sustainability...sustainability report 2018 5 a message from 2018 was a very important year for the...

Sustainability

2018

We provide packaging for a better world

2SUSTAINABILITY REPORT 2018

“I am proud that our board of directors is always concerned with

our responsibility towards the environment and community,

achieving an adequate management of solid waste, investing

in efficient infrastructure for recycling, making sustainable

investments and for offering dignifying job opportunities.”

“Our most important asset is the human resource; we work

in a permanent manner on ensuring work environments and

opportunities that promote development, innovation, problem

solving and empowerment of our people, that is the starting

point of our strategy and actions.”

“I am thankful for the opportunity of being a member of

Termoencogibles’ board of directors, from where we share the

commitment of looking out for the sustainability of the business

in a responsible manner with all our interest groups: clients,

community, environment, to name a few.”

“As leaders of the industry, we find that recycling is integral

part of the business growth strategy; we work at the forefront

to guarantee the sustainability of our raw materials, products,

clients and environment, as responsible citizens.”

“Sustainability in companies is based on an equilibrium of human

capital investment, resources and technology optimization with

a positive impact on the environment, achieving a profitability

and consistency in products, looking for opportunities and

quality in the services offered to the client.”

“The most important lesson our path has taught us is, that there

cannot be true entrepreneurship without human sensibility.

That is why one of the principles in our corporate philosophy

is mutual development, since we are convinced that long-term

growth is only possible with support of collaborators who are

committed and identified with the organization.”

Board of directors

Cristian Leñero Hugo Eduardo Tona Jose Carlos Bonilla

Blanca Villela Arturo Alfredo Tona Hugo Tona y Arturo Tona


Content

Organizational profile Industry Continuous improvement

management Humantalent

Corporate social responsibility

Pillars of Sustainability Global Reach General Organizational Chart Benefits ProgramTermo Business System

New Plastics Economy Global Recycling Plant Staff Turnover Family Gathering 2018History of Operational Excellence

Packages that stand out and are environmentally friendly

Work Environment and Climate

Healthy Life

Reduction of CO2 tons

Training and Development

Recognition Program

Production and Finances

Occupational Safety Performance

Commitment Energy Efficiency Management System (S-GEET in Spanish)

Occupational Health and Opportunities for Everyone

Integral Health

Achievements and Certifications

Leadership Development

Termo Super Humans


Sustainability committee

Commercial Corporate Social Responsibility

CommunicationsContinuous Improvement

The committee complies with the objective of directing the Sustainability strategy, and to coordinate and impulse its most important initiatives.

Rodrigo TonaLuis Carlos GómezEduardo VidalMiguel ArguetaJorge MurilloJuan Diego Tobar

Eduardo Abaunza

Hugo Eduardo TonaAndrea Oviedo

Jenniffer CabreraMelania ParadaIrene Alvarenga

Team Leaders


A message from

2018 was a very important year for the business, since we accomplished the construction of the company’s sustainability strategy, based on

four great pillars: Eco Efficient Operations, Eco Friendly Packaging, Sustainable Communities and Shared Commitment.

In the first one, Eco Efficient Operations, we seek that our operations’ guarantee the optimization of all resources, such as energy, promote internal and external recycling, ensure that carbon emissions are reduced in the processes we can control and also compensate for the emissions remaning.

The second one, Eco Friendly Packaging, is a true challenge since we have to innovate in packaging solutions for diverse industries, while encouraging clients and customers to use options that allow packaging to have less environmental impact.

When we speak about Sustainable Communities, we refer to the continuous work with internal public in topics of values, professional growth, inclusion of people with disabilities and increase of number of female personnel in production areas. Additionally, through strategic alliances we strive to bulid long lasting mutually beneficial relationships with the communities we work with.

In Shared Commitment, our objective is to reach the public in general in order to educate and create alliances that have social and environmental impact, making pioneer efforts as a packaging manufacturing company in the creation of a truly circular economy model.

Looking on towards the future, the packaging industry has an important

role to play, and that is why we identified sustainability as an integral part in

our growth strategy; which is based on values, our personnel, compliance

with ethics, transparency and accountability and being mindful of the

impacts we produce; all this demonstrates the strong commitment to

building a better world for present and future generations.

Our Sustainability report will continue being the instrument to

communicate advances in all our actions, such as: the 800 volunteers

that participated in the company’s different activities, the more than 500

thousand sea turtles that have been released into the ocean, over the

last 9 years, this has been done in conjunction with Funzel (Fundación

Zoológica de El Salvador in Spanish), it is important to mention that it is

one of the programs that educates the most on the importance of beach

care and maintenance of the ocean.

