Toyota Global Vision. As part of the Toyota Motor Corporation (TMC) network of
..... Durban, we produce the Hilux, Fortuner, Ses'fikile taxi,. Quantum and Corolla
..... company to increase service intervals on all Hino models, helping to improve
...
TOYOTA SOUTH AFRICA MOTORS
Sustainability Report 2012
Toyota Global Vision As part of the Toyota Motor Corporation (TMC) network of companies, Toyota South Africa Motors (TSAM) draws on the philosophy of its parent company when establishing its own values, principles and strategies. In 2012, the company introduced TMC’s ‘Toyota Global Vision’ to its South African employees and operations. This vision outlines the elements which have contributed to over 70 years of success at TMC, and defines our plan for sustainable growth in the future. The representation of the Toyota Vision as a tree symbolises a ‘roots-to-fruits’ philosophy which asserts that a company founded on strong principles will have stronger and more stable operations (our ‘trunk’). From this base will ultimately grow the twelve ‘fruits’, representing the desired outcomes and aspirations of the Vision. Throughout this
report, we have highlighted instances in which we have successfully embodied the Vision, and as a result have exceeded expectations and been rewarded with a smile. Achieving the Vision requires the individual commitment of our employees as well as collaboration between different divisions, departments, operations and even between different Toyota companies. TSAM must remain responsive to the needs of its stakeholders, which include: • Employees • Customers • Business partners • Shareholders • G lobal society and local communities, including our neighbours and the environment. This sustainability report seeks to address the issues most important to these stakeholder groups, and, following the philosophy of the Toyota Global Vision, is structured around them.
Toyota guiding principle #6 Pursue growth through harmony with the global community via innovative management.
Toyota Global Vision “Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. “Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. “We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way.”
About Toyota South Africa Motors
Chief Executive Officer’s message .............................. 2
An introduction to Toyota South Africa Motors ........... 4
Toyota ........................................................................ 5 Lexus ......................................................................... 6 Hino ........................................................................... 7
Performance highlights .............................................. 8 Awards and accolades ............................................. 10
Customers ................................................................... 12 Ensuring customer satisfaction ................................ 13 Service excellence ................................................... 14 Ensuring quality ....................................................... 18 Model range ............................................................ 20 Employees ................................................................... 22 Engaging employees ............................................... 23 Development ........................................................... 24 Diversity and inclusion ............................................. 25 Retention and compensation ................................... 26 Performance management ....................................... 26 Occupational health and safety ................................ 27 Business partners ....................................................... 32 Suppliers ................................................................. 33 Dealers .................................................................... 35 Enterprise development ........................................... 37 Global society – local communities ........................... 38 Environmental stewardship ...................................... 39 Community support ................................................. 43 Shareholders ................................................................ 48 Financial highlights ................................................... 49 Governance ................................................................. 52 Board and committees ............................................ 54 Managing our risks .................................................. 57 GRI index ................................................................. 58
About this report
This sustainability report covers TSAM’s 2012 financial year from 1 April 2012 to 31 March 2013. TSAM defines sustainability as its ability to manage a combination of environmental, social and economic elements and optimise their impact on key stakeholders. When done successfully, we believe that these elements will provide an important strategic advantage for the company, enabling us to remain in business for years to come. We are committed to improving our sustainability performance and reporting in a transparent and balanced way. In this report, we share our successes and challenges, and offer a candid view of our performance. This report focuses on TSAM’s operations, encompassing the Toyota, Lexus and Hino brands. Because the scope of our impact extends beyond our office and manufacturing plants, this report also highlights our collaboration with key external stakeholders,
including dealers, suppliers and the communities where we operate. There were no significant changes during the reporting period regarding size, structure or ownership of TSAM. As the company continues on its reporting journey, it draws on international best practice, and follows the reporting guidelines established by the Global Reporting Initiative (GRI). We believe this report represents a C application level and hope to build on our efforts in the future. This report is available in print and online at www.toyota.co.za/corporate Any questions or comments regarding this report should be directed to: Charmaine Reddy Company Secretary and Legal Advisor
[email protected]
1
Chief Executive Officer’s message Dear stakeholder It gives me great pleasure to present the Toyota South Africa Motors (TSAM) Sustainability Report for 2012. This report contains the sum and substance of our efforts to increase our positive social and economic impact in South Africa, while minimising the negative impact that a manufacturing business such as ours can have on the environment. Throughout the report you will find reference to many highlights in all areas of business, but you will also note the challenges faced by this diverse and multi-faceted business over the past year. In the 2012 financial year, TSAM was challenged by many factors – many of which were not directly related to our operations or directly within the company’s control. Inflationary pressures and fluctuating exchange rates between the rand and several key trading partners, placed our operating margins under pressure. These were mitigated by an ever-increasing focus on efficiency and cost saving, in the spirit of Kaizen, or continuous improvement. In the past year, we were also challenged by unplanned labour instability, notably at our manufacturing operations in Prospecton, Durban and at several key suppliers and service providers. This has placed our labour relations under the national spotlight and we are committed to strengthen our efforts to build stronger direct relations with our workforce. A further, albeit less immediate challenge, is the need for critical skills in the existing workforce and in our pipeline of available skills going forward. TSAM invests heavily in building future talent, whether for management positions in our management trainee course or in our apprenticeship and technical graduate programme. We have made major strides in improving working conditions and operational efficiency in the period under review. As an example, we have halved the number of on-site injuries, while the number of minor incidents dropped by 54% over the previous fiscal. At the same time, our use of electricity and water has dropped significantly, which benefits our operational costs and lowers our environmental impact. The increase in efficiency and lower
2
production cost is one of the motivating factors that have led to the localisation of the Ses’fikile assembly, which we celebrated in the past year. The improvements are also visible to our loyal and growing customer base. The Toyota group products outperform the industry on key measurements of loyalty, rational, emotional and relationship elements, and several other key customer service metrics showed an improvement over the review period. We have set ambitious targets for all internal departments and our dealer network to further improve our customer service performance, while TSAM management will renew its efforts to improve internal relations during the current financial year and the upcoming industry wage negotiation phase. I would like to add my voice to that of all my colleagues in the Toyota network in thanking our customers, suppliers and dealers for their continued and loyal support. We look forward to many more years as partners in keeping Toyota South Africa’s favourite brand. Dr Johan van Zyl President and CEO Toyota South Africa Motors
3
An introduction to Toyota South Africa Motors
For 33 consecutive years, TSAM has been the bestselling vehicle brand in South Africa. We are also the largest vehicle manufacturer in Africa, the largest vehicle exporter in South Africa and the biggest investor in the automotive sector. As an integrated automotive company, we hold the rights for the importation, assembly, manufacture and distribution of Toyota, Lexus and Hino motor vehicles and components in Southern Africa and other selected countries. In addition to serving the domestic South African market, we also export Toyota vehicles to 58 countries, and rank among the top 10 Toyota Motor Corporation (TMC) distributors worldwide.
NATIONAL PARTS DISTRIBUTION CENTRE Supplies dealerships in Southern Africa and exports to 30 countries
TSAM is owned by holding company Toyota South Africa (TSA), who in turn, is 100% owned by TMC.
SANDTON
PROSPECTON
MANUFACTURING PLANT IN PROSPECTON CAPE TOWN
Toyota South Africa Motors (Pty) Ltd (TSAM) was established in 1961, and with over 50 years in the country, has become the longstanding automotive market leader.
Assembled 150 015 Toyota and 2 950 Hino units in FY12
From our manufacturing plant in Prospecton, near Durban, we produce the Hilux, Fortuner, Ses’fikile taxi, Quantum and Corolla. We are supported by a workforce of 8 261 employees and a network of over 50 major component manufacturers, and therefore are a source of direct and indirect employment in our communities. We believe that our responsibility as a South African business extends to supporting the communities in which we operate. Since our earliest days, we have given back to them, both through corporate social investment (CSI) and the activities of the Toyota South Africa Foundation, which we run jointly with TMC.
Manufacturing plant in Prospecton Marketing office in Sandton
National Parts Distribution Centre in Boksburg
8 261 permanent employees 222 Toyota, Lexus and Hino dealerships throughout Southern Africa
4
From TSAM’s offices in Sandton, Johannesburg, the Sales and Marketing team supports a network of over 200 dealers who sell TSAM vehicles. The Toyota Academy of Learning and Hino are also located in Sandton. Our National Parts Distribution Centre is located in Boksburg. Toyota South Africa Limited (TSA) Ultimate holding company Toyota Motor Corporation (TMC) Registered office Toyota Building Stand 1 Wesco Park Sandton 2146
Toyota One of the most renowned automotive brands in the world, Toyota has come a long way since its original A1 passenger car in 1937. The Toyota line-up has evolved to showcase a diverse range of vehicles, from compact entry-level vehicles like the Etios, to powerful 4x4s such as the popular Hilux. To date, the Corolla model is the best-selling automobile in the world, with over 39 million units sold. Across the entire range, all Toyota vehicles are produced to extremely high quality and safety standards. In South Africa, Toyota has been a market leader for 33 years – a position it gained through its reputation for reliability, innovation and service excellence. With a combination of locally-produced and imported vehicles, Toyota meets the needs of its Southern African customers. Our network of 199 Toyota dealers sell and service Toyota vehicles in South Africa, Botswana, Lesotho, Swaziland and Namibia, helping to keep them on the road and in excellent condition. For more on our dealers, see page 35.
Toyota Production System The Toyota Production System (TPS) is steeped in the philosophy of “the complete elimination of all waste” imbuing all aspects of production in pursuit of the most efficient methods.
Dakar rally highlights Toyota quality, reliability TSAM entered two Toyota Hilux double-cab bakkies in the 2013 Dakar Rally. Known as the world’s toughest motorsport event, the rally crossed three countries in South America along its 8 500 km, 15-day route. The Toyota Imperial South Africa team of Giniel de Villiers and Dirk von Zitzewitz finished second in the rally, scoring among the top-five finishers in 11 of the 14 stages. Their Hilux, developed and entered by Team Hallspeed on behalf of TSAM, underwent wide-ranging testing and improvement: a production-based five-litre V8 engine replaced the 4.6 litre version previously fitted to the off-road bakkie, increasing its torque and power. Testing was conducted in Namibia to replicate the difficult conditions of the Dakar Rally. To limit the environmental impact, an environmental consultant advised the team throughout testing. Said driver de Villiers, “Our reliability enabled us to not only master the Dakar, but also made the decisive difference. I am looking forward to next year, even if this Dakar was extremely challenging.”
5
Lexus Lexus is a premium automobile brand introduced by TMC in 1989. First launched in the United States, Lexus is now a recognised global brand with vehicles sold in over 70 countries. As the luxury brand within the Toyota family, Lexus delivers premium vehicles with the same quality and reliability synonymous with its Toyota counterparts. Exceptional, bespoke customer service is a longstanding hallmark of the Lexus approach to business and is rooted in Lexus’ guiding principles, and its customer care philosophy, Omotenashi (see box). The individual attention we devote to our customers, paired with the world-class automobiles form what we believe is a true luxury experience. Lexus vehicles have been sold in Southern Africa since 1993; however, its market presence grew notably with the establishment of a dedicated Lexus brand division within TSAM in 2006. Lexus vehicles are manufactured in Japan and imported and distributed to the Southern Africa market through 14 dealerships in South Africa, one in Namibia and one in Botswana. In addition, eight South African Toyota dealerships are authorised to service and repair Lexus vehicles, giving Lexus a presence in eight provinces. The Lexus brand offers three luxury sedans, two luxury SUVs and one supercar in Southern Africa. Of these, hybrid models of the GS, RX and CT lines are available to customers. These eco-friendly alternatives retain the Lexus quality and performance while reducing environmental impact.
In FY12, sales increased by 16% to 1 371 units. TSAM plans to continue to strengthen the brand through new model introductions and by increasing the integration of the Lexus division with TSAM. This will provide a better platform to leverage the strengths of both brands. Lexus has been redefining the definition of luxury for over 20 years through new and innovative technologies. These new technologies also find their way to TMC’s other brands including Toyota and Hino. As a result, the investment in Lexus helps the group to deliver better vehicles and to enhance the experience of its customers.
Omotenashi: treating customers as a guest in our home Omotenashi, the Japanese word for hospitality, implies a deep understanding of customer wants and needs, caring about their wellbeing and treating them as true individuals. In the spirit of Omotenashi, Lexus strives to treat customers as a guest in our home. Recognising that each guest has different needs, we aim to anticipate and personalise each solution to exceed expectations, while recognising that time is always at a premium.
The Lexus Covenant Lexus will enter the most competitive, prestigious automobile race in the world. Over 50 years of Toyota automotive experience has culminated in the creation of Lexus automobiles. They will be the finest automobiles ever built. Lexus will win the race because: Lexus will do it right from the start. Lexus will have the finest dealer network in the industry. Lexus will treat each customer as we would a guest in our home. If you think you can’t, you won’t... If you think you can, you will! We can, we will.
