DMAs

G3 DMA and Description

Information

2009 Sustainability Report Overview > Our Products and Markets, p. 4-5
2009 Sustainability Report Overview > Business Strengths and Strategies, p. 4-9

GRI Disclosure Information:

Our long term goals are to achieve a sales volume growth of 5% annually, and an EBITDA margin of at least 15%. Our strategic plan is focused on achieving organic growth with a market driven approach. 

We believe that innovation and new product development are critical to meeting evolving customer needs, and to generate profitable growth. We employ over 50 scientific professionals, many of whom hold Ph.D. degrees. In the five years ended December 31, 2009, we applied for 61 U.S. patents and 18 Patent Cooperation Treaty patents.

Organizational responsibility for economic performance is layered, with economic goals established at every level of the company. Key Performance Indicators are used to monitor and track performance at frequencies that include by shift, week, month, quarter and year, and performance is measured against annual budgets and personal goals. Progressive training is conducted, and demonstrated knowledge is a prerequisite for job performance at all levels of the company.  

2009 Sustainability Report Overview > Environmental Sustainability, p. 11-15

GRI Disclosure Information:

CORPORATE POLICY Environmental, Health & Safety

Arizona Chemical holds protection of the environment, the health and safety of our employees and safe operation of our facilities as core values that are critical to the success of our business. We expect full compliance with corporate policy and applicable regulations from all employees. As employees of Arizona Chemical, we are committed to promoting the safety and wellness of our employees at work and at home. We will encourage and empower employees to actively participate in safety on and off the job. Company management will take an active and visible role in ensuring a safe workplace. We are committed to environmental leadership and we embrace the spirit of environmental excellence. We focus on continuous improvement, monitoring our performance and auditing against relevant standards. We will maintain strong relationships with the communities in which we operate and will look for ways to exceed their expectations. We will inform the public on our environmental performance. We will foster sustainable business practices through consideration of raw material and supplier selection, energy and natural resource consumption, and the potential impacts and benefits to our communities in the manufacture and use of our products.

Arizona Chemical's Environmental, Health and Safety Policy sets the expectations for company performance. All facilities have implemented an Environmental Management System (EMS). In the US, we adhere to EPA’s Performance Track model, consistent with ISO 14001, and in Europe, we are certified against the ISO 14001 standard.

Sandarne, Oulu, and Chester-Le-Street are active members of the Responsible Care Program which includes self auditing and reporting. As mentioned earlier, we are developing our global business processes against internationally recognized standards, including ISO 14001 and 9001 and OHSAS 18001.

Goals to reduce environmental impacts are set by senior management. Facilities also set environmental goals to address site specific issues. Metrics are established to track progress. Data collection establishes a company-wide baseline and provides a mechanism for benchmarking.

The most senior people with operational responsibility for environmental performance are the Regional Operations Directors. We elevated the position of Global Director, Environmental Health and Safety, in 2009 to report directly to the CEO for EHS issues. Facility personnel are responsible for ensuring the environmental expectations of the EMS are met.  

Facility based EHS training programs are designed and implemented to ensure all personnel whose work may create a significant impact upon the environment have received appropriate training. This training covers both compliance and awareness topics, and competency requirements apply.

Environmental compliance and management system audit processes have been established. Audits are conducted using specific protocols to assess compliance and to evaluate environmental management systems. A final report triggers the corrective action planning and implementation process, which is tracked and monitored. 

These efforts have resulted in significant improvements to our environmental operations, with notable decreases in our environmental events, odor complaints, hazardous waste generation rates, energy use, GHG emissions, and voc emissions. Details of these efforts can be found below and in our 2009 Sustainability Report Overview.

2009 Sustainability Report Overview > Employee Relations; p. 24
2009 Sustainability Report Overview > Safety and Emergency Planning, p. 17
2009 Sustainability Report Overview > Corporate Governance, p. 6

GRI Disclosure Information:

The social aspects of our operations are managed primarily by our human resources group, and are guided by six key principles:  

• Champion a culture of employee engagement, inclusion, and diversity to continually improve business results.
• Lead organizational change, while recognizing and honoring differing opinions.
• Act as a strategic business partner to help the business achieve its goals by providing perspective and consultation on organizational issues.
• Ensure that our employees value our workplace as an environment in which they can develop and prosper personally and professionally.
• Serve as a source of information and expertise that provides quality customer service to employees.
• Hire, develop and retain talent to help the business achieve results.

We work to accomplish this mission by setting goals where appropriate, and establish management practices and standards for our organization. Some goals, such as those for employee safety, exist. Training is used to ensure employee awareness of these expectations. These efforts are overseen by our Vice President for Human Resources and Communication.

Our Code of Business Conduct sets the expectations for compliance with labor laws. Our Human Resource department oversees implementation of company programs and assures compliance with company policies.  In addition to formal business processes we have also defined our policies and procedures for other employment related topics in employee handbooks in both North America and Europe. These policies address items such as Equal Employment Opportunity, open door policy, dispute resolution, violence in the workplace and policy against harassment.