On the subject of development, we had 26 new high school graduates

and invested more than 20 thousand hours on training and development

of internal public. We were also awarded the Positive Brand in El Salvador

for a second time, with the project: Termo Energy Management System,

recognition given by Fundemas (Fundación Empresarial para la Acción

Social in Spanish), in the category of environment.

Furthermore, we see ourselves as leaders of Circular Economy in the

region, having the Sustainable Development Objectives as guidelines, we

are working on an ambitious waste collection project called: Recycle 503

(to be launched early in 2019), whose objective is to educate and collect

plastic waste (straws, bags and caps) to be processed in the recycling

factory.

In 2019, we will to incorporate to our portfolio completely bio-based and

compostable products, as new alternatives to brand owners and end

users.

We will continue giving life to the four pillars through projects that

generate positive change for people and the planet.

Recycling is Sustainability!


Stakeholders Main material topics

Target audience

Environment

Social

Financial Management

Waste Management

Contribution to economic growth in the countries where

we operate

Release of sea turtles

Generation of sources of employment

Recycling and education Arborization Volunteering

Labor practices: compliance with

the law and occupational health

standards

Inclusion and gender equality

Technical and superior internal

training and Education

Supplying of blood banks

Health campaigns Culture of Ethics

- Employees: management team

- Employees: administrative and

operative

- clients - strategic

- Clients - consumer

- Clients - distributor

- Government

- Direct competition

Economy

INFLUENCE

DEPE NDENCY

HIGH

HIGH

LOW

LOW

SUPPLIERS

SUPPLIERS

GEOGRAPHICCOMMUNITY

INDIRECTCOMPETITION

DIRECTCOMPETITION

FISCALGOVERNMENT

GOVERNMENT

COMMUNITY

FAMILY

MANAGEMENT

TEAM LEADERS

SHAREHOLDERS

BUSINESS UNITS(CONSUMER, DISTRIBUTOR AND STRATEGIC)

OPERATIVE(EMPLOYEES)

CLIENTS

OrganizatiOnal

SUSTAINABILITY REPORT 2018

PrOFilE

ORGANIZATIONAL PROFILE


In alignment with the Objectives of Sustainable Development:

Our mission is to provide packaging for a better world

through the four pillars of sustainability

Pillars of Sustainability

INDUSTRY, INNOVATION, AND INFRASTRUCTURE

SUSTAINABLE CITIES AND COMMUNITIES

PRODUCTION AND RESPONSIBLE CONSUMPTION

ACTION FOR THE WEATHER

MARINE LIFE ALLIANCES TO ACHIEVE GOALS

ALLIANCES TO ACHIEVE GOALS



Work with brand owners to reduce

the packaging material per unit of the

products, where this is possible.

Provide reusable options for all our

retail clients and others, where it is

relevant.

Provide packaging alternatives:

reusable, recyclable, compostable or

biodegradable.

Work with local authorities,

associations and communities to

involve them in an active manner

and lead the development of a

sustainable recycling chain that is

realistic in our markets.

By 2025, 50% of our products’ raw

material will be recycled.

We are the first packaging company in Central America that enters the Global Commitment of

the New Plastics Economy!

Commitments

It was created in 2010 with the purpose of accelerating the transition of circular economy in the agendas of responsible companies, governments and academics.

The New Plastics Economy pretends to create an effective economy of reused products and materials, reduce plastic in natural ecosystems and separate it from raw fossil materials.

*These commitments were approved the last trimester of 2018. The official publication will be released in 2019.

Commitments 2015



Our priority is to do business with ethicsTwo years ago, we institutionalized our Corporate Code of Ethics

available for internal and external public through our website.

100% of the cases exposed in the mailbox “Express yourself”

were managed by the Ethics Committee.

Every year we reinforce ethical conduct on our internal public by giving follow up to complaints submitted through different channels available. 19 mailboxes “Express yourself for ethics” in Aoperative factories and administrative offices.

+ 20 awareness processes

12 publications of Ethics recharge

Ethics channels

Summary of reports registered in 2018

19 mailboxes “Express yourself for ethics” in Aoperative factories and administrative offices.

Digital mailbox in our internal network.

Ethics telephone line (503) 2212 7319

Email: [email protected]

Ethic

Ethics cases Suggestions

industrY


INDUSTRY


Global Reach Global Reach

Strategic location that

favors the economy of our

clients; accessibility for

better communication with

dispatches, fast delivery and

agile attention to the market’s

needs.

