Material Issues: Economic performance, Indirect Economic impacts

The next chart shows the evolution of Profertil´s urea domestic sales, which has represented about 80% of the urea market share for agriculture. 2020 ended with a new maximum, reaching 1,191,793 tons of sales in the local market.

* Evolution of Profertil Urea sales in tons in the Argentine market. Own production.

Despite a complex and adverse scenario, we were able to adapt and fiscal year 2020 showed a net profit of $5,496 billion. This was due to a sustained growth in demand for Urea in the local market (record tonnage sold) and to the partial absorption of the peso devaluation with the use of financial hedging tools on monetary items in pesos, which were affected by the increase in the exchange rate.

In 2020, we continue to strive to continue the positive results. The effort and efficiency of each area and each person at Profertil were fundamental to achieve most of the goals and projects proposed at the beginning of the year.

In financial terms, we reduced our debt by 27%, which was generated by the large investments made in recent years. Despite the complexity of the national and global situation in 2020, we fulfilled all our financial commitments to suppliers, tax authorities, banks and financial institutions.

Below, we present the main magnitudes of economic performance through the table of Direct Economic Value Generated and Distributed (DEVG+D), proposed by the GRI Standards. The information is presented in millions of pesos and comes from the Accounting Statements of Profertil S.A. as of December 31, 2020, exposed under the International Financial Reporting Standards (IFRS) in Argentine pesos and audited, externally, by Deloitte & Co. S.R.L.

Material Issues: Practices with distributors and agricultural producers, Practices with suppliers

In addition to satisfaction surveys, we use market research at the level of agricultural producers and technical advisors, which allows us to know the changes in the behavior of our client -the end-user-, in order to analyze the trends of the market in which we operate. We also have different communication channels to facilitate dialog and conflict resolution:

• Telephone hot line 0-800-666-7763 (PROF)
• Commercial Administration Analyst
  
• Commercial management web portal for retail and wholesale customers www.profertil.com.ar, with on-line information on the status of their commercial agreements.
  
• Formal complaint management channels with Integrated Management System audits
  
• Scheduled visits to clients
  
• Twitter: @profertilAgro
• Facebook: ProfertilAgro
• YouTube: Canal Profertil Agroindustria
• Instagram: ProfertilAgro
• Web page: www.profertil.com.ar whose objective is to add value to the agricultural business through technical support on nutrition technologies available in the virtual library, along with brochures, technical notes and newsletters, among others. There, we also provide specialized information about AgTech products and diagnostic tools, such as Triguero and Maicero. We also provide technical information to the distributor, technical advisors and agricultural producers.
• Complaints and claims: always striving to provide an effective response to any contingency, when we receive a complaint, we enter it in the Complaints Management System and assign a person responsible for its primary treatment. This person makes a follow up and involves each person responsible for giving answers to the issue through concrete actions, setting the corresponding deadline for the response to the client. In this way, we ensure that complaints are resolved in a timely and comprehensive manner. During 2020 there were 24 complaints, involving a total of 881 tons over a total of 1,379,043 tons commercialized.

In 2020, Profertil began to work on an Integrated Communication Plan that integrates the areas of Human Resources (HR), Institutional Relations (IR) and Planning and Marketing.. This new Plan involves the interaction of 5 communication axes and the SDGs:

1. We contribute to the production of healthy and nutritious food to meet people’s needs.
2. We produce with the least impact on the environment.
3. We take responsibility so that the use of our products has the minimum environmental impact.
4. We invest, work and contribute positively to the community in which we are inserted.
5. We value Excellence; we are Honest, Transparent and Supportive.

From Marketing, we are committed to working hard on the first 3 axes. Aligned with
SDG 2 (Zero hunger), 12 (Responsible production and consumption) and 13 (Climate action).

Since its inception, and with an environmental and sustainable approach, we have been promoting the use of Best Management Practices (BMP) for nutrition, known as the 4 Requirements or 4R (dose, source, form and correct timing of application).
In this sense, we work together with research institutions and producers’ associations to generate knowledge and transfer the best approaches on Sustainable Crop Nutrition Strategies.
Among them, we highlight the collaborative work with INTA, Fertilizar, Maizar, CIAFA, AAPRESID, AACREA, AIANBA, Universidad Nacional del Sur (Department of Agronomy) and FAUBA. In 2020 we took part in different own and third party events in virtual form. We can mention:

*Congreso Maizar 2020
*Congreso A Todo Trigo 2020
*Congreso AAPRESID
*Congreso de la Asociación Argentina de la Ciencia del Suelo (AACS)

Through our testing network, we evaluate new products and provide the necessary tools for proper soil management and health care. Likewise, along the years, we developed different activities and programs aimed at transferring knowledge and strengthening our relationship with agronomy technical advisors and end customers (agricultural producers), which will be developed in the following sections.

CULTIVATING STRONG RELATIONSHIPS

Ratifying our commitment with the agricultural activity in Argentina and continuing with the plan of relationship with the agricultural sector, we developed different training sessions in virtual format. Through these meetings with specialists, we disseminate the Best Management Practices (BMP) for crop nutrition, as a fundamental basis for sustainable agriculture. This must have an integral approach; it must be sustainable, responsible, environmentally and socially friendly, always taking care of soil health.

