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BARRANQUILLA, 9TH JUNE 2017Sustainable Palm oil:Start of a new journey

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Palm Oil, general facts

• Equatorial crop • Columbia is ranked 4th biggest palm oil producer

• High yielding • almost 4 tons/ha; 7-10 times higher then any other seed

oil

• Important Economic Driver• Main agricultural crop and highly labor demanding

• Small holders• 40% of total production

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Importance of Palm Oil

• Available• most used vegetable oil in the world representing 35% of

global vegetable oil production (Oil World)

• Price competitive• generally less costly then competitive vegetable oils

• Versatile• adaptable to many applications thanks to fractionation,

without hydrogenation

• Stable• generally longer shelf life compared to other seed oils

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The food market is changing…

Consumers are more aware and informed about FoodFrom the year 2000 several scandals related to food;

• Mad Cow Disease• Wine Adulteration• Milk Powder contamination in China• Horse Meat labeled as Beef in EU

Consumers are disoriented and frightenedNew categories of products try to address consumer concerns: “Free of …..” is a new trend in the market (es Sugar-free, Lactose-free, Gluten-free, and lately Palm Oil Free)

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Why is palm oil under attack?• Health

– saturated fats

• Sustainable– frequently accused of unsustainable practices in the producing countries

• Food safety– recent “warning” by EFSA on process contaminants

• Image– reputation is generally bad

Entire Categories shifted away from Palm Oil (Biscuits/Salty Snacks/Cooking Oil)Confectionary sector is reacting; where feasible change of recipes for palm oil free labeling; in few “concerned” markets in Europe

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European trends for sourcing certifiedsustainable PO

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And what about Ferrero?

From a Patisserie shop to Global Leader

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Ferrero, today (2015)

Global presence with 22 Factories, 40.000 employees, 100 nationalities

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Results, Reporting Period 2015

Mars # 1 and Nestlé # 2;

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1960’1950’

Ferrero started to use palm oil in the early ’60, origin was West Africa

Ferrero open his first “patisserie” in Alba just

after the second world war it the so called “terra della

malora”

History of sustainability, Ferrero & Palm Oil

Raw materials must meet specific freshness, quality and safety

requirementsKey principles: excellence in quality,

full respect for human rights, sustainability

Where possible, strategic raw materials are sourced directly

Long term commercial relationships with producers and suppliers

Controlled with a policy of complete traceability

1946

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2005

History of sustainability, Ferrero & Palm Oil

2013 2015

Ferrero join RSPO Ferrero join POIG

100% SG, including non-RSPO countries

Launch of the Ferrero Palm Oil Charter: Additional Social, Environmental, Traceability and

Smallholders criteria

2015

2016

98,5 % Full traceable to the

plantation

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RSPO Segregated Palm Oil

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Ferrero; 100% RSPO SG certified

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The 2030 Agenda for Sustainable Development

2015300 years ago 1987

U.N. World Commission on Environment and

Development: Our Common Future 1987 ("Brundtland

Report") defined the concept: "A development which meets

the needs of the present generations without

compromising the ability of future generations to meet

their own needs.“

Today’s guiding principle of sustainability has its origins in forestry. In 1713 – 300 years ago this year – Hans Carl von

Carlowitz, a German, published his book Silvicultura

oeconomica, which advocated the conservation, growing and use of wood in a continuing,

stable and sustained manner.

History of sustainability, Ferrero & Palm Oil

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1. Providing fully traceable oil, while including smallholders;

2. Not clearing High Carbon Stock forests; 3. Not using fire to clear land; 4. Not planting on peat soils;5. Protecting orang-utans and other

endangered species by maintaining High Conservation Value areas;

6. Reporting on the greenhouse gas

emissions of their production;7. Respecting human rights, including the

right to Free, Prior, and Informed Consent of indigenous and local communities;

8. Recognizing, respecting and strengthening the rights of workers;

9. Not using Paraquat;10. Actively fighting corruption.

Ferrero Palm Oil Charter

• 100% RSPO SG certification is the first step towards sustainability. • The Ferrero Charter on Palm Oil, launched in 2013, defines additional requirements

for growers.• Fact based approach.• Growers agreed to apply it progressively and time-bound.

Ferrero’s suppliers are requested to:

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WWF and Greenpeace

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What do consumer expect?

Raw Material Quality = Quality + Safety + Sustainability

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What role could Colombia play?