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FORD INDIA SUSTAINABILITY REPORT 2006

Ford India Plant View

Ford India Plant View

Ford India Corporate Office

FORD INDIA PRIVATE LIMITED S.P.KOIL POST CHENGALPATTU – 603 204 TAMIL NADU, INDIA Website: www.india.ford.com

Sanjeevi Primary Health Centre

FORD INDIA SUSTAINABILITY REPORT

TABLE OF CONTENTS

1.0 2.0 3.0 3.1 3.2 3.3 3.4 3.5 4.0 4.1 5.0 5.1 5.2 5.3 6.0 7.0 8.0 8.1 8.2 8.3 8.4 8.5 9.0 9.1 9.2 10.0 11.0

Our Environmental Commitment Our Environmental Mission Future Challenges Pant Management Statement and Policy Environmental Conditions Air Stack and Ambient Air Emission Greenhouse Gas Emissions Ozone Depleting Substances Noise Volatile Organic Compounds Wastewater Recycle of the Treated Wastewater Solid Waste Recyclable Non Hazardous Waste (Scrap) Recyclable Hazardous Waste Hazardous Waste Storm water Groundwater Resource Conservation Introduction to the Energy Utilities Waste Metrics Energy Water Production Material Conservation Non Production Material Conservation Environmental Legal Compliance Compliance Assurance Internal Auditing Corporate Social Responsibility Initiatives Environmental Initiatives by Suppliers

1 2 3 4 4 5-7

7-8 8 - 10

10 10 11 - 15

15

16 - 17 17 - 18

Annexure A B

Ford India Integrated Policy Environmental Objectives & Targets – Year 2006

19 20 - 22

FORD INDIA SUSTAINABILITY REPORT

LIST OF FIGURES 1.0

Noise level trend

6

2.0

VOC emission trend

7

3.0

WWTP treated water quality

8

4.0

Oven waste heat recovery process at paint shop

12

5.0

Plant wide percentage of electricity consumption

12

FORD INDIA SUSTAINABILITY REPORT

Our Environmental Commitment This report summarizes environmental data that characterize Ford India site's environmental management performance, highlights facility programs and efforts to demonstrate compliance.

I am also happy to share that Ford India is maintaining a primary health care center in association with Madras Cosmopolitan Round Table near the factory to provide primary healthcare to the community around our facility and neighbouring villages. Ford India also contributed significantly in rehabilitating and improving the well being of the Tsunami affected people in Panaiyur Periya Kuppam, Kanchipuram, Tamil Nadu as part of the corporate social responsibility. We are committed to support initiatives and demonstrate care and support in areas on HIV Aids, Education and Road Safety.

This report also highlights significant environmental programs and efforts taken by Ford India in reducing the environmental impacts that arise due to our operations (refer Annexure-B). More detailed environmental compliance, monitoring, surveillance, and study reports may be of value; therefore, to the extent practical, these additional reports have been included in this report.

The company has been honoured for receiving the prestigious nomination for the US Secretary of State Award for Corporate Excellence 2005 for contributions as a responsible corporate citizen towards positive engagement in its community and adopting high standards of corporate governance in India.

This sustainability report discusses the present environmental status and improvements carried out with regard to the different environmental conditions such as air, water, solid waste, noise etc. This report system will be useful to members of the public, regulators and other stake holders. Ford India is not only committed to reduce the environmental impact arising of its manufacturing operations, but also in developing safe and fuel efficient cars. Ford Fiesta demonstrated the same and entered the Limca Book of Records in 2006 a first-of-its-kind Max Mileage Marathon, recording the longest distance ever traveled on a single tank of diesel and petrol. Through Max Mileage Marathon, demonstrated that good driving conditions, combined with sound driving skills and high-performance modern engines have the potential to considerably increase fuel efficiency and result in savings for the car owners as well as lower the burden of fuel bills for the country.

Arvind Mathew, President and Managing Director Chennai, April, 2007

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FORD INDIA SUSTAINABILITY REPORT

Our Environmental Mission Ford India not only believes in delivering quality products but is also committed in protecting the environment and community through its established Environmental Management System (EMS).

I am happy to see Ford India directly and indirectly progressing and performing in meeting the global mission of Ford Motor Company in achieving sustainable development. As we believe sustainability is all about ensuring that our business is innovative, competitive and profitable in a world that is facing major environmental and social changes.

In the year end 2005 and the beginning of the year 2006, EMS plant implementation team carried out a detail initial environmental review (IER) across the organization to explore the opportunity of identifying the significant environmental aspects and resource conservation potential. This helped us in setting out the stringent environmental targets set for the year 2006.

With these remarks, I would like to see and assure that we would be able to progress much beyond the achievements we did in the year 2006.

Now I am happy to see that all the set targets were achieved and we progressed well in the areas of conserving electricity, water and minimizing the hazardous waste generation.

Tom S Chackalackal, Vice President – Manufacturing Chennai, April, 2007

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FORD INDIA SUSTAINABILITY REPORT

Future Challenges The environment, or a country’s wealth, can provide a flow of goods and services that are needed for development.

Apart from the waste elimination, in the year 2007, we would like to focus on the following key issues;

The main environmental challenges we are facing today include conservation of water and energy, reduction in volatile organic compounds (VOC) emissions and disposal of hazardous waste. We have already progressed towards conserving various natural resources. Power consumption has come down by 35% while diesel and water consumption per car production has dropped by 18% and 25% respectfully in past four years of operation.

•

Develop web based environmental training module

•

Shop floor improvement in Energy Utility Waste Metrics

•

Sustain the Energy Utility Waste Metrics trend.

