Growth in turnover • Increased its total sales increased ... · the market trends. Total Assets...

Pınar Su Annual Report 2013

14

For all of our stakeholders…

Pınar Su in 2013 • Increased its total sales increased by 1.0%

and 10.3% on a tonnage and turnover basis respectively

• Launched many new consumer-focused projects

• Introduced Turkey’s first order-placement app for smartphones and tablets.

10.3%Growthinturnover

7%Despite intense competition in the PET-container segment, Pınar Su succeeded in defending its 7% market share.

Market share


15

In 2013

In 2013 Pınar Su achieved growth rates in the sales of one-way segment products (PET, glass) in line with the market trends.

Net Sales (TLmillion)Total Assets (TLmillion)

2013 2013129.9 109.9

2012 2012119.1 99.7

2011 2011102.9 78.9

At year-end 2013, Pınar Su’s total assets rose by 9.1% and reached TL 129.9 million.

Net sales increased by 10.3% year-on in 2013 and amounted to TL 109.9 million in value.

Breakdown of sales by segment (tons)

Segment 2012 2013 Change (%)

One-way 257,278 268,327 4%

Returnable 216,405 206,191 -5%

One-way(glassbottles) 3,420 4,227 24%

Sparklingmineralwater 0 2,749 -

Total 477,103 481,494 1%

Shareholders’ Equity (TLmillion)

2013 72.9

2012 78.2

2011 73.4

Pınar Su has a strong equity base of TL 72.9 million in value.

PET - PC Breakdown of Sales(%)

PET56

Carboy43

Glass1

At year-end 2013 Pınar Su’s debt/equity ratio was 0.8 (2012: 0.5).


16

In 2013 Pınar Su booked export sales worth a total of USD 4.3 million.

7.6%

seasonal

Exportsaccountedfor7.6%ofPınarSu’stotalsalesin2013.

“PınarDenge”naturally-sparklingmineralwater,Smurf-movie-themed0.5-literHandy-CapPETbottles,andglassbottlesdecoratedwithseasonally-inspireddesignsmarkPınarSu’sfirstforaysintoproduct-specificcampaigns.

7% market share in the PET-container segment PınarSu’stotalsalesgrewby1.0%and10.3%onatonnageandturnoverbasisrespectivelyin2013.Successfullydefendingits7%marketshareinthePET-containersegment,theCompanysecurednetsalesrevenuesworthTL109.9millionandincreaseditstotalassetstoTL129.9millionlastyear.

2013 was an “investment year” for Pınar Su. Inthesteadily-growingPETsegment,twonewhigh-speedproductionlines(0.5-literand5/10-liter)equippedwithstate-of-the-arttechnologywerecommissionedattheHendekplantwhiletwoofitsexistinglineswererelocatedtotheIspartaplant.ThesechangeshaveaboutdoubledPETcontainermanufacturingcapacityandspeedatbothlocations.

Inthecarboysegment,badpublicityadverselyaffectedsalesthroughoutthesector.ThishadanimpactonPınarSudespitetheCompany’sreputationforabidingbyproductqualityandhygienestandardsthatarehigherthanthoserequiredoftheindustry.

Pınar Su is currently engaged in modernization investments aimed at increasing productivity.Withitsstrongabilitytocorrectlyperceive,judge,andrespondtomarketdemand,PınarSuundertakesstrategicinvestmentsbothtoupholdandtofurtherimproveitssuperiorproductionqualitystandards.

PınarSu’stotalinvestmentoutlaysin2013amountedtoTL20,081,667,ofwhichTL192,727wasforlandandlandimprovements,TL235,500forbuildings,TL16,525,634formachinery&equipment,andTL3,127,806forfixtures.

PınarSuappliedforandhasreceivedaninvestmentincentivescertificateintheamountofTL14millioncoveringtheexpansioninvestmentstobeundertakenatitsSakarya-Hendekplant.IssuedbytheMinistryoftheEconomy(DepartmentofIncentivesImplementation&ForeignInvestment),thiscertificateiseffectiveasof19March2013.

Pınar brand’s strong and respected position in the foods and beverages sectorWhenevercommunicatingwithconsumers,PınarSuemphasizesthenotionsof“confidence”,“naturalness”,and“familybonding”withwhichthePınarbrandisassociatedinconsumers’minds.ThestrongreputationandrespectwhichthePınarnameenjoysinitssectorisacruciallyimportantassetforPınarSu.

Brand-associatedvaluesareemphasizedalongwiththequalitiesofhygienic,palatablewaterwhencommunicatingwithconsumers.Initssales-orientedcampaignandpromotionalactivities,PınarSuconveysmessageswithintheframeworkofsuchvaluestofurthercultivateconsumerconfidenceandloyaltywhilealsostrengtheningthesales&distributionnetworkinlinewiththesamevaluesandcontinuouslyundertakingmarketinginvestmentsinlinewithdefinedstrategies.


17

In 2013

Withthecompletionofitscustomerrelationshipmanagementinfrastructureprojectin2012,PınarSuhassegmenteditscustomerbaseandbegunplanningloyaltycampaignswhichwillbetargetedatspecificcustomergroups.Nationalandregionalpromotionalcampaignswereconductedallyearlonginlinewithhouseholdconsumers’expectationsinthereturnable-packagingcategory,theprincipaltargetgroupforwhichconsistsofhousewives.

Intheone-way(non-returnable)packagingcategory,theSmurf-themedlabelsonthe0.5-literHandy-CapPETbottleandthesameproduct’ssix-packsforchildrenwereredesignedwiththe3DcharactersfromthelatestTheSmurfsmoviewhileSmurf-themedtradingcardswerealsogivenawayalongwiththelatter.UsedinTVcommunicationaswell,theseelementsarethefirstinstanceofaproduct-specificpromotionalcampaignundertakenbytheCompany.

