2015 - instituto votorantim · votorantim s.a. legal entity. previously a corporate and operating...

BUSINESSES AND COMMUNITIES EVOLVING IN SYNERGY

2015

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4 Activity Report 2015

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6 MESSAGE FROM THE PRESIDENT

PROFILEVotorantim Institute

GENERATION OF SHARED VALUEAdjusting to Challenges and Anticipating DemandsReturn on Social Investments Everybody WinsExternal Social Investment

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Activity Report 2015 5

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TRANSFORMING REALITIES

Investment of R$71.5 millionSustainable Três LagoasReinforcing Planning and Management Business VisionThe Challenge of InternationalizationConserve To DevelopSide By Side With the Progress of the BusinessA New Look at Social Action

REACH AND RESULTS

Joining Efforts for Social Impact

PARTNERSHIPS

CORPORATE INFORMATIONCREDITS


In January 2016, Votorantim undertook a corporate restructuring process as part of a movement that got underway in 2013 and was consolidated in 2015. The outcome of this initiative was the implementation of a new management and governance model at Votorantim with the definition of the Votorantim S.A. legal entity. Previously a corporate and operating center, the holding became a portfolio manager, and the companies gained more autonomy, with their own Boards of Directors and advisory committees.

Done at the eve of the company’s 100 anniversary (in 2018), this change aimed to prepare Votorantim for the long term in order to continue creating value and achieving superior performance in an increasingly complex, dynamic, globalized, and economically and socially challenging business environment. These commitments, which characterize the company’s performance, demand greater integration of the social investments to Votorantim companies’ challenges; this is what we have done at the Votorantim Institute.

FOR INCREASINGLY COMPETITIVE BUSINESSES AND COMMUNITIES


José Ermírio de Moraes Neto President of Votorantim Institute’s Deliberative Council and member of the Board of Directors of Votorantim Participações S.A.

The corporate restructuring process included preparing the Votorantim Institute to meet the new business challenges, directing actions to improve the businesses’ social performance, generating positive impacts for the communities and leading to more competitive operations. This was the guiding force behind the 2020 Vision, which was consolidated at the end of the year as the essence of the organization’s strategic planning.

The Institute’s activities keep increasing, in pace with Votorantim’s progress, and are in line with the practices at the upwards of 300 businesses participating in Comunitas’ 2015 BISC (Benchmarking of Corporate Social Investments) report. According to the BISC report, there is an accelerated process underway of aligning social investments to business aiming to combine social outcomes and return for the economic enterprises.

Votorantim has focused on consolidating the Institute as a social intelligence center in favor of the companies’ strategies, whether by leading and supporting the planning process, executing and monitoring long-term social investments or by promoting discussions and the exchange of knowledge to enhance the organizations’ capability to align social challenges with business ambitions. It has been on this solid foundation that we have built a track record of effective, efficient, impactful actions.

We have also signed on collaborations that allow us to combine technical know-how, share investments, and multiply results. Our experiences with the National Development Bank (BNDES), the Inter-American Development Bank (IDB), the Arapyaú Institute, and the Together for Sustainable Development program are but a few concrete examples of this.

The information and cases featured in the 2015 Annual Report show the main progress the Institute has made in its work to support Votorantim in generating value for business and for society. With this publication, we showcase to our various strategic stakeholders one more step we have taken in our path towards the future and how we are getting ready to address upcoming challenges.

Enjoy your reading!


PROFILE

VOTORANTIM INSTITUTEVotorantim’s center for social excellence, the Institute provides advice to the companies with a view to contribute to business competitiveness, to maximize the operations’ positive social impacts, and to mitigate risks and drive positive long-term social impacts, improving the lives of people at the communities where Votorantim has operations.


The Institute works alongside Votorantim’s companies to put integrated planning and methodologies into practice in order to generate shared value between businesses and society. The work is guided by the business challenges and opportunities, and is aligned to the social, cultural, and economic diversity of the performance scenarios and to the companies’ different business models. On the horizon there are about 300 municipalities in Brazil alone, in addition to the specificities of other countries where Votorantim has operations and that are gradually being incorporated into the services the Institute provides.

Votorantim is one of the largest Brazilian corporate conglomerates. It operates based on a multiplatform model characterized by the intensive use of capital, large-scale production, and by ongoing investments in technology. The company operates in strategic industrial sectors - such as cement, metals and mining, steel, energy, and pulp - in agribusiness, and in the financial sector. It has more than 650 operating units in 20 countries located on 5 continents, and is more than 44,000 strong.

In 2015, Votorantim companies’ consolidated social investments added up to R$71.5 million, in 320 projects, which benefited 400,000 people. In all, more than 230 Brazilian municipalities hosted initiatives; actions were also carried out in Colombia, Argentina, and Bolivia.

Votorantim S.A. (managing holding)

Votorantim Cimentos, Votorantim Siderurgia, Votorantim Energia,

Votorantim Metais, Fibria, Citrosuco e Votorantim Finanças

100%

2347,000

700

R$ 31.5 billion

R$ 71.5million

R$ 7 billion

Present in

Brazilian company

countries

professionals

NetEarnings

SocialInvestments(2015)

Ebitda

operating units(among plants, mills, distribution centers, farms and administrative units)

140,000 active suppliers

THE VOTORANTIM

(73% own resources)


The Institute is committed to the Sustainable Development Goals (SDGs) the United Nations proposed to set governments, businesses, and institutions into motion to find solutions for sustainable development and face global challenges. The SDGs were launched in September 2015, after nearly a year of studies and debates conducted by the UNDP (United Nations Development Program).

In addition to going on to guiding its performance under the guidelines of the SDGs, the Institute participated actively in prior discussions, especially with regard to the contribution of the extractive industry. It was one of the entities that led the dialog on the extractive industry and on sustainable development. It also contributed to the Mapping Mining to the SDGs: A Preliminary Atlas report, organized by the Columbia Center on Sustainable Investment (CCSI), the Sustainable Development Solutions Network and Development Program, both of the United Nations, and by the World Economic Forum.

The SDGs were created to succeed and adapt the Millennium Development Goals - which provided a comprehensive agenda for the period of 2000-2015 - to the current context.

SUSTAINABLE DEVELOPMENT GOALS


Governance structures

In 2015, the Institute started improving its governance structures to align them to Votorantim companies’ business. The process is expected to be completed in the first half of 2016, and includes bolstering internal rules of compliance and controls by systematizing internal and external audits and reviewing accounting structures. The Institute’s Deliberative Council will also be restructured.


CONSTANT EVOLUTION

ADJUSTING TO THE CHALLENGES AND ANTICIPATING DEMANDSFrom its inception, in 2002, the Votorantim Institute has sought to improve the way it operates and has drawn increasingly closer to the businesses. Year after year, the initiatives carried out diversify, expand, and gain depth to support the companies.


production chains, or the Votorantim Partnership for Education (VPE), which combines social mobilization and education qualification management initiatives at the municipalities.

In addition to its work focused on specific locations, the Institute introduces social solutions in the companies’ interaction with different players in the value chains they operate in. An example of this is the action started in 2014, in which the Institute acts as a facilitator of the dialog between Votorantim Cimentos and recyclable material collectors. The goal is to dialog with this audience on the logistical planning process for waste co-processing for power generation at the company’s furnaces, in order to boost the environmental and social benefits the initiative affords.

Through strategic alignment to the business, by improving technologies, and with an attentive look to trends and opportunities, the Institute adapts to the companies’ short- and medium-term needs and anticipates long-term demands, contributing to the sustainability of Votorantim’s dynamics of generating shared value.

Endeavoring to leverage the transformational impact of Votorantim’s external social investments, the Institute puts a number of tools and methodologies at the service of the companies to guide them in planning the social actions at each location, in defining the programs and projects to be carried out, and in monitoring results attained (see more information on the External Social Investments on page 24). The initiatives can keep pace with the various stages of the business, from that prior to the installation of a new industrial plant to the operation period, possible upgrades, and even operation discontinuation processes.

Whenever the companies require, the organization implements a few of the planning stages directly and undertakes the financial management of the investments in order to meet the company’s seasonal demand, but, above all, to qualify its social actions.

