CSR Activities of Nestlé Bangladesh Limited

CSR Activities of Nestlé

Bangladesh Limited

Table of Contents

Name of the Contents	Page Number
Executive summary	3
Introduction	4
What is CSR?	4-5
Background of the study	5-6
Company profile	6
Companies CSR activates	6-11
Recommendation	11
Conclusion	12

Executive summary

CSR Activities are one of the inevitable part of the organization now a days. Almost all the renowned organization perform CSR activities for the sake of society or as a part of their responsibility. However, Nestlé Bangladesh limited also performs CSR activities in three different sectors. As they are in Nutrition, Health & Wellness Business, their CSR is also aligned with their operation. Their first & foremost CSR is Nestlé Healthy Kids program, which is making awareness about nutrition among school kids so that they can ensure balanced food value in their regular meal. Secondly, Water tank-establishing program to ensure pure drinking water for the children & nearby community. Followed by, establishing girl's toilet to reduce the dropout rate of the girls in rural areas and sourcing rice, spices as a part of Rural Development. So throughout the report, I have tried to focus upon the CSR activities of NBL and how the projects work & its impact in the society. Starting from the company overview, I have put light on giving a brief about NBL as a MNC in Bangladesh. Furthermore, I have added the jobs I have performed during my internship period. During my internship, I had some observation so I also included them into my report along with recommendation. The study also reflects the summary of the project on which I worked. The objective of the project, methodology and limitations is also included in this part. I have also included different parts of my work. Finally, I have analysed the report in my own word. Analysis on the findings in done to sort out the major aspects of my work. At the same time for easier understanding of the report, supporting topics and terms are explained in the light of textbooks and other supplementary documents. Utmost care has been given to explain all necessary aspects related to the subject matter for easier and quick understanding of the report. And I shall be grateful to those persons who will read this report and who shall be benefited from this report at present and in future

Introduction

Nestlé started its operation in 1994 in Bangladesh and its factory is situated in Sreepur, Gazipur. Nestlé Bangladesh directly employs more than 650 people and more than 1000 people are employed by suppliers and distributors in connection to Nestlé. Vastly sold products in Bangladesh are Nido, Nescafé, Maggi noodles and soup, Maggi Shad-e-Magic, breakfast Cereals such as Corn Flakes and Koko Crunch, Coffee-Mate, Munch rolls and many more. Executive Summary Nestlé is present around the globe, on all continents, with around 230,000 people working in more in an 84 countries with 466 factories and with sales representatives in at least another 70 countries. Nestlé is the world's largest food group, not only in terms of its sales but also in terms of its product range and its geographical presence. Nestlé covers nearly every field of nutrition: infant formula, milk products, chocolate and confectionery, instant coffee, ice-cream, culinary products, frozen ready-made meals, mineral water etc. Being an intern in the Human Resources function, I got the splendid opportunity to see how Nestlé in Bangladesh finds the best people for their dynamic workforce and why employees in Nestlé Bangladesh are always so motivated to strive further and further. Details of all those will be discussed on this paper. I hope that my report would give a through insight to all these responsibilities carried out during my tenure as an intern. With limited access to data due to confidentiality, I have tried to provide as much information as were possible about the works involving the recruitment in Nestlé Bangladesh.

What is CSR?

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a distinction between CSR, which can be a strategic business management concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of CSR clearly goes beyond that.

Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective needs and capacities of these businesses, and do not adversely affect their economic viability. UNIDO based its CSR programme on the Triple Bottom Line (TBL) Approach, which has proven to be a successful tool for SMEs in the developing countries to assist them in meeting social and environmental standards without compromising their competitiveness. The TBL approach is used as a framework for measuring and reporting corporate performance against economic, social and environmental performance. It is an attempt to align private enterprises to the goal of sustainable global development by providing them with a more comprehensive set of working objectives than just profit alone. The perspective taken is that for an organization to be sustainable, it must be financially secure, minimize (or ideally eliminate) its negative environmental impacts and act in conformity with societal expectations.

Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures.

A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes.

