PROJECT REPORT COMPANY: “NESTLE FACTORY, KABIRWALA”

TABLE OF CONTENTS 1. Introduction 2. MD’s Message 3. Vision & Strategy 4. Corporate & Legal View 5. Globe 6. Marketing & Sales 7. Human Resources 8. Factories of Nestle 9. Inauguration of Kabirwala Factory

10. Supply Chain

11. Agri Services

12. Milk Collection

13. The Nestle Miracle

14. Milk Collection System

15. Helping the Farmers

16. A Quiet Revolution

17. Nestle Brands

18. Quality Assurance

19. Corporate Social Responsibility

20. Creating Shared Value

21. Environment

22. Health

23. Society

24. Commitment to Good Living

25. Heart of Nestle

26. Earth-Quake Relief

27. Getting Connected

28. Consumer Services

29. Financial Data

30. References

intoduction

Nestlé has been serving Pakistani consumers since 1988, when our parent company, the Switzerland-based Nestlé SA, first acquired a share in Milkpak Ltd.

Today we are fully integrated in Pakistani life, and are recognised as producers of safe, nutritious and tasty food, and leaders in developing and uplifting the

communities in which we operate.We at Nestlé Pakistan ensure that our products are made available to consumerswherever in the country they might be. Convenience is at the heart of the Nestléphilosophy, and our aim is to bring products to people's doorsteps.

• A History of Service

In line with our parent company's global philosophy, we are proud of our commitment to excellence in product safety, quality, and value. Our products cater to human needs, and we are active in the communities we serve.

From spreading awareness about nutrition and wellness to digging wells in the Thar desert and succouring earthquake victims, we are committed to serving our country and its people.

The consumer's voice is key to Nestlé Pakistan's vision and working. Whether you live in the remotest village or the metropolis of Karachi, our consumer services team stands ready to listen to your concerns and provide answers about our products and guidance on matters of health and wellness.

Md message

Commitment to excellence, good food & good life are words that best describe Nestlé. We at Nestlé Pakistan are a team of people committed to adding value to the lives of the Pakistani people by helping them live a life full of wellness & vitality .

We welcome you to this life.

Nestlé with its operational excellence, best management practices and total commitment to quality has you our consumer at the heart of everything we do.

We sincerely thank you for believing in Nestlé and our products & making our journey to success ever more possible.

Our aim is to make our consumers well aware of what they eat and how to take care of their nutritional needs. We, therefore, invite you to get to know our products better and to look at our unique features on this website where you will discover informative pieces that will help you make healthier and balanced choices in your and your families lives.

Nestlé is on accelerated growth with a motto to celebrate life by providing its consumers quality food products that are essential to good living.

Enjoy your visit to our Nestlé Pakistan website and we hope you will visit again often. We wish you Good Food Good Life Ian James Donald Managing Director

Vision and strategy

The Nestlé global vision is to be the leading health, wellness, and nutrition company in the world. Nestlé Pakistan subscribes fully to this vision. In particular, we envision to: Lead a dynamic motivated and professional workforce – proud of its heritage and bullish about the future.

Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.

Deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible role in the social, economic and environmental sectors of the country.

We have profitable and diversified high quality food and beverage product portfolio,

delivering 60:40+ advantage to consumers, available across all sales channels.Our brands are the preferred choice in their categories. Consumer insight drives all aspects ofour marketing and communication efforts.

Our communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of responsible communication. Our company is seen as the No. 1 career destination for talented, motivated and ambitious

professionals.Our result-oriented organisational structure ensures effective communication and empoweredself-management.

Our milk collection and agri services will continue to play the primary role in development of the dairy sector in rural Pakistan.

Our proactive innovation and renovation culture is the key to our success in the marketplace. Fully integrated systems (Nestlé Pakistan, suppliers, customers) ensure efficient business processes.

Non-strategic activities and products are outsourced or discontinued

Corporate and legal

Nestlé Pakistan Ltd is a subsidiary of Nestlé SA, headquartered in Vevey, Switzerland. We are a standard-bearer of Nestlé SA's global performance; registered on the Karachi and Lahore stock exchanges, for the past five years we have been declared one of the top 25 companies on the Karachi Stock Exchange.

Headquartered in Lahore, we serve both Pakistan and Afghanistan. Of our five production facilities, two manufacture a wide range of products. The remaining three produce NESTLÉ PURE LIFE.