INDUSTRY


Recycling

Recycling plant

At the time, the largest and most modern recycling facility of polyethylene film in the region.

We receive material from two sources:Internal: which comes from our own production flow.

External: which comes from postindustrial recollection sources and entrepreneurs specialized in the business.

2018 was a good year, we increased our production capacity by 48%. This means that there is recycled content in 57.88% of the products in our portfolio.

Recycling is Sustainability

Evolution of the recycling productive chain

* Recovered material comes from production plants.* Recycled material comes from external sources; the majority are clean postindustrial plastic residues.

WE RECOVERED INTERNAL PLASTIC

NEW PELLETIZING TECHNOLOGY

NEW GRINDING

TECHNOLOGY

PELLETIZING + GRINDING

TECHNOLOGY

PLANT PROCESSES EXTERNAL + INTERNAL

TO REACH 25 THOUSAND

TONS ANNUALLY

RECYCLING CHAIN (CLASSIFYING + PELLETIZING)

RECOVERED + RECYCLED.

INDUSTRY


Transformation of Continuous Improvement in Recycling

Recycling Chain

Input (Internal and external sources)

Recycling Plant

Recycled raw materials

New products from recycled material

Materials we recycle in the plant

Bottle caps Plastic film and bags

High density bottles

Straws

Recycling

Training 100% of the employees in continuous improvement.

88% have participated in events.

OBEVA construction (board for indicators management).

Strengthening the relationship with clients.

INDUSTRY


Circular economy Source for other’s progress

Positive Impact of the Recycling Chain

Primer empleoFor many young job seekers, being selected to work at the recycling plant means opening the first door to the labor market, which is why it is considered a seedbed of talent; allowing them to move forward and develop in other productive and administrative processes of the organization.

The methodology of this work is based in receiving and collecting all plastic material that companies or suppliers, dispose and/or sell.

After, collection the material destined for recycling, expands of its useful life, creating new alternatives for use in packaging, as well as in other business.

“What I aspired the most when I graduated from high school was to work in Termoencogibles, I was one of the first recruits in the Classifying area. Thanks to the help and knowledge of my leaders I was able to develop, fulfilling mine and their expectations. Now, I am in a new position which represents a big achievement for me, because I have been able to keep studying and growing profesionally. This would not have been possible without the opportunities and support that the company provides.”

Nahún Flores, Employee Service Assistant 2018First Job: Material classifier 2012

We have opened new direct job positions, and our supply chain has grown, we have local and international suppliers.

“Me he sentido bien trabajando con ustedes, ya tenemos 8 años. Les he sido fieles y ustedes a mí, he abierto muchas fuentes de trabajo gracias a la oportunidad que Termoencogibles nos da. No dudo que seguiremos así”

José López, Propietario deReciclado y Transportes López.

Recycling

En el 2018 superamos la meta procesando un total de 15 mil toneladas de plástico, lo que equivale a más de

33 mil millones de libras de plástico, que ya no están en las calles,

océanos y zonas naturales del planeta.

RECYCLEREUSE

PRODUC

TION

DISTRIBUTION

CON

SUM

PTIO

N

INDUSTRY


Termo Energy Efficiency Management System (S-GEET in Spanish)

Climate change is a global challenge that has

no frontiers and to fight it, it needs coordina-

ted work from all.

The link between energy generation and

climate change is very strong. In fact, it

has been the high consumption of energy

from the burning of fossil fuel that has a big

impact on global warming and the effects

we now suffer, and probably will continue to

face in the next decades.

Originally, we believed that the best solution was to invest in a solar ener-

gy generation; however, as the results of various analysis showed, it was

necessary first “to clean up the house,” meaning that we to take on the

challenge of making significant changes in the way we consume energy

far beyond simple solutions, such as changing the type of energy source.

Sustainability is not a destination; it is a journey that begins inside our

business and at home with our employees. For this reason, we strive to

balance coherently our actions with the social, environmental and eco-

nomic impact we generate; ensuring that all of our interest groups grow

along with us.

Energy saving system in the Mass Consumption chain

This project received POSITIVE BRAND 2018 from FUNDEMAS, a national Corporate

Social Responsibilty award in the category of Environment.

Energy Efficiency Management System

The Energy Efficiency System directly supports the sustainability

strategy of the company, obtaining extraordinary results that impact

positively our society, environment, clients and associates.

Within this context and the vision of directing the supply chain

to the goal of being Carbon Neutral by 2020, the production

team has challenged itself to make changes in the use of energy, that will represents savings of around 40% of the

energy consumption of the plant.