Background of the study

I have chose Nestle Bangladesh Ltd for CSR assignment because of its CSR strategy and activity. It’s a worldwide Company and maintains CSR. It’s a big company in Bangladesh. Its Doing CSR activities in Bangladesh from the start of this company since 1994.

I have learned many things from CSR. Companies can be a part of social development by doing CSR activity. By CSR program we can make skill worker, educated rural people, helping poor people and Increase awareness about health and nutrition. 

Corporate Social Responsibility (CSR) has become an important strategic policy for organizations. A considerable amount of attention has been paid to the definition of CSR and yet research on the development of CSR definition has remained limited. Definitions have been hampered by a lack of clarity in theoretical frameworks and empirical methods for the CSR definition. Given that the empirical study of CSR definition development is in an undeveloped state, this research describes efforts to develop and identify CSR definition. A definition is developed based on a critical review of both the conceptualization and practice of CSR. Based on Bangladesh stakeholders, this research develops CSR definition as an essentially contested concept (ECC) and a multi-dimensional concept (MDC). What has been expressed is a set of ideals that are possible, are likely to be acceptable, and that pay due regard to the need for feasibility in regard to CSR definition. This paper should be seen as a response to a problem of the prolonged dilemma that the disciplinary boundaries of the contested concept of CSR often make it difficult to contend with.

In Business Studies curriculum terms, Corporate Social Responsibility (CSR) involves the business taking a broad view of its activities, looking beyond profits for shareholders and focusing on other stakeholders. A stakeholder is anyone that has an interest in or may affect the decisions and actions of a business.

Stakeholders can be internal or external to the business. Internal stakeholders include employees and shareholders. External stakeholders include suppliers, customers, the communities in which the business operates and the environment.

For companies like Nestlé, which work with suppliers from a range of countries, many in poorer regions of the world, it is becoming increasingly important to take a wider view of responsibilities. Nestlé believes for a company to be successful in the long term and create value for its shareholders, it must also create value for society. It calls this Creating Shared Value.

Company profile

Nestle Bangladesh Ltd

Gulshan Tower (4th Floor),

 Plot 31, Road 53 Gulshan North C/A,

Dhaka - 1212, Bangladesh.

Nestlé was founded by the Henri Nestlé (10 August 1814 – 7 July 1890), a German confectioner in Vevey, Switzerland in 1866. Ever since then, in the food industry Nestlé is the most trusted name, with its one and only target putting a seal on it - Good food Good Life.

This is also the mission of Nestlé, driving the company to provide consumers with the most nutritious choices in a wide range of food and beverage categories. The vision of ―creating shared value and the very own ―Corporate Business Principles shaped the company culture and made them a reliable investor over 86 countries of the world. Today Nestlé employs around 280000 people and have factories or operations in almost every country of the world with a total equity of CHF 62.60 billion.                

The timeline of this spectacular journey is as follows - 

1866-1905: Henri Nestlé's quest for a healthy, economical alternative to breastfeeding is the important factor that drives the history of Nestlé Company. Henri Nestlé started his experimentations with various combinations of cow milk. His ultimate goal was to help combat the problem of infant mortality due to malnutrition. People quickly recognized the value of the new product, as Nestlé's new formula saved the life of children within a few years. In August, 1867 Charles and George Page, two brothers from Lee County, Illinois, USA, established the Anglo- Swiss Condensed Milk Company in Cham. In 1877 Anglo-Swiss added milk-based baby foods to their products and in the following year the Nestlé Company added condensed milk so the firms became direct and fierce rivals. Henri Nestlé retired in 1875 but the company under new ownership retained his name as Farine Lactée Henri Nestlé. 

1905-1918: The Company formed by the 1905 merger was called the Nestlé and Anglo-Swiss Milk Company. Most production facilities remained in Europe, however, and the onset of World War I brought severe disruptions, as a result acquiring raw materials and distributing products became increasingly difficult. At the same time the war created tremendous new demand for dairy products, largely in the form of government contracts. By war's end, the Company had 40 factories, and its world production had more than doubled since 1914. Moreover in this period Nestlé added chocolate to its range of food products and also the Condensed-milk exports increased rapidly as the Company replaced sales agents with local subsidiary companies. In 1907, the Company began full-scale manufacturing in Australia.  