Newly-designedseason-liveried0.33-literand0.75-literglassbottlescontinuedtobesuppliedtothemarketin2013.

Pınar Su exports goods to nearly 30 countries spread out over a wide region. Keepingaclosewatchonglobaldevelopmentsandidentifyingcustomers’needs,PınarSuusesthisinformationtoformulatestrategiesanddecisions.TheCompanyhasbeenanactiveplayerininternationalmarketsforaboutthreedecades.

In2013PınarSushippedgoodstoGermany,theUK,Ireland,Belgium,Netherlands,Austria,Switzerland,Kosovo,Luxembourg,theCzechRepublic,Macedonia,Greece,Malta,NorthernCyprus,Libya,Kuwait,Bahrain,Oman,theUAE,Iraq,Singapore,Australia,theUSA,Azerbaijan,andRomania.TheCompanymakesthebulkofitsinternationalsalestoEuropehowever.

Intheperiodahead,PınarSuplanstopursueadditionalgrowthinGulfcountries,Iraq,andLibyaaswellasinEurope.TheCompanyisalsoexploringnewmarketopportunitiesinTurkey’snearabroad,especiallyinUkraine,Russia,andSyria.

GoodsworthatotalofUSD4.5millionweresoldabroadbyPınarSuin2013,ayearinwhichexportsaccountedfor7.6%oftotalsales.

In2013theCompanybeganexportingitsnewly-launchedPınarDengelineofnaturally-sparklingmineralwaters.Thesegoodswereshippedtoelevencountries:Germany,England,Iraq,Libya,Austria,Greece,Kosovo,Macedonia,Azerbaijan,Australia,andSwitzerland.TheIraqiandLibyanmarketsinparticularappeartohaveverystrongpotentialforadditionalgrowth.TheCompanyisalsoexploringotherpossiblemarketsforthisnewproductgroup.

Salesofglass-bottledproductsgrewby145%in2013.Theeffortstofosteradditionalgrowthincludepackagingdesignsuchasthecollectibleseriesofseason-liveriedbottlesandArabiclabelingdesignedforMiddleEasternandNorthAfricanmarkets.

Breakdown of Exports by Destination (%)

Others15.9

TRNC8.6

Kuwait5.9

Libya5.7

Iraq3.3

Germany37.3

UK23.3

In the report issued by SAHA Corporate Governance and Credit Rating Services following its audit in 2013, Pınar Su was assigned a corporate governance rating of 9.34/10. This exceptional rating qualified Pınar Su’s shares for inclusion in the Borsa İstanbul Corporate Governance Index (XKURY).

Corporate governance rating


18

Rather than just tracking the market, Pınar Su proactively seeks to change and take it forward through the new ideas that it comes up with. In 2013 the Company continued to introduce consumer-focused innovations.

care

awards

Intheconductofitsinvestmentprocesses,PınarSumakesagreateffortandtakescaretoensurethatitselectsnothingbuttheverybestsourcesofwaterforharvesting.

PınarSuwastherecipientofBrandSparkInternational’s“BestNewProduct”awardsforitsfive-litercarboyandseason-liveriedglassbottlepackagingformats.

New products introduced to the market in 2013Awarethatthewaytokeepaheadofcompetitorsistoprovidemoreefficientandconvenientserviceandtoproactivelychangethemarketandtakeitforwardratherthanjustfollowingit,PınarSuonceagainintroducedconsumer-focusedinnovationsin2013.

Thedecorationsontheseason-liveriedcollectibleseriesof75-and33-clglassbottlesthatarefilledattheMadranplantwereredesignedbasedonthewinningentriessubmittedinaninter-universitydesigncompetitionthatwasorganizedin2013.Thenewbottleshavebeenwidelyacclaimed.

ThedesignsontheSmurf-themed0.5-literHandy-CapPETbottlesspeciallycreatedtoappealtochildrenwerereplacedwiththe3DcharactersfromtherecentTheSmurfsmovie.Smurf-themedtradingcardswerealsospeciallyproducedandgivenawayalongwithsix-packsofthisproduct.

The newest member of the Pınar family: Pınar Denge Naturally-Sparkling Mineral WaterThesourceofwholesomequalitythatconsumersknowtheycantrust,thePınarfamilyintroduceditsnewestmemberlastyear:PınarDengeMadenSuyu,anaturally-sparklingmineralwaterthatbothaddressesconsumerdemandandroundsoutourproductportfolio.Besidesplain,thisproductalsocomesinfivefruit-flavoredvarieties,twoofwhichareadditionallyenrichedwithvitaminC.

ThisadditiontotheproductportfolioisinlinewithPınarSu’sprincipleofofferingconsumersarangeofchoiceswiderthanthatofanyothercompanyinthesector.

Awards and recognitions• InasurveyconductedbyBrandSparkInternationalinwhichabout15,000consumerstookpart,PınarSureceived“BestNewProduct”awardsforitsfive-litercarboyandseason-liveriedglassbottlepackagingformatsinthe“Food&Beverages”category.

• InthefourthAyYıldızlarıawardscompetitionconductedbythePackagingManufacturersAssociationtorecognizeexcellenceinpackaging,PınarSu’sseriesofseason-liveriedglassbottlesreceivedagoldmedallastyear.

• AsreportedbytheRepManReputationSurveyCenter,accordingtoasurveyconductedbyGfKTürkiyeinwhich16,243peopleinallsevenofTurkey’sgeographicalregionswerepolledandwhichrankscompaniesandsectorsonthebasisoftheirperceivedreputations,PınarnumberedamongTurkey’stenmosthighlyrespectedcompanies.Inthisyear’spopularitypoll,Pınaradvancedfrom8thto7thplace.