Key actions

We recognize that if we make better use of energy, we contribute to the improvement of the condition of the planet and open the possibility of generating relevant economic benefits for the business.

Definition of current situation: History of energy consump-tion, measuring analysis, opportunities for improvement and experiments for saving solutions.

Applying Improvements: leak control, thermal conservation and support of suppliers.

Future of the activity: Replicate the adjustments in the rest of the operations.

INDUSTRY


To promote packages for a better world, Termoencogibles presents a bag made of biodegradable plastic.

Termo Bio, the bag that is a friend of the planet is for those ones who seek to take care of the environment without foregoing quality aspects.

This product complies with the international standards that guarantee the biodegradability of the product in an accelerated manner, the process of oxo-biodegradation requires the presence of solar light, heat and oxygen.

Aware of the important role that packages play in the progress of society, we base our vision in sustainable development, that inspires us to generate economic, social and environmental value for millions of people in the world through our packages.

What makes our Termo Bio unique?

100% biodegradable plastic

bags

100% made of recycled

material

High resistance

Continuous Pre-Cut Roll

Stock bags with star bottom

seal, which adds extra

resistance.

What is the meaning of a bag being biodegradable?

Biodegradability

Eco-Toxicity

DegradabilityAccelerated degradation and rupture of the plastic.

It ensures the absence of toxic residues and heavy metals.

Reintegration into the ecological cycle through microorganisms that eat the material, turning it into Carbon Dioxide (CO2), water (H2O) and a biomass through the metabolism of the microorganisms.

Termo Bio

Biodegradable alternatives

Packages that stand out and are environment friendly

A PLASTIC BAG THAT IS A FRIEND OF THE PLANET.100% RECYCLED 100% BIODEGRADABLE

INDUSTRY


Pioneers in the replacement to mono-material packaging

Stabilization of manufacturing and commercial operations in Termo Vietnam Limited. We have designed the manufacturing plant to have the capacity to handle our current clients’ needs and still be able to service new markets in the region.

Reduces carbon footprint

100% recyclable

Use of recycled material

Substitutes raw materials from fossil and bio-based origin

Simplifies its disposal compared to multi-material packaging

Vietnam

El Salvador

Packages that preserve food with top

technology and low environmental impact.

FSSC 22000 CERTIFICATION

Investments in safety. According to plan, we will be certified FSSC 22000 (Food Safety System Certification) before ending the 1st semester of 2019. This certification, will verify our compliance with the high standards required to enter the supply chain of food manufacturers.

Innovative packaging

Safety systemCommitments of all

INDUSTRY


Production

Service level

Quality level

Production and Finances

Client business unitConsumer business unit

Service level

Quality level

*Graph scale in millions

FinancesRepresentation in sales per business unit

Representation in sales per branch

Client Distributor Consumer

REAL GOALREAL

REAL

GOAL

GOAL

IMPROVES FROM 2017 7%

INDUSTRY



Certificado Nº SC 6260-1

The Chamber of Commerce and Industry, recognized us with the prestigious award “Palma de Oro” for our trajectory and contribution to

the social, economic and cultural development in El Salvador.

Some of the more relevant audits related to quality and innocuity, are the ones from the following clients: Pollo Indio, Toledo, Cargill and Molinos Modernos. The result for all audits was of conformity with the require-ments of the client, receiving the corresponding approval.

“This recognition has filled us with pride and at the same time, it inspires us to keep working on being facilitators of prosperity and growth for El Salvador”

Certification with the latest version of ISO 9001:2015 Norm

Initial date of approval: 06/24/2009 (July

24th 2009)

Graphic Measures International Certification

Approval date: 01/25/2017

(January 25th 2017)

#1 exporter of the

plastic industry

ASI 2015-2018El Salvador

Green Certified Supplier

2015-2017 and 2017-2019

Supply-Chain Security Audit

Score: 98 Risk Rating = Low Risk Priority

Audit Date: 07/28/2018 (July 28th 2018)

Audits

We also complied with the audit program for our storage suppliers: Ran-sa and Almacena.


CEO

Golden Palm

COntinuOus imPrOvEmEnt

managEmEnt


CONTINUOUS IMPROVEMENT MANAGEMENT


Termo Business SystemThe way we do business is very important; the intention is not enough; it is valuable to have a system that allows us to reach desired results in an efficient way.

The way of thinking, feeling and acting every day of each one of the members of the company, is based in two fundamental principles: respect for people and continuous improvement.

The Termo Business System or TBS consists in three fundamental components that are related between each other: strategic formulation, strategic display and operational excellency.