1918-1938: The end of World War I brought with it a crisis for Nestlé. Rising prices for raw materials, the worldwide postwar economic slowdown, and declining exchange rates made the situation worst. In 1921, the Company recorded its first loss. Nestlé's management brings Louis Dapples as an expert to deal with the situation; his rationalized operations and reduction of the company's outstanding debt improve the financial condition. On the other hand Nestlé's first expansion beyond its traditional product line came in 1920s by producing chocolates. Meanwhile, Brazilian Coffee Institute first approached to Nestlé in 1930 to reduce Brazil's large coffee surplus, after eight years of research Nestlé came with Nescafé became an instant success. 

1938-1944: in this period World War II were felt immediately upset the business once again and Profits dropped from $20 million in 1938 to $6 million in 1939. To overcome distribution problems in Europe and Asia, factories were established in developing countries; particularly in Latin America. As the end of the war approached, Nestlé executives found themselves unexpectedly heading up a worldwide coffee concern, as well a company built upon Nestlé's more traditional businesses. 

1944-1975: The graph of growth sets its trends little higher between 1944 and 1975. As a result many new products were added and outside companies were acquired. Nestlé merged with Alimentana S.A in 1947, purchase of Findus frozen foods occurred in 1960, Libby's fruit juices joined the group in 1971 and Stouffer's frozen foods in 1973 and finally in 1974 the Company became a major shareholder in L'oréal, one of the world's leading makers of cosmetics. The Company's total sales doubled in the 15 years after World War II. 

1975-1981: In 1975 and 1977 price of coffee bean and the price of cocoa tripled. In this situation to maintain a balance, Nestlé went to second venture outside the food industry by acquiring the pharmaceutical and ophthalmic product producer Alcon Laboratories Inc. of U.S; as a result it increased competition and shrink the profit margins. 

1981-1995: Improvement of financial situation through internal adjustments and strategic acquisitions are the two important moves in this period. As a result between 1980 and 1984, diversification of several non-strategic or unprofitable businesses occurred. On the other hand Nestlé managed to put an end in the third World to about a serious controversy over its marketing of infant formula in this period. In 1984 Nestlé acquire American food giant Carnation and became one of the largest company in the history of the food industry.    

1996-2002: The opening of Central and Eastern Europe, along with China and a general trend towards liberalization of direct foreign investment was good news for the company. On the other hand in July 2000 Nestlé launched a Group-wide initiative called GLOBE (Global Business

Excellence) aimed to simplifying business process. Two more acquisitions took place in this period-U.S. ice cream business was to be merged into Dreyer's and the acquisition of Chef America, Inc. a leading U.S.-based hand-held frozen food product business.  

2003-2009: Within this area the acquisition of Mövenpick Ice Cream, Jenny Craigand Uncle Toby's enhanced Nestlé's position as one of the world market leaders in the super premium category. On the other hand Novartis Medical Nutrition, Gerber and Henniez join the Company in 2007. Meanwhile Nestlé entered into a strategic alliance with the Belgian chocolatier Pierre Marcolini at the end of 2009.  

2010 to present: In mid-2010 Nestlé finalized the sale of Alcon to Novartis. On 1 March 2010, Nestlé concluded the purchase of Foods’ North American frozen pizza business for $3.7 billion.

In July 2011, Nestlé SA agreed to buy 60 percent of Hsu Fu Chi International Ltd. for about $1.7 billion. On 23 April 2012, Nestlé agreed to acquire Pfizer Inc.'s infant-nutrition unit for $11.9 billion. Before the acquisition, there was a 'bidding war' between the three shareholders Nestlé, Mead Johnson Nutrition and Danone. Each of the companies held a share, with Nestlé holding the biggest share (17%) (Johnson held 15%, Danone 13%).

