While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
PS 5 does not apply as the company acquires mill sites on established industrial parks on a willing buyer-willing seller basis, and leases established farms, where land ownership is not in dispute. PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not considered to be applicable to this proposed investment because the mills will be located within established industrial parks and sow raising on established farms. PS7 (Indigenous Peoples) is not considered applicable because the project will not affect any indigenous peoples. PS8 (Cultural Heritage) is unlikely to be applicable because the mills and sow farms are on developed sites.

This investment is classified as a Category B project in accordance with IFC’s Policy on Environment and Social Sustainability. Based on information reviewed by IFC, this investment will have limited adverse E&S impacts that are few in number, site specific, largely reversible and readily addressed through mitigation measures, as outlined in the Environmental and Social Action Plan (ESAP) attached to this ESRS.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental and Social Assessment. When establishing new mills the company targets available land within designated industrial parks. These sites have the required infrastructure (roads, power, sewer, etc.) and are ‘zoned’ for light industrial activity that permits feed mills. Available land is obtained through a leasehold agreement with the local municipality as per the typical approval process in China. This avoids difficulties and delays in trying to reach agreement with individual landholders. Anyou’s in-house design/engineering department then prepares the design for the new plant, then the company commissions a locally listed and pre-qualified consulting firm to prepare an Environmental Impact Assessment (EIA) for the facility as required by the local authority. The EIA must be approved by the city-level Environmental Protection Bureau before a construction license is provided. Summary project information is made available at the industrial park office.



Construction is carried out by qualified and experienced contractors, usually local firms. The company has three construction management priorities: (i) construction quality; (ii) on-time progress; and (iii) the safety of workers. To qualify to bid for a construction contract firms must provide evidence of appropriate OHS performance that includes: nationally recognized qualifications; a fully developed OHS management system and site supervision management capacity; provision of safety awareness and Personal Protective Equipment (PPE), and enforcement of PPE use; and completion of the work on time with the required technical specifications.



The company appoints an on-site Project Manager from it’s Department of Construction and Expansion to monitor construction and OHS performance, who is supported by Anyou’s construction management team of engineers and related professionals that oversee the contractor’s work. The company also engages a third party project supervisor to review construction quality and worker OHS and to certify construction milestones. The completed building is inspected by the local Land and Property Management Authority that is responsible for certifying that facility has been built to the required standards.



The leasing of sow farms commences with a staged review of farm facilities. The company’s Sales team conducts an initial review of facilities, followed by reviews by the company’s Environmental Protection department and Engineering department. Anyou’s minimum requirements for farm environmental protection facilities are specified in local government statutory requirements, hence the company requires farm owners to provide the local government issued "Animal epidemic prevention certificate", "Species of livestock and poultry business license" and "Environmental impact assessment approved documents and inspection reports" to prove that environmental and bio-security standards are met.



While not directly responsible for the management of private “scientific
farms”, Anyou also requires these farms to comply with local government environmental requirements. The farms must have superior pig housing (tunnel ventilation, water saving drinkers, floor heating, biogas and associated waste management measures) and must comply with Anyou’s Farm Management Handbook that contains standards for general livestock management, biosecurity and quarantine management, including a daily checklist.



Management Program, Organization and Training. Anyou has an Overarching Environmental and Social Policy that sets out the company’s commitments to: social responsibility; human rights; environment; and health and safety. Anyou has obtained ISO9001 (quality management) system certification and ISO 22000 Food Safety Certification (combination of ISO 9001 and HACCP). Anyou’s EHS management function is handled by the corporate HR Department’s Management Development Centre. The Center is one of the HR Department’s three operational areas that also include the Operation Center and the Research Institute. Each plant has a General Manager who is responsible for environmental, social and OHS management issues, and heads the plant-level OHS committee comprised of line workers and supervisors. Environmental issues are managed at each plant by the production departments. Approximately 50 staff are directly involved in environmental, social and OHS management throughout the Anyou Group (i.e., two at head office and one per plant).



The company uses the 5 ‘S’ approach to organization and management within plants; seiri, seiton, seiso, seiketsu, and shitsuke – which can be thought of as sorting, straightening, systematic cleaning, standardizing, and sustaining the workplace - to which they have added a sixth ‘S’ for safety. This approach is commensurate with the limited E&S risks observed at the inspected plants that exhibited organized and well thought-out workflow, creating a low risk working environment. Required work practices are reinforced by appropriate safety signage throughout the plant, assigned roles and responsibilities, safe working practices, emergency preparedness information and required response actions, etc.