By initiating continuous efforts such as waste minimization practices and upgrading our technology, we have reduced the VOC emission from 115 gm / m2 area of car body painted in the year 2003 to 59.1 gm / m2 in the year 2006. Going forward, we would like to focus our efforts in, developing Ford India as zero solid waste disposal facility and zero liquid discharge facility. For zero solid waste disposal option, we are closely working with our Ford Environmental Quality Office, Asia Pacific and USA to identify the possible options of reducing hazardous waste generation at the source and also promoting co-processing of the waste.

S. Ravichandran, General Manager Launch, Projects & Plant Engineering & Environmental Management Representative Chennai, April, 2007

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FORD INDIA SUSTAINABILITY REPORT

1.0 Plant Management Statement and Policy Corporate citizenship and environmental performance are increasingly becoming issues of importance for consumers who are demanding reduced environmental impact and disclosure of organisations' environmental performance.

monitored by reviewing the Environmental Management Plan set against the various objectives and targets. This report discusses in detail the various environmental improvement programmes achieved over the year.

Here at Ford India, we are proud of our sound environmental record, and robust systems to manage environmental impacts. Obviously, we like to share our achievements with the community, and this document also provides information regarding environmental challenges we face. We aim to reduce our environmental footprint through environmental management initiatives at our facilities, partnerships with our suppliers and the sharing of environmental knowledge with industry and the community. To ensure that the environmental focus is maintained, management reviews of plant environmental performance are conducted biweekly at the same time as other plant performance topics (safety, quality, delivery, cost and morale). On a monthly basis, the actual energy, water and waste generation figures are compared to annual targets.

2.0 Environmental Conditions The various environmental conditions discussed in this chapter are air pollution, trade effluent management, hazardous waste management and resource conservation such as electricity, diesel etc. Improving and protecting these environmental conditions is achieved by setting targets year over year. Environmental conditions improvement is

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3.0 AIR Ford globally has undertaken staged ozone depleting substance phase out program, which began with the first group of refrigeration systems in 1998. Ford India complies with Ozone Depleting Substances Rule, 1998, framed by Ministry of Environment & Forest, which evolved out of Montreal Protocol, in which India has signed. The ODS containing equipments will be phased out, once such technology is available in India, which is captured in our Environmental Management Program.

3.1 Stack and Ambient Air Emission Air pollution inside the Ford India premises is monitored through two different ways: ambient air quality monitoring and stack emission monitoring. Different locations for the ambient air conditions are monitored a minimum twice a year for particulate matters (Respiratory and Suspended), Sulphur-di-oxide, Nitrogen oxides, Lead and Carbon Monoxide. All the air emission stacks are monitored minimum once in a year for particulate matters, Sulphur-di-oxide, Nitrogen oxides, Carbon monoxide and Carbon dioxide. All the monitored values are with in the permissible limit stipulated by Tamil Nadu Pollution Control Board

3.4 Noise Emission Ford India is committed in reducing the noise at the source of generation rather at the user end. In last few years lot of initiatives have been under taken to reduce the noise emission at the source of generation.

3.2 Greenhouse Gas Emissions

Some of the major initiatives taken to reduce the noise are:

Ford India is committed in reducing the Greenhouse gas (GHG) emission. The reduction in the consumption of the diesel and electricity accounts directly for the overall GHG reduction programme. The various measures initiated in reducing the electricity and diesels are detailed in the chapter 8

3.3 Ozone Depleting Substances Emission

•

Acoustic noise enclosure provided for all the stand-by diesel engine power driven generator sets

•

Ensuring that new trolleys (for in-house parts movements) purchased have rubber or poly urethane wheel to avoid adverse noise generation while movements.

Every month, ambient noise monitoring is conducted. The minimum and maximum noise readings carried out during the day and night time is detailed below.

The major air conditioning systems used for Process Cooling and Central Air Conditioning Systems in Ford India do not contain ozonedepleting substances (ODS). But there are quite a few equipments such as room air conditioners, water coolers, which do contain ODS.

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80 75 71

70

70

66

NOISE LEVEL (Leq dBA)

60

50

49 46

40

30

20

10

0 Day Noise (06:00 - 21:00)

Night Noise (21:00 - 06:00) PARAMETERS

Max. Value in Leq dB(A) Min. Value in Leq dB(A) Perm. Limit in Leq dB(A)

FIG - 1: Noise level Trend

3.5 Volatile Organic Compounds (PERS) is the systematic, auditable record which can be verified for the details of the emission calculation by various solvent and related materials contributing to VOC emission. VOC content in kg/l or in fraction of each material is tracked.

Ford India is committed in reducing the Volatile Organic Compounds (VOC) generation from its paint shop operation. In last few years, a number of initiatives have been taken to reduce the VOC emissions at the source of generation by initiating cleaner production / waste minimization tasks.

Some of the key initiatives taken in reducing VOC emission are

Even though India does not have any emission norms for VOC, Ford uses the Mass Balance System which is used in most of the developed countries for measuring the VOC emissions. The reduction trend in the past three years is quite significant, thanks to the initiatives taken by our team at the Paint Shop.

•

The transfer efficiency of spray guns has been upgraded to reduce the wastage at the time of paint and solvent application.

•

Maximized the colour batch size, there by avoiding frequent purging operations of spray guns.

•

VOC emissions are monitored through Mass Balance Method using the Plant Emission Reporting System (PERS) database.

Collect purge solvents and reuse rather than disposal.

VOC emission over the period of years can be viewed in the Figure - 2.

