PROTECTING THE ENVIRONMENT

CHALLENGE

Protecting the environment is a growing challenge and a priority for the Virbac Group. Beyond initiatives deployed at the subsidiary level, our ambition lies in our proactive efforts to reduce the environmental footprint of all our activities and products. In seeking to optimize resource use, controlling energy use is at the heart of Virbac’s strategy.

STRATEGY

This ambition is reflected in the structuring of a global approach made up of organizational, methodological and operational components of the entire Group. The objective being to identify competitiveness levers and align policies and actions aimed at acting on two key issues:
- the preservation of the planet’s resources by controlling consumption (energy, materials) used in our manufacturing processes and
- the reduction, in the end, of emissions or waste resulting from our activities.

RISKS

Beyond possible operational cost overruns related to measures put in place to reduce consumption or emissions, Virbac identifies several themes associated with environmental protection:
- risks related to the use of hazardous materials during production, marketing and distribution (storage, shipping, etc.);
- HSE (Hygiene, safety, environment) risks related to operating permits and associated regulatory requirements (waste volume, effluent volumes and quality, etc.);
- risks related to the effects of climate change, which, generally speaking, prompt Virbac to help reduce greenhouse gas emissions. For more information on the risks associated with this CSR challenge, please refer to the chapter on risk factors pages 63 and 64.

From an organizational point of view, the creation of a corporate HSE department, reporting to the chairman of the executive board, supports this route. One of this department’s initiatives involves re-framing the Group’s reporting scope and methods, a precondition for gaining an overall perspective of exposure to environmental risks.
Involving all subsidiaries in environmental reporting and increasing the reliability of relevant indicators as priority actions that will serve, in the short term, to identify existing good practices, in the medium term, to define appropriate objectives and actions when it comes to optimizing resource consumption and reducing our emissions over the long term.
Virbac is also committed to developing a training and awareness segment dedicated to environmental themes for both existing employees and new hires. External stakeholders were also involved in the effort, with the inclusion of environmental clauses in supplier assessment questionnaires.
These initiatives, in conjunction with the roll-out of audits throughout an expanded range of subsidiaries (Mexico, Taiwan, United States, Australia, New Zealand, Uruguay, Vietnam and Chile) demonstrate this move towards consistency in the deployment of a Group-driven strategy.

Consumption: energy & natural resources

ENERGY

For several years, Virbac has been working to reduce energy and natural resource consumption by replacing equipment (improved performance), adding thermal insulation, optimizing air conditioning and by introducing consumption indicators in as close proximity to end-users as possible (better control of energy expenditures).
For all of its industrial sites around the world, whether choosing new equipment or through ongoing monitoring, Virbac strives to take account of energy consumption based on the Best available techniques applicable to its activity.

A few examples:

Virbac in France

  • For an identical volume of activity, the electric power consumption has decreased by nearly 36% over the past ten years.
  • Roll-out of an Energy savings plan with three areas of potential gains: better temperature management (in particular for the storing of raw materials and finished products in Carros); installation of a heat recovery unit at the water treatment plant, and, finally, installation of additional insulation on all steam circuits.
  • The November 2017 startup of the heat recovery unit at the Carros water treatment plant helped reduce gas consumption.

Virbac Australia

  • The Penrith site saw a reduction in electric power consumption (solar panels and optimized management of power demands) of approximately 200 MWh per year, and a 580 MWh reduction in gas consumption (optimized industrial boiler maintenance).
  • At the Crookwell site, electric power consumption was cut in half.

Reducing the energy intensity of its activities and products is clearly a competitiveness lever, placing Virbac on a virtuous path, which, in turn, will help reduce its overall emissions of CO2.

WATER

Virbac also strives to lower water consumption at equivalent activity volumes by setting up recycling or production facilities for various BAT-compliant grades of water. Water consumption at French sites has been reduced by nearly 18% over the past ten years.
The Group also includes in its analyses the environmental setting of the areas in which it operates. Apart from the site in South Africa, located in a water stress zone based on the criteria of the FAO (Food and Agriculture Organization) and the WRF (Water Risk Filter), no other Group production plants are located in a water stress zone identified as such.

Production: emissions, effluents and waste

EMISSIONS

Due to the nature of its pharmaceutical manufacturing activity (especially inhibiting technologies), Virbac does not generate any visual, noise or odor pollution.
Therefore, Virbac focuses on the real impacts of its activity, atmospheric emissions, effluents or waste resulting from its activities or products, by increasingly investing in environmental friendliness: taking into account EHS impacts in the management of industrial projects, improvements in the environmental performance of existing facilities, etc. Furthermore, the Group’s environmental principles are tailored according to the various local regulations of the countries in question. Here again, the objective is to identify good practices at the subsidiary level to be consolidated within the Group context.

Greenhouse gases

Scope 1 & 2: Direct and indirect emissions (industrial site consumption and GHG related to refrigerant gases)

Actions

  • Optimization of energy consumption: insulation of the energy recovery system on the wastewater treatment station for biological production units (Carros), solar boiler for industrial hot water (Mexico).
  • Stability of emissions related to refrigerant gases (better control of facilities in Australia and France).

Scope 3: Emissions resulting from shipping of finished products

Actions

  • New calculation method to increase the reliability of subsidiary data based on the emissions factors given by the French Environment and Energy Management Agency (see site www.bilans-ges.ademe.fr). Careful analysis of the various emissions factors used to adopt an appropriate calculation method will be rolled out in 2019.
  • Shipping of finished products: destination grouping.
  • Transporting employees: inter-site shuttles/ exterior/site shuttles, incentive policies to limit the carbon impact of company/service vehicles, carpooling, etc.