• AllfourofthetopnamesintheSuperbrandslistareinthefoods&beveragescategory.Pınarwasoneofthem.

• In2013PınarSuwastherecipientoftheAegeanRegionChamberofIndustry’s(EBSO)theFood&BeveragesIndustryfirst-placeawardsinthe“MostTaxPaid”and“MostManufacturingJobsProvided”categoriesandsecond-placeawardsinthe“HighestInvestmentPerformance”,“HighestProductionPerformance”and“HighestExportPerformance”categories.

• AttheİzmirChamberofCommerce’sannualtaxpayers’awardsceremony,PınarSureceivedaspecialawardintheAlcoholicandNon-AlcoholicBeveragesGroupbasedonitsnetreportedcommercialearningsandalsoacitationforitsforeignexchangeearningperformance.

For our customers and consumers…


19

In 2013

Pınar Su harvests its water only from superior-quality natural sourcesIntheparlanceofthewaterindustry,agoodsourceofwaterisonewhichisfarfrominhabitedplacesandwhoseflowrateandchemicalpropertiesdonotvaryduringtheyearowingtochangesinrainfallortodrought.PınarSuwasthefirstnational-levelcompanyinTurkeytoharvestandsupplynaturalmineralwaterinbottledform.Whenundertakinginvestments,theCompanydevotesgreateffortandattentiontotheissueofselectingonlysuperior-qualitynaturalsourcesofwater.

PınarSuharvestsandpackagessuperior-qualitynaturalmineralwaterinmodernplantswhosecombinedproductioncapacityis1,372,567tonsandwhicharelocatedbesidenaturally-occurringspringsinthreedifferentpartsofthecountry.• Aydın-Bozdoğan,• Isparta-Eğirdir• Sakarya-Hendek

TheabilitytoharvestandpackagewateratthesethreedifferentlocationsgivesPınarSusignificantadvantagesfromthestandpointoflogisticalcosts.

Pınar Yaşam Pınarım-MadranLocated1,000metersabovethenearestplacesofhabitationinAydın-Bozdoğan,thePınarMadranspringisthesourceofsomeofthebest-qualityandmostpalatablemineralwateravailableinTurkey.Itsaveragehardnessratingis1.65Fr.WaterfromthePınarMadranplantissuppliedin0.33liter,0.5literhandy-cap,1.5liter,2.5liter,5liter,and8literPETcontainers;in0.33literand0.75literglassbottles;andin5and19litercarboys.

F- 0.05mg/lMg++ 1.11mg/lCa++ 3.14mg/lNa+ 4.85mg/lCl- 3.80mg/lNO2- NonePh 7.04

Pınar Yaşam Pınarım-Akçaağaç ThePınarYaşamPınarım-AkçaağaçspringislocatedinIsparta-Eğirdirataplaceremotefromcentersofhabitationandpotentialsourcesofindustrialpollution.Theuniquemagnesiumandcalciumcontentofthewaterharvestedfromthesespringsissaidtohelpkeephumanmetabolisminbalance.State-of-the-arttechnologyandthePınarapproachtoqualityaredeployedatthePınarYaşamPınarım-Akçaağaçplanttobottlewaterin0.5liter,1.5liter,and5literPETcontainersand19litercarboys.

SO2- 2.2mg/lNa+ 1.5mg/lCl- 2.0mg/lNO2- NonePh 8.01

Pınar Yaşam Pınarım-GökçeağaçThePınarYaşamPınarım-GökçeağaçspringandplantarelocatedinSakarya-Hendek.Waterfromtheplantissuppliedin0.33liter,0.5liter,0.5literhandy-cap,1liter,1.5liter,3liter,5liter,and10literPETcontainersandin19litercarboys.

SO2- 7.7mg/ltNa+ 5.6mg/ltCl- 1mg/ltNO2- NonePh 8.2

The source of trusted quality, the Pınar family has introduced its newest member: Pınar Denge Maden Suyu, a naturally-sparkling mineral water that both addresses consumer demand and rounds out the product portfolio.


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Thanks to Pınar Su’s extensive laboratory facilities, mineral water is subjected to physical, chemical, and microbiological tests at every stage of production from harvesting to bottling.

modern

quality

PınarSu’sbottlingplantsareequippedwithstate-of-the-arttechnology.

Havingmakequalityanessentialelementofallofitsbusinessstrategies,PınarSuconstantlyraisesthebarbywhichthatqualityisjudged.

All production at Pınar Su’s plants conforms to the strictest rules of hygiene.PınarSu’sbottlingplantsareequippedwithstate-of-the-arttechnology.Atallofitsplants,PınarSu’sbottlingoperationstakeplaceinacompletelyhygienicenvironmentinwhichsterileairismaintainedatapositivepressureinsidetopreventcontaminationfromoutsidewhiletheinteriorairisconstantlyrecirculatedandrefilteredtokeepitclean.Bottlingtakesplacewithoutanymanualinterventionwhatsoever.Infully-equippedlaboratories,thewaterissubjectedtoabatteryofphysical,chemical,andmicrobiologicaltestsateverystageofproduction.

Pınar Su procures its PET preforms under long-term agreements which it has entered into with manufacturers. PınarSuprocuresPETpreformsandallofitsotherpackagingmaterialsonlyfromfullyaccreditednationalandinternationalmanufacturers.Inordertoensurethesustainabilityofitsproduction,theCompany’sR&D,Machinery&Maintenance,andProductionunitsengageinasystematicandcoordinatedefforttoincreasethenumberofapprovedandactivesuppliers

Pınar Su adheres strictly to international quality standards. Initsnever-endingeffortstoachieveandmaintainthehighestlevelofquality,PınarSuhasmadequalityanessentialelementnotjustofitsproductionoperationsbutofallofitsotherbusinessprocessesandstrategiesofwhichdistributionisjustone.

