Muntons presentation to BC Forum 5th September 2013

Sarah Phillips – Head of Procurement

The factsA brief history of Muntons plc

1921Muntons was incorporated as a company

1948Moved to Stowmarket

1964Expanded to Bridlington

2007Singaporeoffice opened

2010Office opened in Bangkok

2009US companyformed based in Seattle

What we do

20We are in the world’s top 20 manufacturersof malt

180,000At Bridlington and Stowmarket we make around 180,000 tonnes of malt

Enough for 2340 million pints of beer!

45,000We produce around 45,000 tonnes of malted ingredients, the largest in Europe and arguably the world.

Local Supply – Global Customers

66 Agents and Distributors globally supplying 62 countries

Greenest maltster in the world – lowest carbon malt commitment

Delivering to customers from 1kg packs to 29 tonne bulk

Product range and industry scope

Diversification of product and customer into sustainable growth areas through innovation

Malt Malted Ingredients

Central Services Division

Focused on brewing and distilling markets

Focused on diverse markets • Food • Bakery • Beverages• Confectionary • Pharmaceuticals • Micro Brewery • Home beer and wine

• Financial services • Information systems support • Compliance management • Human resources.

Investing in our people

Investment in quality staff

Investment in training

Investment in relationships with customers and suppliers

Investing in Our People

Corporate Social Responsibilityinvolve all stakeholders

Community • Customer • Services • Employees

• Principle enshrined in law

• It is not old fashioned philanthropy/donations to good causes

• It is the contribution of business to the Government’s sustainable development goals

• Currently voluntary, taking into account economic social and environmental impacts of companies’ operations – over and above compliance

• Year round responsibility

• Something we have done for a while – but not formalized

• Involvement to continue in key areas:- Environment- Education- Employees - Local community.

We like to do business the right way

Striving to constantly improve standards of quality in all we do, showing consideration for our environment and respecting business relationships with both customers and suppliers

ISO 9001:2008 ISO 14001:2004 ISO 22000:2005 ISO50001:2011 BRC Quality Environment Food Safety Energy Global StandardManagement System Management System Management System Management System Food ver 5

American Institute All cereal raw materials All products assured Muntons Malt are Organic Certification of Baking sourced from GM free “Assured UK Malt” (Stowmarket site)(Milled products) accredited farms Suppliers

X

Muntons: Building a Sustainable Future

SustainabilityThis is the common objective that links all aspects of Muntons business activities. An

ongoing process that will ensure our goods are supplied in an economical, environmental and

socially responsible way, now and into the future.

Where has Sustainability taken us?

Involvement in government and supply chain advisory groups

Identification of carbon hotspots driven capital programme: energy, recycling

5 years ago first carbon footprint calculation: now 5th iteration

8 years ago working with consortium on water recycling

Wider supply chain involvement downstream

Focus on practical solutions that have environmental and financial benefit

Muntons are helping farmers save money and reduce the supply chain carbon footprint

Factors driving supply chain complexity

InnovationVolatility

Risk

Technology

Increasingly complex & changing markets

Stakeholder demands

Position in Supply Chain

Customers Manufacturers

AgentsConsumers

Retailers Distributors

MuntonsManufacture

r & Wholesaler

Farmers & Merchants

Supply chain challenges

Lead time gap

Muntons

Time horizon

Lead Time Gap

Customer Accepted Lead Time

Construction and Engineering

Automotive Europe

Order Penetration point

Automotive USA and Retail

Source Make Deliver

building our business the right way

Development of Procurement & Supply Chain ManagementDedicated Grain Supply Chain Team.

Centralised Non-Grain Procurement Team.

Supplier relationships, working closely with farmers and merchants

Long term supply agreements to secure supply and manage price volatility

Collaboration with customers through long term supply agreements backing off risk

Educating customers on barley risk

Managing barley risk

“Friends in Rotation”

Agrarfrost, Agroterra, Aviko, Barilla , CIO Parma, CocaCola, Danone, Farm Frites, Fonterra, General Mills, Heineken, Kraft, Kellogg, Lamb Weston Meijer, McCain, McDonald's, Nestlé, Pepsico, Unilever

Supply Chain Collaboration

1 or 2 suppliers per mode of transport, transactional relationships primarily driven by cost and turnover

Low level understanding of each others’ businesses and supply chains

Reduce transport costs, “missed tricks” and untapped potential benefit from economies of scale

Internal inefficiencies driving up costs

Logistics is CORE

Our chosen strategy is LLP

To reduce operating costs (e.g. Transport)

Remove non-value added activities, share benefits of

improvements

Improve customer service performance

1300 live vendors, focus on critical and high value ones, longer term supply agreements

700 direct materials purchased from over 100 vendors going into approximately 750 finished product lines sold to nearly 600 customers globally

Stringent supplier approval process (quality, food safety, sustainability, ethical, CSR , capability, business continuity plans/management system) – visits, audits)SEDEX membership

Continual assessment of supplier performance, complaints & corrective actions (quality systems), feedback to suppliers and exchange of information

Supplier management

Overriding objectives

Develop sustainable supply chains which our customers want to lock into

Develop strategic supplier partnerships which we want to lock into

Act as a catalyst for supply chain discussions across many diverse industries