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Value in Gm / m2 area of car body painted

FORD INDIA SUSTAINABILITY REPORT

140 120

As part of the WWTP process, effluent treatment plant (ETP) sludge and bio sludge is generated and removed separately. ETP sludge is stored in the hazardous waste storage area, where as bio sludge is used as fertiliser for the green belt area development.

115 100

91

100 80

59.1

60 40 20 0

2003

2004

2005

2006

The following are the various parameters that are monitored at the frequent interval (weekly / fortnightly / monthly) to check the effective functioning of the WWTP.

Year

FIG-2 : VOC emission trend

4.0 WASTEWATER

pH; Total Dissolved Solids; Total Suspended Solids; Turbidity; Total Hardness; Calcium Hardness; Magnesium Hardness; Magnesium Hardness; Phenolphthalein Alkalinity; Methyl Orange Alkalinity; Total Alkalinity; Chlorides; Sulphate; Phosphate; Fluoride; Iron; Copper; Chromium Cr 6+ ; Zinc; Silica; Oil Grease; Dissolved Oxygen; Lead; Manganese; Bio chemical Oxygen demand (BOD3 at 27ºC);

Ford India is committed not only treating the sewage and trade effluent generated from its facilities, but also treatment of the sewage generated from the adjacent (Ford India Plant) suppliers. The wastewater treatment plant (WWTP) is designed to treat the trade effluent, sewage and canteen wastewater. WWTP is presently treating around 1100 KL/D (treatment plant capacity is 2000 KL/D). 60% of the wastewater for the treatment in WWTP is obtained from Ford India operation (trade effluent, canteen wastewater & sewage), whereas 40% of the wastewater is received from the suppliers (this includes treated trade effluent – meeting TNPCB surface discharge norms, canteen wastewater and sewage).

Chemical Oxygen Demand; Mixed Liquid Suspended Solids (MLSS); Sludge Volume Index; Food / Micro organism ratio and Sludge Age. The above parameters were found to be with in the permissible limit stipulated by TNPCB. Fig-3 shows the key parameter trend. Apart from the WWTP monitoring, ground water is also monitored periodically through the samples drawn from the eight monitoring bore wells situated at various locations of the site to determine the impact from wastewater irrigation and bio sludge use.

WWTP is manned and operated round the clock, throughout the year. WWTP is designed to treat the wastewater at four different stages – Primary Treatment : collection, storage, sedimentation and floating material removal

These monitoring reports has not shown any undesirable change in the ground water quality.

– Secondary Treatment : neutralization of the effluent and activated sludge process for sewage – Tertiary Treatment : sludge removal, ultra filtration and disinfection – Advanced Treatment : Reverse Osmosis (dissolved solids removal)

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FORD INDIA SUSTAINABILITY REPORT

300

The various solid waste is segregated (using different colour bins) at the source of generation for ease of management. The segregated non hazardous solid waste is moved to the scrap yard for further segregation and disposal. The hazardous waste is moved to the hazardous waste storage yard for effective storage and or disposal to the authorized vendors for recycling.

250

VALUE in mg/l

250

Max. Value in mg/l Min. Value in mg/l Perm. Value in mg/l

200

150

100

88

50 30

27

8

3 0 Biological Oxygen Demand (BOD)

Chemical Oxygen Demand (COD)

5.1 Recyclable Non Hazardous Waste (Scrap)

PARAMETERS

FIG - 3: WWTP treated water quality

4.1Recycle of the treated wastewater

The following are the various recyclable Non Hazardous (scrap) Waste generated:

Ford India is not only committed in water conservation, but also committed in maximum usage of treated wastewater to the process (paint shop operation) and for irrigating the green belt area developed inside the Ford India premises.

Paper, card board, used wooden crates, boxes, glass, metal drum, plastic material metal (pipes, sheet metal, structural steel etc), electrical items (wires, cables etc), packaging material (thermocole, laminated sheets etc) and rubber waste.

The water treated at the various stages of treatment at WWTP is monitored using electro magnetic water flow meters.

The above mentioned wastes are disposed (sold) to the authorized scrap vendors for effective recycling and reusing purpose.

On average 1100 KLD of treated wastewater is treated daily in the WWTP. Out of this, 55% of the treated wastewater is used back to the paint shop process; where as 45% of the treated wastewater is used for irrigating the 70 acres of land (maintained for green belt area development) inside the plant.

Ford India insists Scrap Sale Agreement with the scrap vendors for safe handling and disposal of the scrap and to protect against any unforeseen pollution liabilities. In past two years, reuse of scrap materials inside the plant premises has been initiated. Wooden, carton scrap etc generated at Ford main plant were used at the parts distribution center of Ford India (located around one km away from the main plant) to pack the various car parts, which is to be sent to the dealers

5.0 SOLID WASTE Solid waste generated at Ford India can be classified as: •

Recyclable and Reusable Non Hazardous Waste

•

Recyclable Hazardous Waste

•

Hazardous Waste (Stored at the Site)

All the scrap vendors sign the agreement which spells out terms and conditions for safe handling and use of the materials, dealt by them. Also these vendors are covered with a Public Liability Insurance to protect against any unforeseen environmental issues / damages if arise.

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FORD INDIA SUSTAINABILITY REPORT

Key environmental management plans initiated in the year 2006 for reducing the hazardous waste generation are detailed below:

5.2 Recyclable Hazardous Waste The following are the various recyclable Hazardous Waste generated: Used / waste oil, empty barrels / containers, used solvents and used lead acid batteries.

•

The above mentioned wastes are disposed off (sold) to the Pollution Control Board authorized vendors for effective recycling and reusing purpose. Ford India has entered Master Service Agreement with the hazardous waste vendors for safe handling and disposal of the waste to protect against any unforeseen pollution liabilities. The vendors need to avail Public Liability Insurance Policy to protect against any unforeseen environmental issues / damages if arise.