In recent years, with the consolidation of a number of proprietary technologies adjusted to the operation’s reality, the Institute also gained space in program implementation. The understanding of the business challenges, of the context of the operation, and of its social implications have turned the Institute into a preferred partner for undertaking initiatives such as the ReDes program, that foments


Knowledge and Training

Through working groups, the Institute encourages the exchange of information and experiences among the professionals from the companies who are in charge of the social strategy, in an ongoing review process for developing their performances. Votorantim executives meet with Institute professionals every two months to discuss issues of common interest. In 2015, the companies took turns hosting the meetings and presenting their challenges and specificities in addressing the issue. For example, the groups were responsible for defining the information to be featured in the ISE Guide and for creating a maturity ruler to guide the social action processes.

With a specific focus on training professionals, also conducted are training sessions and workshops, in which the Institute presents updated information on trends in social issues and in the creation of value for the company and discusses opportunities for improving Votorantim companies’ strategies and practices.

The training gains even more importance in an increasingly complex performance scenario that involves different stakeholders and expectations. An example of this move is the inclusion of social content in the Potenciar (Enhance) program. This is a Votorantim Human Organizational Development Area initiative that aims to qualify high-potential young people with knowledge in business and management.

One of the main legacies Votorantim has been building

over time is showing that it is possible to undertake an economic activity that aims at generating profit in a sustainable manner, one in which people and communities realize they are being impacted positively and that they contribute to the development of the Country. One of the challenges this work comes up against is getting leaders increasingly involved and giving visibility, at the office, to the programs taking place at the tip of the spectrum. There is still a lot to do, but we are making great progress. The Institute has been going to great lengths to build this integration, and it plays an important role for being jointly responsible for this work with the companies.”

Sérgio MalacridaFinance and Investor Relations Officer of Votorantim S.A.

“

The Institute is responsible for addressing the social theme and the generation of shared value in its learning curriculum. The focus is on training new leaders with a broader view on the subject. This type of initiative is aligned with the increasingly frequent demand from the businesses for the professionalization of investments in the social area and for the commitment to effectiveness and results for the audiences involved and for the company itself.


The Institute’s strategic planning follows five-year cycles and takes business challenges, the operation’s social context, and the future trends and scenarios into account.

Updated annually, the exercise is aligned to the Group’s strategic planning and aims to keep the organization prepared to meet the business demands in an increasingly integrated manner and to support the maturing and professionalization of the social performance in such a manner as to optimize the generation of value. For each objective there is at least one target to be attained by 2020, accompanied by result and impact indicators.

To keep pace with the development of business and with the growing internationalization of the companies, the Institute has been reinforcing its capacity to perform in partnership with the units located abroad. In 2015, it supported the development of a diagnosis of the social performance model of

PazdelRío, a Votorantim Siderurgia subsidiary in Colombia, aiming to identify opportunities for improvement and establish an action plan to be deployed in 2016 (see page 40).

Another issue the Institute has been focusing on is the qualified search for technical or financial partners capable of enhancing or making programs and actions more effective. The organization invests heavily in a coordination strategy for different agents. It seeks to act as a Social Hub in order to multiply opportunities to gain access to specific knowledge and financial and technical resources made available by public and private organizations in Brazil and abroad. (For more information on the collaborations, see page 46).

VISION FOR 2020


A CENTURY OF HISTORY: LEGACY AND FUTURE IN EDUCATION

In almost 100 years of history, to be completed in 2018, Votorantim has established itself as one of the largest Brazilian conglomerates, and as a major player in the development of communities and municipalities. With consultancy from the Institute, Votorantim undertakes social, educational, and professional qualification activities, actions aimed at improving education, at fomenting entrepreneurship and at community development, and it supports municipal authorities. Its actions are in line with public policies and involve dialog with the society to build a positive legacy at the places where the company has operations.

To mark the first century of Votorantim’s history with an innovative and structuring action, at the height of the company’s pioneering spirit and its commitment with education, the Institute has launched a challenge with the companies in 2015: To shape an intervention in the field of education with potential have an impact in 100 Brazilian municipalities. The proposal is to involve 100 leaderships - such as CEOs, officers, general managers and plant managers - in designing the strategy and implementing the initiative, which is scheduled to get underway in 2018.

The preparation work is being led by the Institute, and from 2016 it involves three lines of action:

Engagement: Establish a flow of communication with the leaders to sensitize them on the topic and get them involved in the project;

Development & innovation: Revisit social programs and technologies the Institute and/or its partners have already adopted to define improvements and adjustments to enhance the escalation capacity of the actions in different realities and leverage the results;

Collaborations: Seek external organizations with capacity to contribute to overcoming the challenge, by contributing either with methodological solutions or resources.

The Votorantim Institute is Votorantim’s center for social excellence and provides advice to the companies aiming to contribute to business competitiveness, to maximize the operations’ positive social impacts, and to mitigate risks

MONITOR & MEASURE

Using indicators and tools the Institute provides enables companies to monitor the development of the initiatives, to evaluate results, and to define improvements in a cycle of continuous improvement.

How we work

WHERE TO ACT AND WHY?

Work begins by defining the locations that will host social initiatives. Prioritization is key to focus on the allocation of efforts and resources. A diagnosis of the local reality is them made to identify challenges and opportunities for the operation at the location and to set out the main issues to be addressed (social agenda).

WELCOME

> Management reports> Monitoring indicators> Measurement of the return on investment

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4

SCHOOL

RECYCLING COOPERATIVE

SOCIAL IMPACT

BOOST LOCAL ECONOMY AND PRODUCTIVITY

TRAINING PUBLIC AUTHORITIES TO LEAD

DEVELOPMENT

Actions connected to the business: Identify opportunities and generate value for the entire chain

Social mobilization and qualification of the management of education.


IMPLEMENT THE ACTIONS

The initiatives follow the different phases of the business and are organized into four areas of development: Human Capital, Institutional Capital, Social Capital, and Economic Dynamism.

Social Hub

Coordination with civil society organizations, government and development agencies, and the qualified search for partners help to identify opportunities for joint action that add new expertise, effectiveness, and scope to the initiatives developed.

WHAT TO DO AND HOW?

The progress hoped to be attained in the long-term guides the social planning, detailed objectively in the investment plan, which determines the initiatives to be carried out, the budget, the schedule, and the indicators to be used for monitoring.

Technical and financial boost for solidarity economy initiatives.

120 municipalities in Brazil and Latin America

82% of the locations have integrated action planning

R$71.5 million in social investments

Modernizing land management and use planning to strengthen local government

320 projects

400,000 beneficiaries

2

3CITY HALL

SOCIAL IMPACT

LEADERSHIP AND JOINT

RESPONSIBILITY

STRENGTHENING OF THE BUSINESS ENVIRONMENT

PLAN

SEAMSTRESS

FLOWERS

FRUITS & VEGETABLES



THE BOTTOM LINE

RETURN ON SOCIAL INVESTMENTSA pilot project developed in partnership with the EMM Network, the German Cooperation Agency, and FGV measured the return Votorantim Cimentos got from implementing social actions in the town of Primavera (PA)

In 2010, Votorantim Cimentos decided to implement a new integrated cement production plant in the municipality of Primavera, state of Pará. In addition to the technical and operational challenges typical to a deployment of this nature, the Primavera project was also marked by attention to the social aspect. The city ranked 4695th in the Brazilian Municipal Human Development Index (IDHM), reflecting the population’s low educational level, the lack of economic activity, and the profound deficits in infrastructure and in the provision of public services.

With support from the Votorantim Institute, the company conducted a series of studies on the potential impacts the venture may have and to identify levers for local development. Through dialog with the community and authorities, a local development plan called “Sustainable Primavera” was drawn up. From 2011 to 2015, the social projects that made up the plan set into motion investments of about R$10 million in activities such as professional training, education, health, sanitation, infrastructure, and the fostering of productive chains, among others.

