STRATEGY ON STREAM

Adhering to the premise “for people to have more and better water”, we strive to generate a positive impact that will transcend our operations y and contribute to foster a more sustainable society, from a social, environmental, and economic point of view.

CONTEXT OF THE WATER ISSUE

ONSOLIDATED OUR
PARTICIPATION IN EVERY
STAGE OF THE WATER CYCLE

Now, more than ever, the ongoing increase in demand for freshwater, as well as the scarcity in water resources, present an opportunity to strengthen water management. Thus, sustainable wastewater management becomes more relevant, as this is an undervalued source of water, energy, nutrients, or other recoverable byproducts. This wastewater management also has social, environmental, and economic benefits that are essential to sustainable development.

Now, more than ever, the ongoing increase in demand for freshwater, as well as the scarcity in water resources, present an opportunity to strengthen water management. Thus, sustainable wastewater management becomes more relevant, as this is an undervalued source of water, energy, nutrients, or other recoverable byproducts. This wastewater management also has social, environmental, and economic benefits that are essential to sustainable development.

BUSINESS MODEL AND CORPORATE STRATEGY

Thanks to the integration of Sytesa and he acquisition of Sanzfield, with wastewater treatment services, we consolidated our participation in every stage of the water cycle. Thereby, we have adopted an integrated approach in our efforts to guarantee that water management and sanitation ensure the availability of this resource in the future.

In 2017, through the integration of innovative solutions and new business models, we reconfigured our offer of individual and integrated solutions.

It is in this year that we updated our 2018-2020 Strategy to reflect the profound transformation of our company. The integration of our recent acquisitions, together with our dual approach to innovation and operating efficiency, resulted in a dynamic portfolio that covers critical needs through a range of distribution channels, including e-commerce.

Distributors: points of sale devoted to marketing products for all-purpose construction, including hardware stores, plumbing, finishes, materials, retailers, and specialized sellers (Government and builders) (B2I).

Direct: marketing our solutions through Rotoplas Direct Sales (B2B/B2C)

Organized Sales: including Home Centers, self-service stores, department stores, price clubs, and convenience stores (B2l).

e-commerce: focused on selling our products and services through direct sales and Marketplaces (B2B / B2C).

Retail: Venta a bordo, including hardware, plumbing, finishes, materials, and retail stores (B2D / B2B).

Serving the various water and sanitation needs of the markets throughout the American continent, our portfolio comprises Individual Solutions for water storage, waterflow, and improvement. It also includes Integrated Solutions such as installation, operation, maintenance, and training services, based on the needs of the rural and urban areas.

We continue to strengthen our position in water treatment and recycling. Thorugh Sytesa, a company specializing in the construction, operation, and maintenance of wastewater treatment plants, we treated over 6,496,416 m3 throughout the year. At the residential level, Sanzfield specializes in the development of water treatment and recycling systems, using technologies to remove organic matter from wastewater, without generating solid waste.

In 2017, together with our collaborators, we continued to evolve in the way we do business. Our solutions integrate installation, maintenance, and training services. Some examples are the Purified Water Service and e-commerce platforms, as well as the wastewater treatment service provided by Sytesa.

In addition, this year we are expanding our contribution throughout the water cycle, generating value through economic, environmental, and social aspects. proof of this is our recognition as Greenbrand, awarded by Superbrands.

We should note our performance in sustainability, which was acknowledged with our entry into the Dow Jones Sustainability MILA Pacific Alliance1 index as one of the 12 Mexican companies included in it.

6,496,416
M3 DE AGUA TRATADOS CON SYTESA

In the context of the Company’s transformation and the integration of our recent acquisitions, the Rotoplas Way and its four pillars (Strategy, Culture, Processes, and Corporate Governance) have bolstered the way we work, playing a key role in our evolution. Thus, the Managing Committee decided to strengthen it, focusing on four main topics: our three platforms to manage projects (Optimiza, PMO, and Labs), the management of the talent cycle, the Service Model, and the Sustainability Model. For this purpose, in addition to incorporating key messages, holding quarterly informational meetings, and carrying out communication campaigns on the various strategic topics, we decided to carry out the “Rotoplas Way Month” for the second consecutive year, this time including operating personnel.

This macro-activity comprises on-site talks, and videoconferences by internal experts and Top Management, as well as various recreational activities on Strategy, Culture, Processes, and Corporate Governance issues. The overall participation averaged 85% of the collaborators, in turn 85% of whom declared that they learned and are now well acquainted with what the Rotoplas Way is.

1

Also known as the MILA sustainability index. This index belongs to the Dow Jones sustainability indices and comprises the 40 “best in class” companies in the region. The MILA comprises the stock exchanges of the countries that integrate the Pacific Alliance: Chile, Colombia, Mexico, and Peru.