6
Customer care sits at the very heart of the Lexus brand.
Hino Hino South Africa is a division of TSAM, and assembles Dyna, Hino 300, Hino 500 and Hino 700 model ranges for the local market at the TSAM Prospecton plant.
Supplying to the commercial market means that Hino trucks must be made to an ever-increasing durability and reliability standard, as breakdowns can mean lost business for owners. As a result, we ensure that our vehicles are built to withstand the most challenging road conditions and that our network of dealers is equipped to respond to problems immediately. Our team of master technicians undergoes rigorous training and is on 24/7 standby to service vehicles when required.
Vision Be the preferred provider of products and support services to professional truck users and freight operators in the RSA transport and logistics industry and broader market.
We recognise that operating costs are an important consideration when purchasing a commercial truck, and aim to deliver our vehicles with competitive warranties, efficient fuel consumption and affordable spare parts. 2012 marked Hino’s 40th year in South Africa, and saw the launch of the new 300-Series medium truck range. Now in its ninth generation, the 300-Series is brother to the Toyota Dyna that was introduced locally in 1965. Combined sales for the range have exceeded 50 000 units and it has been the top seller in the medium truck market for the past 27 years. South Africa is the first country outside Japan to locally assemble the new line.
Mission Hino as part of Toyota South Africa Motors is dedicated and committed towards the following: 1. E nhance its marketing capabilities and maximise sales volumes. 2. Provide the most preferred transport solutions through appropriate product and the highest quality support services.
7
Performance highlights Customers
Employees
We strive to exceed expectations in every interaction with our customers across our three brands. As a result of our continued investment in customer service, satisfaction rates continue to rise (page 12).
2012 was a challenging year for labour relations in South Africa and TSAM, like many other large employers, found its relationship with the unions tested. When faced with a four-day unprotected strike at our Prospecton plant, we demonstrated our commitment to our employees through collaborative engagement and aim to maintain a constructive and transparent relationship in the future.
Competitive customer experience (CCE)
FY12
FY11
FY10
Toyota
90.3%
89.6%
88.5%
Lexus
90.4%
N/A
N/A
Hino
90.6%
90.0%
89.0%
We are pleased to report our best safety performance to date and commend staff at our plant for their diligent work to make their work environment a safer place (page 22).
Headcount (full-time employees) Fatalities
8
FY12
FY11
FY10
8 261
7 926
7655
0
1
0
Lost work day case frequency rate
0.2
0.5
0.7
No. employees undertaking Toyota Way training
371
148
135
dti broad-based black economic empowerment (B-BBEE ) contribution level
5
5
6
Business partners Suppliers: Our suppliers are critical to our ability to produce and service our vehicles. We expect our suppliers to meet our high quality, safety and environmental standards and support them in continually improving performance (page 33). Dealers: There are 222 Toyota, Hino and Lexus dealerships across Southern Africa. Through our Kodawari programme, we work closely with each to ensure they deliver consistently excellent service to our customers (page 35). Enterprise development: TSAM remains committed to supporting the South African taxi industry by providing preferential pricing terms for our Ses’fikile minibus taxis (page 37). FY12
FY11
FY10
Number of ISO14001certified suppliers
93
91
74
Number of Kodawaricertified dealerships
69
25
3
Economic benefit to the South African taxi industry
R90m
R70m
R14m
Global society/ local communities Our environmental impact continues to improve, through a combination of innovative technology and behavioural changes (page 39). FY12
FY11
FY10
Carbon intensity (kg CO2/ vehicle manufactured
799.90
854.26
979.07
Water intensity (kl/vehicle manufactured)
3.88
4.22
5.12
Waste intensity (kg/vehicle manufactured)
16.82
22.49
23.91
Volatile organic compounds emitted (g/m2 body paint applied)
20.57
22.26
27.21
TSAM invests in its communities through corporate social investment (CSI) activities and the Toyota South Africa Foundation with a primary focus on education and community welfare (page 43).
Social investment spend (Rm)
FY12
FY11
FY10
27.50
19.61
26.07
FY12
FY11
FY10
Shareholders FY12 saw the continued improvement in the company’s financial performance, with the second-highest profit recorded in the company’s history. This was achieved through growth in both sales and production volumes as we continue to recover from the global economic crisis and natural disasters in Japan and Thailand (page 48).
Production volume – Toyota and Hino
161 889 154 701 136 207
Sales volume – Toyota and Hino
214 262 194 013 178 417
Revenue (Rm)
44 984
40 168
35 727
9
Awards and accolades The Scott Byers Network Hino has become the first truck manufacturer or distributor to make a clean sweep at the top of all four tables in the Scott Byers Network’s comparative customer satisfaction survey of truck fleet owners in South Africa.
PMR Africa Hino South Africa was rated as the leading brand in the overall local truck market for the third successive year in the annual national truck survey conducted by PMR Africa magazine.
IPE
Platinum award
Thapelo Molapo – Vice President HR and Training – won an HR Leadership Award at the 2013 IPE Global HR Excellence Awards.
TSAM received TSAM’s ‘Platinum Award for the Assembly Plant with the Best Performance in Reducing CO2’, having reduced energy consumption while increasing production in 2012.
SAGMJ The 2012 Lexus GS350 EX, Toyota 86 High Spec 6 MT and Toyota Yaris 1.5 HSD XS were nominated as finalists for Car of the Year by the South African Guild of Motoring Journalists. TSAM was the only manufacturer to have three models nominated.
10
11
Customers Toyota Touch Toyota Touch is a business philosophy based on exceeding customers’ expectations. We believe that by addressing both the behaviours of employees as well as the physical experience in dealerships (including processes and facilities), we will earn the trust and business of our customers.
12
Ensuring customer satisfaction Our customers’ experience is at the core of everything we do and we therefore strive to continually improve our service and exceed expectations. Founded in the Toyota Customer Service Philosophy, TSAM’s belief is that customers must always come first. This means providing innovative, reliable vehicles and treating everyone – both potential and current owners – with care and respect. Our customer pledge promises to our customers that: • We honour our commitment to you. • We provide sound advice. • We will always keep you informed.
While we improved our ranking in the survey from 11th to 7th position, we are determined to continue improving our customers’ experience and achieve our ultimate goal of first place in the survey.
• We provide quality technical expertise. • We value your input. • We strive to strengthen our relationship with you. Overall competitive customer experience: Summary of indices Loyalty
Industry average %
Lexus %
Toyota %
89.0
89.7
90.3
Rational
87.3
88.5
88.0
Emotional
87.6
88.6
90.0
Relationship
88.9
90.4
89.7
Highlights
90.3
TSAM tracks customer experience through ongoing industry surveys conducted by Ipsos (formerly Synovate). These allow us to benchmark ourselves against our peers and to track performance at each dealer and region. Ipsos surveys owners about their experience in sales and service, and awards each automotive manufacturer a competitive customer experience score as well as a ranking. At the time of publishing, the latest figures reflected our performance from January – December 2012. We are pleased that both our Lexus and Toyota brands exceeded the industry averages in loyalty, rational, emotional and relationship elements of the survey during this period.
Challenges Toyota’s competitive customer experience (CCE) score increased from 89.6 in FY11 to 90.3 in FY12
0.26
We received a score of 0.26 in our annual TMC quality audit. While marginally shy of our target of 0.20 (corresponding to one defect per five audited vehicles), it shows marked improvement from 0.40 in FY11
13
2012
2011
2010
90.3%
89.6%
88.5%
7th
11th
4th
90.4%
N/A
N/A
5th
N/A
N/A
90.6%
90.0%
89.0%
2nd
3rd
1st
Customer satisfaction Overall passenger vehicles Competitive customer experience score – Toyota IPSOS ranking – Toyota Competitive customer experience score – Lexus IPSOS ranking: overall passenger vehicles – Lexus Overall light commercial vehicles Competitive customer experience score – Toyota IPSOS ranking – Toyota
Service excellence We want our customers to have a positive experience not only on the day they buy their vehicle, but also during ongoing use and servicing. For example, Toyota and Lexus owners have access to AA roadside assistance through the Toyota Care Programme. AA membership is valid for three years or 100 000 km from the date of sale. It helps drivers solve common problems like flat tyres, dead batteries and keys locked inside cars. In FY12, there were 8 014 requests for assistance from Toyota and Lexus owners. Our target is for callers to receive a tow within 60 minutes of their call in urban areas and 110 minutes in rural and semi-rural areas. See the table below for our monthly averages, which fell well within these targets. In FY13, Toyota will pilot an express maintenance and convenient servicing programme aimed at improving customer convenience by drastically cutting waiting time for periodic maintenance. Building on the concepts embodied in the Toyota Production System, the programme strives to receive, service and deliver customers’ vehicles within 90 minutes. Meeting this target requires dealerships to implement standard operating procedures and continually evaluate and improve performance against it. Pending a successful outcome of the pilot programme, we hope to roll out express maintenance and convenient servicing at additional dealerships across the country.
Keeping Hino customers in business Hino trucks are often a critical component of an owner’s business and it is therefore essential that all problems are solved as quickly as possible in order to keep the vehicle on the road – and the business running smoothly. All Hino dealers must have a master technician on 24-hour standby. Currently 21 of these technicians are associated with dealerships and a further five work from our head office in Sandton. The HinoCare initiative, launched in 2011, enables the company to increase service intervals on all Hino models, helping to improve customers’ cost per kilometre. This is supported by the introduction of Hino Genuine Motor Oil, which permits the doubling of oil change intervals, further reducing downtime. Hino has also made significant improvements to the warranty benefits for certain of our models. Cover for the 300 and 500 Series is now two years (unlimited kilometres). Our 700 series carries a three-year unlimited mileage warranty on the entire vehicle. Another important component of HinoCare is 24/7 roadside assistance through a dedicated Hino call centre. This service includes vehicle towing, if necessary.
Roadside assistance response time: Lexus and Toyota owners* Urban (4 885 call-outs)
Rural (2 387 call-outs)
Actual**
Target
Actual**
Target
Actual**
60 minutes
48 minutes
110 minutes
60 minutes
110 minutes
97 minutes
* 479 calls were cancelled. ** Monthly average
14
Semi-rural (263 call-outs)
Target
Early Detection, Early Response When technical issues are identified by dealers, our Early Detection, Early Response system ensures that we not only fix the individual problem as quickly as possible, but also prevent future occurrences by addressing components or processes at the source. • D ealers submit product feedback through our electronic e-Toyota system to their dedicated TSAM field technical manager. • T he field technical manager contacts the technical liaison specialist who works with the specific model in question. • T he technical liaison specialist then communicates the issue to the global Toyota network. • H e or she then contacts the original engineer responsible for the component, who devises a solution. • T his solution is applied to ensure the problem does not re-occur during manufacturing or assembly. It is then communicated to the dealer network.
Early Detection, Early Response in action When a Hilux owner complained of a vibration while driving, the dealer alerted us to the problem. A TSAM liaison manager shared the issue with the engineer responsible for the component, who identified the problem. During assembly, it was noted that an incorrect procedure was followed in fitting a component to the vehicle. As a result, abnormal pressure was put on a part which was therefore installed in an incorrect position, leading to premature failure of the component and causing a vibration. TSAM engaged the assembly personnel who immediately changed the installation procedures, and no further complaints have been received to date.
15
Service campaigns Toyota remains vigilant to potential problems with all of its vehicles and responds according to severity and potential impact. The table below outlines a hierarchy of campaign types in place to address potential issues. While some are initiated in response to identified defects, others are implemented as a courtesy to owners when engineers improve upon existing components. Unfortunately, the nuances between the various types of service campaigns are often misunderstood in the media, with routine campaigns labelled as ‘recalls’, for example. In reality, vehicle recalls accounted for only a small proportion of the Toyota campaigns in 2012. Toyota service campaigns Recall campaign
Recall campaigns are initiated only when an identified problem does not meet local regulations and presents a specific safety risk. This may relate to critical systems. Owners are notified of the campaign and requested to bring their vehicles to their nearest dealer for repair. Recalls are rolled out against the shortest timeframe with a target of three months to completion.
Special service and Both special service and customer satisfaction campaigns address issues that do not present an customer satisfaction accident or safety risk. They are initiated as an added service to owners, ensuring that their vehicles are up to Toyota’s high standards. Owners are notified of the campaign and invited to bring their campaigns vehicles to their nearest dealer for inspection and, if necessary, servicing. Special service campaigns are implemented against a tighter timeframe than customer satisfaction campaigns. Incoming customer service campaigns
These campaigns relate to minor issues presenting no notable risks. Customers are not contacted directly. Instead, it is an added service provided through our dealer network.
Pre-delivery correction
Often, adjustments or improvements are identified in advance of delivery. In this case, inspections and repairs are carried out on vehicles at local unloading ports, distributors or dealers.