Paint Sludge: Around 360 MT of wet paint sludge (generated since Ford India plant operation – year 1999) was disposed in the month of May – 06 to M/s Grasim Cement Industry, Ariyalur, Tamil Nadu. M/s Grasim cement industry obtained a special permission from the Central Pollution Control Board (CPCB) and Tamil Nadu Pollution Control Board to conduct a trial for using the paint sludge as alternate fuel. The above trial results found to be successful and CPCB has permitted to use the paint sludge as an alternate fuel in the cement industries.

•

ETP Sludge: After continuous trials and jar test, lime consumption has been optimized in the WWTP process.

•

Oily Rags: Body shop initiated the process of collecting the used gloves at the separate segregation bin. Based on the contamination nature, used gloves were reused again in the oily contamination area and less contaminated ones were sent for washing, latter the same was used for wiping the dust surface.

•

Waste Sealer: Body and paint shop initiated the process of using the left out sealers in the containers by developing a special devise. Further to that, the left out sealers in the containers (which was not able to recover) were sent back to the supplier on weight basis. The left out quantity (measured) was adjusted against the supply of the fresh sealers.

5.3 Hazardous Waste The following are the various Hazardous Waste stored at Ford India hazardous waste storage area. Paint sludge, phosphate sludge, effluent treatment plant (ETP) sludge, oily rags, used resins & membranes and waste sealer. The above waste could not be sent for the disposal, since there is no TSDF (Treatment, Storage and Disposal Facility) available at Tamil Nadu. These above wastes segregated at the source of generation, collected in the MS or HDPE barrels, then covered with the lids and stored in the hazardous waste storage area. 6% of hazardous waste generation has been reduced in past one year of operation by initiating the various waste minimization process and effective usage of PPEs.

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FORD INDIA SUSTAINABILITY REPORT

Paint sludge, which has the high calorific value (> 4000 cal / kg), is used as an alternate fuel in their cement kiln, since this is a proven practice in developed countries.

7.0 GROUND WATER Ford India receives raw water from Tamil Nadu Water Supply and Drainage Board (TWAD) for the industrial and domestic consumption. Groundwater (bore well) is not used for the production process and used only for the remote irrigation purpose and fire hydrant systems.

At Ford India, we engaged around 850 man-days and 400 hours of the forklift operations to remove the stored paint sludge from the barrel placed inside the 40 feet containers. Paint sludge were first removed from the barrel, latter solar dried, then broken in to granular sizes, then packed in the polythene bags (20 kg size) and finally loaded in the 8 MT carrying capacity trucks and transported to M/s Grasim for the disposal.

Otherwise only the treated WWTP water is used for the process and irrigating the green field inside the Ford India premises. Till the mid of year 2005, the water supplied by TWAD was meeting the physical and chemical parameters of the drinking water standard (BIS 10500: 1983) except micro biological requirements. Latter by the year end 2006, the total dissolved solids present in the ground water started increasing and reached 900 mg/l (instead < 500 mg/l).

The whole activity was done in a controlled manner with a standard set of procedures and under strict supervision by the Environmental Management team.

In order to make the water potable, existing drinking water treatment plant was upgraded to handle the higher total dissolved solids in the water by treating through the reverse osmosis process.

6.0 STORM WATER Ford India has a well connected storm water drainage network. The storm water network is spread across either side of the internal and external road and periphery of the Ford India land.

The treated drinking water meets the IS 14543:2004 (Packaged drinking water standard).

Since the ground water table is very high at the Ford India site, the rainwater harvesting is not possible. So the storm water collected from the site is drained towards the lake available at one kilometer away from the site. The internal and periphery drains are periodically cleaned to prevent flood flows and velocities, so that erosion and sedimentation is avoided.

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FORD INDIA SUSTAINABILITY REPORT

EUWM has shown an improvement in the trend for the year 2006. Some of the key improvements are mentioned below:

8.0 RESOURCE CONSERVATION Ford India strives in the conservation of resources year by year by setting objective and targets. Conservation of the resources not only helps in the wise use of natural resources, but also leads to attain the sustainable development. This can be achieved only by the planned management of natural resources to optimize their utility, efficient usage in their original application, reuse and recycling.

•

Resource conservation is practiced at Ford India not only for the minimization of the energy consumption, but also reduction in the waste generation at all stages, from production through the life of the product right up to final disposal. Major resource utilization is tracked against per car production in the EUWM (Energy Utilities Waste Metrics) database

8.1 INTRODUCTION TO EUWM The Energy Utility Waste Metrics (EUWM) database is designed to provide information regarding environmental metrics on a global basis for the Company. Major environmental metrics include energy/utility data and waste disposition information. Ford India tracks the disposition (disposal and recycling) of wastes from the plants and facilities.

Increase in energy efficiency (both electricity and diesel consumption)

•

Decreases in hazardous waste generation

•

Improved environmental training programs

•

Reduced water usage

•

Reduction in VOC emission

•

Improved relationships with communities and regulators

•

Increased waste recycling rates

•

Substitution of less hazardous substances

•

Reduced Inventories of Environmental Managed Materials

•

More effective environmental control procedures

•

Improved housekeeping, cleanliness, and preventive maintenance

•

Better tracking and record keeping

•

Upgraded environmental control equipment and facilities

•

Proactive environmental outreach activities

8.2 ENERGY Electricity: Annual energy audit is conducted to identify the area of concern or improvement in conserving electricity. Based on the concerns identified, the following initiatives were taken in the year 2005 – 06:

EUWM data is used by Ford India Management on an annual basis to track corporate citizenship efforts and supports metrics for the SQDCME Environment (Safety Quality Delivery Cost Morale) scorecards. Key EUWM tracked every month in the database (against total car production) are the consumption of electricity, diesel, water, generation of hazardous waste and VOC emissions.