The company provides formal induction for all new workers in a one-day session covering general instructions and guidelines, including a safety and site management module that incorporates a an examination that has to be passed before the employee can commence duties. The company also conducts regular ongoing staff training that covers: on-the-job training in the skills required for different positions; OHS; and first aid and basic medical training, with a designated first aid officer per work group. Doctors from local hospitals are invited to talk to workers and the neighbouring community on general community health issues. The company temporarily transfers experienced personnel from existing plants to new plants to assist in initiating good practices and to train newly hired personnel.



When Anyou decides
to lease a farm for sow production it prepares an Environmental Protection Improvement Plan setting out the required actions to bring the facility and related practices up to standard, as well as an engineering plan for related facility improvements, with the implementation of both plans conditions in the farm lease agreement. The agreed works are then progressively installed by Anyou and/or the farm owner, with the operation having to obtain environmental certification from local Government. A common facility upgrade is conversion to tunnel ventilation facilities to improve the pig shed environment.



Anyou manages its sow raising farms in accordance with the company’s Farm Management Handbook for pig husbandry and related farm management practices (biosafety, waste management, etc). Pig production (including biosecurity) is managed by Anyou’s Operations Management Department that employs over 260 staff. Training in pig management is provided to employees, with experienced staff moved to new sow farms to assist in establishing high quality practices.



Monitoring and Reporting. The main plant E&S risk issues are dust, noise, and the use of forklift trucks. Each of these risks has been recognised by the company and are subject to management and monitoring. Dust is an issue in stock feed plants primarily from grain unloading, cleaning, grinding and mixing. Dust is minimized by (i) dust extractors fitted to each open point in the processing line, from bagged and bulk material unloading to mixing and transfer points, and (ii) regular cleaning of the workplace. The dust level in the Taicang plant was measured at 3.09 mg/m3, well under the WBG limit of 10 mg/m3 (AMR, 2014). Noise levels are monitored and meet applicable regulatory and WBG limits. Measured workplace noise levels at Taicang City plant ranged up to 53.3-58.1 dB(A) depending upon the location, compared with the WBG allowable working environment limit for an 8 hour day of 50-65 dB(A) equivalent level (LAeq) for light industry (decreasing demand for oral communication), while areas where noise levels should not exceed 45 dB(A) (for open offices, control rooms, service counters or similar)) have been measured at 45 dB(A) (AMR, 2014).



Key Performance Indicators (KPIs) are monitored on a monthly basis which are reviewed by the plant OHS committee and reported to the corporate HR department to assess plant OHS performance. KPIs include the accidents and injuries, with the company confirmed that only minor injuries (no fatalities) have occurred on site or whilst staff have been performing off-site duties to date. Plants conduct monthly risk assessments/safety audits. The local Environmental Protection Bureau conducts periodic audits of plants against EHS issues identified in the EIA/Environmental and Social Management Plan (e.g. noise in the workplace), while local fire departments conduct routine inspections of plants.



The Company sources raw materials from reputable suppliers to ensur
e that product quality is maintained. Each mill has a supplier list based upon standardized corporate practice that is updated each year. Group Head Office handles centralized purchasing, product formulas and quality control. For example, the Taicang City mill sources the main feed ingredients from: soy meal - a local mill that has obtained the soy from overseas suppliers; fish meal - obtained from a Peruvian supplier; corn - from suppliers from agricultural areas in North East China; and blood powder - from licensed Chinese slaughterhouses. Amino acids must be sourced from pre-qualified quality suppliers according to corporate procedures. Less critical inputs are obtained from local suppliers based on price. In summary, individual plants are several steps removed from national areas and countries of primary production of commodities and rely on suppliers/traders embedded within commodity value chains for sourcing ingredients.



Every batch of raw material (e.g. grain, additives) is quality tested upon arrival at the plant before the delivery is accepted. Tests are conducted on such aspects as protein content, microorganisms, presence of heavy metals, etc depending upon the type of material. Anyou has emergency response procedures relating to worker safety, poor quality raw materials and potentially harmful feed products that include a product recall if necessary and annual reporting.

The company’s Environmental Protection department is responsible for regularly monitoring sow farm operations, including waste disposal and use and other environmental management measures.