Our legal advisors are Cheema & Ibrahim (Advocates), and our audits are performed by KPMG Taseer Hadi & Co (Chartered Accountants). • Corporate Governance Principles We are dedicated to following the best practices laid down by our parent company, Nestlé SA. We have implemented the Corporate Governance Principles established

by Nestlé SA, covering four core areas:

• Rights and responsibilities of shareholders

• Equitable treatment of shareholders

• Duties and responsibilities of the board of directors

• Disclosure and transparency • Corporate Internal Audit

Recognising the need to maintain transparency and verify the application of corporate standards, Nestlé Pakistan has established an internal audit department that monitors administrative and operational functions throughout the company. Thanks to its operations, we can be assured that adequate internal controls are in place, management information is reliable, resources are used effectively, and company assets are safeguarded.

Globe

As the world's number one Food and Beverages Company, Nestlé is a complex organisation, operating in challenging and varied business environments.

To fulfil our commitment to serve our customers better, we are adopting common business practices in all areas of business. This vision is at the heart of GLOBE – Global Business Excellence, and Nestlé Pakistan is proud to be part of this international initiative.

We know that by standardising the way we capture and report business data, and by putting our IT infrastructure on a global platform, we can be more flexible and focused on our products and brands, and therefore more responsive to our customers.

• GLOBE Launch in Pakistan On 7 February 2005, the System Application Products (SAP) implementation project was successfully concluded in Pakistan.

All Nestlé Pakistan sites, including the head office, factories, distribution centres and zonal sales offices, migrated to SAP, a state- of-the-art information technology system.

The Nestlé Pakistan GLOBE team helped streamline almost every area of operation, allowing the company to become more efficient as well as more consumer-focused.

With Nestlé Pakistan growing at its present high rate, the successful implementation of the GLOBE programme has improved our business processes, operational efficiency and communication/IT infrastructure.

We can now focus on ensuring a better level of service, and providing satisfying and healthy products for our consumers, for many years to come.

Marketing and sale

We want Nestlé products to be within reach for every singlePakistani. Yet nutritional value and quality remain the most essentialingredients in all our brands.

Over the years, food products have evolved from mere commodities to a statement of lifestyle. As consumers get more health and quality conscious, consumer empowerment surges.

We continue to play our part in facilitating this revolution by launching value-added products such asCERELAC, NESTLÉ Raita, NESVITAand NIDO NNS and many other dairy and non-dairy products. Consumers can avail many of our products with branded active benefits that no competitor product offers. Nestlé brands are designed to suit your lifestyle and your needs. You can take advantage of the best nutrition in a way that is suitable for your tastes and lifestyle. For instance, you can purchase NESTLÉ Juices in several different sizes depending on your needs: a personal-sized 200 ml for on-the-go consumption, or a litre pack for your fridge.

All our key brands are equipped with the Nutritional Compass that ensures all the nutritional information about the product is accessible thanks to our user-friendly nutritional labelling and guidelines.

We're proud to be among the only companies in Pakistan to venture outside the commercial mode of communication, offering programmes catering to better child nutrition and good parenting. We have developed an intensive distribution strategy that brings our products to your door, through effective communication, door-to-door sampling, and exciting consumer promotions.

We focus especially on Pakistan's smaller towns, where activities such as town storming, distribution drives and intensive distributor training ensure that products are easily accessible and visible, giving us a strong competitive edge.

Our widespread global network presents opportunities to learn from innovative techniques used in faraway countries. Pakistan has contributed in a big way towards this by introducing NestléNESTLÉ PURE LIFE to the world. Pakistan’s favourite water is now available all around the world

HR

HR is dedicated to our employees, and ensures that we have all theright people with the right skills, in the right places at the righttime.

Understanding that our people are the bedrock of all our businessstrategies, it is our mandate to enhance their skills with cutting-edge training and provide them with world-standard facilities.

We select flexible, innovative people who are ready to confrontnew challenges and make a difference. Our groundbreakingManagement Trainee Programme aims to develop talented youngmen and women and help them achieve their potential in adynamic and enabling environment.

Over a hundred people travel out of the country every year to take advantage of our international training and development events

Factories: Our products are manufactured in five facilities scattered around the country, from Islamabad in the north, to Karachi in the south.

Two state-of-the-art multipurpose factories are located in the agricultural heartland of the Punjab, and the remaining three are dedicated to producing our trusted brands of bottled water.

As citizens of Pakistan, we consider it our duty to make sure that our manufacturing processes are clean, hygienic and safe.

We are constantly working to reduce emissions at our factories, reducing and treating wastewater, and making our packaging environmentally friendly. Regular audits have confirmed that our factories' environmental management meets the Nestlé international standard.