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•

Optimizing the air compressor from 3500 to 1700 CFM with Variable Frequency Drive (VFD),

•

VFD installed for major air supply units in paint shop,

FORD INDIA SUSTAINABILITY REPORT

•

Optimized the lighting load (lux level) across the shop floor,

•

Energy recovery projects - heat recovery system in ovens,

•

Pump optimization at paint shop (Pre-treatment pump, Electro coat chiller pump, PT/ED pump etc)

•

Sealer oven cooling fan elimination from the process at the paint shop,

•

Effective utilization of the electro coat pumps in the paint shop,

•

Optimizing optimizations,

panel

Each shop floor was given electricity consumption targets (minimum 3 – 5%) based on their consumption pattern. For effective monitoring and energy management, all the major equipments and activities are constantly monitored through energy meters. These energy meters were connected through software application to understand the peak and lean consumption and set the targets on power reduction. In past four year (compare the year 2003 to the year 2006), by implementing the above mentioned initiatives and improving the productivity, around 35% of electricity consumption have been reduced per car production.

air-conditioning

•

Air volume optimization in paint shop ovens,

•

Electrical load optimization at press line and crane OVEN WASTE HEAT RECOVERY PROJECT AT PAINT SHOP

Before

Proposed

150-190 deg C

In Paint Shop, diesel fired ovens are used to bake the wet painted bodies. These ovens emit waste heat air of 10000 m3/hr at 140 degree Celsius to atmosphere. To recover these waste heats, new Heat Exchanger at the exhaust side at the exhaust side was incorporated. Thus recovered heat is used to preheat the fresh air fed to the oven. Cost Saving per car achieved was INR 53.9

To Atmosphere 75 deg C

150-190 deg C

Fresh Air Heater

OVEN OVEN

To Atmosphere 75 deg C

Fresh Air Heater

35 deg C

150 deg C

Exhaust Fan

Air Seal Fan

180 deg C New Heat Exchanger 35 deg C

9000 m3 / hr at Amb. Temp

Air Seal Fan

9000 m3 / hr at Amb. Temp

FIG - 4: Oven waste heat recovery process at paint shop Stamping 6% Utility 19%

Plant engineering electricity consumption mainly includes common area lighting and air conditioning load. Utility electricity consumption includes consumption of compressed air facility operation, fire hydrant water and industrial water pumping operation. All other shop floor electricity consumption includes the power required for the machinery operations, shop floor lighting load and man coolers consumption.

Body shop 8%

Assembly shop 5%

Plant Engineering 9%

Paint shop 53%

FIG - 5: Plant wide percentage of electricity consumption

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FORD INDIA SUSTAINABILITY REPORT

Diesel:

•

Diesel is consumed in the canteen boilers, paint shop ovens, power generators and for the production diesel car testing. The following initiatives were taken in the year 2006 for the diesel conservation.

Water conservation taps has been installed such as aerated taps and improved drip irrigation systems.

•

65% of the underground raw water and fire hydrant pipes have been modified to the above ground level pipes. This alleviated the un-identified leaks in the underground pipes.

•

Sequence of operation of paint shop ovens

•

Effective usage of canteen boiler

Around 25% of the water consumption was achieved in past four years by mainly conserving the domestic and the process water. At paint shop, the discharge wastewater at various stages of the operation was effectively reused amongst the process before finally letting out in to the wastewater treatment plant.

Diesel tank monitoring is followed to identify any loss or leakages. Using six sigma tools, a statistical monitoring measure has been developed to monitor the fuel loss (if any in the tank). In past four year (compare the year 2003 to the year 2006), by implementing the various initiatives such as sequencial start up and shut down of all the ovens, optimization of oven heat up time and improving the productivity, around 18% of diesel consumption have been reduced per car production.

8.4 PRODUCTION MATERIAL CONSERVATION Production material conservation not only reduces the cost of production, but also reduces the amount of waste generation and associated disposal cost. As part of the Environmental Management System (EMS), possible resource depleting or excess resource consumption areas were identified. Environmental objectives and targets were set with an appropriate management plan to reduce these environmental impacts by initiating waste minimization / cleaner production projects. Some of the key waste minimization projects are discussed below.

8.3 Water Water is getting more scarce and expensive year after year. It's costing us more to supply, to treat raw water and to again treat the generated wastewater. The energy required to meet these demands is enormous and also carries with it an environmental price tag. Hence water conservation is one of the key initiatives driven across Ford India plant. Some of the key measures taken to reduce the water consumption are detailed below. •

Similar to energy monitoring, water monitoring was also initiated in all the major water consuming areas using electro magnetic water flow meter.

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8.4.3 Copper electrode waste minimization

8.4.1 Sealer waste minimization: Old Practice: Plastic cartridges were used for brush-able manual sealer application. In this process, some residual sealer remained in the cartridges. The entire cartridge was disposed as a hazardous waste.

Old Practice: Earlier copper electrodes were not used effectively (to its fullest utilization) Present Practice: Presently, used electrodes are collected separately and segregated by size and re-used back in the welding process. This effective size segregation and reusing has reduced the copper electrode consumption rate by 60% and improved the cap life by 30%.

Present Practice: Presently the sealer for brushable application is pumped from the sealer stored in the container. The residual sealer in the container is sent back to the supplier for the effective re-usage, thus avoiding generation of sealer waste and empty sealer waste barrels.

