Sustainable development management system
Description and structure of the sustainable development management system
Areas for Rusagro’s sustainable development
- Soil conservation
- Climate change
- Waste management
- Energy management and energy efficiency
- Water management
- Personnel management and training system
- Human rights
- Occupational health and safety
- Engagement with local communities
- Animal health and welfare
- Development of regional infrastructure
- Stakeholder engagement
- Supply chain and responsible partnership
- Product quality
Stakeholder engagement
Supply chain management system and responsible partnership
Rusagro Group is committed to responsible co‑operation with suppliers and supply chain transformation. Rusagro recognises the importance of creating a responsible supply chain and therefore has been raising sustainability standards by engaging with suppliers, regularly updating Rusagro Group’s Tender Regulations across all business segments, and by optimising procurement activities.
| Destination | Description |
|---|---|
| Procurement planning |
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| Supply process management |
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| Product storage |
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Documents that guide Rusagro Group in improving its supply chain management system
- Rusagro Group’s Tender Regulations
- Code of Business Conduct and Ethics (under preparation, its approval scheduled for 2025)
- Anti‑Corruption Policy (under preparation, its approval scheduled for 2025)
- Procurement Strategy
- UN Global Compact
- Universal Declaration of Human Rights
- UN Guiding Principles on Business and Human Rights
- Conventions of the International Labour Organization
Priorities in supply chain management and sample KPIs
- Costs saving
- Inventory and payables turnover
- Stock size
- Timeliness of procurement procedures
- Timeliness of provisions
- Cycle length from application to contract or payment
- Satisfaction surveys
- Staff competency assessment
- Share of employees with more than three years’ experience in procurement management
- Number of training days per employee
Integrating ESG into supply chain management
- Ensuring transparency in the procurement process, impartiality in the selection of contractors, fair competition
- Identifying unreliable suppliers to be removed them from the shortlist of possible counterparties during the procurement phase
- Increasing costs considered against sustainability criteria
- Achieving ESG goals
- Achieving the required sustainability score by the strategic suppliers (e.g., according to Eco Vadis)
Supplier selection and engagement
Rusagro Group follows specific criteria when choosing suppliers and assessing offers of cooperation:
- Compliance with the statement of work
- Supplier category
- major suppliers
- suppliers of critical goods and services
- irreplaceable suppliers
- Quality of materials and services provided by the supplier
- Financing proposal
- Compliance with the Group’s ESG requirements
- Business reputation, including supplier’s cases of fraud and corruption
- Absence of tax debts
The supplier selection criteria may vary to meet the specifics and peculiarities of each business segment. An electronic trading platform, where electronic bidding via a tender system occurs, is used to choose a supplier. Tendering outside electronic trading platforms is allowed only if tender funds are below the established limits.
Digitalisation and automation
Rusagro Group strongly supports process design solutions allowing to optimise processes in supply chain management.
In 2021, Rusagro Group successfully launched the Digital Farmer application to automate the management of raw material suppliers. Many agricultural producers are already using the application.
The objective of the platform is to simplify and improve the quality of Rusagro’s interaction with farmers, make the processes more transparent, convenient and faster for all participants in the supply chain.
In collaboration with TESSA, Rusagro Group initiated a complete shift to electronic document management at the beginning of 2024. The technology will consolidate a geographically dispersed Company’s data and process into a single digital circuit. Covering the entire holding, the project aims to improve the efficiency of document flow operations within the Group and with its counterparties, while simultaneously reducing paper and ink usage.
Risks in the supply chain
The Company has a unified Tender Regulations in place that define the basic requirements for the bidding process. The objectives of the regulations are to fulfil the principle of competitive procurement, ensure transparency of the logistics process and reduce supply costs.
The supplier screening process involves supplier background check through SPARK if run by the Security Service and through the Agribusiness Charter if run by the Procurement Department staff. If the results obtained show high risks, the supplier is blocked.
Product quality and consumer safety
Product quality management system
Rusagro Group considers satisfaction and safety of its customers and consumers to be among its top priorities. Each of the Company’s business segments established its own product management and quality control framework to achieve high relevant performance results. The quality control services assess all categories of finished products in order to ensure that they do not have a negative impact on the consumers’ health.