As is the Nestlé policy around the world, we care for our people. We uphold the

principles of the UN Global Compact and encourage women to participate. • Sheikhupura Factory

At the very heart of the Punjab's major milk district stands our Sheikhupurafactory, a vast state-of-the-art operation that produces many of our mostpopular products, such asMILKPAK UHT milk, low-fat high-calcium

NESVITAproducts , NESTLÉ PURE LIFEw ater, CERELAC and yogurt.

The factory commenced operations as part of Milkpak Ltd in 1981. At thetime it produced only UHT milk, but by 1988 had expanded to producebutter, cream and ghee, as well as fruit drinks.

In 1988, it became part of the jointMilkpak venture, and, soon after,NIDO milk powder started being produced here.

As the needs of Pakistani consumers grew, we added the capacity tomanufacture new products. In 1998 we started supplying dairy mixes toMcDonald's. A plant to produce the popular Nestlé NESTLÉ PURE LIFEbottled water was also commissioned.

In recent years, the plant's capacity has been enhanced to produce fruit yoghurt, tea whitener, cream and raita, as well as low-fat, high-calcium dairy products, sold under theNESVITA brand.

• Kabirwala Factory

In 1990,Milkpak acquired the Kabirwala factory, located in Khanewal district of the Punjab, as a subsidiary. By 1997 it was a fully owned unit of Nestlé Pakistan Ltd.

Soon after it was acquired, we began upgrading its capacity. In 1992 we added a MAGGI Noodles plant was added and 1996 saw an additional of a milk powder.

Over the years, the Kabirwala factory was constantly enhanced.EVERYDAY tea whitening powder was introduced in 2002 and revolutionised tea and coffee drinking in homes and offices around the country.

In 2005, the factory continued to make notable achievements. 2006 has seen the commencement of Kabirwala Extension Project that would be completed in April 2007 at a cost of about Rs. 4.0 billion. The project has seen expansion of milk processing capacity to triple its current size, both for powder and liquid. The factory Is also currently producing Nido (started in 1998) and Milkpak UHT (started in 2006)"

In 2001 we acquired theAVA water factory in Islamabad. It became a fully owned unit in 2003, and we immediately instituted a programme of major improvement to bring the facility on par with international standards.

Over the years, better and more efficient machinery has been introduced. This has helped us speed up production, and provide our consumers with their favourite brands of bottled water in convenient package sizes.

We are proud that the Islamabad factory has made efforts to bring Pakistani women into the workforce, by providing a comfortable and enabling work environment. Indeed, we were amongst the first to employ female operators working alongside men in our production department. • Islamabad Factory •

Continuing its past tradition of excellence, Nestlé Pakistan opened the largest milk plant ofAsia and also the largest milk reception among Nestlé World at Kabirwala on March 16,2007.

The inauguration ceremony was presided over by President of Pakistan, General Pervez Musharraf and attended by Chairman and CEO of Nestlé Mr. Peter Brabeck-Letmathe. Among the other distinguished guests at the ceremony Governor Punjab Lt. Gen (Retd.) Khalid Maqbool, Chief Minister Punjab Ch Parvez Elahi and Federal Minister for Industries Mr. Jehangir Tareen were prominent.

President of Pakistan lauded the services being rendered by Nestlé for the development of dairy sector in Pakistan and also appreciated the investment being brought into the market. An estimated US $ 371 million will be pumped into the economy by 2014, of which more than US $ 70 million have been spent to see the Kabirwala milk plant to its completion. President vowed to work extensively with the company to ensure quality standardization and provide farmers with resources to be able to access the market and take benefit from their produce.

Speaking at the occasion, Mr. Peter Brabeck-Letmathe, thanked the President specifically

and Government of Pakistan in general for their investment friendly policies and initiatives. He termed the event as a ‘historic step’ since Nestlé’s arrival in Pakistani market. This, he stated, was made possible by policies such as zero rating on dairy industry and other measures for developing the sector.

Mr. Roland Decorvet, Managing Director, Nestlé Pakistan outlined the achievements by Nestlé Pakistan and reiterated the commitment to engage with all stakeholders and work towards the benefit of dairy industry in Pakistan. He also termed the outlook for doing

business in Pakistan as positive and shared his long term vision for the company. He also emphasized upon the need to regulate the sector in terms of quality to help consumers avoid harmful, low quality products.

The Plant inauguration was followed by the Graduation ceremony of Lady Livestock Workers under Nestlé – UNDP Community Development Project which was also attended by Resident Representative of UNDP in Pakistan. Mr. Peter Brabeck-Letmathe, speaking at the occasion reaffirmed Nestlé’s commitment to the communities where Nestlé operates. He also thanked UNDP for trusting Nestlé with the project and expressed hope that the project will achieve its objectives and cooperation between UNDP and Nestlé will continue beyond this project.