Resolving issues Continual improvement is a cornerstone of Toyota’s philosophy. While our goal is to deliver flawless vehicles, we recognise that occasional problems do arise over the course of the vehicle’s lifetime and our team of engineers and service staff is committed to rectifying these problems and to prevent them from re-occurring in the future. Dealerships are often the customer’s primary channel for submitting concerns or queries. While TSAM does not own these outlets, it nonetheless works with its business partners to ensure they are equipped to satisfy customer needs and respond to their concerns. (See page 13, ‘Ensuring customer satisfaction’). Our customer call centre is the other channel for customer contact. All calls are addressed by customer service agents equipped to respond to a wide range of technical questions. The centre is able to serve customers in all 11 official South African languages, ensuring that we can meet the needs of a diverse customer base.
16
Issue resolution
2012
2011
2010
% resolved within 15 days
93%
95%
76%
% resolved within 30 days
94%
97%
85%
Customer issues received (call centre)
5 806
3 487
4 732
We strive to resolve all issues as quickly as possible, with targets of 65% resolved within 15 days and 80% within 30 days. In FY12 we again surpassed these targets by a wide margin and in FY13 we will aim for 70% within 15 days and 85% within 30 days. The volume of customer concerns increased 67% to 5 806 during the year. Much of this came as a result of the difficult economic conditions which led to a rise in requests for financial assistance (for example, for owners whose repairs are out of warranty). In addition, erroneous reports of recalls led to increased calls from concerned owners.
TSAM localises the assembly of the Ses’fikile taxi The taxi industry is an important channel of economic activity in South Africa and a major automotive industry customer. In July 2012, TSAM celebrated the successful localisation of Ses’fikile taxi assembly at the company’s production plant in Prospecton, Durban. The commencement of production signalled the completion of a lengthy collaboration between Toyota and the South African Government. It represents one of the first fruits of the government’s Industrial Policy Action Plan and its associated Automotive Production and Development Programme. This seeks to develop the South African automotive and manufacturing sectors by promoting local manufacturing and part-sourcing as well as local employment and personnel development. The Prospecton assembly line represents an investment of R70 million and has created 90 new jobs in the startup phase. It is estimated that a further 210 new supplier
and service provider jobs will be created. Taxis from the Prospecton line feature locally-driven improvements such as an extra seat to bring carrying capacity up to 16 persons – a major boon for taxi operator profitability. The Ses’fikile taxi is a popular product for Toyota in South Africa, and the move to localised assembly has strengthened our position as the country’s largest vehicle manufacturer and exporter. Production performance has started out strong. Results from the shipping quality audit show an average of 0.036 defects per unit for the year, well below the target of 0.1. Furthermore, its operation performance ratio – a measure of production efficiency – has stabilised at 95% and above, exceeding the target of 93%. This performance is at an internationally-competitive level and is considered to be very successful by our parent company, TMC.
17
Ensuring quality Toyota’s reputation is built on the quality of the vehicles it produces. It is therefore essential that the vehicles we manufacture today are of the same high standard as those first produced by Toyota in 1934. We ensure this stringent quality through close collaboration with our suppliers, strict controls in our Prospecton manufacturing plant and ongoing after-sales service.
Quality components TSAM sources its parts from both domestic and international suppliers. We work closely with these suppliers to ensure parts, tools and services are delivered on time, according to strict specifications and at a competitive price. For more information, see ‘Suppliers’, page 33.
After-sales servicing Our commitment to quality doesn’t end when our vehicles leave the manufacturing plant. TSAM’s network of dealers plays an important role in ensuring that Toyota, Lexus and Hino vehicles remain up to standard. For more information on our dealer network, see ‘Dealers’, page 35.
Double-checking quality On a daily basis, TMC-certified auditors sample random vehicles off the production line and conduct a full audit to ensure no defects have avoided detection. All results are reported to the plant daily. Defects are examined and counter-measures put in place to prevent re-occurrence in the future. TMC dispatches independent auditors to inspect each plant in the global network annually. All Toyota plants are given a target score of 0.2 which correlates with one defect per every five audited vehicles. While the results of our 2012 quality audit narrowly missed the target with a score of 0.26, it nonetheless shows a notable improvement from 0.40 in 2011.
18
Toyota guiding principle #3 Dedicate our business to providing clean and safe products and to enhancing the quality of life everywhere through all of our activities.
Manufacturing excellence We have built numerous quality checks into the manufacturing process at our plant in Prospecton.
1
These include:
2
3
Inspection gates: Throughout the manufacturing and assembly processes, inspectors check that work undertaken on each vehicle conforms to the required specifications. All defects are escalated to the appropriate manager or engineer according to the level of severity, and are investigated, repaired, then re-checked before the vehicle is delivered to a customer.
Appearance checks: Each vehicle that comes off the production line is carefully inspected to make sure that all parts are in place and are correct according to the individual vehicle’s specifications. With over 25 000 possible combinations of parts that can be assembled into one Toyota vehicle, it is important that plant inspectors confirm that the right components (such as radios, mirrors and seats) are in place and installed correctly. At this stage, inspectors also verify the results of the previous inspection gate checks. Functional testing: This stage confirms that all completed vehicles are mechanically sound. A machine-driven test analyses the performance of components such as engines, clutches and brakes.
4
Water test: Next, all vehicles are subjected to jets of water at high pressure to confirm that the body is properly sealed and that no leaks occur.
5
Test track: By driving all vehicles over a variety of road surfaces, inspectors identify and rectify any defaults resulting in vibrations, rattles or abnormal noises.
19
Model range Top five models in South Africa (sales)
Toyota
Lexus
Hino
2012
2011
2010
Hilux
34 820 Hilux
37 876 Hilux
31 856
Etios
21 435 Corolla
16 660 Corolla
17 844
Corolla
13 643 Fortuner
11 564 Quantum
12 526
Quantum
13 318 Quantum
10 916 Fortuner
10 757
Fortuner
12 001 Yaris
10 215 Yaris
Lexus IS
706 Lexus IS
643 Lexus IS
854
Lexus GS
208 Lexus RX
207 Lexus RX
265
Lexus RX
190 Lexus LX
126 Lexus LX
150
Lexus LX
131 Lexus CT
110 Lexus GS
90
Lexus CT
127 Lexus GS
67 Lexus LS
34
Hino 500 1626 FC LWB
667 Hino 500 1626 FC LWB
620 Hino 500 1626 FC LWB
427
Hino 300 915 LWB
515 Hino 300 915 LWB
516 Hino 300 915 LWB
410
Hino 300 814 LWB
451 Hino 300 814 LWB
487 Hino 300 814 LWB
351
Dyna 4-093
336 Dyna 4-093
286 Dyna 4-093
258
Hino 300 815 LWB
228 Hino 500 1324 FC
175 Hino 300 815 LWB
230
While five Toyota models (Hilux, Fortuner, Ses’fikile, Quantum and Corolla) and four Hino model ranges (Dyna, 300, 500 and 700-series) are assembled in South Africa, our customers have access to a much wider range of vehicles across the three TSAM brands. These range from entry-level vehicles such as the Toyota Aygo and Yaris, to luxury passenger cars like the Lexus RX 350 and commercial vehicles such as the Hino 300. South African customers continued to face tough economic conditions in 2012 and, as a result, are increasingly price-sensitive and likely to shop around. It is therefore important that our vehicles continue to
Toyota guiding principle #4 Create and develop advanced technologies and provide outstanding products and services that fulfil the needs of customers worldwide.
20
8 560
deliver maximum value to our customers while remaining competitively priced. The launch of the new Etios in FY12 is a prime example of how we are delivering stylish and reliable vehicles at affordable prices. The safety of our vehicles remains a primary concern, and we continually strive to improve our performance. For example, the entire Toyota Verso range is now available with vehicle stability control as standard. In addition, the number of airbags in the vehicle now ranges from five to seven. These, and other safety improvements have helped to improve the Verso’s safety rating. All models now hold the Euro NCAP five-star safety rating.
Toyota
Aygo
Etios (sedan and hatch)
Yaris NG (hybrid and standard)
Auris (hybrid and standard)
Corolla
Prius
Avanza
Verso
Innova
RAV4
Hilux
Fortuner
FJ Cruiser
Land Cruiser 70 Series
Land Cruiser Prado
Land Cruiser 200
Quantum
Ses’fikile
IS350
GS250/350/450h (hybrid and standard)
LS460
CT200h
RX350/450h (hybrid and standard)
LX570
Hino 700
Dyna
Lexus
Hino
Hino 300
Hino 500
21
Employees Our workforce is an important element of our success. TSAM employees hold an immense amount of responsibility – from assembling Toyota vehicles at the plant to engaging with suppliers, coordinating with our dealer network, responding to customer feedback, and providing the back-office functions that keep the company running on a day-to-day basis. It is because of their support that TSAM has remained the market leader for 33 consecutive years in South Africa. In FY12, our workforce comprised 6 027 hourly employees at our plant and warehouse, as well as 2 234 salaried office staff. We are committed to providing our employees with a challenging, rewarding and safe work environment. In this section, we discuss our initiatives against these goals as well as our performance.
22
Engaging employees TSAM conducts an employee opinion survey (EOS) every second year to gauge employee perceptions about their roles, relationships, policies and the general direction of the company. The last survey was conducted in September 2012 and for the first time, was distributed online. In order to ensure that we also take on board the opinions of those without internet access (many of our plant staff, for example), we distributed the survey in hard copy to a representative sample of these employees. Participation was not as high as hoped due in part to technological challenges; however among respondents (48% of the permanent workforce), we saw an increase in engagement to 65.9% (2010: 64.32%). Of the 11 areas evaluated in the survey, ability utilisation (employees’ perception that the company maximises their skills and job knowledge), pay and benefits were the issues showing the greatest improvement since 2010.
NUMSA
UASA
Employment type Hourly Salaried Total Hourly Salaried Total
Our employees are represented by two unions, the National Union of Metalworkers of South Africa (NUMSA) and the United Association of South Africa (UASA). NUMSA holds collective bargaining rights with TSAM and at year end had a total membership of 5 848 (70.8% of our workforce). UASA represents 793 staff – 9.6% of all employees – and holds organisational rights. In total, 6 641 of our employees are members of NUMSA or UASA, comprising 80.4% of our total permanent workforce.
FY12 % of segment headcount 89.4 20.5 70.8 0.9 33.1 9.6
Highlights
-53%
While we are pleased with the improved satisfaction of our employees, we nevertheless pursue the same continual improvement with our workforce as we do with our vehicles. The EOS identified three key areas for improvement, namely interpersonal relations with management, interpersonal relations within a team and pay and benefits. We take this feedback seriously and senior management is currently in the process of formulating specific action plans for addressing these in the coming year.
FY11 % of segment headcount 90.6 22.2 72.5 0.2 34.5 9.3
FY10 % of segment headcount 89.7 23.3 71.5 0.3 28.3 8.0
Challenges FY12 was the safest year yet at TSAM, with total injuries down 53%
100 688
An October 2012 strike resulted in 100 688 lost man hours. The dispute was settled within four days
23
Toyota guiding principle #5 Foster a corporate culture that enhances both individual creativity and the value of teamwork, while honouring mutual trust and respect between labour and management.
2012 was a challenging year in South Africa, on both economic and social fronts. Labour strikes spread across the country, and TSAM was among the many companies affected. In October, workers at our Prospecton plant went on an unprotected strike in response to a wage adjustment made outside of the existing National Bargaining Forum agreement. Workers demanded the same hourly increase given to team leaders. This original wage increase was approved to rectify a pay imbalance in which a small number of team leaders received less than their team members. Nonetheless, we engaged with NUMSA and after four days reached an agreement to grant the same raise to affected hourly plant staff, demonstrating our commitment to our employees and maintaining a collaborative relationship with the unions that represent them. A total of four days (100 688 man hours) were lost at the plant. Our labour agreement is due to be renewed in FY13 and our aim is to maintain a constructive relationship with our employees and their unions in the lead-up to these negotiations. To ensure transparency and access to information, we initiated an internal communications campaign explaining the upcoming negotiations and how they impact employees and to respond to any questions about the process. Monthly soapbox meetings are scheduled to report back to team members on the progress of negotiations, as well as to share responses to the questions that have been raised across the plant.
Development TSAM relies on the talent of its employees to remain competitive. We identify critical skills requirements through ongoing skills audits with a particular focus on training replacements for staff nearing retirement. In FY12, this review identified engineering, maintenance and finance skills as the greatest priority.
