Enablers

Commercial GRI 102-6

As one of the enablers of Nexa’s strategy, the Commercial area is focused on being increasingly marketoriented and developing a global presence. Faced with a scenario of an international price downturn and political and economic instability in Latin America, this positioning proved to be correct.

In line with our goal of continuously strengthening our homemarket shares (Brazil and Latin American countries), we have expanded our participation in global markets through our commercial offices in Luxembourg and Houston. We have bolstered our presence in Europe, raising sales by 20% in the region, and also in Africa, with a 14% increase over the past year.

We also focused our efforts on better understanding the Asian market, which accounts for two-thirds of the world’s zinc consumption. Our sales grew by 8% in the region and we conducted our first transactions with Vietnam and Russia, surpassing volume expectations.

We are working toward the global consolidation of the Nexa brand, participating in the segment’s main national and international events as exhibitors and/or presenting market and technical lectures about our products and applications. We were present for the first time as exhibitors at one of the most important galvanization events in the segment and the main one for the zinc market, Intergalva 2018, held in Berlin. We also participated in an event of equivalent importance in Latin America: Latingalva Peru 2018.

Market differentiation

In recent years, our business strategy has focused on direct interaction with end customers, strengthening the presence of the Nexa brand, deepening our knowledge of the global zinc market and, above all, adding value to our sales. We seek to differentiate ourselves from competitors by offering a portfolio of products that goes beyond 25-kilo slabs (the standard for the commodity priced at the LME) and adding services that develop and retain the market.

To this end, throughout 2018, we focused on the standardization of the jumbos produced in all our units, guaranteeing the quality of the product and, with the greater flexibility between plants, reducing service deadlines. We have also developed the T-Jumbo to meet the demand of a large customer in South Africa, also opening up the market for attracting new customers in Europe.

Aligned with the strategy of meeting the specific needs of customers, we have expanded our production of customized alloys. As an example, we produce a zinc-aluminum-magnesium alloy, already widely used in the European market, now also used in Brazil for the production of galvanized wire. In addition, we approved a project for pelletized zinc oxide in Três Marias, a format that confers greater fluidity to the product, optimizing our clients’ production.

To ensure improved proximity and exchanges with the market, we organize workshops and technical and market lectures to disseminate good zinc process practices and innovative applications, highlighting the enormous potential that exists for developing new demands. In addition, every two years we conduct customer satisfaction surveys. The latter, applied in 2017, achieved higher satisfaction results than in 2015. Nevertheless, in 2018 we put into practice a plan containing 29 actions to address the issues that emerged in the previous survey, reinforcing our commitment to continuous improvement of our services.

Logistics

We seek to offer customers distinctive and customized services, quickly responding to mitigate impacts in moments when there are service disruptions. One such example was during the truck drivers’ strike in Brazil in May 2018. We were able to speedily review the delivery alternatives in order to eliminate or minimize flow interruptions that affected the logistics to much of the industry.

We increasingly are investing in multimodal operations, seeking to improve the delivery reliability rate and service flexibility. In order to guarantee greater logistical control, we are evaluating insourcing the fleet for some operations, including at Aripuanã, a project that is in the execution phase in 2019.

In 2018, designed to integrate, simplify and streamline our processes, in addition to guaranteeing better safety and cost reductions, we set into motion a plan to complete the implementation of new Transport Management System (TMS) tools for all logistics operations in 2019, from raw materials through to the delivery of the products to customers. In addition, we started the process of certification as an Authorized Economic Operator (AEO) for Brazil, a certificate Cajamarquilla unit has had since 2015. In 2019, we will begin studies to extend the AEO to the other Peruvian units.

And demonstrating our commitment to safety, we recorded a reduction of 50% in accidents in the logistics area, resulting in a 59% lower internal lost time accident frequency rate. SDG 3.6

Reduction of
50%
in accidents in the logistics area.

Sustainability

All our activities follow strict sustainability guidelines as expressed in our Sustainability Master Plan, prepared in 2018 as a result of the review and validation of the material topics that make up our strategic plan. We want to be a sustainability benchmark, co-creating a significant legacy to society based on a constructive relationship with our stakeholders.

During 2018, we strengthened the guidelines and initiatives that will govern the development of good sustainability practices throughout the company in the coming years, based on the material topics to be addressed, with goals and deadlines: Water, Waste, Emissions and Energy, Local Development, People (Diversity), Safety and Health, Human Rights (suppliers) and Decommissioning. The material themes are monitored over the course of the year, with the initiatives and results that have been introduced or met reported annually in this document.

For the seventh consecutive year, our Nexa Resources Peru and Nexa Resources Cajamarquilla units received the “Socially Responsible company” seal of approval in recognition of our organizational policies and practices. The prize is awarded by the Peru 2021 organization and the Mexican Center for Philanthropy (Cemefi). The 2018 assessment was based on three key areas: Organizational Culture, Environmental Development and Risk and Impact Management. The award seeks to strengthen the importance of corporate social responsibility in the culture of organizations.

Sustainability Principles

1 To be recognized by society as a socially and environmentally responsible company.

2 To have sustainability as a strategy, guiding governance, management, education, decisions and investments – creating value.

3 To consistently deliver good economic, social and environmental results, seeking operational efficiency and reliability according to world-class standards.

4 To be recognized as a company that attracts, develops and retains talent to create value and build a just and inclusive society.

5 Commitment to the well-being, health and safety of our employees, clients and partners.

6 Contribute to the development of the communities in which we operate.

7 Encourage cooperation and participation of all employees and stakeholders in the construction of partnerships and joint efforts, aiming to generate mutual value.

research and development
investments totaled

US$ 9.million

External initiatives GRI 102-12
Our commitment to sustainable development is also expressed in our voluntary adherence to a number of initiatives undertaken with national and international entities. Among them are:

Global Compact – Since 2017, we have been a signatory of this United Nations Initiative, which aims to mobilize the business community around the world to adopt ten principles that represent fundamental values of human rights, labor relations, the environment and the fight against corruption.

Sustainable Development Goals – Also in 2017, we signed a commitment to the Sustainable Development Goals (SDGs), a global agenda comprising 17 goals and 169 targets to be met by 2030, adopted during the United Nations Summit on Sustainable Development in September 2015. The agenda includes measures to eradicate poverty, food security, agriculture, health, education, gender equality, reduction in equalities, energy, water and sanitation, sustainable production and consumption patterns, climate change, sustainable cities, protection and sustainable use of oceans and terrestrial ecosystems, including economic growth, infrastructure and industrialization, among others. This report indicates the relationship between the SDGs with our material topics and long-term goals.