Human Resources Policy and Terms of Employment. Anyou has a corporate HR Policy and Manual which was previously reviewed by IFC and subsequently upgraded in line with IFC’s requirements for the initial investment. The HR Policy and Manual applies across Anyou’s entire operations (head office, mills, sow raising). Non-discrimination and equal opportunity clauses were added to the Manual in 2013, as well a worker grievance mechanism that included non-employee access. Further regular updates were made to the HR Manual in 2014/2015, including improvements in employee conditions and benefits (e.g. pension benefits, scholarships to employees’ children, relief for employee families in the event of disaster), performance evaluation and awards, and training. Corporate HR management stated that Policy and Manual conditions were followed plus additional benefits were provided to employees in keeping with local custom (e.g. provision of free or subsidized meals for staff). All staff sign a labor contract with the plant where they work, governed by Anyou’s Labor Contract Management Procedure which is compliant with the national Labor Contract Law. Other key items included in the HR Manual cover other employee benefits such as dormitory accommodation (based on 2 people per room, a shared toilet, constant hot water supply, air conditioning and fan), meals, and an annual medical examination. Procedures on the handling of dismissal, retirement, resignation and leave are included.



Workers’ Organizations. The Company provided IFC with written confirmation in 2013 that staff union membership and collective bargaining are allowed, although neither have occurred to date.



Non Discrimination, Equal Opportunity and Grievance Mechanism. Anyou employees consist of 95% full-time staff and 5% part-time, with 70% men and 30% women. The HR Manual contains non-discrimination, equal opportunity and worker grievance mechanism clauses that were added in 2013. Staff hiring and compensation decisions are made in accordance with defined criteria contained in Anyou’s Salary Management System and the specific job descriptions, based on experience and competence. Anyou applies fair, equal and open practices for hiring and promotion, and staff are provided with fair/equal opportunities regarding work, training, career development and benefits.



Key worker grievance mechanism conditions include: lodging a formal Staff Grievance Form with the HR Department; initial review of the complaint by the HR Department and rapid response to this where possible, or parallel review by the HR Department and the staff member’s department to develop a response; recourse by the complainant if he/she is not satisfied with the response via an appeal; hearing of the appeal by a Staff Grievance Committee appointed by the HR Department to lead the internal discussion and investigation and provide a response within one week; and follow-up on any agreed action by the HR Department to ensure it occurred.
The grievance mechanism is also open to those working on behalf of the company but who are not employees (e.g., those involved in the construction of new plants or those transporting incoming raw materials).

Protecting the Workforce. The company complies with national labor laws regarding child and forced labor, i.e., the minimum age of staff that can be recruited is 18 years and it does not use any form of forced labor. The company does not employ contracted labor or use migrant workers. 



Occupational Health and Safety. Feed mills are purpose built by experienced construction contractors whose work is overseen by a third party building supervisor and by the company’s Project Manager from the Department of Construction and Expansion, as described above. Data on the OHS performance of each construction contractor is kept by the company, as reported on a half yearly basis during the term of the contract.



Building design and construction has to comply with national building life and fire safety requirements. The local fire control department must sign off on the plant after the completion of construction, before operation can commence. Typical fire safety, suppression and firefighting equipment include automatic sprinklers in the mill and adjoining warehouse that are set off by smoke alarms, internal fire doors in the warehouse, and extinguishers and fires hoses in all buildings. Instructions on fire safety are clearly displayed in the mill, offices and staff dormitory. Dormitory life and fire safety measures also meet national standards, with construction quality and firefighting measures certified by third party authorities. Firefighting measures in dormitories include smoke alarms, fire hoses and extinguishers. Each facility has a designated fire safety commissioner who checks fire suppression equipment each week and ensures that firefighting equipment and evacuation routes are maintained in working order, recording these checks. Maintenance companies are hired to maintain automatic sprinklers and other fire engineering equipment.



Anyou provides worker training in firefighting and emergency response measures. The Company has a Fire Emergency Plan that sets out the objectives of the Plan, describes the fire emergency team and associated responsibilities, indicates fire emergency response procedures (communications and firefighting measures), and describes fire training, drills and patrols. Every six months the local fire brigade conducts fire evacuation drills and training with Anyou’s assistance at each company plant, which are recorded by the company.



One notable fire hazard is the potential for spontaneous combustion of fish meal used as a raw material in feed production. The Company manages this risk by ensuring that this feedstock is used in the same order that it arrived in warehouses so that no fish meal goes unused for an extended period. In addition, the meal is stored separately from other materials in the warehouse.