24
Our in-house training academy gives employees access to an array of courses and programmes. Life skills programmes help employees to balance the demands of their professional and private lives, while supervisory skills and performance management courses develop a pipeline of future TSAM leaders. During the year, 5 573 employees attended in-house training. A further 891 staff received study assistance bursaries to pursue further education. The academy also houses the Toyota Motor SA Technical Training Centre, a school for hands-on technical training courses. These keep employees up to date on best practice in line with changing manufacturing, legislative and work environments. The centre has trained over 13 000 students to date, with a focus on training and developing TSAM apprentices and artisans as well as TSAM suppliers and other private candidates. The technical training centre holds certifications from the following organisations and training schemes: • R ecognised as an Institute of Sectoral or Occupational Excellence (ISOE) by the South African Qualifications Authority. • A ccreditation certificate from the Institute for the National Development of Learnerships Employment Skills and Labour Assessments (INDLELA) for various learnerships, apprenticeships and artisan programmes. • A ccreditation from the Manufacturing Engineering and Related Sector Education and Training Authority (merSETA) for various training programmes and our decentralised trade test centre. In FY12, we continued to improve our course offering, with a focus on building financial literacy among employees. Two new programmes – ‘Manage my finances’ and ‘Planning my retirement’ – help both shop-floor staff and management to build sound money management skills and to plan for their future. During the year, we also built on our succession planning by mapping important processes and related stakeholders for key roles across the company. Undergoing this exercise helps us to prepare employees to fill new roles as successfully as their predecessors. We aim to fill the majority of our skills requirements through our three feeder programmes: TSAM’s graduate, apprenticeship and learnership programmes. Collectively, these three programmes help the company to build a workforce with the required competencies as well as to embed marketable skills within South Africa’s youth and young professionals.
Learnership programme 2012 Total number of learners
2011
Graduate programme 2012
2011
Apprenticeship programme 2012
2011
99
80
118
107
141
154
96%
82%
97%
98%
98%
95%
14%
15%
9%
10%
15%
22%
6%
3%
8%
10%
8%
6%
% Female
22%
43%
63%
57%
22%
22%
% accepting roles within TSAM (cumulative)
70%
70%
95%
95%
95%
95%
% Black* % Indian % Coloured
* Figures for Black participants include Indian and Coloured participants.
Diversity and inclusion As a longstanding member of the South African business community, TSAM understands the imperative of embracing transformation, both within and beyond company walls. We remain committed to fostering an inclusive and transformative environment in which everyone is afforded the opportunity to develop personally and professionally. 2012 marked the conclusion of our first employment equity plan endorsed by the Department of Labour (DoL),
and saw the introduction of our second plan. This new plan was developed under the auspices of the (DoL) and runs from 1 October 2012 until 30 September 2015. It is a high-level plan designed to help the company achieve diversity and equity within the workforce by pursuing the objectives of the Employment Equity Act 55 of 1998. The plan includes goals, activities and targets for each year of the plan and also designates clear accountabilities for its implementation (see box, below). The table on the following page shows the diversity of our workforce at the end of FY12 as well as our progress towards meeting our 2013 employment equity targets (due by 30 September 2013).
Accountability for achieving TSAM’s employment equity plan • E E Manager: Responsible for the overall management of employment equity throughout the company. • D ivisional EE Advisers: Responsible for day-today support to line managers in relation to divisional employment equity activities. • S enior Managers: Responsible for their allocated employment equity functions, e.g. training, projects etc. • G eneral Managers: Responsible for achievement of employment equity objectives within their departments.
• H uman Resources and Training Vice President: Responsible for monitoring, advising and supporting the achievement of company employment equity objectives. • C hief Executive Officer: Accountable for the achievement of company’s overall employment equity objectives. • B oard: Oversees the progress of the company in relation to its employment equity objectives and provides necessary direction.
• S enior/Vice President: Responsible for achievement of employment equity objectives within their divisions/groups.
25
TSAM is striving to attract more female workers across all occupational levels, and has encouraged women to enter its training and feeder programmes. During the year under review, women accounted for 37% of learnership, 22% of apprentice and 63% of graduate programme participants. Our broad-based black economic empowerment (B-BBEE) contribution level remained at five in FY12 with a score of 62.95. We hope that as we work towards our new employment equity plan, we will improve our performance in the future.
Retention and compensation TSAM is eager to retain our talented employees, as each member of our workforce performs an important and defined role in our operations. In FY12, turnover among permanent employees was 5.2% for salaried employees, up from 3.8% in FY11. This increase, while falling within national norms, is primarily the result of a skills shortage among engineers and technical specialists. As a result, competition is high among automotive manufacturers for these skilled employees. Each year in April, the TSA Remuneration Committee allocates funds to address this, and other market anomalies. Turnover among our hourly workforce remained constant at a low 0.8% between FY11 and FY12. Our strong brand and reputation are key to maintaining a committed workforce. It is also important that we compensate our employees fairly and competitively for their hard work. TSAM participates in two annual benchmarking surveys to ensure that the company remunerates its employees appropriately. The first, conducted by Deloitte, compares compensation across the South African business environment. We aim to fall within in the 50-75th percentile among our peers and currently sit at approximately the 60th percentile. Our performance management system is an important factor in aligning solid, high and excellent performers within this range of percentiles.
26
The second survey is run by the Automotive Manufacturers Employers Organisation (AMEO). The AMEO remuneration committee comprising remuneration specialists from the seven local automotive manufacturers identify jobs specific to the industry and compares their compensation across the sector. Based on the findings of these surveys, TSAM hopes to primarily bring assistant managers, managers and senior managers into parity with national standards. Every TSAM employee receives an annual pay increase roughly in line with inflation. In addition, employees can qualify for a further increase based on their performance against their individual KPAs as well as their demonstration of key competencies established by TMC.
Performance management TSAM’s integrated performance management process (IPMP) is designed to align each employees’ personal actions and targets with the company’s strategy. All salaried staff agree to an individual development plan (IDP) with their manager and set specific target outcomes. Performance against these is evaluated on a quarterly basis and results are submitted twice a year to the Remuneration Department who evaluates annual meritbased pay increases. Shop floor employees’ performance is monitored in terms of the Masibambane incentive scheme which distributes a range of bonuses based on the achievement of certain targets. These include production and sales volumes, after-sales and manufacturing quality metrics, and stable production (no un-procedural stoppages due to labour unrest).
Occupational health and safety The health and safety of our workforce is our top priority. While TSAM’s Chief Executive holds ultimate responsibility for health and safety, the company’s safety, health and environment (SHE) department is responsible for the responsibility promoting improvements that will result in a safer and healthier workplace for TSAM’s employees. Management in our operations ensures compliance and implements the activities required to provide a safe and healthy workplace for our employees. Both TSAM’s Prospecton and Sandton operations maintain separate Executive H&S Committees comprised of Senior Vice Presidents, Vice Presidents and General Managers. These committees are supported on a day-
to-day basis by the SHE Department, which provides guidance, sets standards, monitors performance, helps to identify challenges and shares best practice among sites and divisions. TSAM follows a three-pillar approach to reducing injuries in the workplace. This encompasses: • F elt leadership – Genuine commitment from management to embody a zero injury philosophy and to lead employees towards achieving this goal. • S afe workplace – Creating a safe environment in which accidents, injuries and occupational illnesses are not possible. • T eam member understanding and participation – Encouraging employee commitment to safety through training and awareness activities.
Health and Safety accountability at TSAM
CEO / President
SHE department (Secretariat)
Executive H&S review meeting (Prospecton)
Executive H&S review meeting (Sandton)
Individual plant H&S committees
Individual plant H&S committees
27
Keeping our employees safe 2013 Target
2012 Actual
2011
2010
Target
Actual
Target
Actual
Target
Minor injury frequency rate
4.23
4.74
6.00
10.34
10.00
11.88
16.00
Lost work day case frequency rate
0.23
0.18
0.30
0.48
0.40
0.60
0.50
0
0
0
1
0
0
0
Total fatalities
TSAM’s safety targets are based on an evaluation of the company’s safety environment as well as through guidance from TMC. Each role within the company carries its own set of hazards; however due to the nature of their work, our teams in the Prospecton plant and Atlas Road warehouse are at the greatest risk for injury.
Our safety risks
Improving safety
The greatest safety risks at the plant continue to lie in the maintenance function (which operates in close proximity to a number of dangerous situations) and team leaders, who sometimes stand in for absent staff despite a lack of recent experience on the production line.
In FY12, we introduced ‘Safety Hour’ at TSAM’s Prospecton plant. Held daily at the plant and monthly in administrative sites, safety hour gives employees a frequent reminder of the safe behaviours that help to prevent accidents. During Safety Hour all other appointments or meetings are cancelled and management observes the workplace, takes action to reduce risks, addresses poor work habits and behaviours and strengthens overall compliance with safety rules.
Analysis from FY11 showed that ‘man’ (i.e. human error) was the most common factor in workplace accidents, accounting for 51% of injuries during the year. As a result, addressing human error and its causes was a key priority for the SHE Department in FY12. By improving management observation of shopfloor operations, focusing on reducing safety risks and addressing unsafe behaviours, we have reduced the proportion of injuries caused by human error to 43%.
28
All TSAM employees – from maintenance staff to Vice Presidents – are required to participate in safety hour, and this ‘whole-company’ approach has yielded excellent results. Our lost work case frequency rate (the number of incidents resulting in missed work per one million man hours worked) declined 69% from FY11, and our minor injury frequency rate (the number of minor incidents per one million man hours worked) decreased 54% over the same period. The total number of injuries that occurred in FY12 (84) more than halved from FY11 (180). Across all safety indicators, we are pleased to have performed well below targets for the year and achieved our best performance ever. We hope to build on this momentum and continue the trend in FY13.
Lost work case frequency rate
Minor injury frequency rate 16.00
0.50
10.00
0.40 0.30
6.00
Target
Target
0.66
0.48
0.18
11.88
10.34
4.74
FY10
FY11
FY12
FY10
FY11
FY12
Opportunities for improvement TSAM aims to continue its journey towards an independent safety culture. The introduction of Safety Hour in 2012 was an important first step, however in 2013 we will take a further step by holding an inter-plant safety competition that will reward actions taken by individual plants, not just the results achieved. The competition will highlight actions in focus areas such as an independent evaluation of risk reduction activities, employee compliance to safety rules, communication on safety to employees and strengthening of individual plant safety structures. TSAM will continue to communicate local and global safety incidents with employees to deepen their understanding of safety risk and will take proactive action to prevent similar incidents from occurring in the future. Safety training and an increased focus on ergonomics will also be used to strengthen our safety culture and to achieve our goal of zero injuries.
Safeguarding employee wellbeing Employee wellbeing extends beyond the avoidance of physical injury in the workplace, and is dependent on the decisions staff make both on the job and in their personal lives. We safeguard our employees’ health and wellbeing vigilantly, first through education and awareness activities as well as through support for individuals affected by illness.
All TSAM employees undergo baseline health screening prior to commencing work at the company. These assessments include testing for chronic diseases such as diabetes, hypertension, HIV and sexually-transmitted diseases. They help us to identify potential challenges early and provide the employee with access to the necessary treatment or intervention. Assessments are repeated regularly at a frequency determined by job risk. TSAM’s Employee Assistance Programme (EAP) enables employees to get the treatment and support they need, either through self-referral or by being formally referred by their manager. In FY12, 1 027 employees participated in the EAP. There was an increase in self-referrals, indicating that TSAM staff are becoming more proactive about managing their health. In FY12, we began a process of creating occupational health job risk profiles for all employment categories and we expect to complete the exercise in FY13. These profiles are deepening our understanding of the health landscape of the company and will help us to tailor our health programmes accordingly.
Occupational disease TSAM’s greatest occupational health risks occur in the welding and paint areas of its operations. While the SHE department has made improvements in the working environment to reduce the risk of occupational illness, supplementary interventions will continue to be introduced.
29
HIV/Aids The World Health Organization estimates that over 17% of South Africans between 15 to 49 years are HIV positive. The disease not only impacts individuals and their families, but also harms South Africa’s economic growth and prosperity. TSAM is committed to doing its part to manage and eradicate HIV/Aids first by increasing employee awareness. We also provide a comprehensive HIV/Aids programme for affected employees, and in FY12 we continued to improve it. This included offering HIV tests onsite and registering HIV-positive patients immediately for wellness monitoring and support while on anti-retroviral therapy (ART). In FY12, the threshold at which ART is introduced to patients changed from 200 to 350 CD4 count in line with the guidelines from Department of Health. This ensures that more HIV-positive patients have access to the treatment they need. Over 800 employees participate in the Wellness Programme, 363 employees of whom are receiving therapy. Despite this support for affected employees, the proportion of HIV/Aids-related mortalities increased during the year. Helping employees with HIV/Aids to live healthier, more productive lives is a major goal of our Wellness Programme, and in FY12, we were pleased to see a significant reduction in the proportion of HIV/Aids-related disability in our workforce (23%; FY11: 39%). Our HIV prevention philosophy is founded in the philosophy of ‘test when you’re healthy.’ By knowing their HIV status, employees can make more informed decisions about their health, including taking advantage of the various support services offered by TSAM. We aim to de-stigmatise HIV testing, and encourage all employees to take the voluntary
test free of charge at on-site locations. The proportion of employees undergoing these tests increased slightly to 65% in FY12 (FY11: 62%), however fell behind our target of 75%. The proportion of senior leadership also increased marginally to 66% (FY11: 64%). While we respect employees’ right to decide, we hope more of our staff will take advantage of the free testing in FY13. We are pleased to report that the HIV prevalence rate among those tested dropped notably in FY12. The decline is likely as a result of increased focus on employee awareness and education and the use of peer educators and nurses for HIV/Aids counselling. Despite this moderate success, we recognise that the battle against HIV/Aids is a long-term one and will continue to invest in protecting and supporting our workforce. We hope that these efforts will be reflected in a continual decline in the infection rate among our employees and their loved ones. Tackling the HIV/Aids challenge requires the efforts of more than a single sector. TSAM has worked with the Department of Health since 2006 to test new models for shared management of the disease. Employees are seen on an ongoing basis at clinics at the workplace, thereby reducing the burden on the public health system and ensuring patients quickly receive the treatment they require. Our support has reduced the typical number of HIV-positive TSAM employee visits to public hospitals from 12 to three visits per year. TSAM’s clinic maintains these patients’ principal case records and assists with updating the Department of Health’s systems. In line with the memorandum of understanding established at the outset, TSAM funds the staff including counsellors, doctors and pharmacists, and the Department of Health provides free anti-retroviral treatment to TSAM employees. This model has been so successful that it is currently being replicated in other areas of KwaZulu-Natal.
