SUSTAINABILITY IN RUSSIA

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Sustainability Approach

 

Our approach to sustainability in Russia is grounded in our ability to contribute to the diversification and growth of the Russian market, deliver innovative solutions to our customers, and enhance the quality of life in the communities in which we operate.

 

We are integrating sustainability into our business operations by following Alcoa values, setting strategic targets, and establishing long-term partnerships. We are also taking a leadership role in the country’s business community, with Klaus Kleinfeld, our chairman and CEO, serving as the chair of the U.S.-Russia Business Council.

 

Belaya Kalitva plant

Belaya Kalitva plant

Products

Our operations in Samara and Belaya Kalitva are two of the largest producers of fabricated aluminum in the country. We manufacture aluminum flat-rolled products, extrusions, forgings, and tubing that are used primarily in the aerospace, packaging, and building and construction markets. Other markets for our products include oil and gas, consumer appliances, automotive, and commercial transportation.

 

We are committed to supporting domestic and foreign markets where aluminum enhances product performance, helps protect the environment, and increases efficiency.

 

There is enormous potential for this in Russia, where aluminum consumption is still comparatively low. The country’s annual per-capita consumption is around 7.5 kilograms (16.5 pounds) of aluminum compared to 25.9 kilograms (57 pounds) in the United States and 22 kilograms (49 pounds) in Europe. With an expected annual growth rate of 4% to 6%, Russia’s domestic aluminum consumption on a per-capita basis may reach an estimated 10 to 12 kilograms (22 to 26 pounds) by 2020 and 12 to 16 kilograms (26 to 35 pounds) by 2025.

 

This growth is largely driven by an expanding consumer base. Russia currently is the second largest consumer market in Europe (and very likely will be the largest within the next few years) and the fourth largest in the world. Since 2000, retail spending has grown at a 20% compound annual growth rate—from US$80 billion annually to an estimated US$660 billion in 2012. Of that amount, 54% is spent on non-food items. The average monthly wage also has grown, from US$80 in 2000 to US$850 in 2012.

 

The Eurozone crisis and slowing growth in Europe and China have had little impact on Russia’s domestic economy, which is relatively healthy. The gross domestic product grew 3.4% in 2012 compared to the prior year, while industrial output climbed 2.6%.

 

In addition, Russia has demonstrated its commitment to innovative development and business expansion. The country’s accession to the World Trade Organization in 2012 will encourage investment and trade and open up numerous opportunities for companies operating in the country.

 

These economic conditions are encouraging for our business, and we continue to build partnerships to promote the use of aluminum in a variety of products.

 

In 2012, we partnered with the Tractor Plants Group to launch a lightweight, environmentally friendly aluminum railway hopper to transport grain in the Russian market. The hopper uses our new advanced aluminum sheet, which enables a payload increase of eight metric tons and reduces the wagon body’s weight by two-thirds compared to a traditional steel body. Customers also will benefit from longer life and fewer repairs due to aluminum’s corrosion resistance.

 

Aluminum tube and forging

Aluminum tube and forging made in the Samara plant for drilling risers

In 2013 and 2014, we will be working with Rusnano on an opportunity to introduce aluminum drill pipe to the Russian oil & gas market. Compared to steel drilling pipe, aluminum pipe is almost two times lighter and offers improved reliability and longer operational life due to its resistance to stress corrosion cracking.

 

Environment

Both of our Russian facilities are located within urban areas, and we are aware of our heightened responsibility to protect the environment and members of the community. Our efforts include the following:

  • Minimizing our resource use, emissions and waste;
  • Increasing the reuse of water, reducing process water discharge and more efficiently treating the water we do discharge;
  • Decreasing the use of hazardous materials;
  • Reducing the risk of accidents;
  • Providing environmental education to our employees; and
  • Supporting environmental volunteer projects that involve employees and community members.

 

Between 2005 and 2012, we invested more than US$542 million in our facilities to improve their environmental performance and bring them in line with Alcoa’s standards. This has helped us reduce non-compliances with Russian and Alcoa corporate standards by 96% during that period.