The m
ain OHS issues associated with mill operation are dust, noise, fork lift operation, machinery operation and heavy lifting. Mill mixing and packaging operations observed at the Taicang City and Nantong plants had limited worker OHS hazards and risks primarily because most processes (raw material storage, measurement and mixing) occur in closed and fully automated systems, where bulk raw materials are contained in closed storages and conveyances from the point of unloading to the bagging of feed. An exception to this is the closed hopper system used for measuring out and adding small quantities of additives to mixes, where the base of the hopper is closed when the top is opened for filling, thus removing the potential for a worker to fall down the hopper.



The inspected Taicang City and Nantong mills were both very clean facilities, with little evidence of dust in the workplace. Dust is primarily controlled by air extractors with bag dust filters fitted to raw material unloading points and other dust generating points in the mills to minimise dust. Worker PPE includes dust masks. Other potentially higher risk plant activities were also subject to appropriate management measures (e.g. wearing of safety harnesses to prevent a fall while hand loading bags off a conveyor belt on the back of trucks) and oversight. The maintenance of energized equipment is subject to practices and procedures designed to prevent accidents from occurring (such as Lock-Out-Tag-Out). The sales team is exposed to road safety risks and thus receives driver training to minimise this risk. Anyou’s OHS procedures include safety regulations, labor protection regulations and workshop practice procedures.



The company conducts on-boarding for all new workers that includes fire safety training, consisting of a medical check for all staff at least once a year, regular skills and safety training related to the duties of the position, and production team daily toolbox meetings emphasising safety. Higher risk OHS is regularly supervised by the HR Department. The Production Department convenes daily toolbox meetings with workers to address OHS issues and regularly checks on the appropriate use of safety equipment and PPE. OHS and other workplace training is logged and records are kept of related meetings. Each mill has a Safe Working Committee that considers OHS issues and improvements. The Committee consists of the Plant Manager as the Chairman and worker representatives.



Lost time incidents recorded for the Group in 2015 totalled 16 incidents (resulting in 292 days of lost time), with a lost time injury frequency rate was 2.56 per 1 million hours worked. Incidents ranged from a hand being caught in a conveyor, heavy lifting accidents, and a trip on stairs causing a fracture. Anyou is responding to these incidents with safety training and labor protection measures.

The main environmental issues identified by the company are energy efficiency, noise and water use.



Pollution Prevention, Resource Conservation and Energy Efficiency.



Company energy use for mill operation consists of electricity from the grid to run lighting and power most plant machinery, as well as mains supplied gas to fire boilers. Plant energy efficiency measures employed by the company include: the use of new, more energy efficient machinery (mixers, boilers, etc) in new facilities; heat recycling from mill cooling and drying processes; and energy efficient lighting. The company is currently considering generating renewable energy from solar, wind and other sources, while it already produces biogas for shed heating and worker use on sow raising farms. Anyou reported that it has reduced electricity consumption per unit of feed produced by 10% over the past two years.



Anyou Group''s total electricity consumption was 24,931,000 kWh in 2015 for the production of 885,000 T of stock feed, averaging 28.2 kWh/T of feed. The company has set a group-wide energy consumption target of 23 kWh electricity per ton of feed produced which compares favourably with similar plants in other countries (e.g. the US). Some energy saving measures being retro-fitted in existing plants to reduce electricity consumption include: increasing the number of transformers; installation of reactive power compensators, energy-saving motors and variable frequency AC drives. The company’s group-wide water consumption target is 60 l water per ton of feed produced. Water saving measures include rainwater harvesting for irrigating plant and office landscaping. Forklifts use diesel but there is no fuel stored at plants, with forklifts refuelling directly at local filling stations.



Wastes and hazardous materials. Limited waste is produced by feed mills. Bagged and bulk ingredients are delivered to the plant, grain is cleaned, ground and mixed with additives, and the feed is bagged and stored, awaiting collection by or delivery to customers. The main waste stream is empty bags from incoming raw materials, delivered to feed mills in bags ranging from 20 kg up to 1 T capacity. Bags are separated and collected from the mills by local recyclers. Small volumes of dust and stones are generated from raw material cleaning which are disposed of in Municipal landfills. A small amount of raw material is deemed to be of inferior quality or too small and sold to chicken farmers.



Only a small volume of process wastewater is generated by plant processes. The small amount of steam produced is used in making feed pellets. Water from the cleaning of equipment, canteen operations and toilets is primarily discharged into the municipal sewer system via onsite pipes, with some sewage wastewater used to water on-site gardens. Wastes from the laboratory (which conducts tests on protein, energy, fat, water and phosphorous content of raw materials and products) are generated in small amounts and
diluted and/or neutralized as appropriate, then discharged into the municipal sewer system in accordance with local regulations. Hazardous materials used in the mills consist of hydraulic fluids and oils, cleaning chemicals that include mildew/mould remover, and rodent poison, all used and stored on site in small volumes.