Given the amount involved, the results of the investments made in Primavera are measured in different ways. A project carried out under the Emerging Market Multinationals (EMM) Network, of the German Cooperation Agency - GIZ, in partnership with FGV, sought to identify and quantify the financial return generated for the company. The Discounted Cash Flow model was used to do this, comparing the NPV (Net Present Value) scenarios with and without social investment. The method allowed the measurement of a ROI of 4.54 times and a positive NPV of over R$5 million.

A public library, which includes an archaeology museum, was one of the social investments Votorantim Cimentos made in Primavera (PA)


The ROI was calculated based on the comparison of two scenarios - with and without social investments -, which allowed for identifying the inflows and outflows that the actions resulting from the Sustainable Primavera plan have brought to the Primavera project’s cash flow. The outflows identified were social investments (R$9.9 million) made and costs incurred with staff and plan management (R$2.1 million). Inflows, meanwhile, were organized into three categories:

1) savings; 2) costs avoided; and 3) value added.

The savings quantify a decrease in cost lines that had already been budgeted in the original project, but which had disbursement reductions derived from the return generated by the social investment. This includes savings in financial expenses resulting from access to credit lines with attributes of sustainability (R$5.6 million), savings in tax expenses secured under tax incentive programs (R$4.8 million), savings in specific socioenvironmental constraint costs (R$3.5 million), and the acquisition of non-refundable financial compensation with other social investors (R$0.75 million).

The “avoided costs” benefit, meanwhile, brings together gains derived from savings in costs that had not been budgeted in the original

R$ 4.54FOR EACH

R$1 INVESTEDWAS THE RETURN OF

THE SOCIAL ACTIONS IN PRIMAVERA (PA)

project, but which would have occurred had there not been the impact of the social actions. Standing out were spending avoided in attracting, hiring, and retaining labor coming from other regions (R$5.9 million) and expenses with work stoppages due to conflicts with the community (R$1.2 million).

Finally, value added includes future earnings added to the project’s cash flow as a result of

the social investments. In the case, the components analyzed were the drop in the absenteeism rate allowed for by the improvements made in the water distribution and sewage collection infrastructure (R$0.083 million) and the reduction of costs with the project decommissioning actions (R$ 1.6 million).

The data were calculated based on

the analysis of the company’s financial controls, benchmarks, and interviews with more than 15 members of the team that worked on the project and went through several revisions with internal and external experts. Although the data cannot be replicated automatically to other situations, the idea is that the study consolidate a method for analyzing the return on social investments to be applied in other contexts and locations.

Inflows and outflows


VOLUNTEERING

EVERYONE WINSA joint initiative of the Institute and the companies set 2,000 people into motion in actions aimed at the cleanup, refurbishment, and improvement of facilities, cultural and educational activities, and at the collection of donations

The “corporate game” Volunteer Challenge the Institute launched in the second half of 2015 was the thrust that was needed to turn into attitudes the desire about a thousand employees had to be part of social initiatives. From September to November, these employees mobilized friends and family, for a total of 2,000 volunteers and, organized into teams, undertook actions for the benefit of non-profit organizations and public schools.

The volunteers’ proactive, leading role was encouraged throughout the process. The action was set up like a game and encouraged the teams of volunteers to decide which entity to serve, the type of activity to be done, the overall planning, and the schedule to follow. Participants documented the actions on a digital platform. The Organizing Committee of the Challenge, made up of representatives of the Institute and of the participating companies (Votorantim Industrial, Cimentos, Metais, Siderurgia, Energia and Fibria) analyzed the achievements and were scored per type and scope.

In addition to the direct benefits generated at each activity, the teams competed against each other to accumulate the highest number of points. Teams ranking among the top three in the Challenge were awarded cash prizes, which were sent to the institutions recommended by the winners.

Corporate volunteering is a traditional initiative at Votorantim, and had already been the subject of studies and of a consultancy of the Institute in 2014, when the organization put together the Corporate Volunteer Guide, featuring the main legal information on the topic and providing guidance on the planning and performance of volunteer work at the companies. A committee comprising members of all companies was set up to create and monitor the 2015 Challenge, which gave the issue more visibility and helped raise awareness and engage more people.

The idea now is to hold annual editions of the initiative and reinforce the companies’ own programs.


VOLUNTEER CHALLENGE IN FIGURES

ITEMS DONATED (school, sports, cleaning,

and construction materials, toiletries and first aid supplies,

food, clothing, and toys)

BENEFICIARIES (at 78 non-profit organizations and

public schools)

HOURS of voluntary work

VOLUNTEERS (a thousand

employees and a thousand people from outside the company)

UNITSof Votorantim

and of the Instituto

56

2,00014,000

3,300

88,000


PROGRAMS AND PROJECTS

EXTERNAL SOCIAL INVESTMENTThe Institute provides consulting services to Votorantim at all stages of its social work, providing technical expertise to define the local units’ strategies

In planning the social activities, companies make use of a broad portfolio of solutions the Institute offers, which have been being improved year by year. Based on the business’ needs and objectives, on the identification of specific risks and opportunities in the region of operation, and on the relationships with the various stakeholders, the Institute provides Votorantim with a number of tools and methodologies - many of which developed internally - that help make the interventions efficient and effective.

The social performance planning work involves several stages, beginning with prioritizing the locations to be served and the undertaking of local diagnoses (characterization). The information brought up and the medium and long-term vision guide the definition of the unit’s social agenda. At the next stage, the planning is shaped, the intended objectives are determined, and the actions that will allow for them to be attained are set. This set of information is detailed in the form of an investment plan, which specifies the initiatives and projects and their action plans, with concrete budget and schedule information, for example.

RESULT

SOCIAL PLANNING FLOW

General ObjectiveSupport Indicator

CHALLENGE / OPPORTUNITY

CHARACTERIZATION

PRIORITIZATION

Specific Objective 2

Support indicator

Specific Objective 1

Support Indicator

Action Plan Action Plan Action Plan


SOCIAL CAPITAL

Promoting dialog, engagement, and social

control through networking and alliances of the

community itself.

INSTITUTIONAL CAPITAL

Strengthening of local institutions (public and

social in nature) to perform their role as development agents for communities

and municipalities.

HUMAN CAPITAL

Initiatives aimed at individual development and at forming

citizenship, focusing on education, work, culture, sports, and civil rights.

ECONOMIC DYNAMISM

Development actions for the local economy,

entrepreneurship, income generation, and financial

autonomy of the locations where Votorantim operates.

Throughout the program’s implementation phase, the Institute supports the management and monitoring of the progress made, which local units do with the management tools the Institute provides.

Result monitoring allows the company to evaluate the achievements, compare plans with what was actually done, and to make possible adjustments to the route.

THE INSTITUTE’S PROGRAM AND PROJECT PORTFOLIO FOCUS ON FOUR TERRITORIAL

DEVELOPMENT AXES


ECONOMIC DYNAMISM

APPROXIMATELY 45% OF THE MUNICIPALITIES PRIORITIZED FOR VOTORANTIM’S SOCIAL ACTIONS HAVE LOW INCOME AND ECONOMIC DEVELOPMENT INDICES. ONE OF VOTORANTIM’S ALTERNATIVES IS INVESTING IN THE ENTREPRENEURIAL CAPACITY OF CITIZENS ORGANIZED IN PRODUCTIVE GROUPS AND IN JOB AND INCOME GENERATION ACTIVITIES.


Productive Chain

Through a methodology developed by the Brazilian Micro and Small Business Support Service (Sebrae), the Institute fosters Votorantim suppliers’ competitiveness and productivity. The program works on improving business performance, on increasing competitiveness, and on reducing the company’s dependence. As a result, it increases the qualification of products and services offered by local micro and small businesses. In 2015, there were over 2,000 hours of training, between diagnostic and consulting services, for Votorantim suppliers.

Strengthening local entrepreneurs

Another joint initiative with Sebrae is strengthening entrepreneurs at the locations, offering workshops for the development and qualification of individual entrepreneur or small group business plans focused on formalizing and strengthening initiatives. The business plans the local committee selects are granted seed capital to start deploying their businesses.