8 supply chain analysis

4 supply chain in 6th improvement cycle

443 rapid improvement events (RIE)

150 other transformation events

Transference of knowledge

Human dimensionThrough experience

People certificated

57% of employees immersed in Lean Culture

1,048 employees have participated in a

RIE

BRONZE

182

SPC

51

LEANACCOUNTING

CHANGE MANAGEMENT

TRAINING OF TRAINERS

20

SILVER

89

YELLOWBELT

25

31

GOLD

33 -

-

GREENBELT

13

19

PLATINUM

BLACKBELT

GEMBA COACH

5

18

LEANEXPERT

BENCHMARKING

13

CONTINUOUS IMPROVEMENT MANAGEMENT


Control rooms or War rooms, with their corresponding standard work, help to do weekly checks and manage improvements.

Multiple Boards of Daily Improvement Control (MDI) displayed all around the company to check results daily and measure the different processes everyday per hour.

RIE: Reduction of production input consumptionLeader of the event: Edwin HernándezFacilitator: Alejandra CalderónThey designed a new return flow and reuse of some production input; reusing it up to 10 times, reducing 40% of the investment cost in purchases and achieving a better price with suppliers.

RIE: Reduction of receivable days for Type A clientsLeader of the event: Carlos DahburaFacilitator: David GonzálezActions were taken for the optimization of Accounts Receivable, so that they allow a faster income through means of an effective charge to our Type A clients, always ensuring their satisfaction and business sustainability.

RIE: Optimization of the model of Market Attention and GT Logistics Leader of the event: Alex RamosFacilitator: Cesar BolañosThey succeeded in creating an integral model of attention and logistics for the market, without losing focus of the sustainable volume for all the country, making the distribution cost more efficient, as well as the search for optimal routes to reduce the sales cost.

RIE: Validation of MP (scrap) and creation of new pelletsLeader of the event: Georgina MartínezFacilitator: Rebeca JuárezNew alternatives were created for pelletized materials for our internal clients, providing an effective and efficient response to the needs of cost, quality and processability, not depending entirely on virgin materials or availability of an external pellet supplier.

A team leader group for each level of the company to transfer the vision of the company, challenge and support improvements.

Four committees per strategic business unit to transfer our vision and mission to every team, and to accomplish throughout improvement activities, the objectives of each business unit.

Monitoring in consequence of results A history of operational excellency

Committed and involved leadership

2018 was a year full of challenges for the company, and our system focused on generating effective Rapid Improvement Events (RIE) in each business unit, with the multidisciplinary work teams oriented to achieve the goal and contribute to the fulfillment of indicators. The following RIES were outstanding:

Human


talEnt

HUMAN TALENT


General Organizational Chart

Talent by countries

El Salvador

Guatemala

Honduras

Nicaragua

Costa Rica

Vietnam

1,729 employees

10 employees

7 employees

15 employees

8 employees

132employees

Staff turnover

The turnover accumulated in 2018 was 12.5%, the same percentage as the goal established by the company.

We have divided the turnover in involuntary; this one involves exits by dismissal and restructuring, and voluntary, involves exits generated by job abandonment and resignations. The detail is shown in the following chart:

Turnover causes

Human talent

BOARD OF DIRECTORS

GENERALMANAGER

LEGALADVISOR

MANAGEMENTS

INFORMATION TECHNOLOGY (IT)

ORGANIZATIONAL DEVELOPMENT AND TALENT

PURCHASES AND RECYCLING

COMMERCIAL

CONSUMER

DISTRIBUTOR

CLIENT

OPERATIONS

FINANCES

CORPORATE SOCIAL RESPONSIBILITY

DISMISSAL

Low performance

Turnover causes

Lack of adherence to values

Loss of trust

Upgrading salary

Gang threat

Studies

Health issues

Personal problems

Traveling

RESIGNATION

ABANDONMENT

RESTRUCTURING

HUMAN TALENT


Work EnvironmentOrganizational Climate

In 2018 after obtaining the results, actions were taken to track critical areas. Below, we display the outline with the six phases:

In 2018, the general average of organizational climate is found in the moderate range of strength; two percentage points below the P75 Norm (Comparison norm of studies made in companies of the Latin-American region 142). The survey was answered by 1687 employees, meaning a 92% of participation.