Supply chain

Nestlé Pakistan's supply chain makes sure that Nestlé products are available, no matter where you are in Pakistan.

We integrate processes from the farm to markets, and ensure products are delivered to you at the right time, the right cost and in the right quantities. In the first quarter of 2006 alone, we delivered an astonishing 136 million kg of Nestlé products in Pakistan.

Supply chain was established as a separate department in 2001. Since then, we've achieved a number of milestones, including a cold-chain in 2002, centralised demand and supply planning in 2003, and implementation of GLOBE in 2005.

We were selected for a Best in Class repository study, and three of our best practices were subsequently incorporated into the Best Practices Library.

Our mission is to: • Optimise and consolidate resources and processes for a low- cost but efficient. • Develop and manage simplified and effective supply network to achieve a high level of service. • Create a continuous improvement culture driven by performance measures and reward.

Nestlé has a long tradition of helping the farmers who provide our raw material. Nestlé Pakistan is committed to continuing this tradition; we consider it a way of engaging in a mutually profitable partnership with our suppliers. Thus, ever since we took over the milk collection system in 1992, our Agricultural Services have endeavoured to help the farmers of the milk district with their husbandry. Better animals means there will be better milk. We gain a reliable supply of high quality milk, but the greatest benefits, both immediate and long-term, are to the farmers themselves. Our proudest achievement is our internationally acclaimed development of the Punjab's milk district.

Hundreds of thousands of small farmers live over an area of 100,000 square kilometres in central Punjab. Of these farmers, most have only a few head of buffalo – yet Pakistan is the world's fifth largest producer of milk.

Milk is very fragile in our hot climate, and distribution historically depended on a network of suppliers and middlemen. Without refrigeration, the milk arrived in towns already soured or adulterated with preservatives, such as vegetable oil or caustic soda.

When Milkpak Ltd. began operations, such was the state of affairs that though the milk was cleaned, pasteurised, homogenised and sterilised at theMilkpa k factory in Sheikhupura, its shelf- life in summer was, at most, four weeks. By contrast, in Europe UHT milk had a shelf-life of six months.

Something had to be done.Milkpa k immediately took measures to improve milk quality and the collection system, and when Nestlé entered in 1988, these efforts were stepped up

Milkpak set up reception centres with cooling facilities where farmers and dodhies, small- time milk merchants, could bring their wares.

It was a simple solution, but difficult in practice: importing the stainless steel chilled containers required was prohibitively expensive. By 1988, the company purchased 120 tons of milk a day from 26,000 farmers.

After acquiring a share in Milkpak Ltd in 1988, Nestlé immediately began investing in milk cooling tanks. Between 1988 and 1992, 100 milk tanks were installed.

1992 onwards, with full support from the Nestlé headquarters in Switzerland, reorganisation of the milk collection operation and the provision of agricultural technical assistance became top priorities.

The investment paid off. Within a decade, Nestlé's purchase of fresh milk had quadrupled, and the number of small farmers selling milk to Nestlé tripled.

Follow the story of Nestlé's dairy products, from humble beginnings on tiny farms in Sheikhupura district, all the way to your table! Step 1 A small farmer in rural Sheikhupura district milks his buffalo twice a day and takes about 4 litres to one of Nestlé's 500 Village Milk Collection Centres. Step 2

At the Village Milk Collection Centre the farmer's milk is poured into aluminium churns. The agent checks the milk's freshness and purity, and enters the quantity into the farmer's logbook. He takes it to one of Nestlé's 1308 Secondary Reception and Cooling Stations, about 2-4 kilometres away.

Step 3

The Secondary Reception Station has a large electrically powered cooling tank. A milk inspector measures the fat content, the non-fat solids content, and the milk's acidity. Once satisfied, he takes the milk to one of 27 Main Reception and Cooling Stations.

Step 4 At the Main Reception and Cooling Stations the milk is poured into huge tanks and is thoroughly checked for quality. The milk is dispatched to the factories. Step 5

At the Sheikhupura and Kabirwala factories, the milk is processed and packed into the familiar Nestlécartons you can find in your grocery store. It is checked for quality thrice before being released forsale. Some is processed into yoghurt, powdered milk, or other dairy products.

Even before calling Nestlé in, Milkpak Ltd. had tried to ensure that milk cows were given fresh fodder during the summer. Our teams are always prepared to offer practical advice. We have planted a variety of fodder crops, which we demonstrate to farmers on field days. We also provide training on best practices in animal husbandry. For instance, we stress the importance of giving cattle enough water, and train farmers in hygiene and milking. Livestock Breeding & Health

Pakistan's vast milk production comes largely from buffaloes, despite their small yield. Our agronomists have shown that with artificial insemination we can actually triple milk production. Yet artificial insemination is still not widely used.