Fostering productive chains

The Institute also encourages the strengthening of local production chains. From the demands identified by the local Votorantim unit, local organizations propose projects developed by cooperatives and productive groups, focusing on strategic business planning, on improving administrative and financial management or on providing technical advice to improve products or marketing strategies. The Institute also monitors the selection and review processes for the proposed plans.

ReDes Program

This program is carried out in partnership with the National Development Bank (BNDES) and the Inter-American Development Bank (IDB) and provides technical and financial support to local cooperatives and associations in structuring and managing businesses that generate jobs and income. The program begins by prioritizing productive chains with the most potential to impact the location. From there, socially and economically feasible projects are prepared in a participatory manner. After going through local and external assessments, the selected initiatives get investments in property, equipment, technical training, and in management to ensure their long term sustainability. ReDes also involves reinforcing institutional networks to leverage partnerships with government, businesses, and society in the different areas of performance.

R$ 1,500,00

48

1,700

R$ 6.3 million

inclusive businesses supported

people benefited directly

Invested in 2015 (R$51 million since 2010)

Average income of the benefited families


HUMAN CAPITAL

THE INSTITUTE INVESTS IN STRENGTHENING CITIZENSHIP AND PROMOTES INDIVIDUAL DEVELOPMENT THROUGH INITIATIVES IN THE AREAS OF EDUCATION, CULTURE, SPORTS, PROFESSIONAL QUALIFICATION, AND DEFENSE AND PROTECTION OF CIVIL RIGHTS, WITH SPECIAL ATTENTION PAID TO CHILDREN AND ADOLESCENTS.

Votorantim Program for Children and Adolescents (VIA):

By diagnosing critical issues and through direct support for projects designed to combat the breach of the rights of children and adolescents and to provide services to this audience, VIA helps strengthen the Municipal Councils for the Rights of the Child and Adolescent (CMDCA) so they can do their duties in the municipalities. The actions are carried out through the companies own resources or incentivized funds.

9municipalities


Votorantim Partnership for Education (VPE)

The program contributes to improving public education with actions aimed at social mobilization and at strengthening public and school management. The strategy is to engage the community, reinforce the demand for quality education, and to qualify educational opportunities by supporting school management and encouraging the implementation of national education policies.

From its onset, the program has accumulated positive results, haven even impacted the Basic Education Development Index (IDEB). A study conducted to compare municipalities with the VPE and a control group showed that from 2007 to 2013, the VPE helped speed the progress the municipalities that have implemented the program made in the index up by 30 percent. The VPE is certified as Social Technology by the Bank of Brazil Foundation.

Support for projects

Focusing on culture, sports, education, and work. The Institute provides technical support for the selection and management of local projects, which will benefit from the companies’ social investments.

The initiatives related to culture are developed in three lines: Dissemination and access to culture, community artistic training, and training of cultural mediators. In 2015, 57 projects got support from Votorantim companies in this area.

In 2015, Votorantim supported 15 sports projects. Here, the focus is on three types of investments: Centers to promote sports activities, sports agent training, and reinforcing public sports equipment.

In education, in addition to the Votorantim Partnership for Education, Votorantim supports initiatives aimed at complementary training and increasing schooling. Fifteen projects were carried out in 2015 on this front.

Work-related projects are divided into training activities connected to the Apprenticeship Law, aimed at people aged from 14 years, and professional training courses focusing on integration into the labor market based on demands identified locally. There were 17 initiatives in this field.

5,300

348

253

53

students impacted

schools reached

schools have applied the Indique (Education Quality Indicators) methodology

municipalities have already been impacted by the VPE since it was created


INSTITUTIONAL CAPITAL

FOCUSING ON STRENGTHENING MUNICIPAL GOVERNMENTS AND CIVIL SOCIETY ORGANIZATIONS, THE INSTITUTE PROVIDES TECHNICAL AND MANAGERIAL KNOWLEDGE TO THE DIFFERENT AGENTS OF LOCAL DEVELOPMENT.

Support for Public Management

Conducted in partnership with BNDES, this initiative aims to contribute with municipalities where Votorantim has operations in the modernization of management, including process improvements, financial management and balance system, and in territorial organization through the development of sectoral plans (Master Plan, Sanitation, Housing and Mobility) and executive projects aimed to promote the municipalities’ sustainable development.

11.3million

R$

leveraged

Projects carried out at the city halls

municipalities

21 25

Qualifying organizations

By offering customized training and monitoring activities, this action helps social organizations in issues related to management, planning, fundraising, and communications.

Together for Sustainable Development

Another initiative focused on public management is the participation in the Together for Sustainable Development, a Comunitas program that involves business leaders and the civil society in the debate on actions to improve the municipalities. Votorantim participates by supporting Juiz de Fora (MG), and the focus is on actions aimed at fiscal balance, payroll diagnoses, and at developing the city hall team in leadership and public management. On the fiscal balance front, for example, the R$36.4 million target was surpassed by R$31.6 million, for a total of R$68 million in savings for the town.

sector plans approved as

municipal laws

161.2million

R$

Invested in the program in 2015

(R$5.8 million since 2012)


3operationsin the 4th year

of methodology application

engagement plans implemented

municipalities with actions

8 12

SOCIAL CAPITAL

OPEN DIALOG AND TRAINING NETWORKS AMONG THE DIFFERENT SOCIAL AGENTS ARE THE FOCUS OF THE INSTITUTE’S ATTENTION, AND ARE ENCOURAGED IN DIFFERENT PROGRAMS.

Engagement with Stakeholders

This action directs the strategic systematization of the local units’ relationship with their strategic stakeholders based on the mapping and defining of action plans. The goal is to reinforce risk management and to maximize the opportunities generated from the dialog with different social players.

Community Participation Groups

This action fosters the creation and autonomous working groups that set community representatives, government, and the private sector into motion in local development initiatives. The Institute provides technical assistance in forming groups, building their identity and defining purpose, and offers technical training for their operation.

LOCAL DEVELOPMENT

INVESTMENT OF R$71.5 MILLION Faced with a scenario of economic slowdown, the companies maintained the initiatives planned for the year and concentrated investments on actions focused on the long-term

Votorantim’s external social investment (ISE) in 2015 added up to R$71.5 million, in line with what had been planned for the year. Of the total invested, almost 73 percent came from resources belonging to the companies - Votorantim Cimentos (VC), Votorantim Metais (VM), Votorantim Siderurgia (VS), Votorantim Energia (VE), Fibria, and the holding company, Votorantim S.A. – and to the Votorantim Institute. The remainder is composed of incentivized funds and credits obtained externally. Among the major societal challenges identified at the locations and addressed in the operational strategies defined, education, economic development, and the strengthening of public management stand out.

The demand for social technologies developed by the Institute followed the upward trend seen in previous years, and voluntary investments already account for an average of 0.48 percent of the companies’ EBITDA. The importance of planning as a guide for investments in the social field also increased.

Geographically, the Southeast concentrated most investments (49%), followed by the Northeast (20%) and the Midwest (16%). This distribution reflects operation localization and the process of location prioritization. In all, 320 projects were carried out in more than 120 municipalities in Brazil and abroad.


39%

23%

15%

13%

6% 2%2%

Allocation at the companies

Fibria

Votorantim Cimentos

Votorantim Metais

Votorantim Institute

VotorantimSiderurgia

Votorantim S.A.

VotorantimEnergia

61%

71.5MILLION

71.5MILLION

1%9%

3%

18%

8%

Source of the resources1

Votorantim(voluntary

investment)

Total Investments

Total Investments

Votorantim(mandatory investment)

Incentivized resources Instituto

Votorantim

BNDES subcredit

external fund raising

R$

R$

Investment Background

64.8MILLION

R$

R$

R$

MILLION

MILLION

76.171.5

2013 2014 2015

320

293248

109119 120

450400 400

projects

projects

projects

municipalitiesmunicipalities municipalities

THOUSANDbeneficiaries THOUSAND

beneficiariesTHOUSANDbeneficiaries


own resources

municipalities

projects and programs

73%

120

320

beneficiaries

400,000The figures above are for the investments in social activities planned and carried out with the Votorantim Institute and do not include the companies’ direct investments.

1This amount considers own resources, raised with partners and derived from incentive laws.