35% of the factors evaluated in the work climate study are scored above 80%, only the Remuneration and Benefits factor is presented in the range for improvement:

In total, 15 Action Plans have been made for the processes with critical results; therefore, questions with the least positive results have been isolated. 13 Action Plans have been executed. % POSITIVE % NEUTRAL % NEGATIVE

P75*

*Results of “Hay Group 2017” climate survey

Action plans for climate result study Climate Score Historic Results

Generalities

82% of our employees consider us an excellent place to work

90%OF PARTICIPATION

0.8ERROR MARGIN

1,796GUESTS

1,596ANSWERS

Organizational Climate

Confirmed strength

Moderate strength

Improvement opportunity

HUMAN TALENT



Class of 2018

Trust index per dimensions

Great Place to Work Historic Chart

Creating new paths

Study Permits

Termo Experience


The training programs are one of the best investments for our Human Talent, and it is one of the main sources of well-being for the personnel and the organization.

In 2018, we invested 20,098 hours in training, contributing to the development of the employees and strengthening their competences and abilities.

356TRAINING EVENTS

3,241TRAININ

PARTICIPANTS

$106,322.86CONTRIBUTION FROM THE COMPANY

$42,933.90CONTRIBUTION FROM INSAFORP

$149,256.76TOTAL100%

Internships, professional practices and social hours.

We believe in our alliances with educational institutions that promote the development of young people and give opportunities for professional development.

In 2018, our alliances were the key in the execution of institutional projects.

1,777HOURS IN PAID LEAVE

PERMISSIONS FOR

STUDIES

77COLLABORATORS

BENEFICIARIES

10 3

1

4 7OPERATORS

TECHNICIAN IN FLEXOGRAPHY

PROFESSIONAL PRACTICES

CORECOMPANY

TECHNICIAN IN MECHATRONICS

DUAL FORMATION PROGRAM

YOUNGSTUDENTS

FUNDEPLAST PROFESSIONAL EDUCATION

TECHNICAL EDUCATION

ITCA UNIVERSITIES

Total company 2018

27 Best results from more than 1000 employees CA 2018

TOP 10 from more than 1000 employees CA 2018

Year Graduated employees

HUMAN TALENT




Leaders’ Academy

Main Purpose:

The name represents its protagonists, “the leaders” and the five branches that form the development program are described through the stars and the world of Termo, which represent the group of tools created to fortify abilities and competences of an operational leader.

The open book in the base of the logo, represents the development, the interest for continuous improvement and achievement of goals set by a continuous education that makes us more efficient and effective every day.

SLOGAN: “Developing leaders at the service of people”The slogan of the program is located in a ribbon, that represents the recognition and exclusivity of this program.

In 2018, its focus was the development of leaders from top to intermediate management, providing tools for developing competences for leadership. This new program has justificare that 100% of the employees have feedback on their performance.

The key abilities to practice situational leadership are:

1) Set goals2) Diagnose specific task’s development level of employees3) Adequate the style of leadership

Each leader had a measurement that allowed to expose the actual situation and set goals for the development of these abilities.

With the help of Termo Leaders’ Academy, challenges have been established. These include offering development to employees who are reported to us, increasing quality conversations and improvement on results in an individual and team level.

Trained facilitators

94 employees trained in situational leadership

To provide leaders with effective tools to focus, develop and

commit their subordinates in the fulfillment of their goals.

ACADEMY OF LEADERSSITUATIONAL LEADERSHIP

HUMAN TALENT


Operative Recognition ProgramInstitutional Pillars

Motivation for success

Inspire teamwork

Promoter of results

We value our people and their unique

contribution.

Maintain positive relationships and promote team integration.

Institutional recognition: Hall to Excellency

Individual and team recognition

High commitment level with the success of the company.

Recognition of the supervisor’s performance

The purpose was to recognize the exceptional effort made by operational teams in the fulfillment of the indicators in each area.

Recognition

HUMAN TALENT


Opportunities for EveryoneContributing to the inclusion culture, in 2018, we reached a historical goal: the incorporation of women for the first time in productive floors. They were well received by the employees on the different processes, with whom they previously developed One Point Lessons (OPL), where we seek to reinforce the inclusion culture, in reference to the Philosophical Framework and Code of Ethics.

18 women in total are working in activities that might have been destined only for men. We have broken paradigms and are looking forward to breaking a lot more…

We also succeeded in certifying 18 employees with disabilities, with the support of the Salvadoran Institute of Social Security (ISSS). This activity was part of the follow-up of the Inclusion Plan for People with disabilities.

This year we set to establish a system that guarantees monitoring work conditions and evaluates employees, with the purpose of early knowledge of deviations on their health that may be intertwined with their job position.

We changed our way of working to protect the health of our employees

We recognize that jobs are fundamental pillars for the development of human beings. Through Inclusion Politics, we seek to stand out and socialize the company’s actions to guarantee in our processes equal opportunity and respect for diversity, including people with disabilities in work teams, complying with the valid law in each country where we operate.