Asacompanythathasrepeatedlydemonstrateditscommitmenttotheconsistentexcellenceofitsquality,PınarSumakesuseofinternationally-approvedqualitysystemsanditabidesbyrecognizedinternationalstandards.

Atallofitsplants,PınarSuhasreceivedcertificationsforcompliancewiththefollowingstandards:TSISO9001QualityManagementSystem,TSISOEN22000FoodSafetyManagementSystem,ISO14001EnvironmentalManagementSystem,TS18001OccupationalHealth&SafetyAssessmentSeries,andTSISO10002CustomerSatisfactionManagementSystem.

AuditingandproductcertificationworkiscurrentlybeingcarriedoutattheCompany’sMadranplantbyNSFInternational(USA)andbySGSInstituteFresenius(Europe)todeterminethisfacility’scompliancewithinternationalproductionstandards.

Operational Cost Improvement and Lean Six Sigma projects being conducted effectively.PınarSuconcentratesonkeepingallelementsofcostundercontrolinordertomaintaintheefficiencyofitsbusinessprocesses.CostoptimizationisalwaysoneofthemostimportantitemsonPınarSu’sagenda.

PınarSuconductsitsLeanSixSigmaprojectsnotjusttoimproveproductionstandardsandefficiencybutalsotoincreasetheeffectivenessofitscustomerrelationshipmanagementaswell.Theimplementationofsuchprojectsresultsinsustainableimprovementsandprocesssimplification.

Becauseinflatinglighter-weightPETpreformsalsorequireslessenergy,theCompany’senergyefficiencyhasbeenincreasedanditscarbonfootprinthasbeenreduced.


21

In 2013

Distribution services have been standardized.Inordertomaximizethequalityoftheservicegiventocustomers,PınarSuhasformulatedstorage,backoffice,stock,vehicle,anddeliverypersonnelstandardsthatareapplicabletobothitscarboyanditsPETdealerships.Dealersaremadeawareofthesestandardsbymeansofbrochures,regionalmeetings,andtrainingprograms.PınarSuqualitymanagementpersonnelregularlycheckdealers’compliancewiththesestandardsandtheyrateandcertifydealers’performancebasedontheirfindings.

AprocedureincorporatinganinteractivevoiceresponsesystemandthePınarSuorderhotlinehasbeensetupinordertobettermanageserviceanddeliveryperformanceinthecarboysegment.Anothersystemwhichdispatchesordersdirectlytodeliverypersonnel’smobilephonesalsomakesitpossibletokeeptrackofwhetherornotdeliveriesarebeingmadewithinprescribedperiodsoftime.Mostrecentlythissystemhasbeenfurtherdevelopedtobecompatiblewithsmartphones.Customers’addressesarenowbeingsenttodeliverypersonnelbymeansofamappingapp.

TheSAPsystemhasbeenexpandedtoincludedealersinordertostandardizedistributionservicesinthePETproductssegment.Thismakesitpossibleforcustomer-relatedinformation,financingterms,etctobemoreeffectivelymanagedaccordingtopre-determinedprinciplesandprocedures.

Social media

twitter.com/PinarKurumsalConsumersareprovidedwithspecially-createdrecipes,pressreleases,announcements,andholiday-andweek-specificcelebratorymessagesviatheCompany’scorporateTwitteraccount.

Aspecialtwitter.com/InfoPinarpagewasalsoopenedinordertoseparateconsumers’wishes,needs,andsuggestionsfromthecorporatepagesothattheymaybedealtwithmoreeffectively.ThispageismonitoredbythePınarCommunicationCenter,whichisresponsibleforresolvinganyissuesthatmaycomeup.

Call center management, customer loyalty & satisfactionPınarSugivesgreatimportancetotheefficientandeffectiveoperationofitscallcenter.KnownasthePınarSuOrderHotline,thiscallcentergreatlyimprovestheCompany’sabilitytoholdontoexistingcustomers,toacquirenewcustomers,andtoenhancecustomersatisfaction.

ThroughtheCustomerRelationsManagement(CRM)project,whichbecameoperationalinlate2011,thesystemhasbecomemuchmoreeffectiveandthusbroughtPınarSuanotherstepclosertoitsgoalofbeingacompanywhichknowsitscustomers,respondsquicklytotheirneeds,andseekstoenhanceconsumersatisfactionandloyalty.

Pınar Su gives great importance to the efficient and effective operation of its call center. Known as the Pınar Su Order Hotline, this call center greatly improves the Company’s ability to hold onto existing customers, to acquire new customers, and to enhance customer satisfaction.


22

firstIn2013PınarSudevelopedanorder-placementappspeciallydesignedtoworkonsmartphones.ThefirstofitskindinTurkey,thisappallowsconsumerstodirectlyplaceordersbyspecifyingtheappropriateproduct,date,time,andaddressinformationthemselves.

Adhering to a customer-focused business approach, Pınar carefully examines and gives importance to requests and suggestions received from consumers.

Bymeansofasingleandeasily-rememberedtelephonenumber(4449900),thePınarSuOrderHotlinemakesiteasyforcustomerstoreachPınarSufromeverywhereinTurkey.Thesystemredirectscustomerstotheirnearestregionaldealership,thusensuringthattheyreceivethefastestandmosteffectiveservicepossible.

Aswasthecaseinpreviousyears,in2013PınarSucustomerswhohadregisteredwiththeCRMsystemweresentgiftpacksasawayofthankingthemfortheirloyaltytotheCompany.