FIBRIA

SUSTAINABLE TRÊS LAGOASThe production capacity upgrade at Fibria’s pulp mill in Mato Grosso do Sul is leveraging new social investments

In May 2015, Fibria’s Board of Directors approved the construction of the second pulp production line at the unit in Três Lagoas, Mato Grosso do Sul. Investments worth R$7.7 billion have been earmarked for the venture in the coming years. Operations are scheduled to go on stream there in 2018, and the upgrade will make the plant one of the largest pulp mills in the world, with an installed capacity of 1.75 million tons of pulp per year. The construction of the new line will generate 40,000 direct and indirect jobs.

Parallelly to the works, Fibria is also increasing its social activities in the city. In 2015, it started the activities under the Support for Public Management (AGP) program, which aims to support the modernization of administrative and fiscal balance practices and to develop infrastructure projects in themes related to land use. The AGP in Três Lagoas also includes a sustainable development plan, developed under the ICES (Sustainable Cities Initiative) methodology, promoted by the Inter-American Development Bank (IDB). Três Lagoas is the first municipality that is not a capital city to receive the ICES methodology and the first among all Latin American cities to rely on a competitiveness study.

The work underway in Três Lagoas is an example of Fibria’s social performance, which involves more than 43 projects nationwide. The company’s objectives include reinforcing the relationship with the locations, increasing the number of beneficiary families and communities, and providing conditions for

Fibria maintains the Responsible Network, which aims to engage other companies in local development processes and to encourage the exchange of experiences and joint learning. By means of the Responsible Network, Fibria acts as a link between partner organizations and beneficiary associations, providing all the necessary support for project management and accountability for the investments made by transferring experiences related to the knowledge gained from the socioenvironmental investment projects to partners.

Responsible Network


a growing number of supported income-generating initiatives to achieve financial autonomy. In 2015, Fibria invested more than R$27.8 million in the initiatives.

In addition to the investments made under the scope of the Votorantim Institute, the company also undertakes other local development initiatives. An example of such initiatives is the Beehive Program, created ten years ago to support small honey producers. In 2015, 29 associations and 591 producers were served. Another highlight is the Territorial Rural Development Program, which includes training in the conscientious use of water in agriculture and rural tourism projects.

R$ 27.8 million

Social Investment (2015)

projects undertaken

43


VOTORANTIM METAIS

REINFORCING PLANNING AND MANAGEMENTThe company has made progress in the use of project monitoring tools and, with a new cycle of location characterization, it is currently developing local social agendas

With a diversified portfolio and social performance in nearly 50 municipalities in Brazil and Peru, in 2015 Votorantim Metais (VM) focused its efforts on two axes of improvement: Improving the result monitoring structures, and detailing the social diagnosis that will guide future investments.

Focusing on the first axis, VM systematized the use of management tools provided by the Votorantim Institute, such as the One Page reports, which bring together, in a user-friendly interface, the projects’ key progress indicators and allow for a quick view of the progress that has been made. The tool is used systematically in more than 90 percent of the 163 projects developed, and guides the monthly analysis that plant managers have incorporated into their business monitoring routines. The remaining 10 percent refer to specific initiatives, which go through sporadic monitoring in accordance with their stage of implementation.

In addition to giving visibility to actions and encouraging the active participation of managers in the supervision of social activities, strengthening management routines also lays the foundation for a process that aims to improve the monitoring methodology itself.

The main highlight of the second work axis was the characterization of seven locations where VM

is already developing projects. Information was brought up about the local context in order to identify the challenges and opportunities of the operation that will guide the social agenda to be implemented gradually in the upcoming years.

The progress made in planning and monitoring VM’s social performance supports the movement the company has been making to increasingly strengthen the connection between social management and business management. In 2015, the company deepened its approach on the social, economic, and environmental aspects of sustainability in its strategic planning. Also reviewed was the company’s sustainability strategy, and the target of reaching 90 percent efficiency in local development and relationship plans was set for 2025. The company’s board will now periodically monitor how it performs against this target, which will be part of result reports issued to shareholders.

R$ 11 million


projects undertaken93


VPE in Três Marias

Três Marias, Minas Gerais, had a record number of essays entered in the 2015 edition of the School Times Contest, part of the mobilization front of the Votorantim Partnership for Education (VPE). About a quarter of all entries came from the municipality.

The high level of participation is only one indicator of the scope of the VPE in Três Marias, which has hosted the initiative since 2011. In the 2015 actions, technicians from the municipal department of education and managers of the 18 schools comprising the municipal public school system were trained in program activities, in an action that the municipal Secretary of Education of Três Marias, Thaís Castelo Branco, rated as “fundamental.” To Thaís, “training is the foundation of everything, and prepares professionals to implement the public policies that will bring improvements to where they are needed most, i.e., serving the students.”

In 2015, one of the VPE highlights was setting the community into action to survey information and perform the diagnosis of the “Indique” - Education Quality Indicators Project. In Três Marias, more than 1,500 people - among teachers, principals and school professionals, parents, students, and representatives of institutions related to education – took part. The data helped compose the department’s action plans for 2016.

“Indique” is coordinated by Educational Action, by the United Nations Children’s Fund (UNICEF), the United Nations Development Program (UNDP), and the Ministry of Education’s Anísio Teixeira National Institute of Educational Studies and Research (INEP).

VOTORANTIM CIMENTOS

BUSINESS VISIONVC’s sustainability strategy aims to establish socio-eco-efficiency dynamic activities based on the company’s relationships throughout the value chain

Votorantim Cimentos has been enhancing the way it approaches sustainability, adopting a vision that is increasingly connected to the business. As with other Votorantim companies, and based on the characteristics of the industry it operates out of, VC operates mainly in hard-to-reach municipalities that have deficient infrastructure, local economic development, and manpower qualification. Programs that are structural in nature, such as the Support for Public Management (AGP) and the Votorantim Program for Children and Adolescents (VIA) are often required by the company, as are actions aimed at the promotion of the local economy.

In 2015 Votorantim Cimentos participated, for example, in the implementation of pilot projects based on the Production Chain, a technology of the Brazilian Service of Support to Small and Medium Enterprises (Sebrae) available to Votorantim’s supplier network through a coordination promoted by the Institute. The actions are structured based on five focus areas - Small Business Development, Learning Network, Competitive Intelligence, Corporate Policies and Access to Markets - and aim at improving the companies’ performances and their degree of autonomy on the market.

The program has the potential to impact simultaneously the company’s productivity and the local economy through supplier qualification. The companies that make up the supply chain in the municipalities of Edealina (Goiás), Sobradinho (Federal District), and Cantagalo (Rio de Janeiro) were served by the Chain project in 2015.

Business topics

The technical support the Institute provides is not limited to issues related to external social investments; in fact, it has become increasingly connected with business topics. In 2015, the organization coordinated of the dialog between Votorantim Cimentos and the National Movement of Collectors (MNC) in order for the company to present its project to use recycling waste as fuel in the cement furnaces. The goal was to show the synergy there is between the company’s initiative and the collectors’ interests based on the opportunity to create value for society as a whole.

The main fuel currently used in the furnaces is petroleum coke, but VC has already been substituting some of the material for industrial waste, with positive impacts on the environment through the reduction of petroleum consumption. At some of the units, the replacement rate exceeds 60 percent. At the Cuiabá and Nobres units, in


R$ 16.7million


projects undertaken

103


ReDes in Xambioá

Mato Grosso, materials such as tires, rice straw, industrial waste, and sawdust are already used on a regular basis. The proposal now is to leverage urban waste that cannot be returned to the production chain for reuse or recycling and, thus, would have landfills as their final disposal destination.

Meetings were held throughout the year between representatives of the company and of MNC and, at the end of the year, the topic was part of the lecture agenda of the National Meeting of Collectors, held annually in São Paulo. Edson Rodriguez, from VC’s Raw Material and Alternative Fuel area, was the speaker.