Arizona Chemical is an equal opportunity employer.  We do not discriminate or allow discrimination on the basis of race, sex, religion, national origin, pregnancy, age, disability or any other classification protected by applicable law. All personnel actions, including hiring, benefits, transfers, compensation, layoffs, and educational, recreational, and social programs are administered in a non-discriminatory manner.

We require that all of our employees understand and practice equal employment opportunity. We require that all employees add their support to achieving our objectives of equal opportunity employment and of zero tolerance for any type of illegal harassment or discrimination. Violations are dealt with severely and any employee who engages in such behavior will be subject to appropriate disciplinary action up to and including discharge.

At Arizona Chemical, we have adopted as a tenet of our EHS Policy to be welcomed in the communities in which we operate which typically takes the form of formal community engagement efforts, including meetings. If community attendees raise concerns, we explore how to address them, and report back on the actions we will take. 

Community Giving/ Volunteerism

Each of our manufacturing facilities maintains a budget to support local organizations and causes. These funds, and employee volunteer efforts, are used to support local organizations and efforts at the discretion of the site management. Examples include

• Superior Support and Outstanding Leadership Award:  Chatham County, GA. Awarded to our Savannah, GA facility for their involvement with Summer Bonanza, an at risk summer education program
• Partner of the Year. Recognized by Southeast Elementary School in the "Community Partners In Education" (CPIE) program
• Northeast Florida Chapters of the National MS Society annual PGA Tour Cycle to the Shore to fight multiple sclerosis. Arizona Chemical fields a team of cyclists and volunteers who participate in the event.  In 2009, 30 Arizona Chemical employees and their families participated as riders or volunteers. The team contributed over $9,500 and ranked tenth among over 100 teams participating in the event. 

Our Code of Business Conduct sets the expectation for employee and community engagement. Our human resource policies provide additional guidance, and are supplemented by our goal setting process. Our Code of Business Conduct also establishes expectations around anti-competitive behavior, political activities, conflicts of interest and competitive activities. Our site managers are responsible for the oversight of and compliance with these expectations, as delineated in our position descriptions. Monitoring and follow-up programs continue to evolve, as gaps resulting from our divesture from International Paper are identified.

Supply Chain Management 

Supply chain management is an area of opportunity for Arizona Chemical. We are developing a global policy that integrates sustainability criteria into our purchasing process. We anticipate that the policy will be developed in 2010, and implemented in 2011. 

We maintain a formal process for evaluating our suppliers. Areas of focus include quality, price, logistics, environmental compliance, and financial performance. We employ full-time engineers whose sole function is to work with our primary raw material suppliers in minimizing waste, improving material recovery and ensuring the application of best practices.

We work with our transport providers by participating in regular technical meetings to ensure safe truck, rail and marine transport of our raw materials. Per company policy, we perform EHS audits on contracted storage tank terminals to ensure compliance with appropriate EHS standards and all applicable regulatory requirements.

Operating primarily in North America and European Union, we have identified no operations where the right to exercise freedom of association and collective bargaining may be at significant risk; or where a significant risk exists for incidents of child labor or of forced or compulsory labor. Training on our Code of Business Conduct (available on our website) addresses our expectations in these areas. No incidents or violations involving rights of indigenous people have occurred. Were issues to arise, our Vice President for Human Resources and Communication would have responsibility for addressing them.

For Arizona Chemical, product responsibility means exercising due care in the design of our products, to ensure fit for their intended use and no unintended hazards to health and safety. We have longstanding management systems in place to assess the health and safety impacts of our products at every stage of their life cycle.

Our Product Regulation department reviews purchased raw materials to ensure they are in compliance with regulations and will not adversely affect the compliance of the Arizona Chemical products in which they are used. All raw materials entering our product lines are screened before being allowed onsite using our raw material process questionnaire, and any additional raw materials used at the site are subject to our chemical review process. Restrictions exist for individual materials; materials on these restricted lists are either banned from use, or require senior management approval prior to use. Any material which leaves our sites is subject to our multistage product information review process.

We also review all experimental and commercial products for regulatory compliance such as international chemical control (TSCA, REACH, etc.), FDA, state right to know, transportation, and safety and health before they are sent to customers for evaluation or before they are manufactured in one of our facilities for commercial purposes. 

Management systems have been implemented that trigger review of existing products when formulation/process changes are necessary to ensure the change is evaluated and approved with respect to regulatory compliance and other criteria before it is allowed. Regulatory compliance information on products is made available within the company to all functions through various databases/systems and appropriate warnings/blocks/ statements are in place within our sampling and order systems to ensure both internal parties and external customers are made aware of issues such as restricted countries and special exemptions that may apply to our products or the sale or sampling in various countries. Information regarding the safe use of our products is provided on all product labels, in accordance with both the applicable regulatory requirements, and company policies and procedures. 

On the job training is conducted, while more formalized systems to ensure that the required training is completed are under development.