8.5 NON PRODUCTION MATERIAL CONSERVATION

Also by changing the nozzle size in the paint shop, the sealer application was optimized

8.5.1

Carton Recycling:

Different types of cartons with various specifications are received in the warehouse. These cartons are sent back to Ford India's parts distribution center and reused in the process for packaging of sale parts to be sent to dealers.

OLD PRACTICE

NEW PRACTICE

8.5.2 Effective use of Abrasives Old Practice: Earlier the 7” abrasive was not 100% used, since only the side and the immediate layer were used, the center portion was unused (because of non requirement).

8.4.2 Yield improvement in sheet metals Scrap generation in stamping was reduced by effective utilization of the steel.

Present Practice: Presently, only the annular ring type 7" abrasive is purchased. This reduces 1/3rd wastage of abrasive disc compared to the conventional method and also resulted in a cost reduction.

The major benefits achieved were reduced blank cost per panel, increase in yield percentage and decrease in blank weights. Benefits due to the yield improvement Increase in the yield percentage are •

3% yield improvement achieved in Fiesta

•

0.75% yield improvement achieved in Ikon model

Total savings per viehicle achieved through yield improvement in USD is 12.7 for Fiesta and 3.18 for Ikon

OLD PRACTICE NEW PRACTICE

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8.5.3 Effective usage of Personal Protective Equipments (PPE's)

Ford India is maintaining the EMS certificate as per ISO 14001 for past seven years. Every year surveillance audit is conducted by TUV SUD South Asia. In May '2006 Ford India got recertified for ISO 14001:2004 standard. There were no major non-conformances identified during the audit.

Used gloves generated at the shop floor were collected in the common bin, latter based on the contamination level, further segregation is carried out. Highest contaminated gloves are disposed as hazardous waste, where as the medium and lower contaminated gloves are sent for washing and reused again.

9.2 INTERNAL AUDITING

This initiative helps not only minimizing the usage of cotton gloves, but also reduces the disposal cost.

Internal auditing is scheduled every quarter. Environmental Management System (EMS) audit ensures environmental management controls in place, such as procedures and work instructions, are being followed effectively. Nonconformances (if any) are identified during the audit and Corrective & Preventive Actions (CAPA) is taken for the same. The audit findings are reported to management during the scheduled

9.0 ENVIRONMENTAL LEGAL COMPLIANCE 9.1 COMPLIANCE ASSURANCE The environmental compliance assurance audit is a process used to make sure that Ford India complies with all relevant local environmental acts, regulations and site permits and licenses. The results of the annual compliance reports are also a useful tool for the company because they provide an indication of the common issues faced at the plants. Annual compliance assurance assessment is carried out at the beginning of every year by Ford India internal audit team. The non conformance (if any) identified during the assessment is notified to the Ford India management and Environmental Quality Office Asia Pacific. The audit conducted in the year 2006 confirmed the site was in full compliance. The assessment covers in details the various environmental legal compliances to be adhered such as air pollution, ozone depleting substances, water pollution, hazardous waste, hazardous chemical, noise, batteries, bio-medical and Petroleum etc.

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FORD INDIA SUSTAINABILITY REPORT

10.0 CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Corporate Social Responsibility, we believe is demonstrated in who we are as a company, how we conduct our business and how we take care of our employees, as well as how we interact with the community we operate in. It is indeed a commitment that must be driven through leadership, teamwork, volunteerism and compassion. Health Care: Health care is another priority for Ford India’s Corporate Social Responsibility Committee. Ford India built and resourced its own medical centre right outside the plant – at a cost of over Rs. 35 lakhs. The Round Table MCRT - 94 has supported the programme right from its inception.

Ford demonstrates commitment to India through many corporate citizenship initiatives. Ford India places high value on giving back to the people of India and the local Maraimalai Nagar community, from education and health care to environment and safety. Some key Ford initiatives include: the establishment of the Sanjeevi Health Centre; the Henry Ford Chair for Vehicle Emission Research and the Henry Ford Chair for Biomechanics and Transportation Safety at IIT Chennai and New Delhi, and Ford’s support of the Automobile Research Association of India.

The Sanjeevi Health Centre provides free primary treatment for all people in need. Since its opening, the Centre has seen thousands of patients with the facilities accommodating 97% of the patients for treatment at the centre, with the remaining 3% referred to the local hospital for more extensive care.

Community initiatives have always been and will continue to be the focus of Ford India's corporate citizenship initiatives. One such initiative was joining hands with CII to rebuild the lives of the residents of Panayur Periakuppam affected by the disastrous Tsunami of 2004 and provide them with immediate livelihood, community infrastructure and capacity building.

Health education also plays an important role. The centre employs a trained health worker who visits the surrounding villages to give advice on preventative health care. She also acts as a liaison between the villagers and the centre, collecting valuable data on families’ health and education. Dr. Achyuth Rao and his staff also visit village primary schools to give the children a check-up and advise on good health practises.

Ford India has formed a CSR Committee with representative employee from cross-functional team which meets once a month. This CSR Committee, supports range of projects from local educational initiatives to international environment to road safety initiatives and is empowered to make decisions and implement ideas.

The fundamental philosophy behind these various projects is unwavering – to provide assistance and support in a manner that will result in tangible improvements in the quality of life in the communities where Ford operates.

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FORD INDIA SUSTAINABILITY REPORT

Environment and Safety: With the rapidly increasing number of vehicles on India’s roads, the environment and safety are hot topics and Ford India takes them very seriously. Ford India was the first automotive manufacturer to sponsor two lifetime Chairs at the Indian Institute of Technology (IIT). Representing an investment of Rs. 95 lakhs, the Chairs encourage and guide research and development in the areas of automotive environment and safety. The research is independent and results are shared with the automotive industry.