 

Our Samara facility successfully passed an audit on the International Organization for Standardization’s ISO 14001 (environmental management systems) standard in 2012 and continues to implement energy-efficiency projects. The plant also earned the highest honor in a regional environmental competition that was focused on environmental system management efficiency.

 

To maintain compliance for air emissions and waste storage, our Belaya Kalitva facility completed the repair of two ventilation systems in the casthouse and developed an industrial environmental monitoring procedure during 2012. It also passed an ISO 14001 compliance audit.

 

Environmental Performance
  Direct Greenhouse Gas Emissions
Metric tons of CO2 equivalents
Indirect Greenhouse Gas Emissions
Metric tons of CO2 equivalents
Freshwater Use
Millions of cubic meters
Landfilled Waste
Thousands of metric tons
2008 190,869 0 6.7 5.9
2009 118,246 0 4.6 4.4
2010 114,970 0 3.1 3.4
2011 132,086 0 3.3 4.6
2012 126,492 0 3.4 4.5

 

Workplace

Health & Safety

We had a third successive calendar year with zero fatalities, and this was due in large part to our efforts at eliminating fatality risks in our operations. In 2012, we removed 78 such risks for a total of 9,516 risks eliminated since Alcoa began operations in Russia in 2005.


Major safety projects completed at each of our facilities in 2012 included:

Samara

  • Engineering and installation of lifelines along the overhead crane ways to protect employees from falls.
  • Installation of service platforms to ensure safe maintenance of the equipment.
  • Installation of interlocks for machine guarding purposes.

Belaya Kalitva

  • Engineering and installation of fixed machine guarding to ensure compliance with Alcoa standards.
  • Repair of the roof in the casting and other areas.
  • Installation of a telescopic covering on the Whirt scalper pits.
  • Installation of lifelines along overhead crane ways and new stairs for easier access to hydraulic press areas.

 

These and other efforts resulted in a 42% decrease in our total recordable incident rate and a 43% decline in our days away, restricted, or transferred (DART) rate between 2011 and 2012. These improvements were somewhat offset by a 13% increase in lost workday incidents due to one additional case and a decrease in hours worked as a result of process optimization.

 

To ensure sustainable progress, we are putting extra focus on the cultivation of a safety culture and the continued implementation of human performance, a framework that teaches employees how to recognize error and error-likely situations to predict, reduce, manage, and prevent fatalities and injuries from occurring. In 2012, both Alcoa Russia locations reached level 2 of human-performance implementation (level 4 is the highest level of implementation).

 

Our 2012 efforts to improve occupational health included ongoing employee medical evaluations, exposure assessments, and the removal of employees from exposure to specific chemicals.

 

Health & Safety Performance
  Fatalities
Employee/contractor
Lost Workday
Incident Rate
Days Away, Restricted, or Transferred (DART) Rate Total Recordable
Incident Rate
2008 3/1 0.21 0.63
2009 1/0 0.15 0.48
2010 0 0.04 0.49
2011 0 0.15 0.52
2012 0 0.17 0.28 0.30

 

People

Our people are the most important factor behind our success, and our focus is on employee engagement and succession planning.

 

Our efforts to increase the engagement of our employees in 2012 included:

  • Intensive follow-up on the annual Alcoa Global Voices employee survey, including setting clear action plans;
  • Enhanced use of non-monetary recognition systems for high-performance results;
  • Active involvement of employees in the Alcoa Worldwide Month of ServiceGreen Works, and other volunteer projects; 
  • Implementation of Alcoa’s Advancing Supervisory Excellence program;
  • Improved use of communication tools, such as information days;
  • Succession planning and development for key positions through our Talent Management and Targeted Succession programs;
  • Engagement of shop-floor employees through best-in-profession competitions; and
  • Active participation by employees in the Stop Losing program, which is part of the Alcoa Business System.

 

Through the Advancing Supervisory Excellence program, we provided targeted training in 2012 to more than 190 of our line supervisors. This training focused on key management skills, such as conflict resolution, employee engagement and motivation, and effective performance.