On the way for inclusion:

15% job positions

tested

Inclusion and Occupational Health

90% employees tested per job position

We measured noise levels and particulate.We reduced the noise sources with the purpose of eliminating harmful levels in the area.We change the manual handling of cargo for mechanized handling.

We provide job opportunities to employees with certified disabilities.

We have tested 15% of our job positions with sensory requirements and motor skills for inclusive hiring.We have raised awareness of managers, chiefs and supervisors on work inclusion.

We have the CAOHC certification for audiometry tests, and their follow up.We have the NIOSH-ATS certification for spirometry tests, and their follow up.Our clinic personnel have the Basic Vital Support certification by AHA.

We work with international standards for exams

HUMAN TALENT


Key Actions for Occupational Safety and Health

Occupational Safety

For 2018 in the subject of Occupational Safety, two goals have been established as a parameter for comparison of our performance:

OSHA goal (Occupational Safety and Health Administration) for plastic industry, which is 46.99 for the Gravity Rate (AGR also known as Severity Rate) and an internal goal of 9.

The result of our performance was 7.58, which is 83.8% below the OSHA goal and 15.77% below our internal goal.

83.8% below the OSHA goal in AGR

The Accident Frequency Rate (AFR) established by OSHA is 3.6, and our internal goal is 0.88. Our result was 0.53, which is 85.27% below the OSHA

goal and 39.77% below our goal.

85.27% below the OSHA goal in AFR

Training, oriented for safe behavior and risk knowledge in job post, to 90% of personnel all year round.

Relaunch of OPA technique (Observe, Plan and Act) for all operative personnel.

Implementation of the One Point Lessons (OPL) which are given to all operative personnel, with specific topics on work incidents.

AGR

AFR

Occupational Safety Performance

OSHA goal

Termo goal

Result

COrPOratE sOCial rEsPOnsibilitY




Benefit program for collaborators

Benefits Program

Financial aid for funeral expenses of chil-dren or spouse

Presents given for an employee’s child arrival

Insurance Program

20,945 times have used the transport in 2018.

We know that economic help will not get you through hard times or your losses, but we are aware of the expenses they generate. For this reason, we include the policy of life insurance for funeral expenses of children or spouse.

This jolly time is shared with the Termo family; we congratulate our employees via Email for his or her child’s birth. We also give them a baby stroller and accessories.

108 strollers delivered!

This program searches coverage in insurance for our employees and their family group.

The medical insurance’s purpose is to cover a percentage of our employees’ medical expenses and their families. This benefit is available by position categories: managers, chiefs, leaders, audit and sales personnel. The number of insured employees is 181.

Food Pantry

Internal Transport

Lactation rooms

The Pantry offers basic items at lower prices than those found in the market, and it is available for all employees.

More than 320 products available!

We supply internal transport between plants to reduce traveling time. The minibus makes around 13 daily trips.

We have two lactation rooms available inside the company for all nursing mothers.

UniformsTwice a year we deliver four uniforms to operative employees for their working day.

We have given more than 6,800 uniforms.

Anniversary event in September

We celebrated one more year of the company and delivered to all our employees a commemorative souvenir, thanking them for being part of the big Termo family. In 2018, we gave a bag full of Termoencogibles’ products.

Special DaysMother´s day: we celebrated Termo women who are mothers; we delivered roses and festive balloons congratulating 74 employees. Father´s day: we celebrated 1030 fathers who are part of the Termo family, providing time and facilities to broadcast games of the soccer world championship during their working hours. We also made raffles with different prizes, such as team championship t-shirts.

Birthday CelebrationsWe have developed three events, one per plant and one celebration for the administrative area. We congratulate the employees via Email and decorate their desk with a personalized balloon.

As part of a healthy balanced life, we created the Termo

Cup tournament, in which we promote institutional values

and teamwork. In 2018, 21 teams, with a total of

420 players participated.

Termo Cup Tournament

Winners: Vietnamitas F.C.



Family Gathering 2018

The biggest annual event of the company, where we reunite all the Termo family and have the opportunity to enjoy a healthy leisure time.

FAMILY GATHERING 2018

Raffle of 165 giftsContests area gave 230 prizes

Delivered 1200 toys

33 recognitions for longevity

Delivered 2000 plantsDelivered 1700 baskets



Family Gathering and Health Program

Termo VIpYour benefits program

Thinking about a positive impact on personal economy, this program was created to enjoy discounts in different establishments.