In Tocantins, Votorantim Cimentos supports the Biojewel Artisan Cooperative of Xambioá (COOABX), which makes accessories and decorative objects out of seeds, nuts, and fiber from plants typical of the Cerrado region. There are 22 co-op members; 15 of whom have the cooperative as their sole source of income. “Before the cooperative, many families lived only off of the husband’s salary; now, with this additional income, things have improved a lot,” says COOABX president Santana Barreto Silva.

With financial and technical support from the ReDes program, the project has been professionalized in aspects related to piece design and production, marketing strategies, and administrative and financial management.

The average annual production is around 8,000 pieces. The goods are sold in stores in São Paulo, Brasilia, Belo Horizonte, and Palmas. The orders are made on the cooperative’s Facebook page, in addition to at trade shows and events.

In 2015, the Xambiart was granted the BNDES Best Practices in Solidarity Economy award.

To Rodriguez, “the Institute played an important role in this dialog, and helped us show how our work converges with the collectors’ work.”

In Cuiabá, for example, a proposal has been made for a Public-Private Partnership (PPP) for the management of solid waste and the landfill of the city, based on a model that provides for proper material segregation and different destinations in accordance with the type and condition of the waste. Submitted to public consultation in early 2016, the PPP tender requires the winning company to install sheds for organized groups of collectors from the capital city and surrounding towns to handle the recyclable waste. Votorantim’s plant located in the city has the potential to receive the volume of waste. The company’s plan, as discussed with the municipal government, is to establish a partnership agreement for the receipt of the materials.

A similar operating model is being discussed in Sobral, Ceará, which is home to another VC unit.


VOTORANTIM SIDERURGIA

THE CHALLENGE OF INTERNATIONALIZATIONOperating and being present on foreign markets is an important part of the Group’s business model, and the Institute has increased its support for the companies’ social performance in the international arena

In 2015, the Institute supported Votorantim Siderurgia (VS) in preparing an assessment of the performance of the PazdelRío Foundation, the social arm of VS subsidiary in Colombia. The initiative aimed to deepen knowledge of local specificities, to identify opportunities for improvement, and to reinforce the strategic alignment to the Institute. These goals have guided the Institute and VS teams in diving into the local reality.

PazdelRío is the largest steel company in Colombia. It is located at the department of Boyacá, in the central region of the country, 220 kilometers from the capital, Bogota, and operates its own iron ore, coal, and limestone mines in various municipalities. It was established in the late 1940s, and since 2007 has been controlled by the Votorantim Group. It is the only Votorantim company to have a foundation in Colombia.

The diagnosis made in 2015 took three dimensions into account: Institutional, organizational, and programmatic. At the institutional level, the focus was on analyzing the fundamentals that guide its performance, such as its objectives, social status, in addition to the characteristics, limitations, and opportunities inherent to the legal form of a foundation. The organizational dimension considered

elements related to general management, governance, financial management, and account rendering. At the program level, the diagnosis focused on establishing possible convergences between the Foundation’s current projects and Votorantim’s social investment objectives.

To Votorantim Siderurgia’s Communications and Social Responsibility Manager Daniella Lopes, the analysis “was crucial to define action plans that will be implemented from 2016 and will make it possible to optimize resources and enhance the social impact in the medium and long term.” To communication and corporate social responsibility analyst Letícia Born, the Institute’s participation enriched the end result. “We worked together, particularly at the work construction and validation stages; without the Institute, it would not have been so complete,” she noted. Daniella and Letícia mention integration and partnership with the Foundation’s team as key to understanding local specificities and to undertake the analysis successfully.

The work has given more depth to the alignment effort that had already been in progress since 2007 and laid the foundation for a long-term improvement plan. Everything that was built from the diagnosis was validated by the Institute’s Board and has shareholder backing for implementation.


Some of the recommendations resulting from the process started to be further implemented in 2015, with the improvement of the administrative and financial management. Initiatives scheduled to be launched in 2016 include reassessing the Foundation’s institutional position based on its vision for the future, seeking financial autonomy for the projects developed through fundraising, and bolstering the foundation’s relationship with employees, surrounding communities, and other stakeholders.

The Institute has been strengthening the initiatives in partnership with Votorantim units located abroad. At Votorantim Siderurgia, in addition to serving PazdelRío (photo), in Colombia, it provides support to Acerbrag, in Argentina.

It also undertakes projects with Votorantim Metais’ Cajamarquilla unit, in Peru, and is gearing up to support Votorantim Cimentos in projects at the units located in Bolivia, the United States, and in Europe.

R$ 3.9 million


projects undertaken

21


LEGADO DAS ÁGUAS/VOTORANTIM ENERGIA

CONSERVE TO DEVELOP An integrated social strategy between Votorantim Energia and the Legado das Águas - Votorantim Reserve combines the preservation of the rare Atlantic Forest ecosystem with the development of the Vale do Ribeira region

For over 50 years, Votorantim has operated a complex of seven hydroelectric power plants in the Ribeira Valley, and 3 years ago it introduced Legado das Águas - Votorantim Reserve, the largest private reserve of the Atlantic Forest biome in Brazil, covering an approximate area of 31,000 hectares in the state of São Paulo.

The plants are managed by Votorantim Energia, while the Legacy by Votorantim S.A.’s holding company. In 2015, Votorantim Energia and the holding aligned their social plans and started to implement coordinated actions in the municipalities of Juquiá, Miracatu, Tapiraí and Votorantim, which are directly affected by two ventures.

The objectives pursued went on to integrate with the community, to promote economic activities focused on social and

R$ 1.7 million

R$ 1.3 million



projects undertaken

projects undertaken

14

5

environmental development, and to help increase the provision of infrastructure and enhance the quality of public services.

Based on diagnoses that evaluated the social, cultural, and economic conditions, and on the characterization of the three municipalities, a joint plan of social action was implemented with economic dynamism, engagement with stakeholders, entrepreneurship, and public management actions.

In 2015, the main action was a diagnosis of the rural and territorial development of the communities surrounding the Legacy, with a focus on the communities in the Tapiraí and Juquiá area.


CAPEX

SIDE BY SIDE WITH THE PROGRESS OF THE BUSINESSIn the context of new operations or expansions, the Votorantim Institute’s expertise can leverage structuring social initiatives and better prepare the locations that receive investments

In 2015, Votorantim Metais (VM) made progress in decisive steps for the completion of the Aripuanã Project, an initiative of underground mining polymetallic and processing of zinc, lead, and copper, in Serra do Expedito, located 25 km northwest of the Mato Grosso city of Aripuanã. The project involves investments worth R$675 million, is scheduled to start operating in 2018, and is expected to have a useful life of at least 15 years. The year 2015 was marked by an intense dialog between the company and representatives of the government and of the society for the presentation and discussion of the project, of the documents required for environmental licensing - Environmental Impact Assessment (EIA) and Environmental Impact Report (EIR) - and of the expectations of the various stakeholders involved.

The Institute supported Votorantim Metais’ participation in the calendar of technical forums and public hearings held in the second half of the year, and provided qualified information for dialog, especially with regard to risk management and the generation of positive social impacts derived from the operation. This was possible based on the social action planning work done in the city, which is taking place in parallel to the steps taken prior to the new unit’s deployment.

With support from the Votorantim Institute, initiatives related to the Support for Public Management (AGP) program, a proprietary Institute technology aimed at modernizing

municipal management practices and land use planning by improving local infrastructure, for example, were agreed to with the local government. Work got underway in April. Also started at the municipality were Votorantim Partnership for Education (VPE) and ReDes Program activities.

Additionally, the first meeting with local mobilizers of the Votorantim Program for Children and Adolescents (VIA) was held in May. The program’s first delivery will be a diagnosis of the violence against children and adolescents in the city aiming to support advocacy actions.

The actions help the company lay the foundation for the relationship with the local community and to play an important role in preparing the municipality to receive the new venture.

Defining social action strategies for new operations or upgrade projects has been a trend at Votorantim in recent years, and the positive results of the experiments that are carried out drive growth. In 2015, three Capex projects relied on social strategies: Aripuanã (MT), Primavera, and Rondon do Pará (PA).