The Corporate Social Responsibility Committee continues to meet and implement both local and national initiatives to benefit the people and the environment of India. The Corporate Social Responsibility Committee continues to meet and implement both local and national initiatives to benefit the people and the environment of India.

11.0 ENVIRONMENTAL INITIATIVES BY SUPPLIERS

The Henry Ford Chair for Vehicle Emission Research was set up at IIT Chennai in March 1998 and exemplifies Ford’s strong commitment to the worldwide clean air initiative. The Henry Ford Chair for Biomechanics and Transportation Safety was established at IIT Delhi in March 1999. Ford sets industry standards in test requirements, often introducing safety procedures well ahead of legislation. Ford vehicles have advanced safety structures, which exceed local safety legislation and carry additional supplementary restraints.

The Indian supply base makes up one of Ford India’s key strengths. Ford India invested major resources to build a supplier base capable of providing up to 90% local content – on time and with high quality. Ford set high local content objectives long before it was mandated. The task of setting up a supply base in India, which could meet Ford’s stringent quality standards and engineering support requirements, began in 1996. Up until that point, very little total design, engineering or development was done in India.

Ford India granted emission testing equipment to the Automobile Research Association of India (ARAI) in Pune. ARAI conducts research and development, testing and evaluation, and certification of vehicles and components for the industry and government. Additionally, Ford India trained a number of ARAI executives at Ford's extensive research and technology facilities in Dearborn, USA. This training provided familiarisation with new techniques, testing procedures and test equipment.

The first step was to identify components that could be localised, in terms of feasibility, quality and cost. Conventional items, such as tyres, seats, wheels and glass, were not an issue but technology, or level of expertise and quality systems for many of the components, simply did not exist in India. Ford India decided the best solution would be to develop partnerships with suppliers and create a supply chain. For the first time in the Indian automotive industry, a vehicle manufacturer facilitated the setting up of business collaborations between Ford’s global suppliers and Indian component manufacturers

Ford India also funds and supports initiatives in and around Chennai, reinforcing our efforts in areas of Education, Road Safety and HIV AIDS. Every Ford India employee is actively encouraged to spend 16 working hours – fully paid – to participate in charitable work.

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FORD INDIA SUSTAINABILITY REPORT

To enable and ensure the success of this massive project, Ford India formed the Supplier Technical Assistance (STA) group to partner with purchasing team to work on the following objectives: •

•

their efforts. Eighty Indian suppliers lined up to deliver high quality parts when the production lines start rolling in November, 1999. Around 75% of the local supply base is located within 50 km of the plant. Only a few of the major components such as some parts of powertrain, AC compressor and EEC modules are imported.

Identify Indian component manufacturers with the potential to supply world class products

As a result of the successful partnership between best in class Indian suppliers & global suppliers and STA group’s pioneering work, several existing Ford suppliers came into India. And those companies, with their established expertise, improved technology, design capability and quality standards of many Indian suppliers. In turn, some Indian companies won business from other vehicle manufacturers. The result is a more effective, high technology supply base, an integrated auto industry and more business for India – thereby providing employment and export opportunities.

Facilitate the formation of business links and joint ventures (JVs) between established Ford suppliers with Indian partners.

• Ensure the necessary transfer of technology from Ford and established suppliers to new companies and JVs The team trained in Ford systems and worked in close co-operation with the Ford global purchasing managers and the suppliers for many months. Suppliers were also exposed to Ford quality systems and procedures to better understand the company’s expectations.

Ford India ensured that all its Tier -1 level suppliers are ISO 14001 certified or have a plan towards ISO 14001 certification (a period mutually agreed) for the supply of parts or components to Ford.

As each new supplier came on board, a member of the STA group went through a 23-step process known as Advanced Product Quality Planning (APQP) with them. This includes detailed schedules for Ford programme pre-production and production milestones, facility planning, design-related issues, design failure mode analysis, process failure mode analysis, and quality systems and processes. Additionally, against each of the 23 points, daily-monitoring systems guided components through to final production and delivery

Communication is a critical enabler of the supply process and instant interaction is guaranteed as all suppliers are linked both to Ford and each other online. Suppliers are linked to Ford’s Material Planning and Logistics (MP&L) system and, at any time, they can see daily production figures, the schedule, their own stock levels, and how much is held in the plant. India is only the third country in the Ford world to use this highly sophisticated & integrated supply system.

Some of the smaller companies, meanwhile, changed their entire operations to embrace APQP, after recognizing the benefits. While technology flowed through partnership with global suppliers, a major shift in standards for all these companies resulted from Ford’s STA group and

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FORD INDIA SUSTAINABILITY REPORT

Annexure - A FORD INDIA QUALITY & ENVIRONMENT (INTEGERATED POLICY)

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FORD INDIA SUSTAINABILITY REPORT

ANNEXURE – B The key environmental objectives and targets achieved by various shop floors in the year 2006 are detailed below: S. No

Objective

Stamping 1 Reduction in consumption of water (Die washing and Filter washing) 2 Reduction of rejected panels due to quality concern 3

Reduction in the generation of the sheet metal scrap.

4

Reusing of scrap directly as supplementary component Reduction in consumption of electricity at stamping shop.