HIV testing (% of workforce)
TSAM HIV prevalence rate
30
51% 78%
62% 64%
65% 65%
75%
FY10
FY11
FY12
FY13 target
All employees
Senior Management
18.3%
18.9%
16.5%
FY10
FY11
FY12
Tuberculosis Tuberculosis remains a challenge in South Africa. Our Wellness Programme is working to reduce the instance and impact of the illness on our workforce through early detection and active follow-up. Our health assessments include a questionnaire on tuberculosis, which, if indicating positively, leads practitioners to administer a rapid TB test and refer positive cases to local government clinics. Because Aids and Tuberculosis are known co-morbidities, we encourage employees diagnosed with Tuberculosis to take voluntary HIV tests. At the end of FY12, 82% of Tuberculosis patients had taken advantage of this service.
Tuberculosis: number of employee cases
79
54
57
FY10
FY11
FY12
31
Business partners Even with the most dedicated employees, the latest technology and a loyal customer base, TSAM cannot deliver its vehicles without the support of its business partners. Our network of partners comprises our suppliers, who provide the parts, components and services that help us to build and service TSAM vehicles, and our dealers who represent our brands to current and potential customers. In addition, we are committed to developing enterprises in related industries and therefore work closely with the South African Taxi Association to bring affordable transport to the population. In all interactions with our partners, we recognise the importance of maintaining effective, functional relationships based on trust and mutual benefit. We look for partners who not only meet our quality and service standards, but who also share our sense of responsibility to the environment and our communities.
32
Suppliers We have high expectations of our suppliers. All services and components must be delivered to our high quality, environmental and safety standards, at a competitive cost and in a manner that contributes to the transformation of the South African economy. Quality TSAM maintains a close relationship with its network of suppliers through its quality and purchasing departments. Our Supplier Technical Support (STS) Team helps suppliers to identify and implement opportunities for improvement. We encourage suppliers to adopt the Toyota Production System (TPS) when relevant, and provide free training covering both its principles and methods for implementing them. The STS Team follows up six months after the training to ensure that suppliers are successfully embedding the TPS improvements. A cross-functional team representing quality engineering, purchasing, design and local engineers understands the requirements of the various vehicle components and works closely with suppliers to ensure it is delivered to the necessary standard within the required timeframe and at a competitive cost. See page 18 for more detail on how we ensure our vehicles are made and remain at the highest quality standard.
Environment TSAM aims to extend its commitment to environmental stewardship throughout its value chain. We require our suppliers to carry the ISO14001 environmental certification and work closely with them to help them to achieve and maintain their ISO14001 status. In FY12, 93 out of 147 suppliers were certified, including three new and 14 renewed certifications.
Toyota guiding principle #7 Work with business partners in research and manufacture to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships.
We also require suppliers to avoid the use of substances of concern (SOC) in their operations and products. These include mercury, chromium VI, cadmium and lead, among others, and in FY12 the list of SOCs was increased through our updated green purchasing guidelines. When components need to be sourced on time at low cost, their location matters. When feasible, we aim to have suppliers located within 100 kilometres of our Prospecton plant. This affords us a greater degree of certainty and reduces transport costs, but it also helps us to reduce the environmental impact of our logistics operations. Currently 46% falls within the target range. While we hope to improve upon this, doing so can be difficult when our partners also supply to other major vehicle manufacturers in Port Elizabeth, East London and Gauteng.
Safety TSAM considers the safety of its suppliers to be critically important and collaborates with its partners to improve their safety performance. This is done through a combination of behaviour changes and improved equipment and technology. For example, improvements made during the year included the installation of secondary emergency evacuation stairs, improved illumination and the installation of extraction units to vent welding fumes above work stations. In addition, we invite suppliers to visit our own plant to observe safe work habits. Our efforts are paying off and in FY12, safety continued to improve at our suppliers. The lost work case frequency rate (LWCFR) decreased by 22% and we hope to help our partners to continue this trend in the coming year. We have identified five priority suppliers based on their safety performance and plan to support them in improving safety in their workplace in FY13. Planned interventions include activities to build commitment among top management, site assessments and assistance in developing supplier action plans to improve performance.
33
Transformation We believe that transforming the South African economy requires the contribution of everyone. While TSAM is addressing equity in the workplace, we are also working to transform our supply chain by supporting South African, black-owned businesses and driving the transfer of valuable skills.
Preferential procurement TSAM’s internal procurement guidelines require that suppliers to our parts and accessories division achieve a level four broad-based black economic empowerment (B-BBEE) rating by 2015. Suppliers to our spares, consumables and services division must be at the same level by March 2014, and preference is given to companies with a higher rating during tender evaluation. At present, 17% of our suppliers are level four BEE contributors. We monitor this progress regularly, and require updated certification every six months. We are in the process of developing a preferential procurement policy in line with the amended dti codes and expect to have the policy in place by the end of FY13.
Localisation Manufacturing a Toyota vehicle requires thousands of individual parts and components. Where possible, TSAM aims to support the South African economy by sourcing these from local suppliers. Our target is to procure greater than 60% of the parts per vehicle from South Africa. Currently, 39% of parts are sourced from South African businesses. At present, some components or materials are not available at the required quality or volume in South Africa. We continue to working with TMC and local suppliers to establish the necessary skills and processes to increase the proportion of our local sourcing.
34
Rewarding supplier excellence Each year we recognise the suppliers who best embody the Toyota commitment to safety and quality. A selection of the many 2012 winners include: • S afety award: L & J Tool and Engineering Works (Pty) Ltd • Q uality management – top supplier: Schaeffler South Africa (Pty) Ltd • S ervice and consumables – top supplier: Freightmax (Pty) Ltd
Knowledge transfer Our smaller suppliers often run the risk of falling behind larger competitors with access to the latest technology. To support these small businesses, we require that our suppliers be linked with a global partner either through joint ventures or a technical aid agreement. Where necessary, we help them to form the partnerships in order to remain technologically up-to-date. These arrangements help to develop world-class capabilities in South African businesses and our local supply chain. Currently, 81% of our suppliers are affiliated with global partners.
Engaging suppliers With such high expectations of our suppliers, it’s important that we maintain open lines of communication and relationships based on collaboration. Each year, we invite all our partners to our TSAM annual business meeting. The session gives us the opportunity to provide performance feedback, updates and clarify expectations. Participants are also invited to deliver feedback and ask questions.
Dealers Our network of dealers is the channel through which we sell and service our vehicles. Though owned independently to TSAM, these dealerships nonetheless represent the Toyota, Lexus and Hino brands to customers and therefore play a critical role in ensuring a positive customer experience. At the end of FY12, there were 199 Toyota, 16 Lexus and 58 Hino dealerships in Southern Africa. Embedding Kodawari within the dealer network We work closely with our dealer network to ensure that they meet our high expectations for customer service. Our Kodawari Programme continues to form the basis for evaluating, training and certifying Toyota dealers. Based on 79 physical and operational aspects affecting customer experience, Kodawari outlines specific requirements with accountable individuals relating to the dealer’s processes, facilities and staff. For example, the Kodawari manual gives precise specifications for signage around the dealership to ensure customers always know where to go. The certification programme is closely aligned with Toyota’s goal of delivering service excellence. Indeed, there is a strong correlation between Kodawari certification and higher customer experience scores among TSAM dealerships. In 2012, 37% of Kodawari dealers scored above 90% in the Ipsos customer experience survey, whereas only 20% of the non-Kodawari dealers fell within that top band of performance. Dealers monitor actions and accountability online through our E-Toyota dealer portal and submit monthly self-audits. These are validated by TSAM after-sales managers who also visit each South African dealer once a year to conduct site assessments. Once 100% compliant with all Kodawari
requirements, dealers are certified by TMC. They are then re-certified yearly through self-audits and bi-annual assessments. Kodawari certification is a requirement of all Toyota dealerships worldwide. In FY12, TSAM’s drive to certify its dealers helped to serve our priority of raising standards across the dealerships. At year-end, 69 dealers were Kodawari certified, surpassing our target of 60, and up significantly from 25 in FY11. By the end of FY13, we aim to help a further 40 dealers to attain certification, bringing the total to 109. We will also begin to roll-out Kodawari certification to Lexus dealerships and are targeting four Lexus certifications by the end of 2013.
Environmental responsibility Our high expectations for dealers extend beyond customer service to environmental stewardship. Through our ECO Status Programme, we work closely with dealers to ensure they adhere to our standardised environmental management requirements. ECO Status is aligned with the TMC Dealer Environmental Risk Audit Programme (DERAP) and was reconfigured in FY12, merging ECO level II with ECO level III. The certifications are cumulative, so dealers who achieve level III status do so after meeting requirements for level I (see next page). TSAM guides dealers through the process of reaching the two levels.
35
Two levels of ECO status ECO I
ECO III
• B asic responsibilities assigned for environmental management
• Implement standard operating procedures outlining approach to waste disposal
• Person appointed to oversee environmental matters
• Make use of reputable waste removal companies
• M aintain environmental policy and declare legislative compliance
• A udit waste removal companies to ensure waste is correctly disposed
• Manage hazardous waste • Basic HFC/CFC recovery
• Implement environmental and social projects within the community
Toyota: 155 dealers Lexus: 6 dealers Hino: 51 dealers
Toyota: 79 dealers Lexus: 4 dealers Hino: 20 dealers
As a part of the global Toyota network, all TSAM dealers are held to the stringent reporting standards of DERAP. Bi-annual compliance audits are submitted in addition to monthly validations conducted by TSAM’s after-sales managers. All dealers are expected to keep a budget for environmental improvements such as water and waste management systems. For an example of one such improvement, see ‘Water-wise dealers’, below.
Dealers in the community
For example, Greyling Broers Toyota in the Free State contributes annually to the Arrive Alive Summer Campaign, assisting the province’s traffic and police service to promote road-safety and remove unroadworthy vehicles from the road. This marked the 12th year the dealer participated in the campaign, and it received a special commendation in recognition of its commitment.
Our dealers espouse Toyota’s sense of responsibility for contributing to their communities. Many choose to
Other examples of dealers’ community contribution include support for firefighters in Cape Town, as well as crisis counselling in Windhoek, Namibia.
Dealer of the Year
Water-wise dealers
Through our annual Dealer of the Year awards, we reward the hard work and commitment of our dealerships and their employees. Awards are given in recognition of customer service, financial services, marketing and performance as well as individual awards for strong leadership and management at dealerships. The 2012 winners for each Toyota brand were: • H ino Dealer of the Year: Hino East Rand (Dealer Principal Frans Cloete) • T oyota Dealer of the Year: Imperial Toyota Kempton Park (Dealer Principal Desiree Wiseman) • L exus Dealer of the Year: Lexus Kingsmead (Dealer Principal David White) We congratulate this year’s award recipients and thank them for representing the Toyota, Lexus and Hino brands with such excellence.
36
undertake initiatives within their towns where they see a need.
Toyota dealers across the country are installing large water tanks for recycling car wash water and capturing rainwater. This is in line with stricter environmental laws as well as Toyota’s green ethos. Pending legislation will soon require that 50% of commercial wash bays, including at dealership level, make use of recycled water. The new system catches water from various sources on the dealership premises, cleans it through electrolysis and retains it for re-use. The system is powered primarily by solar energy and can store up to 20 000 litres of water per tank. Some dealers have installed up to five tanks, allowing them to wash vehicles for up to 200 days without relying on rain or other water sources. In addition to lowering reliance on water sources, it also decreases water and sewerage costs.