VIDEO CONFERENCES CYCLE

During 2020, training sessions were held on the sustainability of agri-food production, providing scientific information for these challenges. Seven video conferences were held, which can be found on our YouTube channel:

• “La fina nos empuja a decidir”. Agr. Eng. T. Zorraquin
• “Fertilización de trigo: aliada imprescindible en tiempos difíciles”. PH.D. M. Torres Duggan
• “Tecnología agrónica para una Fertilización 4.0”. B.A. R. Martínez Peck
• “El cambio climático y el sector agropecuario:
  ¿cómo nos adaptamos y cómo podemos mitigar sus consecuencias?“. PH.D. M. Taboada.
• “Herramientas para un buen manejo del N”. Agr. Eng. G. Ferraris
• “Mitigación de GEI a través del secuestro de carbono en suelos”. Agr. Eng. G. Peralta
• “Nutrición en el cultivo de Maíz tardío”. End. M.Sc. G. Ferraris
  

APPLICATION MIT

In 2020, an application MIT was held in a virtual format. Participants were able to learn about the tools available for solid fertilizer application and new technologies that improve crop nutrition efficiency while preserving soil nutrient levels.

PROSUELOS

It involves our Distribution Network, with the objective of training and encouraging producers in the performance of correct sampling, and to promote the use of soil analysis as a diagnostic tool to determine the correct fertilizer dosage. In 2020, 2 Prosuelos virtual workshops were carried out with different distributors of the area in the Province of Bs. As. and Córdoba. The topic chosen for this training was Nutrition in Summer crops (Maize) and we were accompanied by specialists in Nutrition: F. García, N. Reussi Calvo and G. Ferraris.

DISTRIBUTORS WORKSHOPS

We accompany our distributors in their annual conferences in these activities. This year we participated in the Colón Agribusiness Day (Fertilizer Application).

PRESS RELEASES IN SPECIALIZED MAGAZINES

We understand that part of our responsibility is to disseminate and share knowledge and experience with the community. For this reason, during the year, we published 10 technical notes for specialized agricultural magazines and websites, 1 technical bulletin “Stabilized Fertilizers – EUN and Environmental Care” and we performed 5 Triguero tutorials and 3 Maicero tutorials:

To access the Bulletins, enter Profertil’s virtual library:

https://www.profertil.com.ar/index.php/sustentabilidad/agricultura-sustentable/biblioteca-virtual/

Material issues: Economic performance, Indirect economic impacts

We have a procedure for assessing suppliers that may directly affect the quality of our products and services marketed.
This is done at the time of incorporation of new suppliers, as well as in certain cases, according to the analysis of the level of criticality. After a comprehensive evaluation of the supplier, all the multidisciplinary information is consolidated and a ratio is calculated, which will determine whether the supplier is critical or non-critical, and the way in which it will be evaluated, and its periodicity will depend on this.

In this assessment, several attributes are analyzed, which allow to score the service from the profiles of the requesting area, as well as from purchasing, quality, safety, environment and energy. Some of the attributes evaluated, according to the level of criticality, are the following:

• Possible health and safety risks, derived from the type of input or service to be acquired, such as handling, storage and use
• Infrastructure and facilities
• Documentation, training and adherence to international certification standards

(*) Critical supplier performance evaluations begin in February and conclude at the end of May. The evaluation period corresponds to the service or material “past due” year. For this report, the period corresponds to 2020.
(**) Causes not applicable performance evaluation:
• By Critical Supplier biannual condition
• By user’s decision
• By lack of service 2020
• By material supplier evaluation (does not include environment)

(3)The evaluation identifies 3 items of significant importance:
• Compliance with the standard
• Impact to the site/installation/image of the Company
• Compliance with MSDS (safety data sheet)

With respect to our contractors, there are safety and environmental requirements, which are set out in the contract bases, within the Normal Purchasing Management procedure Additionally, we are in charge of developing, together with the Universidad Tecnológica Nacional (Facultad Regional Bahía Blanca), a training system (for suppliers and contractors) in environmental issues. Through it, the university provides accreditation of the knowledge acquired, which is supported by the development of consultation material prepared by our professionals.

As signatories of the United Nations Global Compact, we incorporate its principles into our contracting conditions to verify and promote that our suppliers are aligned with the protection of human rights, the eradication of child and forced labor, the elimination of discrimination and the promotion of freedom of association, as well as the protection of the environment and the prevention of corruption.

Also, we regularly evaluate and measure the business relationship with them through different mechanisms:

• Annual internal customer survey: to integrate all areas involved, in order to evaluate and improve the management of internal processes.

• External audits to partners and entities contracted by the Board of Directors: exhaustive evaluations are carried out, from which improvement actions arise.

• Internal audits of the Integrated Management System: to verify that the services provided comply with certain regulations.

• External audits of the Integrated Management System: these are carried out by quality organizations, which evaluate compliance with the Integrated Management System.