Meat Business
The Food Quality and Safety Policy of the Company serves as a guideline for the management of product quality in the Meat Business. The quality control system includes four components, namely, veterinary service, quality control and assurance service, standardisation and certification function, and claims collection and processing function. The Company’s veterinary service makes sure that animals are medically fit for food production, examines finished products and draws up veterinary reports. The quality control service is responsible for quality control of all finished products. The quality management systems at the production sites in Tambov and Belgorod Regions are certified to ISO 22000 and FSSC 22000. Claims management involved the collection of quality complaints from customers and their investigation together with the logistics and production departments.
Since 2021, Rusagro has been utilising a digital monitoring system for the hygienic state of production and non‑production areas of the BRAMS facility at its pig breeding facilities in Tambov and Belgorod Regions.
With the support from Rusagro Tech, the Company uses a machine vision system (neural networks) for the online quality control of finished products on the production line at Tambov Meat Processing Plant
Oil and Fats Business
The Quality Department of the Oil and Fats Business follows the provisions of the following internal documents: Quality and Product Safety Policy, Integrated Quality Management System Manual, Non‑conforming Product Management and Food Safety Management System Manual (HACCP). All production sites are certified to ISO 9001 standard, and Yekaterinburg, Saratov and Atkarsk plants are also certified to FSSC 22000 standard. Saratov Fats Plant has RSPO and ISCC certification. The Quality Department of the Oil and Fats Business is also directly involved in screening the Company’s suppliers to ensure the quality of products purchased.
of raw material reception process
Sugar Business
The Quality Service in the Sugar Business is responsible for the coordination of all product quality assurance activities and the development of the quality management system. This structure is applicable for all production sites. The Head of Security coordinates activities of the Quality Service at the business segment level, while the site quality manager oversees quality control activities at separate production sites and supervises a plant chemical engineer (in charge of laboratory control) and a quality specialist (in charge of certification and incoming inspection). All plants have a food safety management system compliant with FSSC 22000 standard, and all production sites are certified by an external certification and auditing service provider. Compliance audits are carried out once a year and recertification audits – once every three years. The fodder safety management system is based on the GMP+ standard: seven plants are certified for pulp production and two plants – for betaine production.
of the monitoring system for critical production parameters to all sugar plants
Agriculture Business
The product quality management issues in the Agriculture Business are covered by the Company’s Commercial Function, reporting directly to the General Director of the Agriculture Business. The Commercial Function operates to Customs Union technical regulation 015/2011 ‘On Grain Safety’, Rusagro’s Quality Policy, instructions for quantitative and qualitative accounting of grain and its derivatives, incoming quality control, drying and cleaning, storage of finished products, and regulations for crop production outgoing inventory. As for product quality management and control, the Commercial Function has four focus areas: laboratory control, assurance of system requirements for storage conditions, accompanying documentation and standardisation.
Priorities of the Quality Management System
Meat Business
- Fulfilment of the requirements of external stakeholders
- Quality as a competitive advantage
- High level of customer service
- Certification of meat processing plants in export markets
- Cost‑effective quality service
- Centralisation of the quality service
Sugar Business
- Development of the food and feed safety system and improvement of product quality
- Measurement efficiency improvement (through automation and statistical analysis methods)
- Focus on meeting customer specifications
- Focus on improving the production culture and bringing it to lean manufacturing standards
Agriculture Business
- Internal auditing of grain storage elevators in terms of product quality
- Examination of the requirements and prerequisites for integrating express analysers at storage sites into a single FOSS network
- Consideration of replacing manual quality control methods with automated equipment
- Reproducibility of quality indicators at all stages of the production process and during supplier and customer interactions
- Uploading of data into the Federal Grain Inspection Service system
Oil and Fats Business
- Quality improvement of products
- Implementation of an operational efficiency plan
- Realisation of the site automation project
- Staff development and staff interchangeability
Feedback system
One of the most important tools for raising the calibre of the products supplied is effective customer communication. For this reason, every business segment of Rusagro Group gives careful consideration to customer complaints and requests.