Enterprise development Increasing economic opportunity in South Africa strengthens the business environment as a whole, creating jobs and improving skills. TSAM is committed to playing a role in the development of small, medium and micro-enterprises (SMME), particularly in the various sectors in which it operates. In 2012, TSAM’s enterprise development activities centred on its support for the South African taxi industry as well as the business environment in the Durban metropolitan area. In addition, we identified an opportunity to supply SMMEs with materials to build their businesses (see case study below).
Supporting the South African taxi industry Minibus taxis play an important role in the daily lives of millions of South Africans. The industry provides convenient transport at reasonable fares to over nine million people. Its economic contribution is also significant, providing income to 20 000 taxi owners who employ over 200 000 people. TSAM is a longstanding supporter of the taxi industry. In the past, we provided local and regional taxi associations with material resources and infrastructure development. In 2012, we refocused our enterprise development strategy to providing the industry with preferential pricing terms on our Quantum Ses’fikile minibus taxis. Vehicles purchased by registered taxi owners pay a reduced price. In 2012, we sold over 9 000 Quantum minibus
taxis at a discount, amounting to industry savings of over R90 million.
Seda-eThekwini Launched in 2006, Seda-eThekwini is a business development agency backed by Durban’s eThekwini Municipality and the South African Department of Trade and Industry. It provides support services to emerging entrepreneurs in the Durban region, including advice, business planning, tender assistance, training and mentorship. TSAM sits on the board of Seda-eThekwini and its operations committee to strengthen the activities of small business enterprises in Durban. We are continually looking for ways to strengthen our local business environment. In 2012, TSAM identified an opportunity to provide small enterprises with valuable business inputs, while reducing the volume of waste the company’s manufacturing operations send to landfill. For more information, see the case study below.
Toyota seat covers given new life Contributing to a recycling-based society is a key pillar of TMC’s fifth environmental action plan. In line with this objective, TSAM continues to identify opportunities to reduce the volume waste in its operations. All of our vehicles are manufactured with standard fabric seat covers. When customers order leather seats, the fabric is replaced with leather. Previously, the unused material was sent to landfill because it could not be returned to the production line. In 2012, we began to donate the redundant seat covers to three manufacturing SMMEs and NGOs in KwaZulu-Natal. In total, we donated 420 kilograms of fabric to Injiya Interiors, Indalwenhle Manufacture Co-operative and African Children’s Feeding Scheme and Sewing Project. These organisations used the fabric to produce a wide range of products including furniture, bags and clothing that is sold to generate income to sustain the enterprise. These donations had the dual benefit of reducing waste from production and supporting local enterprises.
37
Global society/ local community TSAM respects the impact its products and operations have on the environment and local communities. Our local production has a direct impact on communities and, through the export of our South African-produced Toyota automobiles, we also have a global impact. In line with the Toyota Global Vision, TSAM respects the planet and communities in everything that we do. We take seriously the responsibility to invest in our communities and to reduce our environmental impact.
38
Environmental stewardship Every aspect of our operations – from our manufacturing operations to our Marketing Department – has environmental impacts. TSAM’s most significant effects, however, come from the vehicles and parts the company manufactures and the logistics involved in delivering them. Most significant among these are: • E nergy consumption and the associated carbon dioxide (CO2) emissions • Water use and waste water production • Waste generation • Volatile organic compound (VOC) emissions TSAM’s third environmental action plan directs its environmental actions and objectives, covering the years FY11 to FY15. It follows the direction set by TMC’s Fifth Toyota Environmental Action Plan in accordance with the Toyota Global Vision. Now nearing the midpoint of the plan, we are seeing the positive results of our work and are working harder than ever to ensure that we meet our objectives by its conclusion in 2015. Ultimate responsibility for TSAM’s environmental performance is held by the South Africa Environment
Committee (SAEC). The committee oversees TSAM’s progress against targets, the efficacy of its environmental management systems, legal compliance and the mitigation of environmental risks. It is supported by key TMC departments to ensure alignment with global initiatives and is comprised of executive management from various operations and functions and chaired by the CEO and President of TSAM. Three environmental working groups support the SAEC, namely the Manufacturing, Manufacturing Support and Marketing and Sales functions. We draw further guidance and inspiration from the Toyota Earth Charter, which has reflected TMC’s environmental philosophy since its establishment in 1992. To date, over 530 affiliates – including TSAM – have adopted the charter. In FY12, there were no incidents of environmental noncompliance or complaints related to our environmental performance.
South Africa Environmental Committee (SAEC)
Group Safety, Health and Environment Department
Manufacturing Environmental Working Group
Toyota Motor Corporation support
Manufacturing Support Environmental Working Group
Marketing and Sales Environmental Working Group
39
Energy consumption Manufacturing vehicles requires energy in three forms: electricity, liquefied petroleum gas (LPG) and methane gas. The CO2 emitted by our operations is in direct proportion to our consumption of these three energy sources. As a result, we are continually looking for ways to use energy more efficiently and thereby lower our carbon footprint. TSAM’s Environmental Engineering and Compliance Department was established in 2010 to identify and implement energy reduction opportunities across the company (see our energy objectives, below). These range from simple behaviour changes to the introduction of innovative new technologies. In FY12, ESCO implemented 25 energy reduction projects, saving a combined 9 115 gigajoules of energy. As a result, our carbon emissions decreased to 799.90 kg per unit produced, 18% less than FY11 (970.31 kg) and 6% below our target of 851.5 kg.
Energy: CO2 emitted per unit (kg)
As the cost of electricity continues to rise in South Africa, these initiatives are not only helping to reduce our environmental impact, but are also a significant source of cost savings. The impact of our logistics operations is primarily due to the transport of vehicles, service parts and components to and from our network of business partners. Our two ambitions for reducing logistics impact are to improve the accuracy of logistics data to better understand our impact, and to improve transport efficiency. This latter goal requires that we work with our logistics partners to: • Reduce the distance travelled • Improve loading efficiency • Improve load factor • Make use of transport with lower emissions per unit • R educe the need for inefficient ‘emergency’ orders through improved planning
Logistics emissions: CO2 kilotonnes
1 074.50
11.36
970.31 851.50
16.80 Target
78.80
40
979.07
854.26
799.90
FY10
FY11
FY12
14.08 78.59
58.80
6.70
8.46
8.32
FY10
FY11
FY12
* Production parts and component exports have been combined into one emissions category and figures for FY11 and FY10 have been restated to reflect this.
Logistics Control Division (Production parts and component exports*) Vehicle Logistics Division Service Parts
TSAM receives TMC’s Platinum Award
TSAM’s energy objectives:
At TMC’s second global environment meeting, TSAM was awarded the Platinum Award for the Assembly Plant with the Best Performance in Reducing CO2. The award was handed to TSAM General Manager: Group Safety Health and Environment, Riaan Olivier by TMC’s Executive Vice President Nobuyori Kodaira. In FY12, TSAM was able to reduce its energy consumption while increasing production volumes, thereby improving its energy efficiency.
• Reduce energy usage during non-production hours • S tudy, evaluate and implement feasible energy reduction improvements • Identify and implement energy wastage reduction opportunities • S tudy, evaluate and implement renewable energy systems where feasible
Our Vehicle Logistics Division shifted its mode of transport for ship vehicles from Durban to Johannesburg. Whereas vehicles were previously shipped on double-decker trucks with a payload of seven units per truck, the route is now made by trains with a payload of 75 units. This change has reduced CO2 emissions by 498 tons. In addition, we changed the configuration of the trucks delivering vehicles internationally, increasing the load efficiency and saving 468 tons CO2. Emissions from our service parts division increased during the year as a result of the transition to the new warehouse. The nation-wide transport strike also negatively impacted the division’s overall emissions. In FY13, we hope to further reduce our logistics impact by optimising transport and reducing unnecessary trips.
Resource efficiency Manufacturing vehicles requires a variety of raw materials. Some of these ultimately end up as a component of the vehicle, whereas others are consumed in the process of manufacturing. We realise that many of these are finite resources, and that it is therefore incumbent upon us to use them responsibly and efficiently.
Water Our manufacturing processes consume a large amount of water, particularly in the painting stages. In a country facing serious water shortages, we feel that it is essential to use only what is absolutely necessary, and to capture and re-use water wherever feasible. TSAM has made good progress in reducing the volume of water consumed per unit produced, with an 8% reduction to 3.88 kilolitres in FY12 (FY11: 4.22). Through a combination of efficiency and optimisation projects, we continue to surpass our targets.
Water: consumption per unit (kl)
In the coming year, the SHE Department plans to implement further water recycling initiatives as well as improvements to reduce water usage. In addition, it will look to its employees to help save water by actively promoting water-wise behaviours.
Waste Our ultimate goal is to use our resource inputs so efficiently that our processes produce zero waste that must be sent to landfill. Meeting this ambition requires that we address the many sources of waste as well as the technologies and behaviours that can eliminate it. In FY12, our waste-reduction activities centred on improving our ability to separate waste by material and to increase the proportion of waste that is recyclable. We also worked to promote and strengthen a culture of recycling among our employees through various awareness activities. These efforts yielded our greatest waste reduction to date, with a 25% decrease in waste generated per unit produced. Within our logistics division, we are working to reduce the volume of packaging required in transport. Unfortunately we did not meet our target of 1% reduction in packaging due to extra packaging required during the establishment of the new warehouse. However, the use of returnable packaging increased from 11 051 crates in April 2012 to 24 605 in January 2013 and we expect this trend to continue into FY13.
Waste: kg/unit 24.16
5.55
23.45
4.80
21.98 Target
4.02 Target
5.12
4.22
3.88
23.91
22.49
16.82
FY10
FY11
FY12
FY10
FY11
FY12
41
Banned chemicals and substances of concern We believe that the materials involved in the manufacturing of our vehicles should be as safe as possible and actively work to replace potentially harmful substances with more benign equivalents whenever possible. Our Zero-Use Policy applies to over 500 substances and we work closely with our suppliers to ensure that they are not used in any part or component used in our vehicles. In FY12, we established a TSAM Chemical Management Task Force to oversee our screening and verification system and had no incidents of banned substances in use. In addition, we revised our banned and reportable substances lists in line with updated TMC standards. Our Green Purchasing Guidelines were also amended, making provision for TMC’s increased global focus on reducing the use of potentially harmful chemicals across all business operations. The latest edition of the Guidelines will require our business partners to track their CO2 emissions and report these to TSAM. While not banned, some substances nonetheless can negatively affect health and the environment. In particular, TSAM is working to reduce the amount of volatile organic compounds (VOC) used in its painting processes. In FY12, our activities included reducing solvent usage in paint operations as well as improving our ability to recover solvents after use. We also worked to improve the efficiency of paint transfer and expanded our VOC emission reduction efforts from our body paint operations to include our bumper paint operations.
42
While we narrowly missed our VOC emissions reduction target for body paint operations (see below), we recorded our lowest ever VOC emissions in March 2013 (18.02 g/m2) and view this as a signal of further improvements to come.
Volatile organic compounds: g/m2 body paint 28.00
25.00
20.00 Target
27.21
22.26
20.57
FY10
FY11
FY12
Volatile organic compounds: g/m2 bumper paint 250.00 Target
210.00 FY12
Community support
We believe we have a responsibility to strengthen our communities and to contribute to the development and enrichment of South Africa. We conduct our community upliftment activities through the Toyota South Africa Foundation as well as our Corporate Social Investment (CSI) Department. TSAM commits to addressing four strategic pillars: welfare, environment, road safety and education. In FY12, we contributed R27.5 million to these activities.
The majority of our social investment is channelled through the Toyota South Africa Foundation and its education activities. By focusing our resources on specific flagship activities, we aim to have a greater and more sustainable impact in the communities surrounding our operations. We continue to support the other three pillars of support through smaller campaigns.
Social investment (Rm) FY10: R26.07 FY11: R19.61
Toyota guiding principle #2
FY12: R27.50
Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in their respective communities.
43
Toyota South Africa Foundation Toyota South Africa Foundation (TSAF) was founded in 1989 by TSAM’s founder, Dr Albert Wessels, and through a donation from TMC (¥60 million). The foundation works to improve primary education through sustainable ‘whole school’ interventions. A portion of TSAM’s CSI budget goes to support the Foundation’s work in our operating areas in KwaZulu-Natal. In FY12, TSAM contributed R21.4 million to the Foundation. The Foundation is in the process of changing its name. By FY13, we plan to finalise the name as the Toyota-Wessels Foundation in recognition of the important contributions made by TMC and Dr Wessels.
