MBSA East London Plant Sustainability Report

2012 MBSA East London Plant Sustainability Report

Index TOPIC PAGE 1. Foreword: Vice President of Manufacturing 2 2. SHE Structure and appointments..4 3. Management Structure...5 5. Integrated Management System Policy 6 6. Integrated Management System 7 7. Quality Management System.8 8. Environmental Management System..10 9. Health and Safety Management System.13 10. Plant Energy Reduction Programme 15 11. Social Responsibility...16 12. Assembly Improvements.17 13. Employee Wellness..18 14. Contact us 22 1

Foreword from the Vice-President The Mercedes-Benz South Africa manufacturing plant achieved another successful record-setting year in 2012. Production volumes for both our passenger car and commercial vehicle lines were at their highest levels ever. Our quality performance was world-class once again, resulting in the East London Plant receiving the JD Power and Associates Silver Award in the Initial Quality Survey. We therefore became the first plant in the Daimler network to be recognised by the JD Power institute for four consecutive years of quality excellence in the American market. However, quality excellence by itself is not enough, but joined to our commitment to everimproving production efficiency and unparalleled flexibility, we continue to reap rich rewards. In 2013 we will intensify our planning for the next-generation C-Class as we embark on massive facility development which will result in our production capacity almost doubling by 2014, underpinned by an investment in excess of R2.5 billion. Leading up to 2014, we will bring 10 new global cutting edge construction technologies to East London in our bodyshop alone. With this, and the capacity increase, we will triple the number of highly skilled indirect production jobs in, technology management, maintenance, control systems and logistics. It has always been important to our company to integrate and harmonise its operations with the community around it. 2

Continued At the MBSA Plant we regard the safety and health of all our employees and our environmental responsibility as the highest priority. At the same time, we as a company can contribute very little to the environment if our business isn t competitive. We are focused on our future growth, but it is important to realise that we cannot exist in isolation. The work we do here must be seen in the context of the greater whole. What this means for our plant is that we have: Continued to provide a stable income to our employees and their families, and create a deeper economic impact on the local and national economies. Conducted our business with integrity and good corporate governance, ensuring compliance with all the country s laws. Supported the disadvantaged communities through our CSR initiatives, focussing particularly on education and HIV and AIDS awareness. Placed a strong focus on training and development as we prepare for the growth which W205 will bring. Continuously monitored our progress and improvements in productivity and efficiency to ensure the long-term competitiveness and sustainability of our plant. One of the main reasons for our company s continued success throughout our history is that we have never focused only merely on the short-term. Long-term sustainability is a basic principle governing our operations here in East London, especially as prepare to begin an exciting and fruitful era with the launch of the W205 in 2014. We firmly believe that our long-term commitment to our environment, our people and our community will lead to excellence and global competitiveness in South Africa. Arno van der Merwe Vice-President: Manufacturing Mercedes-Benz South Africa 3

SHE Structures and appointments VICE PRESIDENT MANUFACTURING HEALTH AND SAFETY MANAGEMENT ENVIRONMENTAL MANAGEMENT REP QUALITY MANAGEMENT REP RISK GROUP HEALTH & SAFETY ADVISOR RISK MANAGER PLANT ENGINEER IMS SHEQ SPECIALISTS IMS SHEQ PRACTITIONERS SHE REPRESENTATIVES HEALTH SERVICES FIRST AIDER FIRE SERVICES FIRE MARSHALL 4

First Line Team overview Vice - President Vice - President Manufacturing Human Resources Arno van der Merwe Johann Evertse Bodyshop C-Class Logistics Controlling Human Resources Arvid Barmberger Andre de Beer Melanie Cevahir Goodman Lucwaba Paintshop Quality Management Information Technology Group HR Arnhelm Mittelbach Ian Judd Tom Cawood Mike Folan Assembly C- Class Product Planning Procurement Prod-Mat Legal & Group IR Gladstone Mtyoko Barry Canning Karlheinz Hertweck Brian Knoesen CV Manufacturing Central Maintenance TSS Goodhope Ncapo Cilliers Stapelberg 5