In 1996, our vets and agronomists independently formed an NGO to promote artificial insemination using high quality semen. Today, with help from Nestlé and others, they have established a training programme for

inseminators, and provide high quality imported semen at low cost to farmers. We concentrate on preventative measures against the most common diseases that afflict cattle in Pakistan. Farmers know that they can call on our trained vets whenever necessary. Better Equipment Our agricultural services staff have drawn up technical plans for cowsheds, which are provided free of charge. Our mechanics have also developed prototypes of machines to cut fodder quickly and inexpensively. Starting 2004, we went a step further and proposed a system of small loans for farmers who wanted to make improvements to their farms, such as building cowsheds. We drew up the sample specifications for a model farm to be presented to the banks disbursing the loans. The Service even helps farmers fill out applications for loans

Asif Ikram is a typical small farmer. He owns two hectares of land and lives in a mud house in a village of 1800 people. He has electricity but no running water.

Asif and his family work their land themselves. The only equipment they own are hand tools, though Asif hires a tractor when needed. He recently bought himself a bicycle and a television.

Asif owns three buffaloes, of which two are in lactation. With Nestlé's help he plans to apply for a loan to build a cowshed, but for now, the animals live in his courtyard.

Asif's buffalos produce ten litres of milk a day. He takes six litres on his new bicycle to a Village Milk Collection Centre a kilometre away. Every Tuesday, he receives payment at published rates. 60% of the family income derives from Nestlé's milk pay.

"I thank God that now, for the first time in my life, I sleep in peace. I no longer fear for my family's future,” he says. The above excerpt is an extract from 'Nestlé in Pakistan 1988-2004: The Development of a Milk District', by Rémy Montavon

Our community

In Nestlé's view, it must be fully integrated in the social, cultural and economic fabric of the countries in which it operates. Thus no matter which country it operates in, it is committed to strengthening local communities.

At Nestlé Pakistan we are wholeheartedly committed to meet our obligations to Pakistani society and be a good corporate citizen of the country. We follow the code of corporate governance strictly, and try to deal fairly with all stakeholders, no matter their age, background or geographical location.

We take our responsibility to our consumers very seriously. • Community Service

Our vision of Corporate Social Responsibility guides all our operations. We feel that businesses and society are partners: if one flourishes, so does the other. We are deeply involved in philanthropic initiatives, from humanitarian relief to sponsoring schools and donating to hospitals and welfare programmes.

At the same time, we try to make sure that our own business practices are good for our society. Our Milk Collection System is a glowing example of our dedication both to our community and our consumers.

In the years since we began operations in the Punjab's milk- farming region, local farmers have seen their lives improve, while consumers get safe, high quality milk products.

We follow a code of good corporate practice so that our operations create positive social and environmental impacts.

Recognising that the current generation is the guardian of Pakistan's future, we at Nestlé Pakistan adhere strictly to environmentally safe industrial practices.

We are active in Social Action Programmes for disadvantaged Pakistanis, and wholeheartedly support the principles of the

United Nations Global Compact. • Our Consumers

The countless Pakistanis who choose Nestlé know that they can rely on us. We provide the finest quality, while constantly reinventing our self and our products to suit consumer needs better.

We try to make our products accessible to every consumer. Whether you need just a drink of water on a cricket field, or a week's pure water for your workplace,NESTLÉ PURE LIFE is available in a size to suit your needs.

To help you lead a more fulfilling life, our research centres around the world are constantly developing new ways to make the food you eat and the beverages you drink healthier and reinforced with vital nutrients.

This concern for your wellness extends beyond our in-house brands – our Wellness team is always there to help guide you to a healthier lifestyle for you and your loved ones.

Your views and needs are central to Nestlé Pakistan's operations. That's why we have a dedicated Consumer Services team ready to answer questions, advise you about your family's nutritional requirements, or simply help you whip up a quick, delicious meal

Nestle brand

Good Food, Good Life: the key to health, nutrition and wellness.

With over 140 years of experience and expertise, we take great pride in bringing you the best products because happy, healthy consumers are important to us.

We develop our products keeping your preferences, tastes and needs in mind. We understand that you, along with millions of other consumers, know that you can trust our products to deliver purity, quality, convenience and nutrition.

Our products are carefully aligned to Pakistani tastes and needs. We're always trying hard to develop new products and improve existing ones, and serve our consumers better.