Recognizingthatexcellenceinserviceisoneoftheprerequisitesforstayingaheadofthecompetition,PınarSuoriginallylaunchedthePınarSuOrderHotlineon4449900atthebeginningof2010.ThisaccessibilitywassubsequentlyexpandedwiththeintroductionofonlineorderingandthelaunchofanappforIOSsmartphonesinlate2012andforAndroidunitsin2013.ForthefirsttimeinTurkey,customersnowhavetheconvenienceofdirectlyplacingordersonlineandgiventheoptionofspecifyingdeliveryondatesandtimesoftheirownchoosing.

Pınar Communication CenterPınar’s“ConsumerandCustomerFirst”principledemandsthatallcompanyunitsquicklyandcorrectlyperceivenotjustconsumers’butallexternalandinternalcustomers’needsaswell.Theprinciplealsorequiresthemtotakeanimble,proactive,andinnovativeapproachinrespondingtocustomers’andconsumers’expectationsforabetterwayoflife.Adheringtoaconsumer-focusedbusinessapproach,PınarSucarefullyexaminesandgivesimportancetorequestsandsuggestionsthatarereceived.

AccessiblefromeverywhereinTurkeyon4447626withouttheneedtodialanareacode,thePınarCommunicationCenter(PİM)isstaffedbyliveoperatorswhoareondutyandrespondtoincomingcallsbetweenthehoursof07:00and23:00everydayoftheweek.Theirjobistoensurethatcallersareprovidedwiththeinformationthattheyneedasquicklyaspossible.PİMhasacallsuccessrateofabout90%and92%ofallcallsareansweredwithin15seconds.LastyearadedicatedPİMTwitteraccountwasopenedbymeansofwhichitispossibletoexamineandrespondtoconsumers’wishesandsuggestionssubmittedthroughsocialmedia.SatisfactionsurveysareregularlyconductedamongconsumerswhocontactthecenterinordertosystematicallyquantifyPİM’sservicelevels.ApollconductedamongconsumerswhocontactedthePınarCommunicationCenterin2013indicatedthat91%ofthemweresatisfiedwiththeservicetheyhadreceived.


23

In 2013

Pınar Su’s actions are informed by its awareness that its human resources are among its most important assets.

430Atend-2013,PınarSuhad430peopleonitspayroll.

ThefundamentalmissionofhumanresourcesmanagementatPınarSuistoensurethattheCompanyhasasufficientnumberofpeoplewhoareinnovative,whoarecommittedtothetotalqualityapproach,whohavetheabilitytoeasilykeeppacewithchangesanddevelopments,andwhogivetheCompanyacompetitiveadvantageatthegloballevel.Indoingso,PınarSuactswithanawarenessthatemployeesareamongitsmostimportantassets,withoutregardfordifferencesinnationality,race,sex,ethnicbackground,religion,ormaritalstatus,andinordertobeanemployerthatpeoplewanttoworkfor.

ThebasictenetsofPınarSu’shumanresourcespolicyconsistof:• Creatingemployeeswhoaresuccessfulandhappyandwhohaveastrongsenseofbelongingbyputtingtherightpeopleintherightjobsandbydevelopingtheirqualifications

•ConductingavarietyofintramuralandextramuraltrainingprogramsthatareenrichedbymeansofmethodologiessuchasdistancelearningandareformulatedinordertoensuretheprogressionofemployeesinlinewiththeCompany’scurrentandfutureneeds

•Regularlyreviewingsystemsandprocessesandmakingsuchchangesasareseentobenecessaryinordertoensureorganizationalsuccessandcontinuity

•Beingmindfulofequalityofopportunityandsupportingcareerplanninginthemanagementofallpromotionsandappointmentsthroughoutitsorganization

•Reducingthetimeittakesfornewly-hiredemployeestoadapttotheirworkplaceenvironmentandjobbymeansofcarefullydesignedandexecutedorientationprograms

•Sothatemployeeperformancemaybeimproved:assessingemployees’performanceinordertoensurethatcompanyobjectivesandindividualobjectivesdovetail,toencourageresults-focusedjobperformance,andtosystematicallysupportemployees’progression;makinguseofperformanceevaluationresultsinsuchmattersasHRtraining&development,careerplanning,andcompensation&meritawards

•Solicitingemployees’opinionsonvariousissuesbymeansofEmployeeOpinionSurveysanddevelopingandimplementingappropriateactionplansthatenhanceemployeesatisfactionandloyalty

•TakingallmeasuresmandatedbytheOccupationalHealthandSafetyActsoastopreventoccupationalrisksandensuretheexistenceofasafeworkplaceandworkingconditions,toprotecthealthandsafety,andtoeliminatefactorsthatmaygiverisetorisksorleadtoaccidents.

Allhumanresourcesprocessesarecarriedoutwithattentionbeinggiventostaffingrequirements,corporatevalues,competencies,andhumanresources-relatedproceduresandpolicies.Suchpracticesareinformedbytherequirementsoflawsandregulationsandbycompanyproceduresandrulesofconduct.

For our employees…


24

Pınar Su strives to constantly improve its environmental performance.

sensitivePınarSuusespackagingmaterialsthatwillgeneratetheleastamountofwasteandhavetheleastenvironmentalimpactduringboththeproductionandusestagesofitsproducts.

Pınar Su: For a sustainable future…Inthemanagementofitsproductsfrominitialinputstofinalconsumption,PınarSuconstantlystrivestoimproveitsenvironmentalperformancebyidentifyingenvironmentalimpactissuesandtoensurethatsuchissuesareeffectivelycontrolledsoastominimizetheirenvironmentalimpact.

PınarSu’soperationsfocusontheeffectiveandefficientmanagementoflimitednaturalresources.Tothisend,theCompanyengagesinmanydifferenteffortstoprotecttheenvironment,topreventpollution,tomakeeconomicaluseofnaturalresources,andtoproperlydisposeofwaste.