6,496,416
M3 DE AGUA TRATADOS CON SYTESA

In the context of the Company’s transformation and the integration of our recent acquisitions, the Rotoplas Way and its four pillars (Strategy, Culture, Processes, and Corporate Governance) have bolstered the way we work, playing a key role in our evolution. Thus, the Managing Committee decided to strengthen it, focusing on four main topics: our three platforms to manage projects (Optimiza, PMO, and Labs), the management of the talent cycle, the Service Model, and the Sustainability Model. For this purpose, in addition to incorporating key messages, holding quarterly informational meetings, and carrying out communication campaigns on the various strategic topics, we decided to carry out the “Rotoplas Way Month” for the second consecutive year, this time including operating personnel.

This macro-activity comprises on-site talks, and videoconferences by internal experts and Top Management, as well as various recreational activities on Strategy, Culture, Processes, and Corporate Governance issues. The overall participation averaged 85% of the collaborators, in turn 85% of whom declared that they learned and are now well acquainted with what the Rotoplas Way is.

1

At Grupo Rotoplas, we define Social Responsibility as the Company’s direct and indirect effects on society and the environment, which lead to activities and programs to bolster the positive impacts and reduce the negative ones to contribute to sustainable development. Likewise, we understand sustainability as the result of executing the organizational strategy to generate and distribute economic, social, and environmental value for the company and its stakeholders.

SUSTAINABILITY MODEL AND PROGRESS ARCHIEVED

At Grupo Rotoplas, we define Social Responsibility as the Company’s direct and indirect effects on society and the environment, which lead to activities and programs to bolster the positive impacts and reduce the negative ones to contribute to sustainable development. Likewise, we understand sustainability as the result of executing the organizational strategy to generate and distribute economic, social, and environmental value for the company and its stakeholders.

Aware of the existence of a wide range of initiatives that foster sustainability, we have identified those which are aligned with our corporate strategy and mission to add to the achievement of their corresponding goals. A clear example is the United Nations 2030 Agenda and the Sustainable Development Goals (SDG), to which we contributed both directly (SDGs n° 6 and n°9) and indirectly (SDG n°3, n°4, and n°5)2.

This understanding led us to design our Sustainability Model and its four focal points. The model is conceived as a flow triggered by innovation and materializing with our team through the business models that we continue to develop, the operations that foster an ongoing improvement of our processes, and the solutions that constantly serve customers’ and user’s water and sanitation needs better.

Our great focal points enable us to prioritize our initiatives, and from them come a series of lines of action aimed at the 2020 horizon, where we have already obtained the first results. The Sustainability Committee is responsible for implementing and keeping our Model updated, as well as aligned to the corporate strategy, through monthly monitoring sessions. Headed by the Vice President of Institutional Business and co-chaired by a member of the Board of Directors, in 2017, we incorporated representatives from each of the countries where we have operations to drive the implementation of the Sustainability Model throughout the Group and focus on developing initiatives that are suited to the context of each Country. Likewise, it reports its performance on a quarterly basis to the Corporate Practices Committee, which in turn reports to the Board of Directors.

In line with the first focal point defined in our Sustainability Model, we have published a Sustainability policy and a decalogue to ensure its application and experience throughout our operations. We continue to work on formalizing a management system based on ISO 26000, which will imply constant monitoring and implementation of relevant indicators and initiatives. This system will enable us to consolidate the sustainability and value generation for our stakeholders, as well as for our own evolution.

Convinced that social responsibility is to be equally exercised by everyone at our Company, and that our daily work must focus on sustainability, in 2017, we worked on the communication and understanding of our Sustainability Model. Through a series of online courses, we sensitized our collaborators and led them to commit, adding a total of 208 participants.

With regard to the external communication of our economic, environmental, social, and corporate governance performance, we added to the preparation of our integrated annual report a sustainability website. Likewise, we are preparing a publication on our contribution to the Sustainable Development Goals (SDGs), which will be available in the first quarter of 20183

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Goal n°6: Ensure access to water and sanitation for all; Goal n° 9: Build resilient infrastructure, promote sustainable industrialization and foster innovation; Goal n°3: Ensure a healthy life and to promote well-being for all at all ages; Goal n°4: Ensure inclusive and quality education for all and promote lifelong learning; Goal n°5: Achieve gender equality and empower all women and girls.

Focal 1   

Corporate sustainability governance

Focal 2   

Collaborative innovation with porpuse

Focal 3   

Driving economic and social development

Focal 4   

Safeguarding water as a resource for the future

STAKEHOLDER ENGEMENT

At Grupo Rotoplas, we value and promote collaboration and dialogue as the guiding axes of our relations with our stakeholders. We are aware that the Company's growth and leadership in the various markets where we participate is the result of a sound network of relations and efforts with all our customers, collaborators, and suppliers, as well as with the financial community, authorities, regulators, and the community in general.

The definition of these stakeholders is the result of a process to denominate and validate key players. Their prioritization is determined based on their level of involvement and relevance to the Company’s activities and enables us to detect those issues that are relevant to them.

We are highly convinced that the interaction and participation of our stakeholders is essential to keep generating and distributing value. Likewise, in addition to our website and the release of our annual Integrated Report, we have a series of specific channels, platforms, and tools for each group, encouraging dialog and feedback with a focus on openness and on listening.