That's why through constant renovation and innovation we're always testing or launching value added products and making them available in sizes that will suit every requirement.

So explore the world of health with Nestlé products, and find out what suits your family's needs!

Whether it's in a restaurant, a café, a university or an office, we have a range of solutions to fit your needs, from economical bulk packaging to ready-to-serve individual servings.

Our FoodServices team is there to help businesses and food and beverage professionals. We provide high quality solutions that are convenient, economical and easy to use.

We add value by offering the ideal solution for your business. Our diverse products are known for their consistent quality and are designed to optimise on utility and usage.

When you partner with us, you work with a company with 10 years of expertise, trust and the credibility of being the number 1 food and beverage solutions provider in the world.

Nestlé FoodServices operates in more than 60 countries worldwide, on all 7 continents

Quality

Quality is the foundation of our Food, Nutrition, Health and Wellness Company

At Nestlé Pakistan, we consider ourselves the standard bearers of our founder Henri Nestlé's care for safety and quality. Thus, Nestlé Pakistan has an absolutely non-negotiable commitment to product quality and food safety.

We take our motto of Good Food, Good Life very seriously. At every step, from collecting raw materials from rural farmers to distributing finished goods in city supermarkets, our employees are trained and retrained to understand their role in ensuring that consumers enjoy food and beverage items of the highest quality. The Nestlé name on a product is a promise to consumers that:

It is safe to consume

It complies with all relevant laws and regulations and meets high standards of quality. In addition, we constantly try to improve and tighten existing regulations. We wish to ensure the highest possible benefits and protection for our consumers. For this reason, we actively participate in the revision of food standards with the government.

Quality is to win consumer trust and preference

We are committed to offering products and services to our customers that meet their needs and/or preference and provide sound nutrition.

Quality is everybody’s commitment

Our management takes the lead, sets the objectives and demonstrates its commitment towards quality. All Nestlé functions across our Value Chain are fully responsible to follow mandatory norms and instructions for maintaining agreed quality

standards. We follow the stringent international standards of the World Health Organisation's Codex Alimentarius on food production. All factory laboratories operate according to Good Laboratory Practices guidelines. Our Sheikhupura and Kabirwala laboratories have long enjoyed an 'Excellent' rating in the worldwide proficiency tests conducted by Nestlé SA (Switzerland), and attest to the world-class quality of our factories.

Quality is to strive for zero defect and no waste

We focus on facts and results and we strive for zero defect and excellence in everything we do. We adopt a “no waste attitude” and constantly look for competitiveness and

opportunities for Continuous Improvement of the quality standards delivered to our consumers.

Quality is to guarantee food safety and full compliance

A solid quality management system must rely on a strong and fully empowered quality function. We enforce full compliance with the mandatory standards and principles of our Quality Management System, which include Food Safety, Regulatory and Quality requirements in every step of our Value Chain. The Nestlé Quality Management System builds on the existing Nestlé Quality System and adds a strong management component to it. The new dimension is the management of quality in all the relevant business processes from Consumer Requirement to

Consumer Satisfaction

We believe that every single company, no matter where in the world it operates, ought to be fully integrated into the local social, cultural & economic life. We must be good corporate citizens, and give back to the societies to which we belong.

There are two ways of fulfilling our responsibility and practising corporate Social Responsibility: • Through social investments: giving to charities, leading and supporting cultural or welfare initiatives.

• Through the realisation that businesses create social and environmental impacts, both positive & negative, through the daily operations of their value chain.

Our operations throughout the world are committed to making full use of these tools. Thus Nestlé people everywhere are involved in the many programmes and projects we have designed to strengthen local communities and nations.

We are heavily involved in projects relating to our own areas of expertise, such as nutrition education & research, health projects, and agricultural assistance. In times of crisis we are often amongst the first on the scene to help with humanitarian relief aid and food donations.

To help culture & society flourish, we do our best to encourage a host of other activities: we support charities, education and training initiatives, art and cultural events, sport events and HIV/AIDS prevention

n line with Nestlé's global commitment, Nestlé Pakistan is dedicated to playing its role in helping to protect the environment. We comply with the Environmental Act (1997), and try to ensure that

at every stage of our operations, the environmental impact is minimal.

Learn more about our Responsibility to the Environment projects:

Our Environmental Commitment in Action

Our environmental commitment extends to every part of our value chain. Thus, at the raw materials stage, we support sustainable agricultural and dairy farming practices, including environmental protection.

When it comes to production, all our factories try to maximise eco- efficiency, i.e. increase production while minimising resource consumption, waste and emissions.