 

In our Talent Management Program, we developed succession plans for 100 leadership positions in 2012. We identified at least one successor who will undergo a three-year development process for more than 80% of these jobs. For the remaining jobs, which have longer development paths (three to six years), we identified emergency candidates. While we focused mainly on existing employees, we did consider external candidates for some roles.

 

Our Targeted Succession Program focused on operation line supervisors, resulting in 90 successors being identified and trained in 2012. The program also facilitated the promotion of more than 20 employees for these roles during the year.

 

Due to our efforts at developing our internal talent, we filled more than 90% of open professional and leadership positions in 2012 with existing employees.

 

Supply Chain

Our goal is to work with sustainable partners, and we have rigorous requirements for our suppliers.

 

A key criterion is their environmental, health, and safety performance, and we use a detailed questionnaire with each potential supplier to gain a better understanding of their performance in this area. In addition, we clearly communicate that our preference is to work with suppliers that are ISO 9000 (quality management systems) certified.

 

Community

Proactive engagement with communities is part of our business strategy and operating framework. We actively use the Alcoa Community Framework, which helps us build and measure partnerships and engage in two-way communications with our community stakeholders.

 

We work with Alcoa Foundation to identify investment opportunities that will allow us to address important needs and make the communities in which we operate stronger. Our focus is on technical education, environment, and community health.

 

Our key community investments in 2012, many of which continued from prior years, included:

  • Alcoa Foundation’s Technical Education Program is designed to attract and retain talent in the technical field. We support top students and young faculty at our partner universities through scholarships, faculty development stipends, and equipment. Our university partners are Samara State Aerospace University, Donskoy State Technical University, Rostov-on-Don, and Moscow Institute of Steel and Alloys. We also support two technical colleges in Samara and Belaya Kalitva through scholarships to their top students.
  • Reducing Our Environmental Footprint educational program for middle-school students focuses on effective use of natural resources, energy efficiency, and recycling. Through theoretical and hands-on activities, young people learn how they can contribute to a better environment on a personal level.
  • Responsible Water Resource Management for Sustainable Development is researching water management and oily wastewater cleaning technologies. Activities include identifying best practices for phyto-cleaning technologies; modernizing university curricula; educating the general public and professionals about water pollution; and undertaking water conservation efforts at federal, regional, and local levels.
  • Youth Votes for Health Program promotes healthy lifestyles in our comunities. As part of this program, nine outdoor fitness complexes were installed at our partner schools. A comprehensive program to encourage young people to use the complexes also was developed. 
  • In partnership with U.S.-based Heart to Heart International Children's Medical Alliance, we are assisting our Russian communities in the development of pediatric cardiac centers of excellence. Access to timely and modern care for children with congenital heart defects is one of the vital issues in Russia’s public health system.

 

Employee volunteers plant rosebushes

Employee volunteers from the Belaya Kalitva location plant rosebushes at a social and rehabilitation center.

We believe that our employees play a key role in our community relations. Their engagement in numerous volunteer activities throughout the year helps us better understand our communities and enhances the impact of our community contributions.

 

Our employee volunteers have helped elderly people and children with special needs, improved the infrastructure of educational and health institutions, protected the environment, and brought the concept of “green” to their communities.

 

In 2012, 62% of our employees in Samara, Belaya Kalitva, and Moscow volunteered during Alcoa’s Month of Service. We also had a significant increase in employee participation in our Bravo! volunteer program, which resulted in more than 17,000 hours of service during the year.

 

Employee Volunteer Hours
2008 2,000
2009 1,250
2010 8,000
2011 8,950
2012 26,200

Awards

Best Russian Exporter in 2011 (most dynamically developing Russian exporter—non-ferrous metals industry category)—Russia Department of External Economic Affairs
Alcoa Russia

 

EcoLeader-2011 (large enterprise category)—Samara Ministry of Forest Management, Environmental Protection, and Natural Resources
Alcoa Russia


Case Studies

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Related Link

Alcoa in Russia