There was a decrease in both energy consumption and energy costs in 2013.Intensive,ongoingeffortsaremadeatPınarSuplantsto:• conserveandmakeefficientandproductiveuseofenergyresources

•seekoutandmakeuseofenergyresourcealternatives

•reducethecarbonfootprintofoperations.

Inefficientandunnecessaryuseofenergyhasbeenpreventedbytheinstallationoffrequencyinvertersonhigh-pressureaircompressorsinplants.Productunitenergycostsarereducedwhereverpossiblethroughtheuseof“smartmeters”andbyreschedulingproductionactivitiestooff-peaktimesofthedaywhenelectricityischeaper.

Awarethatthemeasurementandmanagementofgreenhousegasemissionsisofvitalimportancetoeffortstoprotecttheenvironmentandtocombatclimatechange,PınarSukeepsaclosewatchonthelatestdevelopmentsinenergyconservationandalternativeenergyresourceuseanditregularlycalculatesandtracksthecarbonfootprintsofitsoperations.

•PınarSucalculatesitsowncarbonfootprinttobetheequivalentoftwotenthousandths(0.02%)ofTurkey’stotal.AsamemberoftheYaşarGroupitranksthird,accountingfora3%shareoftheGroup’soverallcarbonfootprint.

•Asmeasuredona12-monthbasis,PınarSugenerates0.019tonsofCO2onaverageforeverytonofproductthatitmakes.

•75%ofPınarSu’sCO2emissionsstemfromitsuseofelectricity.

Consolidated production line efficiency ratings improved.PınarSuseekstoturnoutmoreproductatthesameunitenergycostbyincreasingitsproductionlineefficiency.Asaresultofsucheffortsin2013,PınarSuachievedconsolidatedproductionlineefficiencyperformanceratingsof:•79.4%atitsAydın-Bozdoğanplant•75.0%atitsAdapazarı-Hendekplant•78.8%atitsIsparta-Eğirdirplant•78.6%overall.

For the environment and the community…


25

In 2013

Pınar Su - ÇEVKO collaboration PınarSuisafoundingmemberoftheEnvironmentalProtectionandPackagingWasteRecoveryandRecyclingTrust(ÇEVKO),whichhasbeendesignatedasan“authorizedagency”bytheMinistryofEnvironmentandUrbanPlanningpursuanttothePackagingWasteControlRegulations.TheCompanyhasenteredintoacontractualagreementwithÇEVKOunderwhichtheCompanyhasassignedtothetrustallofitsownpackagingwastecollectionandrecyclingrightsandobligations.

PınarSuonlyworkswithfirmsthatarelicensedbytheministrytocollectandrecycleallpackagingwastematerials.TheCompanyhasformulatedawastemanagementplan,whichisbasedoncontractualagreementsandhasbeenapprovedbytheministry,underwhichactivitiessuchasat-sourcewastesortingandsegregation,recovery,andrecyclingarecarriedoutbyÇEVKO,whichalsoengagesinpubliceducationactivitiesthatareaimedatbothindividualsandmunicipalities.

ThepackagingofPınarSuproductsisdesignedandexecutedwithreusabilityandrecoverabilityinmind.Frominitialproductionandpost-use,attentionisgiventotheuseofpackagingthatwillcauseaslittleharmtotheenvironmentaspossible.

Social responsibilityPınargeneratesasmuchvalueforsocietyasawholethroughthedirectandindirectemploymentopportunitiesthatitcreates,theinvestmentsthatitundertakes,thegoodsandservicesthatitpurchases,andthetaxesthatitpaysasitdoesthroughtheproductsthatitmakes.Inadditiontoallofthis,theCompanyalsoregardsitsongoingsupportforandcontributionstoart,education,sport,andcultureasvitalandindispensableinthefulfillmentofitsprincipleofgivingbacktosociety.

Pınar Art CompetitionThePınarArtCompetitionhasbeenheldfor32yearswiththeaimsofincreasingprimaryschoolchildren’sinterestinthefineartsingeneralandpaintinganddrawinginparticular,ofgivingchildrenopportunitiestoexpresstheircreativitythroughpictures,andofeducatingtheartistsofthefuture.Everyyearthecompetitionprovideshundredsofthousandsofchildrenwithanopportunitytoexpresstheirdreams,theirhopes,andtheirlongingsthroughart.

Focusingonadifferentthemeeveryyearsinceitwasinauguratedin1981,thePınarArtCompetitionhas

alsobeenservingasguideforfutureartistsaswell.Arecord-breakingnumberofyoungsterstookpartinthe2013competition,whosethemewas“Let’sProtectOurEnvironmentAndTakeChargeOfOurFuture”.

Fromamong377,824entriessubmittedfromeverypartofTurkey,theTurkishRepublicofNorthernCyprus,andGermany,theworksoftwenty-threechildrenwereselectedbyajuryofeducatorsandprofessionalartists.Thewinnersofthe32ndPınarArtCompetitionwererewardedwithachancetotakepartinaone-weekartcampinİstanbulunderthecoordinationofthewell-knownartistDevrimErbil.Atanawardceremonythatwasheldonthelastdayoftheartcamp,thechildrenalsoreceivedcertificatesofattendanceandnetbooksasprizeswhilethreeofthem–pupilsfromAğrı,Diyarbakır,andCyprus–wereeachawardedascholarshipaswell.

Accordingtoapublic-awarenesspollconductedbyGfK,thePınarChildren’sArtCompetition’spublic-awarenessratingwas31%in2012.

Source:GfKFlavoredDairyProductsTrackingSurvey

Pınar Children’s Theater in its 26th yearInthecourseoftwenty-fiveyears,thePınarChildren’sTheaterhasreachedmorethanthreemillionchildren,fosteringamongthemaloveoftheaterthroughperformances,towhichnoadmissionischarged,witheveryplaybeingcarefullycraftedtocontributetowardsitsaudiences’culturalandpersonaldevelopment.Asatraininggroundformanyfamousperformers,thePınarChildren’sTheaterevenfunctionsasasortofschooloftheperformingarts.