Integrated System Management policy 6

Integrated Management System PLANT STATISTICS - 2012 Total number of employees 2520 Total Plant Area 603 000 m 2 Total Sealed Area 254 465 m 2 Passenger Cars Produced 60 030 Commercial Vehicles Produced 5656 Total number of vehicles produced 65 265 Man Hours Worked 4 355 387 ISO Certification Audits The plant was re-certified for the three standards namely ISO/TS 16949, ISO 14001 and OHSAS 18000 in an audit which was successfully co-ordinated by the IMS department with the assistance of the SHEQ practitioners in October. Top Green Awards The year saw the return of the Top Green Organisation competition in the Eastern Cape where MBSA was the previous title holder. The competition is run by the Department of Economic Development and Environmental Affairs (DEDEA) with the Eastern Cape branch of the Institute of Waste Management (IWMSA), was established to promote and recognise responsible Environmental Management Practises in the Eastern Cape while fostering better relationships between government, industry, business and other organisations. MBSA were the second runners-up in this instance and whilst the plant won in the platinum category (above 80% score), a lot has to be done to make sure that it remains the Top Green Organisation in the Eastern Cape. 7

Quality Management System Production of the new C Class (W205) will commence during the first quarter of 2014. To meet this challenging deadline the East London plant is a hive of activity which includes new buildings, facilities, skills upgrading and last but not least ensuring that our Quality Managements system is such that the build of a premium product can proceed without any significant hiccups. To this end the East London plant will be adopting a QM Release process which will ensure identified critical processes are robust enough to meet the strict requirements of the new C Class. As 2012 was a recertification year for the Management system, this required that the whole system be reappraised to ensure it functions optimally. All the turtle diagrams had to be reviewed, core and support business processes adjusted where necessary and Business Plans established to address all the key topics in a structured manner. To effectively measure an improve motivation between divisions the SHE award process went a long way in achieving this. Eventual winners were PMC and HR who were shared winners in the technical support area category and CV was crowned winner of the best performing production area. The SHE award process has been in place since 2008 and goes a-long way in keeping the Business system focussed and perpetually audit ready. The year also had numerous changes which included the change year -CY 803 and the introduction of the Code M274, new C180 engine to the existing C -Class W204 which was administered via the project office but had to meet the QM release criteria before sign off was achieved. The QM Release is very much a participative process all role players are involved throughout the planning decision making process which culminates in a mutual proverbial hand shake to allow the build process to continue. A project to review the quality of archived data was completed during the year. It is essentially monitored by Daimler AG with monthly reports received that reflect units without the complete record portfolio, these are investigated by a cross functional team to determine the root cause and either the unit or the capturing system rectified. The focus of this system is on the recording of vehicle job cards as well as torque results of critical bolting operations in a data base known as CEPRA. The importance of this system is that in an unfortunate event of a vehicle problem the company is in a position to trace back and prove that the vehicle in question did indeed leave the plant in a satisfactory condition. 8

Quality Management System The year finally culminated in the re-certification of the Quality Management System to ISO / TS 16949 together with our safety health and environmental management systems, OHSAS 18001 and ISO 14001 respectively. On completion of a corrective action program the TueV auditors were satisfied with the health of our Management Systems. The Management System is well entrenched and supports the manufacture of our product which is well accepted by the customer as reflected by the JD Power results. The way forward for East London s IMS Department is comprehensive preparation to ensure a successful production ramp up of the new C Class W205. It must be ensured that processes are robust for the manufacture of this vehicle, to this end the QM Release process is a key driver to place the necessary focus especially during the planning and process development phases. New QM Release criteria have been made available by Daimler s Q/KT department and training on these has begun. We look forward to continued support from all participating Divisions at East London Plant, with a strong team collaboration that will ultimately result in a successful W205 Q- Release process. 9