Our factories are equipped with complete testing and monitoring facilities for waste and air emissions.

To eliminate air pollution, we have stopped using heavy fuel oil in our factories, which are now run on clean natural gas. This has reduced our emissions into the atmosphere to well below the legal limits.

Our Sheikhupura & Kabirwala factories have elaborate water treatment systems to prevent wastewater from polluting the environment.

In 2005, we upgraded our wastewater treatment plants in both factories. That's not all; we are continually reducing our consumption of raw water per ton of production.

Irresponsible packaging can have a heavy impact on the environment. To reduce the amount of material used without jeopardising the safety

and quality of our products, we are always working on new packaging solutions that have minimal weight and volume and can be easily recycled.

We even operate a collection system for used packaging. Solid waste is collected at source and then reused, recycled or disposed in an environmentally friendly way.

Natural gas incinerators at our Sheikhupura & Kabirwala factories are used to safely dispose of material that cannot be recycled & dumped.

Our factories have environment committees to manage routine environment issues and review performance. Environmental impact assessment is done in advance for every new project and measures are adopted to minimise adverse impacts on the environment.

Our employees regularly undergo training to inculcate awareness about environment-friendly practices.

Nestlé Pakistan is involved in a wide range of programmes and projects intended to improve the lives of underprivileged Pakistanis. Efforts are focussed on: • Well and Hand-Pump Installation Projects

Potable water is a basic human necessity, yet it is denied to millions of Pakistanis. We have helped alleviate rural suffering by undertaking tube-well and hand pump installation schemes in selected areas.

Our first tube-well was completed in 2002 in a village of 3000 inhabitants in Tehsil Dunyapur, Khanewal. A second one was commissioned in 2005 near Chishtian.

Since then 300 hand pumps have been installed in the arid deserts of Thar and Cholistan.

Moreover, the residents of villages which host our milk reception centres know that they can always make use of our water pumps.

• Help Centre for Farmers Our Milk Collection and Agricultural Services Department provides free advisory and support service to dairy farmers.

We give training in animal husbandry practices, vaccinate and treat their milch animals, help farmers buy feed supplements and fodder seeds, and assist in breed improvement.

This translates into increased milk production, better income, and a better life for farmers.

Society

Taking the Nestlé concept of corporate Social Responsibility to heart, we are deeply involved in social investment and humanitarian aid.

We are committed to Pakistan's long-term betterment, and strictly follow the code of corporate governance. We deal fairly with stakeholders.

We serve our consumers through safe, high quality products & communicate with them responsibly. We try to benefit our consumers by spreading awareness about healthy nutrition and lifestyles as well as constantly developing or improving existing products for health, nutrition and wellness.

During our manufacturing process we are careful to minimise environmental impact and value employee welfare highly.

We are actively involved in several social action programmes (SAPs) to improve the lives of our country's under-privileged people.

We offer generous financial support to hospitals and organisations that are dedicated to providing services to the poor. Only recently, we donated a mobile dispensary to APWA for its medical outreach programme in a remote community near Hub, Sindh.

We adhere to the global Nestlé philosophy of Creating Shared Value. Our dairy suppliers in the Punjab's milk district can attest to the agricultural and technical support we offer them.

We have always responded generously with assistance to victims of natural disasters, such as floods, earthquakes and droughts.

When the October 2005 earthquake hit Azad Kashmir and the NWFP, we lost no time in reaching out to the affected with donations of food products worth millions of rupees.

Consumer Relationship Marketing lies at the heart of Nestlé Consumer Services. We strive to build a long-term, sustainable relationship of trust and loyalty. Our customer staff stands ready to help consumers with any queries or complaints regarding our products, and draws upon Nestlé Pakistan's vast in-house resources to answer questions.

Recently, we launched an advanced consumer contact management system called CONSO+. This is a specialised programme specifically designed to help us deal with contact management and analysis and form closer ties with our consumers.

We can better develop our products based on consumer tastes and preferences, while consumers themselves benefit from our customised services and commitment to delivering wellness

Food and beverages play an increasingly important role in people's lives. What people eat and drink – and how – affects how they live their lives. Moreover, each person's nutritional and social requirements are different.

Thus, our consumers benefit greatly from Nestlé's commitment to providing products that go beyond taste and convenience, and integrate health, nutrition and wellness, at every stage in life.

We have created two key units to further this project: the Corporate Wellness Unit and Nestlé Nutrition.

The Corporate Wellness Unit drives the health, nutrition and wellness dimension by providing wellness-related tools and solutions. We have devised the world's first global nutritional labelling system: the Nutritional Compass. (Play animation below to see an example of the Nutritional Compass in practice.)