Since1987,thePınarChildren’sTheaterhasbeenemployingaprofessionalteamofperformers,directors,designers,andbackstagecrewstomountdozensofprogramsthatarespeciallydesignedtoappealtochildren.Forthe2012-2013academicyear,thetheatermountedanewplay,“Alaaddin’inSihirliLambası”[“AladdinandtheMagicLamp”],whoseprofessionally-createdscenery,costumes,staging,andmusicprovidesatheatricalexperienceandavisualfeastthatitsaudienceswillneverforget.LastyearthePınarChildren’sTheaterwentontourandmountedperformancesinİzmir,Mardin,Kızıltepe,Şanlıurfa,Gaziantep,andEskişehirthatwerewatchedbythousandsofkids.

Accordingtoapublic-awarenesspollconductedbyGfK,thePınarChildren’sTheater’spublic-awarenessratingwas33%in2013.

Source:GfKFlavoredDairyProductsTrackingSurvey

Recycled Packaging Materials

(Kg) 2012 2013 Supplied to Market Recovered Supplied to Market Recovered

PET 3,808,416 1,523,366 4,169,493 1,751,187PE 963,039 385,216 1,165,206 489,387Cardboard 1,036,969 414,788 1,115,294 468,423Glass 1,112,669 445,068 1,616,558 678,954

32ThePınarArtCompetitionhasbeenheldannuallyfor32years.

33%ThePınarChildren’sTheaterhadapublic-awarenessratingof33%in2013.


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Pınar & UNICEF Hand-In-Hand Underthe“Pınar&UNICEFHand-In-HandWithArtIntoTheFuture”project,3,000ofprevious-years’PınarArtCompetitionsubmissionswereselectedandreproducedintheiroriginaldimensionsasdecorationsfortableplacemats.TheseplacematsarebeingsoldbyUNICEFandtheproceedsfromthesalesareaddedtothatorganization’srevenuesandusedtofundprojectsthatbenefitchildrenaroundtheworld.

InsteadofsendingoutNewYear’sgiftsin2013,PınarcollaboratedwithUNICEFinmakingdonationstoŞanlıurfaregionalprimaryschoolsthatacceptboardingpupils.

Pınar InstituteIn2012thePınarInstitutewasfoundedinordertocontributetothedevelopmentofahealthysocietybyengaginginresearch,supportingsuchresearchandeducation,publishingtheresultsofsuchactivities,andinvolvingitselfinsimilarendeavors.TheinstituteisheadquarteredonthecampusofYaşarUniversity.

ThePınarInstitute’smissionistoeducatethepubliconissuesrelatedtofood,health,andnourishmentandtofosteraquality-of-lifeawarenessbysupportingscientificprojects,takingpartininformationnetworks,andtakingpartineducationalactivities.

Tofulfillthismission,thePınarInstitutecommencedactivitieswiththeinaugurationofitsBoardofDirectorsandScientificCommitteeon13June2013.

ThePınarInstitutewassetupinordertocontributetothedevelopmentofahealthysocietybysupportingscientificprojects,takingpartininformationnetworks,andengagingineducationalactivities.Anotherofitsobjectivesistoserveasatrustedreferenceonissuesrelatedtofoodandnutrition.

Inkeepingwithsuchaims,thePınarInstitute’sfirstprojectwas“Let’sHaveFunExercising&EatingHealthy”,acampaignundertakentoeducatechildrenonthesubjectoffood,health,andnutrition.Underthisproject,childreninthe6-12agegrouponvacationattheÇeşmeAltınYunusThermalandResortHotelduringthesummermonthswereprovidedwithconsciousnessandawarenesstrainingonnutrition-relatedissues.

Seekingtocontributetoinformationflowsbetweenagenciesandorganizationsontheonehandandthepublicatlargeontheotherthroughtheprojectsinwhichitisinvolved,thePınarInstituteisparticipatinginjointactivitiesincollaborationwiththeNationalFoodTechnologiesPlatform.

AmemberoftheEuropeanFoodInformationCouncil(EUFIC)throughitssistercompanyPınarEt,PınarSüthasformalizeditscollaborationwiththatbody.Food-andnutrition-relatedprojectsandeventsinvolvingEUFICwillbepublicizedinTurkeythroughthePınarInstitute.

Support for sport

Pınar KSKPınardemonstratesitssupportforsportsthroughitssponsorshipofthePınarKarşıyakaBasketballTeam(PınarKSK).AteamwhichhasbeencontendingintheTurkishPremierBasketballLeaguesince1998,PınarKSKdevotesconsiderabletimeandenergytoinculcatingaloveofsportamongchildrenbyencouragingthemtoplaybasketball.EveryyearnearlyathousandyoungstersaregivenfreeaccesstothefacilitiesoftheÇiğliSelçukYaşarSportsCenterthankstoPınar’ssupport.

PınarKSKalsorepresentsTurkeyininternationalmeets.Duringthe2012-2013seasontheclubhostedtheEuroChallengeCupinİzmirandwasalsooneofthefinalfourcontenders.

Inthe2013-2014season,wasthechampionshipwinneroftheSporTotoTürkiyeCup.

PınarSuwasalsotheofficialbeveragessponsorforthe2013SporTotoTurkishMen’sandWomen’sBasketballChampionshipgames.

Yaşam Pınarım KVSKIn2013,PınarSualsosupportedvolleyballsportsthroughitssponsorshipofthePınarKarşıyakaVolleyballSportsClub.