Environmental Management System MBSA takes part in the Daimler Environmental Representatives Group MBSA participated in the Daimler ERG 2012 meeting.the participants of this group largely speak English and is comprised of representatives from America, Brazil and Mexico Daimler Plants. The meeting allows participants to present their plants and the environmental challenges they face with how they have overcome these.dudis II was introduced, which is a more comprehensive reporting tool for all Daimler plants environmental data for Sustainability reporting. Also amongst other items, legislation hurdles that the various plants faced were presented. A lot of useful information on environmental topics was shared. MBSA s participation means the way for interaction with other Daimler plants beyond the meeting has been paved. Plant carbon footprint reduction In 2007, Daimler AG issued a directive to all its plants to reduce Carbon Emissions by 20% by end 2012. As a result of this, MBSA embarked on an extensive exercise to reduce its carbon footprint by establishing an Energy Forum comprising of Facility Planners, Maintenance departments from the various shops and the IMS department. Various projects throughout the plant were initiated and the end result was the cumulative reduction of plant Carbon Emissions by 13.5%. Sustainability Audit Results All of the plant environmental performance is captured in the DUDIS II central database owned by Daimler AG. MBSA was sampled for the Quality Assurance Audit by Price Waterhouse Cooper (PwC) Switzerland on behalf of Daimler AG. The focus areas were Integrity, Employee Commitment and Sustainability. The aim was to establish the accuracy, completeness, consistency, reliability of documentation and reporting structures within the organisation. This in turn,assures the Daimler AG Management that existing reporting systems and controls are functioning, thus assuring the credibility of the Daimler Sustainability Report.MBSA achieved good results in this audit and site leader Arno van der Merwe had this to say about the achievement Thank you very much for your passion, it is so exciting to see how our collective team spirit is building, from a solid foundation! 10

Water in KL C02 in Tonnes Environmental KPI s Carbon emissions per unit produced 1.60 1.50 1.40 1.30 1.20 1.10 1.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 1.45 1.26 1.17 1.33 1.19 1.27 1.51 1.22 1.07 1.16 1.12 1.39 2012 1.49 1.21 1.27 1.22 1.10 1.20 1.08 1.07 1.12 1.05 1.13 1.24 Water Consumption per unit produced 6 5 4 3 2 1 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 2.68 2.6 1.82 2.3 1.32 1.92 2.4 1.51 1.34 2.01 2.6 5.91 2012 4.18 2.56 0.78 1.14 2.83 4.15 2.88 2.8 2.65 2.19 3.04 3.05 11

Waste in Kg Environmental KPI s Waste generated per unit produced 250 200 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 128.3 116.1 96.8 139.4 122.8 139.5 200.6 132.7 114 137 126 113.5 2012 63.5 140.9 124.4 115 114.4 116.4 97.2 120.8 105.8 128.5 124.8 133.1 12

Health and Safety Management System Highlights Awareness for Health, Safety and Environmental issues was created through a roll out of the SHEQ handbook to all employees. This pocket size handbook makes it easy for employees to make a quick reference on all matters pertaining safety, health and environment. A total of 217% with regard to Basic SHE & Fire Training of all employees against the annual plant target of 5% was achieved.68% of all Annexures was closed off prior to the 30 day due date period. Health and Safety Monitoring conducted in 2012 Legal compliance Audit and Occupational hygiene Survey Business Continuity Management 2012 saw the introduction of the Business Continuity Management, a risk assessment programme aimed at recognising, managing and reducing certain risks which may cause major disruptions in business.it is integrated in the risk program of the organisation and is about preparedness to handle all scales of incidents i.e. power failure, water interruption, traffic disruption etc.bcm is a reality to any business and is therefore each employee s responsibility. It is a way of making sure that after an incident the way to back to recovery is as quick as possible as critical business processes will be recovered within minutes or days. SHE STATISTICS: Accident Frequency and Tension 20 18 16 14 12 10 8 6 4 2 0 18.39 15.22 11.85 9.6 3.75 4.174.21 3.04 3.11 3.11 Accident Frequency Accident Tension 2009 2010 2011 2012 31-Jan- 13 13