BANCO VOTORANTIM

A NEW LOOK AT SOCIAL ACTION The Institute served as a consultant in a wide-ranging review of the social strategy and performance

Faced with the challenge of re-evaluating its own social action strategy to strengthen its connection with the business and long-term vision, Votorantim Bank sought external expert knowledge in the area and chose the Institute to do this work. Throughout the year, the Institute’s consulting team conducted an analysis of the internal and external elements of the current scenario and future trends that supported the construction of the Bank’s social strategy and position, validated by the company’ senior governance.

“The work was very thorough, enabling us to resignify our performance in a broader context and in line with our institutional positioning,” explains Jonathan Colombo, Votorantim Bank’s Manager for Sustainability and Social Responsibility. “The gathering of information and the analysis that was done helped us better define the drivers of social investments,” he says.

The prior diagnosis the Institute prepared (see box) was validated by the Bank’s managers and served as the base for the development phase, which involved the definition of the general guidelines of the strategy, of the governance model for the topic, and of the project management process. The guidelines have already been implemented to guide the selection of incentivized projects the Bank is supporting in 2016. There are 45 initiatives addressing issues related to culture, sports, the rights of children and adolescents and the elderly, and to the health area, which have in common their alignment with the company’s commitment to the future of Brazil.

participants in sporting events

children served under the scope of the Childhood and Adolescence Fund

tickets distributed free of charge for cultural events

participants in programs for the elderly

353,266

1,531

1.3 million +

92,000 +

R$ 21.9 million

projects supported



The Institute monitors the projects and evaluates the results, while the Bank’s team monitors the results using management tools. Through a periodically updated indicator panel, company managers receive key information about the progress of the initiatives. To Colombo, this is an important difference when it comes time to share information internally. “The tool helps us translate into the executive language data from a typical social environment that need to be measured objectively and would be difficult to convey only in numbers,” he says.

The strategy review was not limited to social investments. The process leveraged internal discussions about other possibilities of action, and the company is getting ready to launch a corporate volunteer program in 2016.

Strategic drivers: Mission, vision, values, sustainability position

Company and shareholder policies and practices

Internal interviews: Bank executives, members of the Board of Directors

External interviews: Shareholder managers, partners, experts

Comparative study of private social investment practices

Analysis of incentive laws and interviews with government officials on the subject

Industry reports and trend studies

Prior diagnosis: Main elements



SOCIAL HUB

JOINING EFFORTS FOR SOCIAL IMPACTBNDES; Sebrae; the ministries of Development, Industry and Foreign Trade, and Cities; All for Education; IDB; the Arapyaú Institute, and the Lemann Foundation are among the organizations that make up the Institute’s network of partners.


In 2015, the Institute intensified its joint work with civil society organizations, government, and development agencies in order to identify joint action opportunities that add new expertise, effectiveness, and scope to the initiatives carried out. Through the qualified search for partners, it enhances Votorantim’s access to expertise, methodologies, and financial resources to implement the programs, adding value to the businesses and communities in the daily support of the development of the social strategy. The premise is to channel efforts of different organizations to coordinate complementary potential and face common challenges in the field of social action.

Throughout the year, the number of network institutions contributing with financial and technical resources increased from five to nine, with the development of ten collaborative initiatives.

The National Development Bank (BNDES) acts as a joint promoter of two social technologies the Votorantim Institute operates: The ReDes and Support for Public Management (AGP) programs.

From 2010 to 2015, ReDes set R$62 million into motion, divided equally between Votorantim and BNDES, to develop productive groups in 28 municipalities. By participating in the initiative, BNDES puts into practice its mission to act in reducing inequalities and regional development by means of the productive inclusion of low-income populations.

Investments in the Support to Public Management are in line with the institution’s commitment to modernize tax administration and improve the quality of public spending

through efficient resource management. The joint work began in 2012, with the implementation of a pilot project in four municipalities. This has been being expanded year by year, reaching a total of 24 in 2015.

In 2015, the partnership with BNDES was enhanced to the two programs, and the total investment plan for the 2016-2019 period adds up to R$40 million.

Another important partner in the scope of the AGP is the Ministry of Cities, which contributes to the initiative’s objectives by providing training in integrated urban policies to public and social agents. The courses - online and classroom - are part of the Ministry’s National Program for the Qualification of Cities (PNCC), which aims to promote institutional development and technical training focusing on process efficiency and on the construction of democratic and social justice.

The sum of efforts to achieve matching goals focused on the same audience has driven good results. In 2015, the Votorantim Institute supported the Ministry in divulging its online courses and helped facilitate classroom training modules in the municipalities of Juiz de Fora, Corumbé, and Fortaleza, which were attended by hundreds of people.

The same logic applies to the coordination work done by the Institute to help increase the efficiency of the National Program for Access to Technical Education and Employment (Pronatec), coordinated by the Ministry of Education and Culture (MEC). The Ministry of Development, Industry and Foreign Trade (MDIC) is the requester of openings for training for the productive sector.


Based on the information Votorantim gathers, the Institute qualifies the mapping of the demand in the municipalities and guides the companies in coordinating local organizations capable of offering the courses, such as the S System companies – National Industrial Education Service (Senai), Social Service of Commerce (Sesc), Industry Social Service (Sesi), and National Commercial Learning Service (Senac). Courses conducted in 2014 and 2015 amount to an investment of R$11.9 million, with 5,900 people having been trained.

Exchange of Knowledge

The sum of the expertise and the complementarity of the performance leverage two Institute initiatives with the Brazilian Service of Support to Small and Medium Enterprises (Sebrae). The two organizations have teamed up to create an initiative to empower the local business environment, which consists in the coordination of actions based in a same territory to prepare development plans with the aim of strengthening leadership and activating productive potential. The work also involves a partnership with the Brazilian Confederation of Commercial and Business Associations (CACB), which is part of a few of Sebrae’s action fronts in the local economic development area.

The proposal is for the three organizations act in a coordinated manner to address common challenges in areas of mutual interest. An example is the application of the Leadership for Regional Development (Leader) program, or of the Entrepreneur Public Leader program, together with the ReDes initiatives developed by Votorantim, in order to drive local transformation and establish a more solid foundation for the autonomy of local agents and of the public administration itself.

Another front of action with Sebrae, coordinated with the Sector Service to the Industry is the Productive Chain methodology. The work has focused on increasing productivity and the quality of products and services of small businesses in order to strengthen these businesses and increase their access to major buyers. The program’s implementation in Votorantim units’ value chains meets the business’ demand to qualify suppliers and boost productivity, especially in areas of low economic development that characterize much of the context of the company’s operations.

With the All for Education movement, the Institute maintains a collaboration project in the development of the Votorantim Partnership for Education (VPE). The content of the 5 Attitudes initiative, built by the movement based on a survey carried out among student parents and educators from all over Brazil on the actions and behaviors that promote the partnership between family, school, and community and that have a positive impact on student learning, guides many of the training and engagement activities the VPE has undertaken. The 5 Attitudes rely on the assumptions of affective ties, frequency, recognition of progress made, dialog, and good examples and aim to promote the joint responsibility of the various players involved in the education improvement process.


The Institute is a member of Brazilian and international networks that work on qualifying private social investment, developing sustainable communities, and measuring impact. They are: Foundation and Company Studies Group (GIFE) Comunitas, CECP (Committee Encouraging Corporate Philanthropy), RedEAmérica, and the Emerging Markets Multinationals network, of the German Cooperation Agency (EMM- GIZ).

Strategic Networks

BNDES

Gife

GVces

CECP

Sebrae

Comunitas

Pnud

RedEAmérica

CACB Arapyaú Institute

German Cooperation

Agency

All for Education

Lemann Foundation

IDB

Ministry of Cities

Ministry of Development, Industry, and Foreign Trade

NETWORK EXPANSION

THREE NEW PARTNERSHIPS ENHANCED THE INSTITUTE’S NETWORK IN 2015 WITH A VIEW TO IMPLEMENT PROJECTS FROM 2016.

Inter-American Development Bank (IDB)

IDB is a partner in two initiatives. An agreement provides for the funding of $1.3 million from the Multilateral Investment Fund (MIF) for the improvement of the ReDes program. The goal is to take advantage of the learning made so far to improve the methodology by focusing on the sustainability of the supported business and on increasing the program’s replicability in different contexts.