Turkish Athletics FederationInanefforttoincreasepublicinterestinalternativeformsofsport,PınarhasbecomeanofficialbeveragessponsorfortheWorldIndoorAthleticsChampionships.PınarisalsoaprimesponsoroftheEuropeanTeamChampionshipsnationalmeetsthatareconductedinTurkeybytheTurkishAthleticsFederation.

ESTİ PınarSuisaprimesponsoroftheAegeanWaterSportsandWaterPoloclub(ESTİ),whichwasfoundedinİzmirin1993.Since2008,ESTİhasbeensuccessfullyrepresentingİzmirintheTurkishWaterPoloPremierLeague.ItalsorepresentsTurkeyattheinternationallevelintournamentsheldinothercountries.

PınarSusponsoredthe“HidoTalentCamp”organizedbytheHidayetTürkoğluSportsSchoolsattheHalkapınarGymnasiumfrom23to29June2013.

supportPınardemonstratesitssupportforsportsthroughitssponsorshipofthePınarKarşıyakaBasketballTeam(PınarKSK).


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In 2013

Publications

Yaşam PınarımFocusingespeciallyoncontentthatwillbeofparticularusetoparentsandfirstappearingin2004,YaşamPınarımisamagazinethatseekstoestablishandmaintainbondsbetweentheCompanyanditsconsumersandbusinesspartnersaswellaslinkswithacademicandgovernmentalcircles.Themagazineispublishedquarterlyandisdistributedfreeofcharge.In2013themagazinebeganbeingdistributedtoconsumersasane-bulletinsentoutbyemail.Asaresultofthischangeinformat,itisnowreaching115,000peopleamonth.

Dolu Dolu Yaşa! DergisiDoluDoluYaşa![LiveLifeToTheFull!]isamagazinepublishedbyPınarSuanddistributedfreeto19-litercarboysubscribers.ThepublicationisanenjoyablereadthatprovidesconsumersinformationaboutPınarSunewproductandserviceofferingswhilealsostrengtheningtheemotionalbondsbetweensubscriberandbrand.

Publishedquarterly,DoluDoluYaşa!appealstotheinterestsandtastesofitsreaderswithseasonallyappropriatearticlesandcurrentnewsaboutbeauty,health,andlifestyleissuesaswellasrecipesinwhichPınar-brandproductsareused.

Fairs & congressesSincethedayitwasfounded,Pınarhastakenpartinandsupportednumerousfairsandcongressesdealingwithmattersofconcerntothedevelopmentofitssectorsuchasquality,foods,R&D,andmarketing.Comingintocontactwithmanydifferentmarketingandconsumerchannelsthroughthefairsthatittakespartinathomeandabroad,Pınarisaleadingparticipantshowingoffmorethan600productsatthemostprestigiouslocal,regional,andinternationaltradefairs.Abidingbyitssustainabilityprincipleofcontributingtothedevelopmentofitssector,Pınarseekstomakeitsproductsbetterknownininternationalmarketswhilealsoorganizingandhostingdistinguishedeventsofitsownthatcontributetothefoodsindustryinavarietyofways.Bysponsoringactivitiesrelatedtocooking,gastronomy,andcuisineinTurkey,Pınaralsocreatesopportunitiestolinkupwithsectoralleadersandscientists.

LastyearPınarshowedoffitsproductsatGULFOOD2013inDubai,theİzmirInternationalFairinİzmir,andAFHEXPOinİstanbul.TheCompanyalsosupportedandsponsoredavarietyofcongresses,symposiums,andsimilaractivities.

In2013PınarSu:

• ExhibiteditsproductsattheYaşarGroupFood&BeveragesDivision’sstandatthe82ndİzmirInternationalFairin2013;

• Foundopportunitiestopromoteitsgoodstotheaway-from-homeconsumptionmarketbyattendingtheAFHEXPOFairheldatCNRExpoinİstanbul;

• TookpartinGULFOOD2013,theworld’sbiggestandmostprestigiousannualfoodandhospitalityshow.Thishighly-attendedeventgavetheCompanymanyopportunitiestoeffectivelyshowoffitsproductstopotentialinternationalcustomers.

Sponsorships

Leading events supported and sponsored by Pınar in 2013:• “AegeanBrandsSummit”,organizedbyEgeUniversity(12March)

• “14thPediatricsDays”,organizedbytheDokuzEylülUniversityHospitalSchoolofNursingattheİzmirSabancıCulturalCenter(5-6April)

• “10thLeadershipSummit”(11April)• “TRTKids’Country”,organizedbytheTRTKIDSTVchannel(15-23April)

• “InternationalChildren’sTheaterFestival”,organizedbytheAnkaraStateTheaters(24-30April)

• “28thGrandkids’AthleticsMeet”,organizedattheAtatürkOlympicStadiumbytheKarşıyakaRotaryClub(2-3May)

• “4thFoodSafetySummit”(14-15May)• “1stQualityofLifeProjectandIdeaContest”,organizedbytheİzmirbranchofKalDer(30-31May)

• “FoodsR&DProjectMarket”,organizedbytheAegeanExporters’Association(3-4June)

• “14thInSearchOfExcellenceSymposium”,organizedbytheİzmirQualityAssociation(5-6June)

• AegeanWaterPanel(7June)• “49thTurkishPediatricsCongress”(11-13June)• “WorldFoodDay”,organizedbyFAOHeadquarters(10October)

• “Engelsizmir”,aprojectundertakenjointlybytheGüzelyalıRotaryClubandİzmirMetropolitanMunicipalityforthebenefitofthephysicallyhandicapped(30October)

• “22ndQualityCongress”(12-13November)• “UIP-4BosphorusSummit”(20-22November)• “BrandsConference”(19-20December)

115,000In2013YaşamPınarımmagazinebeganbeingdistributedtoconsumersasane-bulletinsentoutbyemail.Asaresultofthischangeinformat,itisnowreaching115,000peopleamonth.

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