 

As of 28 May 2013, Nestlé has announced that it will expand R&D in its research center in Singapore. With a primary focus on health and nutrition, Nestlé is investing $4.3 million in its Singapore center, creating 20 jobs for experts in related R&D fields. In 2013 Nestlé Nigeria successfully pioneered and implemented the use of compressed natural gas as a fuel source to power their Flowergate factory.

Globally recognized brands of Nestlé:

The brand portfolio delivers the message once again how big Nestlé in the food industry. It is the trust and effort of the Nestlé professionals which created the win wining scenario. Today Nestlé covers almost every food and beverage category – giving consumers tastier and healthier products. 

 Baby foods: Cerelac, Lactogen, NAN, Gerber, Gerber Graduates, NaturNes, Nestum 

 Bottled water: Nestlé Pure Life, Perrier, Poland Spring, S.Pellegrino 

 Cereals: Chocapic, Cini Minis, Cookie Crisp, Estrelitas, Fitness, Nesquik Cereal 

 Chocolate & confectionery: Aero, Butterfinger, Cailler, Crunch, Kit Kat, Orion, Smarties, Wonka 

 Coffee: Nescafé, Nescafé 3 in 1, Nescafé Cappuccino, Nescafé Classic,NescaféDecaff, Nescafé Dolce Gusto, Nescafé Gold, Nespresso 

 Culinary, chilled and frozen food: Buitoni, Herta, Hot Pockets, Lean Cuisine, Maggi, Stouffer's, Thomy 

 Dairy: Carnation, Coffee-Mate, La Laitière, Nido 

 Drinks: Juicy Juice, Milo, Nesquik, Nestea 

 Food service: Chef, Chef-Mate, Maggi, Milo, Minor’s, Nescafé, Nestea, Sjora, Lean Cuisine, Stouffer's 

 Healthcare nutrition: Boost, Nutren Junior, Peptamen, Resource 

 Ice cream: Dreyer’s, Extrême, Häagen-Dazs, Mövenpick,  

 Petcare: Alpo, Bakers Complete, Beneful, Cat Chow, Chef Michael’s Canine Creations, Dog Chow, Fancy Feast, Felix, Friskies, Gourmet, Purina, Purina ONE, Pro Plan 

 Sports nutrition: PowerBar 

 Weight management: Jenny Craig.

Nestlé in Bangladesh:

Popular Nestlé brands started entering this part of the sub-continent during the British rule and the trend continued during the pre-independence days of Bangladesh. After the independence in 1971, Nestlé World Trade Corporation, the trading wing of Nestlé S.A, sent regular dispatch of Nestlé brands to Bangladesh through an array of indentures and agents and some of the brands such as NESCAFE, CERELAC, LACTOGEN, MUNCH ROLLS and MAGGI became some very common products. 

Nestlé Bangladesh Limited started its commercial operation in Bangladesh in 1994. Its total authorized capital is TK1.5 billion and total paid up capital is TK 1.1 billion. The only factory of the company in Bangladesh is situated at Sreepur, 55 km north of Dhaka. The factory produces the instant noodles and cereals and repacks milks, soups, beverages and infant nutrition products. Today Nestlé Bangladesh Ltd. is a strongly positioned organization. The Company is continuously growing through the policy of constant innovation, concentrating on its core competencies and its commitment to high quality food to the people of Bangladesh. 

Since the beginning of Nestlé’s operation in Bangladesh, the chairman of the company has been Mr. Latifur Rahman, one of the top industrialists of the country, his firm Transcom used to import the products of Nestlé. His business house Transcom is still involved in wide range of business like beverage, pharmaceutical, electronics, newspaper, tea export, fast food franchises etc.  Still he remains as an honorary chairman of the company.

In Bangladesh Nestlé’s vision is-to be recognized as the most successful food and drink Company in Bangladesh, generating sustainable, profitable growth and continuously improving results to the benefit of shareholders and employees. 

Company CSR activities

Nestle Bangladesh has taken Corporate Social Responsibility (CSR) as major areas of its business principles in addition to producing and marketing a wide range of food products.
The company not only believes in manufacturing and marketing products, makes profits, paying taxes and complying with state laws but also believes that a good company has something more to do for the society-even more than CSR which has become a buzz word during the recent years in the corporate world. 