Another partnership project takes place under the Emerging and Sustainable Cities Initiative (ICES). Under the Institute’s coordination, a Memorandum of Understanding was signed to include the municipality of Três Lagoas, Mato Grosso do Sul, in the initiative. The ICES provides technical and financial support to drive sustainable urban development based on diagnoses and action plans for issues related to the environment and climate change, urban development, governance, and fiscal management.

Três Lagoas is home to a Fibria pulp production unit that is being upgraded. The Votorantim project is expected to be completed by late 2017. It involves investments worth $2.2 billion, which will double production capacity, create about 3,000 direct jobs in the operation, and rank the plant among the world’s largest pulp producers.

The IDB and the Votorantim Institute have implemented joint actions in

two fundamental development areas: Cities and social businesses. Through our Emerging and Sustainable Cities Initiative (ICES), we are supporting the city of Três Lagoas in its development of an action plan for short-, medium-, and long-term sustainable development with the definition of priority areas for intervention. Together with the Multilateral Investment Fund (Fumin), a member of the IDB Group, we have contributed to cooperative enterprises and to enterprises aimed at strengthening capital, allowing low-income families to attain financial autonomy. We consider partnerships with the private sector and civil society fundamental for consistent development projects, and the Votorantim Institute has been a partner that has been extremely aligned with our aspirations, concerned with joining efforts to improve lives.”Hugo Flórez TimoránIDB’s representative in Brazil

“

The application of IDB’s methodology, focused on medium-sized cities (with populations ranging from 100.000 to 2 million) with economic growth above the national average and potential for regional integration, confers more breadth and depth to the efforts aimed at strengthening public management that was already developed by the Institute at Três Lagoas.


Arapyaú Institute

Votorantim Institute’s experience in projects aimed to support public administration and local knowledge were two factors that made it stand out for its choice as a member of the Sobral with a Future project, which aims at the construction and collaborative implementation - of the private sector, government, and organized society - of an integrated plan for the sustainable local development of Sobral, in the state of Ceará. The city is home to a unit of Votorantim Cimentos, and was already the focus of the Votorantim companies’ social initiatives.

The Arapyaú Institute and the Votorantim Institute are co-funders of the project and are part of the group of promoting entities with the Federal University of Ceará, the Acaraú Valley University (UVA), and the Federal Institute of Education, Science and Technology of Ceará (IFCE), as the technical implementer. The Votorantim Institute will also be in charge of the financial management of the project.

Sobral is located 240 km from Fortaleza, and has 201,700 inhabitants. It is the third largest economy and has the second highest Municipal Human Development Index (0.714

- considered high) in the State. The goal of the coordination promoted by Arapyaú is to make sure that the municipality’s path towards development is sustained over time and generates benefits for the entire community.

All candidates for city government will be invited to commit to the future vision built based on the project, and the idea is to mobilize a local group to be responsible for monitoring the implementation of the actions over time.

Lemann Foundation

The proposal is to enrich the work of the VPE by using tools and methodologies the Foundation has developed to qualify the decision-making of the audiences involved in improving education in Brazil. The foundation is a non-profit, family organization that supports innovative projects in education, empowers industry professionals and leaders, and conducts research to support the improvement of public policies. By joining

efforts with the Institute, the Foundation’s work gained capillarity and different application contexts. In 2015, the VPE was present in 17 municipalities in 12 Brazilian states.

One of the intelligence solutions the Foundation undertakes to be used within the partnership is the QEdu Redes platform, an online database that gathers information and educational indicators to assist in the planning the public education networks’ actions.

Sobral with a Future is a challenging project, as it is creating a new model of

public involvement in the long-term planning and in the definition of municipal public policies. In line with our commitment to achieving together, the Arapyaú Institute and the Votorantim Institute are co-investors in this initiative. Arapyaú has supported citizen mobilization initiatives and actions to promote people’s participation in politics; and the Votorantim Institute has an important front in supporting the public administration and had already working on modernizing management in Sobral.”Thaís Ferraz, Arapyaú Institute Program Manager

“



The reason for our work, and the driving force behind our long-term planning, is making sure that Votorantim’s presence improves peoples’ quality of life and leads to a better environment for the companies’ operations. We are aware of the fact that there is a lot to do, but, when looking at the results achieved in 2015, presented in this Activity Report, we are confident that we are on the right path.

The participation of the school community – students, parents, and teachers – in the decisions concerning the present and future of the school, the increased income of the families that are part of productive projects, better qualified suppliers, and cities that are better prepared to design and build long-term development and to offer better quality services to their citizens are concrete examples of this. These and other social advances we are building allow us to be sure that the structured operation of the Votorantim companies, underpinned by a consistent network of partners, have transformed peoples’ lives in the communities where we have a presence, both in Brazil and abroad.

While, on one hand, economic difficulties, particularly in Brazil, required us to reduce, even if slightly, social investments between 2014 and 2015 (R$76.1 million and R$71.5 million, respectively), on the other, we have been able to maintain the number of beneficiaries: 400,000. Additionally, we prioritized structuring initiatives conceived for the long-term and with perennial impact in peoples’ lives.

VOTORANTIM COMPANIES’ STRUCTURED PERFORMANCE, UNDERPINNED BY A CONSISTENT NETWORK OF PARTNERS, HAS TRANSFORMED THE LIVES OF PEOPLE AT THE COMMUNITIES WHERE WE HAVE OPERATIONS, BOTH IN BRAZIL AND ABROAD.


With the Votorantim Partnership for Education, for example, we supported municipal education managers in preparing diagnoses and action plans to boost access to childhood education.

In the ReDes program, which we carried out with BNDES and in which we were supported by the IDB, in 2015 there were groups showcasing their products at airports, others went on to supply to municipal school meals, and a few to major retail networks.

In public management, citizens from 21 Brazilian towns can now monitor the 16 sector plans that were voted into municipal laws and may become sustainable actions for the population.

The three initiatives, and many other actions implemented, drove a better business environment and brought a new perspective to people impacted by them. These are examples of how planning and managing financial resources aimed at social actions, when implemented efficiently and with a strategic focus, represent investments and not costs to the companies. With this evolution in mind, we are encouraged to look forward, with courage and optimism, to future challenges and to continue advancing, always.

Ana Helena de Moraes Vicintin Vice President of the Votorantim Institute’s Deliberative Council


CoordinationAndré Rodrigues de LaraRafael GioielliRaquel LeiteWillian Lourenço

Writing and editingJudith Mota

TranslateÚltima Versão Traduções

Graphic design and layoutZapall Comunicação

InfographicsNaná de Freitas

PhotosVotorantim Institute Stock Photos

Printing and finishingCorset

For more information about the work of the Votorantim Institute, contact us via e-mail [email protected] or go to:

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www.programaredes.org.br

DELIBERATIVE COUNCILPresidentJosé Ermírio de Moraes Neto

Vice PresidentAna Helena de Moraes Vicintin

BoardCloves Otávio Nunes de Carvalho

TEAMGeneral Management of Planning and Development of Social ActivitiesRafael Gioielli

Corporate RelationsAdemar AssisJunia CaldeiraJussara Barbosa Marcela LairesPaula EbelingSueme Matuzawa

Program ManagementAna Paula BonimaniCarolina Alves de JonghFelipe CastroFernanda Serem PereiraFilippe BarrosGustavo AlvesKarina SaesLarissa CruvinelLuis CamposRaquel Leite Renata BugniMichelle OliveiraTatiana Capitanio

PMO Ana Carolina CarvalhoAndré Rodrigues de LaraEdson Souza Junior

CommunicationsMelanie LayetWilian Lourenço

Administrative and financialAntonio Neres CardozoLucinalva SantosMariana Liberato Thais Chaves

Institutional Coordination and PartnershipsLigia Saad

mailto:contato%40institutovotorantim.com.br?subject=Relat%C3%B3rio%20de%20Atividades%202015

http://www.institutovotorantim.org.br

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http://www.programaredes.org.br

2015 - instituto votorantim · votorantim s.a. legal entity. previously a corporate and operating...

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