Toyota Teach Primary School Project Toyota Teach is TSAF’s flagship community programme. It aims to enrich the quality of teaching and learning in primary education through holistic school development. Created in 1991, the project has reached over 250 schools and over 20 000 beneficiaries in KwaZulu-Natal. In its early years, Toyota Teach focused on improving teaching skills through an accredited Advanced Certificate of Education (ACE) training course it developed in partnership with the University of KwaZuluNatal. Toyota Teach presents the highly-subsidised ACE course to maths, science and English primary school teachers, and to date, over 250 teachers have obtained the Toyota Teach ACE. In 2006, Toyota Teach extended its support beyond individual teachers to provide assistance to entire schools by introducing the Whole School Development Programme. The four-year programme addresses 10 focus areas including psychological services, governance, management and financial management. The Foundation believes that this approach will have a greater and more lasting impact on the schools and their students. Ten schools completed the programme in 2012 and nine new KwaZulu-Natal schools were added in January 2013. Toyota Teach is liaising with other companies to contribute to the programme. This includes developing mobile libraries in partnership with South African Petroleum Refineries (SAPREF). We are also investigating the possibility of installing satellite dishes at school to promote electronic learning.
44
Rally to Read TSAM continues to support Rally to Read, a joint project involving private sponsors, members of the South African business community and 135 rural schools. During May and June each year, convoys of vehicles deliver educational material and resources to rural schools across South Africa. Rally to Read addresses the literacy gap between rural and urban schools in South Africa, where the literacy level of the average 16-year-old rural student lags up to seven years behind that of their urban counterparts. TSAM has supported Rally to Read since its founding in 1998 through financial donations, vehicle sponsorship and employee participation. In 2012, a team of seven employees in two vehicles participated in the KwaZulu-Natal North Rally to Read event to donate mobile libraries, reading material and school equipment to two primary schools in rural areas near Weenen, KwaZulu-Natal. TSAM employees were also encouraged to participate by sponsoring school shoes through the Barefoot No More charity. Barefoot No More makes shoes suitable for rural learners. They are made from waterproof recycled materials and do not require polishing. Through employee donations and TSAM’s 1:1 matching contribution, 400 pairs of shoes were purchased and distributed – 379 pairs to the pupils at one of the Rally to Read schools and the remaining 21 to a Toyota Teach school.
Corporate Social Investment TSAM’s CSI Department reports to the Audit & Corporate Compliance, Social & Ethics Committee. The committee is responsible for ensuring the CSI activities are in line with TSAM’s four strategic pillars. In addition to its financial support, TSAM makes material contributions to community organisations related to our strategic pillars. For example, following an upgrade of our office furniture, we donated chairs, tables and other furniture to schools near our operations including beneficiaries of our Toyota Teach Primary School Project. In 2012, we donated car body shells, tools, engines and gear boxes to technical high schools and FET colleges in KwaZulu-Natal. Hino South Africa Motors also provides non-financial support through the use of its trucks for community development work. In FY12, Hino South Africa loaned a four-ton Hino 300-Series 8-14 truck, fitted with a Praga van body, to Touch Africa, an educational initiative based in the Eastern Cape. The truck helped the organisation to transport materials for its school desk rehabilitation project.
45
Our CSI activities aim to provide effective, sustainable and impactful outcomes to beneficiaries. Through our CSI Department, we identify and support initiatives near our operations in Durban and Johannesburg. Dealerships also contribute in their own capacity to local initiatives (see ‘Dealers’, page 35). Most of our support is across multiple years in line with our long-term philosophy to community development. Below are the highlights from a selection of our CSI projects. Activity category
Project
Education
Toyota South Africa Foundation
Comment
Spend
Future plans
FY13
FY12
TSAM donates a portion of its CSI budget to the foundation. The foundation focuses its activities on the education pillar of TSAM’s CSI strategy
R21.4m
R18.3m
The Foundation will increase its activities in FY13 to reflect the donation made by TSAM in recent years
Toyota Teach Primary School Project, KwaZuluNatal (Foundation)
The four-year cycle running from 2009 to 2012 finished with 10 schools and we began work with nine new schools in January 2013.
R2.8m
R2.6m
Toyota Teach will continue to strive to improve the quality of teaching and learning in participating schools
Protec
Protec provides extra classes in maths and science. It also helps learners to build career skills through ‘World of Work’ lessons. During 2012, 67% of participants were admitted to university/university of technology and 15% attended technical college, of which 66% are now pursuing a career in engineering.
R75 000
R75 000
TSAM will continue to support the programme in FY13
TSAM increased its sponsorship to two vehicles and seven employees. In addition, school shoes were sponsored by TSAM and its employees. See ‘Rally to Read’, page 45.
Barefoot No More shoes: R58 000
R50 000
TSAM will continue programme sponsorship in FY13
N/A
The programme was re-introduced in 2012 and will continue for 2013
Umlazi, Durban, KwaZulu-Natal (CSI)
Rally to Read, KwaZulu-Natal (CSI)
Employee contribution: R15 000 TSAM matched contribution: R15 000
Welfare
46
Junior Achievement, Johannesburg, Gauteng (CSI)
40 learners from the nearby community in Alexandra township participated in the Mini-Enterprise Programme to develop entrepreneurship and to provide young people with insight into what is required to establish and manage a small business.
R45 000
Junior Achievement, Durban, KwaZuluNatal (CSI)
40 learners from five high schools R54 500 participated in a Mini-Enterprise Programme
R42 500
An additional week will be sponsored in 2013 for “Discover your Career”
Ubuntu Community Chest, KwaZulu-Natal (CSI)
Ubuntu community chest provides resources and support to welfare and development organisations in the Durban and coastal region of KwaZulu-Natal. It donated R7 million to 78 organisations in 2012.
Employee contribution: R13 800
Employee contribution: R36 970
The programme will be introduced to new employees
TSAM matched contribution: R13 800
TSAM matched contribution: R36 970
Highway Hospice, KwaZulu-Natal (CSI)
A passenger vehicle was donated for medical staff to visit terminally ill patients in their homes and to supply family and community training to care for a terminally ill patient.
Vehicle donation R55 000
Toyota will continue to support homebased care of patients
47
Shareholders As a wholly-owned subsidiary, TSAM (through its holding company Toyota South Africa) is accountable to a single shareholder, the Toyota Motor Corporation. The global Toyota network carries high standards, not only in terms of financial returns, but also with regard to the non-financial performance elements that can impact a company’s success. In everything we do, we strive to meet and exceed these expectations.
48
Financial highlights Despite the disruptions caused by the industrial unrest during the latter half of 2012, production volumes grew by 4% on the back of strong overseas demand for the locally-built Hilux model. In addition, Toyota’s entry into the competitive sub-B market in early 2012 resulted in its passenger car market share increasing by almost 2.6% with the introduction of the Etios. As a result, our domestic market share increased by 1% to 19.8%, enabling us to maintain our position as market leader for the 33rd consecutive year.
TSAM sales and market share
Market share (%)
Units
19.8% Total domestic: Toyota, Lexus and Hino
124 759
18.8%
107 908
20.3%
105 428
15.7% Passenger cars: Toyota and Lexus
69 645
13.1%
52 383
15.8%
Light commercial vehicles: Toyota
56 384
32.2%
51 305
34.9%
52 181
32.9%
Medium commercial vehicles: Hino
Heavy commercial vehicles: Hino
45 741
22.7%
2 248
22.2%
1 931
23.6%
1 920
8.7%
1 561
8.5%
1 413
9.3%
1 383
89 503 86 105
Export units: Toyota
72 989
FY12 FY11 FY10
49
Statement of responsibility by the board of directors
resources in place to continue in operation for the foreseeable future.
The company directors are responsible for the maintenance of adequate accounting records and the preparation and integrity of financial statements and related information. The auditors are responsible for reporting on the fair presentation of the financial statements. The financial statements have been prepared in accordance with International Financial Reporting Standards and the Companies Act, 2008.
Because TSAM is not a listed company in South Africa, it is not legally obligated to publicly disclose its financial statements. The company shares these with its holding company, Toyota South Africa, as well as its parent company, Toyota Motor Corporation.
The directors are also responsible for the company’s system of internal financial control. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the financial statements and to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect mis-statement and loss. The financial statements have been prepared on the basis that TSAM is a going concern, since the directors have every reason to believe that the company has adequate
Economic impact on stakeholders Through our ongoing business activities, we stimulate economic activity across numerous sectors and stakeholders. The resources we distribute benefit an array of stakeholders including suppliers, government, employees, communities and our shareholder, TMC. The proportion of expenditure across these stakeholders varies from year to year depending on factors such as financing terms, workforce size, changes to tax obligations, the degree of production localisation and other strategic factors.
In FY12, TSAM distributed value across its key stakeholders as follows:
50
Community
TSAM’s community investment remains constant at 1% of net profit after taxes (NPAT) of the current financial year.
Local suppliers
TSAM continues to increase its commitment to local suppliers and contributes to a substantial level of economic activity within the country.
Government
We support the government by meeting our tax obligations. In FY11, TSAM was pleased to settle all long outstanding tax issues with the South African Revenue Service (SARS). The company remains committed to complying with all laws and regulations.
Shareholder
Our shareholder continues to support our operations with an appropriate mix of funding between equity and short-term financing within the confines of the law.
Reinvestment in the company
TSAM continued to prioritise reinvestment in terms of asset maintenance and future investments.
Employees
In line with global economic recovery, production volumes increased in FY12. This growth, together with a general increase in employee costs, meant that more resources were distributed to our workforce during the year.
Imported procurement
TSAM imports fully built-up vehicles as well as some raw materials and parts from Japan and other countries. The fluctuating foreign exchange rate has a direct bearing on the ratio of imported to local procurement. In FY12, the proportion of imported procurement remained fairly consistent.
51
Toyota guiding principle #1: Honour the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world.
Governance TSAM’s business conduct is guided by a clear set of systems, policies and codes of practice. Combined, these help us to meet our business objectives while safeguarding the interests of our stakeholders and the environment. Good governance also ensures our adherence to international and South African regulation, legislation and standards.
52
While these frameworks align for the most part with those of the Toyota Motor Corporation, we strive to apply them in a locally-appropriate manner. TSAM’s governing internal codes, practices and principles Core values Code of Conduct Hoshin Kanri
TSAM’s core values demonstrate the integration of sustainability with everyday business. The Code of Conduct outlines the behaviour expected of all TSAM employees. A strategic planning approach, in which TSAM identifies a shared goal, communicates it to all leaders, involves them in planning and holds everyone accountable for their contribution to the agreed plan. TSAM Environmental A plan which translates long-term vision and policy into annual and mid-term objectives. It also Action Plan articulates specific actions to meet these goals. Masibambane Pact An agreement between TSAM employees and the company wherein the parties agree that all stakeholders must commit to and share in the success or otherwise of the company. Employees in particular must be rewarded if they contribute to the achievement of certain objectives. Employment Equity The employment equity plan helps TSAM to achieve equity in the workplace. Now in its second Plan and Policy iteration, it sets out the objectives, procedures and responsibilities that TSAM will undertake. TMC codes, practices and principles to which TSAM adheres Toyota Global Vision The articulation of Toyota’s path to sustainable growth, encapsulating our commitment to quality, innovation and respect for the planet. The Toyota Way The Toyota Way is based on respect for the people, customs and laws of each operating country, and encourages teamwork and the pursuit of excellence. The CSR policy outlines the company’s and its subsidiaries’ commitment to sustainable Corporate Social development as well as expected responsible behaviours. Responsibility (CSR) Policy Toyota’s Guiding The articulation of the company’s business philosophy, reflecting the importance of respect and Principles honour in all business activities. Toyota Earth Charter The founding philosophy that informs environmental policies and activities in all TMC operations around the world. The Charter outlines the ambitions, actions and accountability for environmental stewardship within the company. The Whistle-Blowing A policy encouraging employees to speak up when they witness unethical behaviour. Policy External legislation, regulation and standards Companies Act 71 of The board’s mission is to operate in the best interest of the shareholder and the company. In doing 2008 so, directors are both agents of the shareholders and trustees of the company. Consequently, maintaining a balance of executive and non-executive directors is fundamental to ensuring both interests are met. King III A South African code that calls for the integration of good governance, sustainability and long-term performance into the fabric of a company. Though its legal requirements pertain only to companies listed in South Africa, TSAM nonetheless strives to follow its tenets as a matter of best practice. Consumer Protection The Act promotes a fair, accessible and sustainable marketplace for consumer products and Act 68 of 2008 services. It aims to improve consumer access to information, prohibits certain unfair marketing and business practices and encourages responsible consumer behaviour. Labour Relations Act The Act establishes the law governing labour relations in the workplace. 66/1995 Occupational Health The Act safeguards the health and safety of people in the workplace and includes stipulations for and Safety Act, 1993 protecting persons using machinery. Trade Marks Act The Act establishes guidance on issues related to intellectual property laws. 194/1993 Sarbanes-Oxley Act As a wholly-owned subsidiary TSAM is required to perform testing on key financial controls in line (US) with certain Sarbanes Oxley (SOX) requirements. Results of SOX tests are then submitted to TMC for collation and final submission to the New York Stock Exchange. TSAM has subscribed to SOX principles since FY2007, and FY2012 was the 6th year we have participated in SOX testing. In this time, no significant deficiencies have been identified or reported in relation TSAM’s controls.