"For Nestle, the terminology is CSV (Creating Shared Value) -- Nestle's own style of CSR-to create value for shareholders and society simultaneously, in a manner that is integrally linked to our core business strategies and operations," said Naquib Khan, Corporate Affairs Director of Nestle Bangladesh Limited. 

1. Health and Nutrition
2. Education and manpower Development
3. Community Development
4. Environment Protection and Preservation
5. Packaging Source Reduction Program
6. Solid Waste Management
7. Water: a precariously diminishing resource
8. Water Conservation Program
9. Rural Development in Bangladesh
10. Nutrition awareness training.

Health and Nutrition: Health and Nutrition Nestle is an advocate for good health and proper nutrition. It conducts feeding programs and medical missions in the areas where it operates.

Education and manpower Development: Donate-a-Classroom Program , Technical Skills Scholarship Program , Academic Linkage Program

Community Development : Cut and Sew Livelihood Project , Yard and Garden Livelihood Project, Suklay and Gunting Project, Misis Kong Trainors Program, Julius Maggi Kitchen ,Street Illuminations Project

Environmental Protection and Preservation: Nestle Environmental Management • Solid Waste Management Program • The Greening the Supply Chain • Air Emission Testing

SOLID WASTE MANAGEMENT :Segregation Reuse Composting

Water Conservation Program: Sensor operated faucets Water in Manufacturing •Water Conservation Program Water Conservation Task Forces and SGA teams Water gun on all hoses at production area Water recycling at vacuum pump cooling system Re-used water for CIP Boiler blowdown and effluent used for watering plants

The food and beverage company, a wholly owned subsidiary of Nestle S.A, received the Standard Chartered-Financial Express Corporate Social Responsibility (CSR) award 2010-11 along with two other reputed companies-DBL Group and Renata Limited.

Naquib Khan in an interview with The Financial Express recently spoke about the company's social commitment, areas of CSR, how they engaged society into their activities etc.

He said Nestle's mission of "Good Food, Good Life" is to provide consumers with the best taste, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.

Naquib Khan, who is involved with the company from the very beginning of its journey, said Nestle Bangladesh Limited started its commercial production in 1994 and currently employs 600 people directly in the company and another 1000 people indirectly in the industry.

He said the philosophy of Creating Shared Value envisions us to have long term business success. This philosophy itself is embedded in Nestle, with us producing high quality Nestle products leveraging science based nutrition; touching millions of consumers every day.
Mr. Khan said the company has spent about Tk 3.6 million, Tk 3.4 million and Tk 3.2 million respectively in 2011, 2010 and 2009 as CSV. 

Naquib Khan

He said, "Our main focus of CSR is in three areas-

Water,

Nutrition and

Rural Development-

as those three issues are directly linked with ourproducts and also very crucial for the countries like Bangladesh."
"Our all CSR activities are concentrated in the district of Gazipur because of our factory location in the district," Mr. Khan said.  Nestlé Bangladesh Limited directly supervises the implementation part of all CSV projects.
He said, "We have constructed a total of 28 water tanks to ensure safe drinking water in schools to date. Some 35309 school students are directly benefited from those water tanks."
"Our main desired goal is to supply the clean drinking water among the students of the schools and in addition nearby local folks are also drinking the clean water. The students are directly benefited in drinking water and free from water borne diseases." He said.
Mr. Khan said a total of 1540 students were given water education training so that they can learn wise use of water besides having access to safe water.
He said they have constructed a total 15 girl's toilets for the benefit of 8380 girl's students as we had been observing many female students leave school in absence of separate toilets.
"It lessened the drop-outs of female students at a considerable level in the Gazipur districts," he said. 
He said our achievement in the reduction of water consumption was 7.57cubic meter for per ton of production in 2010 which was 21.92% less than of 2009. In 2011, till September, water consumption per ton of production was 6.41 cubic meter where our target was 7.34 cubic meter.
Naquib Khan said every year, our corporate target for water & energy savings are 5% & 3% of reduction from previous year consumption and for this we implement various plans to achieve it.
"Our achievement in energy consumption reduction was 10.16 Giga Joule for per ton of production in 2010 which was 8.07% less than of 2009. And the consumption for per ton of production was 9.19 Giga Joule in 2011 till September where our target is 10.00 Giga Joule," he said.
"We have a Waste Water Treatment Plant (WWTP) where factory waste water is treated. At least (60%) is reuse in factory where only 40% of treated water is discharge to outside," he said, adding that they have a plan to implement 'Zero Waste Discharge' very soon.