5

Body Shop Reduction in sealer backup 6 sheet waste generation Reduction in highlight oil 7 consumption Reduction in the 8 consumption of anti-spatter spray Reduction in the 9 consumption of the used PPE Reduction in generation of 10 sealer waste per car

11

12

13

Reduction in consumption of abrasives and back up pads Reduction in the electricity consumption at the body shop Reduction in the generation of the used copper electrodes

Target

Performance Indicator

5% reduction in usage of the water compare to the year 2005. 15%reduction in panel rejection compare to year 2005. 3% reduction in the scrap generation compare to the year 2005 3% reduction in scrap percentage generation 2% reduction in consumption of electricity compare to the year 2005

Water consumption trend

1% reduction compare to the year 2005 5% reduction compare to the year 2005 25% reduction compare to year 2005.

Back up sheets generated trend Highlight oil consumption trend Anti-spatter consumption trend

5 % reduction in the consumption compare to the year 2005. 1% reduction in waste generation compare to the year 2005 20 % reduction compare to the year 2005.

PPE cost trend per person

5% reduction in the electricity consumption compare to year 2005. 3 % reduction in the generation of the used electrodes compare to the year 2005

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Reduction trend

Scrap yield improvement trend Scrap disposal Trend Electricity consumption trend

Sealer usage trend per car Abrasives and back up pads consumption trend Electricity consumption trend Electrodes waste generation trend

FORD INDIA SUSTAINABILITY REPORT

S. No

Objective

Paint Shop Reduction in paint shop 14 electricity consumption

15

Compressed air lines leakage reduction

16

Reduction of diesel consumption

17

Reduction of Electro coat paint wastage

18

Reduction in the consumption of the filters

19

Reduction of water consumption at paint shop

20

21

22

23

Reduction in the consumption of the air dry sealer cartridge Reduction in the paint consumption Reduction in the sanding paper consumption at primer sanding operation. Reduction in the solvent consumption

Reduction in the consumption of the 24 aluminum and polythene sheets Reduction in the volatile organic compounds 25 emission (VOC) from the paint & related operation. Trim Chassis Final Shop (TCF) 26 Compressed air lines leakage reduction 27

Reduction in TCF electricity consumption

Target 2 % reduction in power consumption per car, compare to the year 2005. 25% reduction of air leak reported compare to the year 2005. Reduction in the consumption from 50 Liters per car to 40 Liters per Reduction in the wastage generation from 50 Liters to 20 Liters 10% reduction in the consumption of the filters compare to the year 2005 Reduction in the consumption 3 3 from 1 m to 0.75 m . 10 % reduction in consumption of air dry sealer cartridge from 1010 to 909 no's. 10 % reduction in the total paint consumption compare to the year 2005 5 % reduction in the sanding paper consumption compare to the year 2005. 10 % reduction in the solvent consumption from 1.40 to 1.26 Liters per car 10 % reduction in the consumption of the aluminum and polythene sheets

Performance Indicator Energy consumption trend No of leak tags generated versus closed per month Diesel consumption trend E-coat wastage trend Filters consumption trend Water consumption trend Bulk material consumption trend Paint consumption per car trend Sanding paper consumption trend Solvent consumption trend Consumption trend of the materials

VOC reduction from 90 gram 2 per m area of the car body 2 painted to 60 m area of the car body painted.

VOC Emission trend monitored through PERS

Reduction in number of leak tags by 5 % compare to the year 2005. 5 % reduction compare to year 2005

No of leak tags generated versus closed Energy consumption trend

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FORD INDIA SUSTAINABILITY REPORT

S. No

Objective

Target

Performance Indicator Scrap cost trend

29

Reduction in parts rejection and scrapping of parts

Achieve budgeted Scrap cost model wise

30

Reduction in generation of glass breaking during handling and assembling Consumption of fuel for vehicles Reduction in water consumption

75% reduction in breakage compare to the year 2005

Glass breakage trend month wise

Achieve the budgeted fuel consumption Reduction of water consumption by 5% compare to the year 2005 20% reduction in the consumption compare to the year 2005.

Fuel consumption trend Water consumption trend per car

5% reduction in the generation of Packing material waste received through Non-durables

Trend of packaging material reuse & generation

31 32

33

Reduction of waste coolant, brake fluid and washer fluid generation

Consumption trend per car against engineering requirement.

Material Planning & Logistics (MP&L) 34

Reduction in the generation of the packing material waste received through Nondurables items Plant Engineering 35

Bio remediation of the diesel contaminated soil

Bio remediation of around 85 MT of contaminated soil

36

Effective collection of R-22 gas (otherwise leakage to atmosphere), while maintenance of split AC's to prevent ozone depletion Reduction in electricity consumption per car production (plant wide) Reduction in water consumption per car production Reduction in the noise level to Leq 80 dB(A) at the four existing diesel generators. Meeting the drinking water standard as per the IS 14543: 2004 standard. Usage of left out food waste by turning into compost Disposal of the paints sludge as an alternate fuel

Procurement of the gas collection kit for effective usage during maintenance activity

37

38

39

40

41 42

Total Petroleum Hydrocarbon values with in the permissible value R-22 gas leak to the atmosphere prevented

Reduction in the electricity consumption from 964 kWH to 656 kWH Reduction in the water consumption from 6.6 KL to 5.0 KL Provision of acoustic enclosures for all the DG's

Electricity consumption trend per car Water consumption trend per car

Provision of the reverse osmosis treatment and other systems to meet IS standard Initiation of the vermi-compost treatment system. Disposal of around 160 MT of the paint sludge to cement manufacturing unit.

Drinking water complying with the IS 14543 standard. Availability of the compost Records and necessary permissions

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Acoustic enclosures in place

For More Details Contact Head-Corporate Communications Corporate Communication Department

FORD INDIA PRIVATE LIMITED S.P.KOIL POST CHENGALPATTU – 603 204 TAMIL NADU, INDIA E-mail : [email protected] Website : india.ford.com