In the Meat Business, claims management falls under the jurisdiction of the Customer Service Department, which structurally belongs within the Logistics Department. The common tools employed by the Customer Service Department to collect and process claims include a hotline, common email and feedback forms on the product brands’ websites. To facilitate more effective analysis and processing, all calls and reports are digitally recorded. Every month, the Department compiles an analytical report on complaints that have been filed.
The Operations Support Service, which is part of the Operations Directorate of the business segment, is responsible for customer relations in Rusagro’s Oil and Fats Business. The claims management of the Operations Support is compliant with ISO 10002 and involves processing the return requests, customer complaints and other customer reports. Available feedback options are through website, e‑mail, postal service or telephone.
The Sugar Business uses telephone and email communication to interact with its customers. Electronic document exchange is a preferred and widespread way of interaction with network customers. Feedback from retail customers is collected centrally: product packaging contains contact information, including email address, website address and office telephone number. At least once a year, the Sugar Business carries out an automated customer satisfaction survey.
The Commercial Function of the Agriculture Segment is also responsible for communications with customers and partners, usually via postal service.
Risk management in the Quality Management System
In pursuance of greater customer and consumer satisfaction, Rusagro Group closely monitors emerging risks relating to product quality and tailors appropriate measures to prevent or minimise them.
| Risk | Management measures | |
|---|---|---|
| Meat Business | ||
| Product spoilage before the end of the actual shelf life declared by the producer | Sanitisation of production sites Procedures to improve sanitary conditions in the workplace Control over process‑related parameters | |
| Sugar Business | ||
| Increased sugar temperature at the outlet of the production line due to insufficient cooling capacity and inadequate sugar storage conditions in warehouses increase the likelihood of caking of the finished product | Repair and upgrade of sugar cooling systems at the plants Installation/upgrade of air conditioning systems in warehouses | |
| Agriculture Business | ||
| Poor quality of produce | Enhanced incoming quality control of products – inspection of each vehicle | |
| Unsatisfactory condition of parties to be conditioned | Periodic control | |
| Deterioration of long stored batches | Periodic control at storage locations | |
| Poor quality of product shipped | Enhanced incoming inspection of products shipped – inspection of each vehicle | |
| Oil and Fats Business | ||
| Risks related to the government and regulators | Changes in industry-specific legislation in consumer countries Lack of knowledge and non-compliance with laws and regulations due to outdated external and internal documentation Punitive sanctions or blockage of products made | Continuous monitoring and tracking of possible changes in legal and regulatory requirements Updating of regulatory documents to accommodate the changing requirements, using the latest versions of standards, regulations Timely notification of interested departments of forthcoming changes in requirements |
| Supplier-related risks | Assignment of ineffective and inefficient corrective actions Failure to implement preventive and corrective actions or to develop and implement ineffective corrective actions Re-occurrence of non-conformities, release of non-conforming products into free circulation | Quality control of purchased products, including by third-party accredited laboratories, at prescribed intervals Continuous quality control of products by internal and external control bodies Periodic testing of finished products by third-party accredited laboratories |
| Personnel-related risks | Supply of products purchased that do not meet quality and safety standards Release of substandard products into free use with or without endangering the health of consumers Harm to the health of the consumer and the likelihood of damage to the Company’s image and reputation | Recording of planned corrective actions Continuous follow-up of the corrective actions Monthly monitoring of the effectiveness of preventive and corrective actions |
| Risks associated with partners and outsourcing | Bioterrorism and sabotage Release of substandard products into free use with or without endangering the health of consumers | Entrance coded locks at the production workshops Video surveillance |
| Risks related to the internal control system | Inadequate internal control system Release of substandard products into free use without endangering the health of consumers | Reconsideration of the monitoring frequency as necessary Video surveillance |
| Customer-related risks | Cross-contamination related to return of products that are overdue for sale Harm to the health of the consumer and the likelihood of damage to the Company’s image and reputation | Reception of returned products for storage in a separate warehouse for isolation and subsequent disposal purposes |