Health and Safety Management System SHE Assessment Results 100 90 80 70 60 50 40 2010 2011 2012 30 20 10 0 MBPC Assembly F4 Bodyshop FP2 Paintshop Logistics CV SHOPS 2012 SHE Assessment winners in service areas Procurement Division 14

Energy Management System In light of the ever increasing pressure worldwide to preserve energy through innovative engineering controls and awareness programs and the drive toward seeking sustainable energy solutions through harvesting of renewable energy prospects, MBSA made a decision to implement an Energy Management System - ISO 50001. MBSA has joined a project run by UNIDO (United Nations Industrial Development Organisation) together with the Department of Trade and Industry, UK Aid and the Energy Department called the Industrial Energy Efficiency Project. This project focuses on the implementation of the Energy Management System (EnMS) and energy systems optimization in industry. The organisation offers expert advice on implementation, training of energy experts and energy audits. MBSA has had 5 employees trained up to expert level and more employees will be trained in various levels. With the start of production of the new C-Class not far off, the timing couldn t have been better as baselines will be established. The near future will be a hive of activities that will support this program and will include all individuals in the company. Energy is the largest contributor to the East London plant s carbon footprint, a lot of focus has been on reduction of consumption and in the period between 2007 and 2012 the plant has reduced its energy consumption by 13.5%, due to a series of energy reduction projects run by the Facilities Planning Department together with the Maintenance departments from the various shops. Some energy reduction investments in 2012 for paintshop alone include: 1) UBS Incinerator Catalytic Converter installation 2) Basecoat Incinerator replaced by a more energy efficient one 3) Building ventilation improvements and re-use of air to Basecoat ARP 4) Chiller Plant optimisation 5) Ultra Filtrate Plant upgrade to VFD drive A lot of work has been done towards the implementation so far, as assistance has also been sought from the Sindelfingen Plant Energy Team who were certified to the system in 2012.The policy was formulated and the energy structure is being set up. Implementation is planned for 2014 and MBSA aims to be the first Daimler plant outside Europe to be certified to the ISO 50001 standard 15

Corporate Social Responsibility 2012 Annual Schools Environmental Expo in pictures The Annual Schools Environmental Exhibition is a highlight for the East London plant Environmental Calendar as it brings together learners from all types of schools in East London and surrounds, both urban and rural for environmental education and entertainment. 16

CV Environmental Improvements A number of waste reduction initiatives were taken by the Commercial Vehicles division which assited in reducing the total amount of waste generated by the plant in 2012.See illustrations below: One way packaging from Japan used in multiple applications and the manufacture of axle stands. Obsolete Aluminium step plates reused as protective wall cover to protect from paint and plaster damage by production trolleys. 17

Employee Health and Wellness Introduction MBSA employees enjoy a comprehensive Health Management System whose objective is to promote working in health promoting environments. Safe and health promoting workplaces and processes provide a meaningful contribution the sustainability of the organisation. EOH Health a division of EOH Abantu Ltd is the professional service provider currently supporting MBSA in ensuring comprehensive organisational health management. The chart below illustrates the services provided by MBSA with the assistance of the EOH Health Wellness Centre team. 18

Medical Services: Medical Surveillance Medical Surveillance Programme Consultation Type No. of Consultations Medical Surveillance Screening 2933 Pre-employment / Initial Medical Examinations (W205 Project) 525 Periodic Medical Examinations 2085 Exit Medicals 69 Travel Medicals 252 Executive Health Screening (E1 - E4) 36 Voluntary Health Screening (E5, E6, Hourly) 85 Medical Surveillance Follow Up 553 Medical Surveillance Follow -Up 280 Occupational Medicine Physician Consultations 274 Non-MBSA Employees (Contractors): 347 Medical Surveillance 347 Total Number of Consultations 3799 Medical Services: Primary Health Care and Other Consultation Type 19 No. of Consultations Primary Health Care 21676 Occupational Nurse Practitioner Consultations 19361 Occupational Medicine Physician Consultations 2115 Influenza Vaccinations 1133 Injury on Duty / Work-related Illness 275 Minor First Aid and Minor Medical (Treat and Return) 168 Referred Off Site: No Days Lost 13 Referred Off Site: Days Lost 16 Reportable to Department of Labour 6 Occupational Diseases 2 Occupational Medicine Physician Consultations 70 Medical Services: Primary Health Care and Other Consultation Type No. of Consultations Incapacity / Disability Management 904 Chronic Medicine Services 8897 Collection of Chronic Medicine 7197 New UTI-SP Registrations 150 Chronic Medicine Consultations 2369 Emergency Services 70 Emergency Callout: Fire Alarms 17 Emergency Walk-Ins 22 Emergency Callouts 31 Non-MBSA Employees (Contractors): 4102

