from 700 companies
Investing in the Future of the Food Industry

14. In an effort to internalise the CSR philosophy of the company, we unveiled a
company-wide initiative in 2005 ~ the Nestlé REACHING OUT to COMMUNITY &
KIDS employee volunteer programme (or Nestlé ROCKS for short) to further
encourage employee involvement in the communities where the Company
operates, which is aimed at reaffirming and strengthening our commitment to CSR.
• Nestlé ROCKs provides an avenue for all our employees to be involved in Nestlé’s
CSR programmes while giving them the opportunity to fulfil their own social or
community obligations. This is the first initiative that is launched nationally in all work
locations involving some 3,500 employees, and allows our employees to dedicate 16
hours of their work time annually towards CSR activities, endorsed by the Company.
• Currently, there are 28 homes, orphanages and charitable organisations that Nestlé
has been supporting, where they may volunteer their services.
INTERNALISING OUR CSR WORK

15. The NESTLÉ Concept of
Corporate Social Responsibility
Conclusion:
The CSR Hierarchy
COMPLIANCE
Laws, Business Principles, codes of conduct
SUSTAINABILITY
Protect the future
CREATE
SHARED VALUE
Reduce poverty,
Improve health
Empower people

16. Thank You
For further info, please visit:
www.nestle.com
www.nestle.com.my
Or call Freephone:
1-800-88-3433