53
Board and committees
Committees
TSAM is guided by the experience and knowledge of its board of directors. In 2008, when Toyota South Africa (TSA) became wholly-owned by Toyota Motor Corporation (TMC), TSAM’s executive committee was reconstituted as its board. Chaired by the President and CEO, Dr Johan van Zyl, the TSAM board is comprised of both South African and Japanese Executive Directors based in South Africa, and is responsible for the general oversight of the company. In periodic executive and cross-functional meetings, employees may deliver input directly to the board.
Remuneration Committee
TSAM’s board of directors receives strategic leadership and oversight from the board of TSA, which meets quarterly and in turn reports to the TMC board. The TSA board also ratifies financial statements and major decisions taken by the TSAM board. The TSA board’s directorship is made up of Executive and Non-Executive Directors as well as representatives from TMC. The directors are the final arbiters of the company’s internal financial controls. These are designed to provide reasonable assurance that the financial statements are reliable, assets are accounted for, and mis-statements and losses are detected and prevented. During the year under review, the board feels that these systems and processes functioned adequately. For an illustration of the reporting structure of TSAM and TSA boards and sub-committees, see the illustration below.
Board and committee structure
Our boards are supported by a framework of board and executive committees that address specific strategic issues and functions. See below for a brief description of these committees.
The Remuneration Committee comprises members from both TMC and TSAM, reports to the TSA board and meets as and when necessary. Its mandate is to ensure that remuneration policies attract and retain critical skills, align with the company’s strategy and drive performance.
Audit & Corporate Compliance, Social & Ethics Committee In FY12, TSA extended the mandate of its Audit and Corporate Compliance Committee to include oversight of social and ethical issues. This move is in line with the requirements of the Companies Act. In addition to its previous responsibilities, the committee now oversees social and economic development, corporate citizenship, the environment, consumer relationships, labour and employment, the environment, health and public safety.
TSAM executive committees Our Executive Committees are in place to oversee the operations of the various TSAM divisions and functions. These include sales and marketing, manufacturing and corporate administration.
Toyota Motor Corporation Board
Toyota South Africa Board Audit & Compliance and Social & Ethics Committee
Remuneration Committee TSAM Board
Sales and Marketing EXCO
54
Manufacturing EXCO
Risk Management Committee
Corporate Administration EXCO
TSA board of directors In FY12, Mr Takashi Sakai, Mr Takao Gonno, Mr Hiroyuki Ochiai, Mr Naoki Fujioka and Mr Shinji Takabayashi resigned from TSA’s board of directors. They were replaced by Mr Hitoshi Muramoto, Mr Yasushi Nakano, Mr Masaki Hosoe (who subsequently resigned) and Mr Shinji Takabayashi, respectively. Johannes Jacobus van Zyl Executive Director Appointed: 1 May 1996 Nationality: South African
Takashi Sakai Executive Director Appointed: 1 January 2009 Resigned: 31 December 2013 Nationality: Japanese
Hitoshi Muramoto Executive Director Appointed: 1 January 2013 Nationality: Japanese
Masaaki Iwase Executive Director Appointed: 1 January 2010 Nationality: Japanese
Marius George Burger Executive Director Appointed: 1 January 2008 Nationality: South African
Hisayuki Inoue Non-Executive Director Appointed: 26 June 2008 Nationality: Japanese
Sindisiwe Ntombenhle Mabaso-Koyana Non-Executive Director Appointed: 1 January 2010 Nationality: South African
Keiji Masui Non-Executive Director Appointed: 27 June 2007 Nationality: Japanese
Baldwin Sipho Ngubane Non-Executive Director Appointed: 1 January 2010 Nationality: South African
Noluthando Dorian Bahedile Orleyn Non-Executive Director Appointed: 1 November 2004 Nationality: South African
Takao Gonno Non-Executive Director Appointed: 10 June 2011 Resigned: 31 December 2012 Nationality: Japanese
Yasushi Nakano Non-Executive Director Appointed: 1 January 2013 Nationality: Japanese
Naoki Fujioka Alternate Director to Hisayuki Inoue Appointed: 1 January 2012 Resigned: 30 April 2012 Nationality: Japanese
Masaki Hosoe Alternate Director to Hisayuki Inoue Appointed: 1 May 2012 Nationality: Japanese
Hirohisa Shibata Alternate Director to Keiyï Masui Appointed: 1 January 2012 Nationality: Japanese
Mikio Hirohashi Alternate Director to Takao Gonno Appointed: 1 January 2012 Nationality: Japanese
Hiroyuki Ochiai Non-Executive Director Appointed: 26 June 2008 Resigned: 8 June 2012
Shinji Takabayashi Alternate Director to Hiroyuki Ochiai Appointed: 1 January 2012 Resigned: 8 June 2012
55
TSAM board of directors During the period under review, Mr Takashi Sakai resigned from the board and was replaced by Mr Hitoshi Muramoto. We thank Mr Sakai for his four years of service to the board and welcome Mr Muramoto. Johannes Jacobus van Zyl (Chairman) President and CEO Appointed: 1 July 1993 Nationality: South African
Masaaki Iwase EVP: Manufucturing & Manufacturing Support Group Appointed: 1 January 2010 Nationality: Japanese
Takashi Sakai EVP: Chief Co-ordinating Executive Appointed: 1 January 2009 Resigned: 31 December 2013 Nationality: Japanese
Hitoshi Muramoto EVP: Chief Co-ordinating Executive Appointed: 1 January 2013 Nationality: Japanese
Marius George Burger SVP: Corporate Admin Appointed: 1 January 2008 Nationality: South African
David Stephen Finch SVP: Manufacturing Appointed: 1 January 2011 Nationality: South African
Calvyn Nicolaas Hamman SVP: Sales & Marketing Appointed: 1 January 2011 Nationality: South African
Mikio Hirohashi Senior Executive Co-ordinator: Finance Appointed: 1 January 2012 Nationality: Japanese
Masakazu Morito Divisional Senior Executive Co-ordinator: Corporate Admin Appointed: 1 April 2009 Nationality: Japanese
Hirohisa Shibata Divisional Senior Executive Co-ordinator: PCLD & Manufacturing Appointed: 11 November 2011 Nationality: Japanese
Masaru Shimada Divisional Senior Executive Co-ordinator: Sales & Marketing Appointed: 1 January 2010 Nationality: Japanese
Shinji Takabayashi Divisional Senior Executive Co-ordinator: Manufacturing Appointed: 10 June 2011 Nationality: Japanese
Nigel Grahame Ward SVP: Manufacturing Support Group Appointed: 1 January 2011 Nationality: South African
56
Managing our risks TSAM must remain continually abreast of changes within its sector, business environment and country in order to successfully navigate the risks and opportunities they present. Our risk management approach is based on the following objectives: • C reate risk awareness and understanding at all levels throughout the organisation. • Instil a culture of risk management and responsible ownership at all staff levels. • E ngage and manage risks well within the group’s risk appetite. • Embed risk management in the way the business is run. • C omply with appropriate risk management practices in line with corporate governance guidelines. In pursuing these objectives, we aim to ensure that we approach both the upside and downside of risk in an informed manner and avoid major surprises or mistakes through proactive risk management.
TSA’s Risk Management Committee oversees the company’s day-to-day risk exposure and assists the board in fulfilling its duties relating to corporate accountability and associated risk, particularly with regard to management assurance and reporting. It meets quarterly to review and assess the integrity of the risk control systems, ensuring the effective management of the risk policies and strategies. The Risk Management Committee reports directly to the Audit & Corporate Compliance, Social & Ethics Committee. Based on changes to the environment or new business objectives, risk committee members assess key risks for changes and when necessary, re-rate their severity and probability. This assessment is performed as soon as changes are identified, otherwise on a quarterly basis. Risks requiring mitigation are delegated to committee members based on their area of expertise and responsibility. They then identify existing controls, treatment strategies and action plans that are documented in the company risk register.
57
GRI Index Indicator Description 1. Strategy and analysis 1.1 Statement from the most senior decision-maker of the organisation. 2. Organisational profile 2.1 Name of the organisation 2.2
Primary brands, products, and/or services
2.3
Operational structure of the organisation
2.4
Location of organisation’s headquarters
2.5 2.6
Number of countries where the organisation operates Nature of ownership and legal form
2.7
Markets served
2.8
Scale of the reporting organisation
2.9
Significant changes during the reporting period regarding size, structure or ownership 2.10 Awards 3. Report Parameters 3.1 Reporting period
3.2
Date of most recent previous report
3.3 3.4 3.5
Reporting cycle Contact point for the report Process for defining report content
3.6 3.7
Boundary of the report Specific limitations on the scope or boundary of the report Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report
3.8
3.10
3.11
3.12
58
Table identifying the location of the standard disclosures in the report
Comment
Reference Chief Executive Officer’s message (Page 2)
Toyota South Africa Motors (Pty) Ltd Toyota, Hino and Lexus An introduction to Toyota South vehicles Africa Motors (Page 4) An introduction to Toyota South Africa Motors (Page 4) Toyota Building An introduction to Toyota South Stand 1 Africa Motors (Page 4) Wesco Park Sandton 2146 South Africa An introduction to Toyota South Africa Motors (Page 4) An introduction to Toyota South Africa Motors (Page 4) An introduction to Toyota South Africa Motors (Page 4) No significant changes during the reporting period Awards and accolades (Page 10) 2012 financial year, spanning 1 April 2012 to 31 March 2013 The previous sustainability report covered FY10 and FY11, running from 1 April 2010 to 31 March 2012 Annually About this report (Page 1) About this report (Page 1) Toyota Global Vision (IFC) About this report (Page 1) None This report is limited to TSAM’s wholly-owned operations None
In this FY12 sustainability report, we have aimed to include additional detail on our Lexus and Hino brands GRI Index (Page 58)
Indicator Description 4. Governance, commitments, and engagement 4.1 Governance structure of the organsation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight 4.2 Indicate whether the Chair of the highest governance body is also an executive officer 4.3
Comment
Reference Board and committees (Page 54)
The TSAM Chairman, Dr Van Zyl, is also the President and CEO
Number and gender of members of the highest governance body that are independent and/or nonexecutive members 4.4 Mechanisms for shareholders and employees Employees may deliver to provide recommendations or direction to the input directly to the board highest governance body in periodic executive and cross-functional meetings 4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental and social performance and the status of their implementation 4.9 Procedures of the highest governance body for overseeing the organisation’s identification and management of economic, environmental and social performance 4.14 List of stakeholder groups engaged by the organisation 4.15 Basis for identification and selection of stakeholders with whom to engage STANDARD DISCLOSURES PART III: Performance Indicators Economic Market presence EC6 Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation Environmental Energy EN5 Energy saved due to conservation and efficiency improvements Water EN8 Total water withdrawal by source Water consumption is normalised against the number of units manufactured Biodiversity EN11 Location and size of land owned, leased, managed Our National Parts in, or adjacent to, protected areas and areas of high Distribution Centre is biodiversity value outside protected areas adjacent to a wetland conservation area Emissions, effluents and waste EN16 Total direct and indirect greenhouse gas emissions Emissions are normalised by weight against the number of units manufactured EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved
TSA board of directors (Page 55) TSAM board of directors (Page 56)
Governance (Page 52)
Committees (Page 54)
Toyota Global Vision (IFC) Toyota Global Vision (IFC)
Suppliers: Environment (Page 33), Suppliers: Localisation (Page 34)
Energy consumption (Page 40)
Water (Page 41)
Energy consumption (Page 40)
Energy consumption (Page 40)
59
Indicator Description EN22 Total weight of waste by type and disposal method
Comment Reference Waste is normalised Waste (Page 41) against the number of units manufactured
Transport EN29 Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations and transporting members of the workforce Social: Labour practices and decent work Employment LA2 Total number and rate of new employee hires and employee turnover by age group, gender and region Labour/management relations LA4 Percentage of employees covered by collective bargaining agreements Occupational health and safety LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region and by gender LA8 Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases Training and education LA11 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings Social: Society Local communities SO1 Percentage of operations with implemented local Our community investment community engagement, impact assessments, and is focused in Durban development programmes and Sandton, our two operational sites Public policy SO5 Public policy positions and participation in public policy development and lobbying Social: Product responsibility Product and service labelling PR5 Practices related to customer satisfaction
60
Energy consumption (Page 40)
Retention and compensation (Page 26)
Engaging employees (Page 23)
Keeping our employees safe (Page 28) Safeguarding employee wellbeing (Page 29)
Development (Page 24)
Community support (Page 43)
External legislation, regulation and standards (Page 53)
Ensuring customer satisfaction (Page 13)
TOYOTA SOUTH AFRICA MOTORS Toyota Building, Stand 1, Wesco Park, Sandton, 2146
www.toyota.co.za