Occupational Nurse Practitioner Primary Health Care Consultations 3745 Occupational Medical Physician Consultations 283 Injury on Duty / Work-related Illness 97 Total Number of Consultations 35924 Biokinetics Services Consultation Type Wellness Centre: Biokinetics Services No. of Consultations Medical Surveillance 531 Executive Health Screening (E1 - E4) 11 Voluntary Health Screening (E5, E6, Hrly) 166 Consultations 1 304 Gym Utilisation 2509 W205 Pre-Employment Assessments 369 Rehabilitation Sessions 10987 Total Number of Consultations 15877 Counselling Services Consultation Type Wellness Centre: Counselling Services No. of Consultations Self-Referral / Voluntary Consultations 470 Informal Referral Consultations 53 Formal Referral Consultations 120 Total Number of Consultations 594 World TB Day - 24 th March Tuberculosis (TB) is a major infectious disease epidemic affecting South Africa driven to a large extent by the HIV pandemic. While the TB case-load in the Plant is low, the Plant is situated in one of South Africa s TB Hot Spots. Three different posters with TB information were posted in key areas in the Plant in 2012. Lunch time talks were given in 5 canteens by the Wellness Peer Educators. Peer Educators are MBSA employees who give freely of their time as volunteers to provide communication support and referral to care for MBSA employees, families and community members. EOH Health Wellness Centre staff supported the Peer Educators during the campaign and the presentations were well received with numerous questions being asked by employees and answered by Peer Educators. 20

World AIDS Day Commemoration - 1 st December Ensuring universal access to HIV/AIDS information, prevention, testing, counselling, treatment, care and support remains central to health management efforts in MBSA. World AIDS day is a global campaign to commemorate the global HIV response and to remember people affected by HIV. The MBSA plant s Peer Educators with the assistance of the Wellness Centre Staff commemorated World AIDS Day by giving talks on HIV/AIDS and Sexually Transmitted Infections in the canteens during the lunch breaks and engaging employees in a Board game called Choices and Consequences which aims to influence health-promoting behaviour. Woman s Day - 9 th August The Wellness Centre supported the Human Resources Division by presenting talks on health issues affecting women across the Plant. Pamphlets on breast cancer were also distributed. Wellness Expo The Wellness Expo was held on the 23 rd and 26 th of November in the new Imbizo. Winter Challenge Inactivity, overweight and obesity are important health risks that MBSA has agreed to assist employees to tackle. The Winter Challenge was run to challenge employees to face up to these health risks and take action to improve lifestyle choices through assessments of health and fitness, assistance with dietary modification and assistance with physical fitness training. More than 100 employees participated in the Winter Challenge and after sheer hard work and dedication 12 employees were presented with awards at the Winter Challenge Awards Ceremony on 5 th October 2012 by the Vice President Manufacturing Mr Arno van der Merwe. 21

Contact Us Interested and affected parties can contact the East London Manufacturing Plant 7 Settlers Way Gately Township East London P.O.Box 671 East London 5200 Or contact Mercedes-Benz South Africa toll free number on 0800 133 355 Do you have any queries or complaints on environmental matters? Viwe Xawuka Environmental Specialist Tel: 043 706 9417 Email: viwe.sajini@daimler.com Do you have any queries or complaints on health and safety matters? Gavin van Rooyen Health and Safety Specialist Tel: 043 706 9325 Email: gavin_denzil.van_rooyen@daimler.com 22