Anyou manages sow farm waste in accordance with local government farm requirements, with waste mainly used for bio-organic fertilizer production and biogas production. Each sow farm has animal waste collection and treatment facilities and a biogas plant. Animal waste is managed by separating out fermented solids from slurry, fermenting it for seven days then hammer milling and bagging the material for use as fertilizer (mainly used by vegetable gardeners and orchardists). The remaining waste is used in a biogas plant to produce methane to heat pig sheds in winter and supply gas to workers and/or local residents for heating and cooking. Treated effluent discharged to local streams or waterbodies meets local government requirements.



Emergency Preparedness. As noted above, the inspected plants have emergency fire procedures and regularly conduct response drills. Feedback from previously conducted drills is posted for workers to review as part of the 5S (plus safety) system.

Greenhouse Gas Emissions. All electricity used is purchased from the national grid, equating to 18,513 tons of CO2 equivalent (CO2e) emissions in 2015 (based on 24,931,000 kWh consumed). Additional mill production to be supported by this project, targeted at 800,000 T/a, is estimated to consume an additional 18,400,000 kWh of electricity (based on the rate of 23 kWh/T of feed produced), thereby bringing Anyou’s estimated total annual greenhouse gas emissions from electricity consumption up to 32,176 T CO2e. Annual natural gas consumption by the Group was 720,000 m3 in 2015, which is projected to increase by around 75,000 m3 with the proposed expansion of production.



Pesticide Use and Management. Poison is used to control rodents at feed mills, but used in limited amounts within contained bait stations.

Raw materials are delivered to the mills by suppliers. Trucking of feed from the mills to customers is either (i) the buyer’s responsibility using transport that it arranges or (ii) third party transport is arranged by Anyou. The Company allows third party firms to bid on transport contracts if they demonstrate good performance, with only licensed trucks used. Statistics on contractor performance are required to be submitted and are maintained by Anyou. Daily truck transport rates into and out of plants is relatively low. For example, the Nantong plant has approximately 9-10 truck movements per day over a single eight hour shift from suppliers delivering ingredients and customers collecting product. Road access from the mill compound is directly onto a public road, with plant traffic being a minor component of the overall road traffic volume.



Most mills are only operated for a single eight hour shift per day over a five day week, although some mills are operated for a second shift (16 hours a day) to meet production demands. Occasionally the operating shift may be moved to night-time due to seasonal daytime power shortages at some locations.



Noise from the plant is reported as not creating a disturbance for neighbouring land uses or residents as plants comply with applicable regulatory limits and the mills located within industrial areas with good setbacks to the nearest sensitive receptors.



Feed has use by dates that range from 45 days for concentrate feed, up to 3-6 months for pre-mix, to ensure that product quality is maintained. After the use by date feed nutritional value and palatability may diminish. The company confirmed that no hormones are added to any of its feed products.

Security. Plant premises are secured with a perimeter security fence around the compound and manned security gates through which people and vehicle movements are regulated. Security personnel are full-time company staff that have been trained and are unarmed.

Community Engagement. Risks and impacts associated with the Company operations are limited due to the nature of the activities. Sites/plants are purposely located in designated industrial parks and are therefore not adjacent to residential communities. New projects are disclosed at the park office and the local Environmental Protection Bureau (but only in summary form that confirms the EIA application was successful) as part of the EIA process. Individual complaints, if any, from the public would be directed to the industrial park’s management team, who in turns engages with their tenants (even if land is bought, it is a leasehold arrangement in China) and local authorities. If needed, the individual plant manager would be tasked to talk directly to the Environmental Protection Bureau to resolve the issue. Corporate is kept involved but each plant General Manager is responsible for managing the issue.

Name: Ms. Zhang Xiaona
Address: No. 239 Xingang Road, Taicang City, Jiangsu Province, 215437, China
Tel: + +86 512 33006637
Fax: + +86 512 33006699
Email: mailto:mailto:sunnyzhang@anschina.cn

Broad Community Support is not applicable for this project

Anyou II(36905) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Improve OHS data collection and analysis, specifically by: enhancement of employee awareness of “near miss” incidents; analysis of collected data to define the lost time injury frequency rate and identify the root causes of these incidents; and subsequent training of employees and workplace modification (as needed) to prevent and reduce lost time accidents.	31-Dec-2016	Completed	Completed	8/9/2023