Water education at Roverpalli High School

Naquib Khan, a leading singer of the country, said Nestlé is using treated waste water in factory incinerator to capture carbon particle from black smoke of incinerator. After capturing, water color become black and this water is passed through a Fat Trap and Pre Treatment process in which chemicals are dosing for sedimentation/separation of carbon particles.
After sedimentation, colorless water is pumped to WWTP and treated water is again reuse in incinerator, he said.
He said, "We have a world class incinerator where we burn market returnproducts, expiry products, production wastage products etc. This burning is accomplish within temperature 800-10000C and smoke is passed through a Water Chamber where water is sprayed and captures suspended particles, ash particles etc in our factory. Later bright smoke is rejected through our chimney."
He said Nestlé has 2 Rain Water Ground Recharging Pit from where 15 to 20 cubic meter per hour water discharges to ground. Around 3 sq. meter of recharging pit has 5 layers of different size of stones & sand bed which is especially designed for charging of water into ground.
He said the Nestlé distributed a total of 84 computers among the schools. Thousands of students have been benefited directly and indirectly from thecomputers.
"We have also various plans to engage Nestlé in this regard more." 
Naquib Khan informed that around 3000 girl's students trained on nutrition basics since 2010. Nestlé has agreement with Institute of Nutrition and Food Science of Dhaka University. The INFS takes of the training part.
"Present female students one day will be the mother and subsequently the trained mother must contribute in building a healthy future generation," he said.
The Nestlé funds for100 cataract surgery done in the floating hospital of "Jibon Tori", a sophisticated floating hospital of Impact Foundation Bangladesh, a leading NGO work

for underprivileged people.

Nutrition awareness training.

Nestlé also has many programmes through the Impact Foundation Bangladesh in view of Promoting rural development.
Naquib Khan said Nestlé has implemented a series of nutrition programmes for mothers club of rural poor women.
The company also trained 18000 women through 600 clubs for 8 months including 506 govorment health workers, 97 Union Parishad female members and 125 community leaders including local elites.
"This large number of people must help building a healthy nation," he said.
Nestlé can trace its origins back to 1866, when the first European condensed milk factory was opened in Cham in Switzerland, by the Anglo-Swiss Condensed Milk Company. One year later, Henri Nestlé, a trained pharmacist, launched one of the world's first prepared infant cereals 'Farine lactée' in Vevey of Switzerland. Later, the two companies merged in 1905 to become the Nestlé, with headquarters still based in the Swiss town of Vevey.

RECOMMENDATON

1.         Nestle should expand its business.

2.         Nestle should more conscious on its product-life cycle.

3.         Nestle should more attentive on its advertising activities.

4.         Nestle should improve its product day by day.

5.         Nestle should minimize its product price.

6.         NBL needs improvement in terms of number of CSR projects

7.         NBL has way to go in the CSR activities as they are far away from PRAN Foods Ltd. & GSK Bangladesh.

8.         NBL's operations are limited in one area and so as the CSR is also limited in one particular area which needs to be modified.

9.         In terms of Investment in CSR, again, NBL is way behind than other competitors. This has an ultimate impact on the sales of the NBL's products as people are not aware of their contributions.

Conclusion

To conclude, I would like to say that, although there are some drawbacks from CSV side, but again, being nutrition and comparatively new company in Bangladesh, NBL has improved a lot than ever before. Yet, they have many things to do in future which I have already mentioned. But as they are committed to the society and its people, hopefully with the passage of seconds, they will modify their strategy as well. Thus, their action and implementation will help them to be the world’s most trustworthy company in terms of nutrition, health and wellness.