Our health program is based on the recommendations made by ILO (International Labour Organization), where our “work health services” have essential preventive tasks for maintaining a safe and healthy work environment that favors the physical and mental health of the employee.

The success of the event is due to our volunteers

They make the event possible with activities such as:• Event organization• Toys and basket delivery• Games for children• Food• Family show, among others.We recognize their effort in an event where we thank them with a snack, prices and a present.

More than 200 volunteers made our event come true!

We have built 12 key alliances!

Integral Health Components



The fact that the company is sponsoring their races is a big motivation factor for our athletes, in which they have the opportunity to measure and improve their physical condition and personal records.

As an extraordinary activity, and celebration of the first year of work between Motiva and Termo runners, there was a hiking trip to the Volcano in San Salvador, where we had the participation of our athletes and families. This activity brought very positive feedback from its participants, and was an inspiration to set new goals for Mountain hiking.

Healthy Life

Termorunners

Sponsored races

Improvement in personal marks

Carlos Anaya - Termo runner

Javier Rodriguez - Termo runner

Beyond personal record improvements, the athletes’ feedback after a training session is very important for Motiva, as it allows them to establish more specific parameters on the intensity of the Training. Below, we share some comments about the Termo runners’ project:

Healthy Life “Being part of the Termo runners’ project has given me endless positive results that favor better performance as an

athlete and a stress-free employee with a high motivation level. For this, I am grateful for this program and feel encouraged to make the effort, to achieve more kilometers and more positive

results.”

“I find the program great, little by little more people are adding up and discovering the benefits of doing sports, especially with

the guidance of a trainer. In my case, I feel better running with no injuries, or pain, even though I have years of running, I

have never had a coach to make the process easier.”

TermoZumba

For the benefit of our employees’ health, we started in August 2018 with Zumba classes. The average attendance is 20 people per class, in which men and woman take part. Zumba has a lot of benefits that transform dance and training into a different way of exercising.

Burns calories

Full body workout

Increases coordination

Increases confidence



Reduction of CO2 tonsIn the year 2018, measurements of Greenhouse-gas

emissions (GHG) have been compared to the results in

2014, revealing a decrease of 473.9 CO2 tons.

With the objective of being Carbon Neutral by 2020, we

have been developing strategic projects oriented to the

reduction of gas emissions, especially in electrical energy

comsumption, with internal measurements from 2014,

which serve as base line.

For this year, we have started with the planning of activities

to achieve the certification. For which, with the company

of experts, we have decided to pick a new base year for

measurements. The selected year is 2017.

*2018 has challenged us to seal gaps found in our internal measurement; and because of that, in 2019, we will plan and validate

the methodology through an expert external entity to guarantee the accuracy of the reduction of CO2 emissions in 2020.

¡Reducimos 473.9 toneladas de CO2!Reduction of CO

2020 CHALLENGE CO2 NEUTRAL



Volunteers

TREE PLANTINGWe took part of a yearly nationwide arborization initiative called plantatón, we planted 1,643 trees. We overreached by 143 our goal for 2018 reforestation! The goal was 1500 trees.

BEACH CLEANINGWe participated in 7 cleaning events of beaches: El Zonte, El Palmarcito, La Coquera, Isla Tasajera and Los Cóbanos; in Alliance with different institutions: Let’s do it El Salvador, Eco friends of plastic and Green Movement 503.

EXCHANGEWe participated in two exchanges in 2018. It is a journey that promotes recycling and reuse of residues in homes and communities of El Salvador.

INTERNATIONAL VOLUNTEER’S DAY

An international celebration each december 5th in alliance with FUNDEMAS. In 2018, Termo added its 3rd year of participation in this event. Super Termo humans improved and decorated the park called Daniel Hernandez in Santa Tecla, with the help of other organizations and city hall.

RELEASING SEA TURTLES+ than 500 thousand turtles released

We had three sessions of awareness, education and liberation of sea turtles with our ally FUNZEL in San Diego beach. More than 25 Termoencogibles families participated, adding up to 80 attendees.

Volunteers 2018I AM A SUPER TERMO HUMAN

Alliances

Certificado Nº SC 6260-1EDITORIALEDITORIAL BOARDHugo Eduardo Tona

PHOTOGRAPHY Carolina ChinchillaJenniffer CabreraDV Comunication

EDITORIAL DIRECTOR Jenniffer Cabrera

GENERAL EDITORIsa de Casanellas

LAYOUT AND GRAPHIC DESIGNCarolina Chinchilla

CONTACT [email protected]

Find the digital version at: www.termo.com.sv

sustainability...sustainability report 2018 5 a message from 2018 was a very important year for the...

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