EFFLUENTS

Calculation and reporting methods are also being revamped for industrial waste management. The inclusion of all industrial sites (Carros) or the resumption of activity in Saint Louis in the United States and in Mexico may have affected the past few years’ results.
The goal remains to bring about Group-wide consolidation of the various locally driven initiatives, subject to specific regulatory frameworks. In this regard, the Group’s oversight leads to conservative guidelines. For example, many sites must recover and treat a large portion of manufacturing water discharges in accordance with related standards for hazardous waste.
Steady investments are made in all of our facilities to best treat wastewater resulting directly from our activities and from the cleaning of equipment. Our goal is to reduce the amount of COD (Chemical Oxygen Demand), the key pollutant in discharged industrial water.

MATERIALS USED

Virbac seeks to fine-tune its use of active ingredients, excipients and packaging to avoid product wastage or the duplication of wrapping and packaging.

Key actions implemented are:

  • optimized supply management to limit warehousing and internal transfers;
  • optimization of shipping flows and rate;
  • with the help of our strategic suppliers, this innovation aims to reduce wrapping and packaging;
  • minimized wastage at every stage of the industrial process.

As part of its veterinary medicine manufacturing business, Virbac uses substances that present health, fire and/ or explosion, air pollution and spillage risks during the various phases of development and marketing (R&D, manufacturing, storage and shipping).
To limit these risks, which could cause harm to people, assets and the environment, the Group complies with the safety measures prescribed by the laws and regulations in force, implements good manufacturing and laboratory practices, and ensures its employees are trained.
Virbac manufacturing sites and research and development facilities are also regularly inspected by the appropriate authorities.
Primary packaging in contact with medicines is subject to strict pharmaceutical industry quality standards that limit the use of materials originating from recycling channels.
However, Virbac is focused, as early as the research and development stage and in partnership with its suppliers, on principles of eco-design for secondary or tertiary packaging (optimized in terms of weight, use of recycled fibers in certain packaging, etc.).

WASTE

Virbac produces two kinds of waste: non-hazardous industrial waste and hazardous industrial waste.
The Group is committed upstream to reducing the volume of waste produced, and downstream to optimizing source separation before sending it to dedicated collection and sorting sectors in charge of recovering or recycling it.

Non-hazardous waste

  • In France, since 2003, Virbac has been contributing, along with other companies in the Carros industrial area, to the roll-out of a non-hazardous waste (aluminum, iron, glass, cardboard, plastic, paper, etc.) collection system through the “Tri&Co” effort. 100% of waste is recovered, no landfill is required.
  • Mexico: pre-packaging facilities for non-hazardous waste to optimize the volumes produced.
  • Within France, and with the help of a specialized company, a study is underway to identify key areas of improvement, firstly in terms of reducing waste volumes, and secondly in terms of reducing disposals.

Hazardous industrial waste

In addition to continually seeking to control the volumes generated and improve collection for treatment and maximum recycling, Virbac tracks all hazardous waste up to the point of disposal: soiled packaging, laboratory, production, medicinal or infectious wastes, and chemical effluents (mostly incinerated and therefore thermally utilized or recycled for solvent recovery).
Controlling waste volumes also begins at the research and development stage by considering treatment application methods so as to limit wastage and residues that could harm the environment (targeting/ optimizing sprays, for example).

AIMS & INDICATORS

Virbac’s energy management strategy translates into ambitious target figures from the consolidated results of
all subsidiaries. It is about the Group’s commitment to reduce its consumption so as to, over time, reduce its
emissions, effluents and all waste resulting from its activities.

CONSUMPTION: GAS, ELECTRICITY, WATER

Reducing energy and water consumption in the next five years, global objective addressed through initiatives across all subsidiaries

In 2018, the quantity of energy consumed (gas) was 33,101 MWh.
In 2018, the quantity of energy consumed (electricity) was 50,060 MWh.

Controlling water withdrawals

In 2018, the total volume of water withdrawn by source was 237,462 m3.


PRODUCTION: EMISSIONS, EFFLUENTS AND WASTE

Reducing GHG emissions

Scope 1 & 2: direct and indirect emissions (gas and electricity consumption at manufacturing sites and related to refrigerant gases) in 2018 were equivalent to 23,681 tons of CO2.
Scope 3: emissions from shipping of finished products was 16,927 tons, more than half of which was attributed to air transport.

Reducing the intensity of greenhouse gases (tons of CO2/thousand €)
*Ratio between direct and indirect greenhouse gas emissions (scope 1) and the value added in thousands of euros of each subsidiary (direct labor costs + indirect production costs).

In 2018, the intensity of direct and indirect emissions of GHG was 180 tons of CO2/k€.

Limiting the volume of discharged water (m3) and its COD content

In 2018, the volume of discharged water was 142,259 m3, including 121 tons of COD for the entire Group.

Reducing the overall share of materials, including all packaging placed on the market

In 2018, total packaging placed on the market amounted to 4,682 tons.

Controlling the production of non-hazardous and hazardous waste

In 2018, the volume of non-hazardous waste was 2,270 tons.
In 2018, the volume of hazardous industrial waste was 2,966 tons at constant scope.