Already printed on food and beverage packs accounting for half our global sales, it gives our consumers relevant information on nutritional content, as well as nutritional tips and contact information for our consumer services.

Nestlé Nutrition focuses on three main areas: Infant Nutrition, HealthCare Nutrition and Performance Nutrition. It aims to launch innovative scientifically based products, such as Clinutren repair, a nutritional supplement that aids wound healing.

We hope to cater to the specific needs of every consumer, to enable them to lead healthy, productive and enjoyable lives

n October 2005, the biggest natural calamity in our history struck Pakistan. Thousands died and millions were left homeless after a massive earthquake hit our mountainous northern areas.

In step with the rest of the nation, Nestlé Pakistan responded immediately, putting its infrastructure and resources to work in the affected areas. • First Responses

When the earthquake struck, Nestlé Pakistan responded instantly, even before the magnitude of the disaster had dawned upon the nation. We immediately donated food and beverage items.

Within two days, we had established a crisis committee under the supervision of our Managing Director. The same day, the management team left to visit the affected areas, and by 11 October, the first six Nestlé trucks left our factories, bearing bottled water, powdered and UHT milk and ready-to-cook

MAGGInoodles .

Instead of burdening the government and relief agencies, we aggressively reactivated our own shattered distribution channels to bring supplies to the people who needed them most and established six camps to distribute relief goods.

Despite blocked roads, grave logistical challenges & an atmosphere of fear and suffering, our teams, consisting of about forty Nestlé employees and distributors, went out and distributed Nestlé products to the affectees.

Within two days our teams reached the worst-hit areas around Muzaffarabad, Bagh and Mansehra. They worked in collaboration with the Pakistan Air Force and arranged for supplies to be airdropped to the most inaccessible areas.

Other teams of Nestlé volunteers supported relief worundertaken by other agencies around the affected areas.

As a result of our swift and carefully planned action, we were able to distribute 80 trucks of goods, worth Rs 20 million. Two 10-ton trucks of drinking water were dispatched to Muzaffarabad Hospital, and our volunteer teams ensured that goods were distributed fairly and efficiently to those who needed them most.

• Aftermaths After the crisis comes a time for rebuilding shattered lives. Among our reconstruction efforts are the following initiatives:

• We have allocated an amount of Rs 20 million, raised through employee contributions, matching grants and contributions from other Nestlé markets. This amount will be used to adopt and reconstruct a model village in Azad Kashmir.

• We are thankful that no Nestlé employee was personally affected, though a few lost family members and property. We have compensated all employees, distributors and their staff for homes destroyed, to the tune of Rs 4.1 million.

• We intend to build an orphanage in the affected areas for the hundreds of children who lost their parents in this disaster. • We are initiating a livestock health improvement programme to help the locals rebuild their shattered lives. • Our parent company, Nestlé SA has donated an additional Rs 16 million for reconstruction and rehabilitation work. • Pitching In

Nestlé employees worked tirelessly to bring aid to earthquake victims. We are immeasurably proud of our people for their contributions:

• Nestlé employees donated Rs 3.3 million from their own salaries. • Nestlé employees in other countries also stepped forward and donated to the Nestlé relief fund.

• Five teams of staff volunteers worked day and night in the affected areas to ensure that relief goods got where they were needed.

• A medical detailing team worked with the students of King Edward Medical University, Lahore, to collect medicines worth Rs 175,000.

• Our parent company, Nestlé SA has donated an additional Rs 16 million for reconstruction and rehabilitation work

brief them about our brands. We try to give them vital information about health and wellness, to help their families live a better lifestyle.

At these sessions homemakers have the opportunity to learn about a company that produces many of their favourite foods and beverages, globally and locally.

They also have the confidence of knowing that any concerns regarding their family's nutrition, health and wellness will be capably answered. They know that they can rely on Nestlé.

At Nestlé, our chief commitment is to our consumers, and we make every effort to make sure that their voices are heard.

When Henri Nestlé prepared his first boxes of infant formula for sale, he put his address on the packages. Today, our Consumer Relationship Panel exhorts people to "Talk to Nestlé", expressing the same belief in openness and accessibility.

Our consumer services department is staffed by experts in every area related to our products and wellness, and is poised to provide prompt and relevant service to our consumers.

We believe that consumer services requires us to talk to consumers and also, above all, to listen to them.

Only by listening to what people say can we understand what they want and need. Only by understanding their needs can we serve our consumers to the fullest.

References:

www.nestle.pk

www.google.com.pk

Local market

Nestle Factory Kabirwala