We are the Chemicals and Fertilisers division of Wesfarmers which incorporates CSBP, Australian Vinyls (AV), ModWood and Australian Gold Reagents (AGR, a 75 per cent owned joint venture we operate).

We manufacture and supply chemicals, fertilisers, polyvinyl chloride (PVC or vinyl) resins and related services to the mining, agricultural and industrial sectors. While the majority of our products are supplied to the domestic market, some of our products are also exported to the international market.

We operate a major industrial complex at Kwinana in Western Australia and have complementary facilities in regional Western Australia. Our business in Western Australia produces agricultural fertilisers, ammonia, ammonium nitrate, sodium cyanide and other industrial chemicals.

AV and ModWood are located in Victoria and manufacture and supply PVC resins and wood-plastic composite products.

We have a 50 per cent interest in Queensland Nitrates (QNP), an integrated ammonia/ammonium nitrate facility in Queensland. QNP is not included in this report because we do not operate this business.

In this report, CSBP Western Australia refers to CSBP operations in Western Australia, including AGR, and excludes our Victorian-based businesses AV and ModWood.

For more information on Chemicals and Fertilisers view their online Sustainability Report 2009.

Our focus continues to be the safe operation of our facilities in a way that minimises any adverse impact on our employees, the environment or the communities in which we operate.

We completed the $2.1 million expansion of our nutrient-stripping wetland at Kwinana and started the commissioning of a $5.3 million water recycling plant at Laverton in Victoria.

Ammonium nitrate particulate emissions from prilling plants at our Kwinana site were estimated to be 41 tonnes, a decrease of 54 per cent on last year. This decrease is due to the operation of the new prill plant, part of our new ammonium nitrate facility, which includes a state-of-the-art scrubbing system, and operation of the original prill plant for only part of the year.

In line with approval conditions for the ammonium nitrate facility expansion project, CSBP will not have a licence to operate the no.1 prill plant in its current state from October 2009.

Our total water consumption at CSBP was 3,325 megalitres, up one per cent on last year, while our net energy consumption was 8,016,174 gigajoules, down 25 per cent on last year.

In 2008/09 we had 27 reportable environmental events, an increase of five on last year. Of these 27 reportable events, nine were potential non-compliances.

As at 30 June 2009 we employed 1,028 people, including contractors and casual employees.

We remain committed to training and developing our employees to retain and maintain a skilled workforce for our operations. In 2008/09 we spent approximately $2.1 million on training and development, equating to at least 2.3 per cent of payroll costs.

The company supported nine apprenticeships and one traineeship during the year.

During 2008/09 there were six Lost Time Injuries, compared to five in 2007/08 which included AV from September 2007. Although an additional LTI was incurred this year, our Lost Time Injury Frequency Rate remained similar to the previous year due to an increase in the number of hours worked.

Safety statistics are distributed and discussed by management each month and reported to our Board every three months.

The safety targets set for 2008/09 were exceeded for both spot observations and hazard and housekeeping inspections. This increase can be attributed to regular communication and re-enforcement of target expectations throughout CSBP Western Australia.

As part of our ongoing efforts to gauge employee opinions about the culture of our company we introduced the Organisational Culture Inventory survey in September 2008. Survey results were communicated through a series of briefings and a set of six priority areas for improvement has been identified as a result.

We continued to provide information about our business to our employees and encourage feedback through our intranet, internal newsletters and employee briefings.

We completed the expansion of the nutrient-stripping wetland at Kwinana. This $2.1 million project involved the construction of two additional nutrient-stripping wetland cells, both of which hold and process approximately 2,000 cubic metres of wastewater each day. The expanded wetland will assist in further reducing the nitrogen load in wastewater discharged from the site and has increased the stormwater holding capacity for the site. The project is a finalist in the Western Australian Environment Awards 2009.

Commissioning of AV’s $5.3 million water recycling plant at Laverton started in June 2009. The water recycling plant will reuse plant effluent to reduce AV’s potable water consumption by 325 megalitres, a reduction of approximately 50 per cent. The project was part-funded by the Victorian Government, which contributed $1.8 million.

Greenhouse emissions

Our greenhouse gas emissions (as reported under the National Greenhouse and Energy Reporting Act 2007) were estimated to be 1,475,588 tonnes of carbon dioxide equivalent (CO2e) and this equates to 0.7 tonnes of CO2e per tonne of product. Greenhouse gas emissions were largely due to the Kwinana nitric acid plants (68 per cent), ammonia plant (22 per cent) and sodium cyanide plants (two per cent), and AV’s Laverton PVC plant (four per cent). In addition, Scope 3 emissions associated with our electricity, natural gas, transport fuel consumption, waste, and air travel were estimated to be 68,043 tonnes CO2e.

Energy use

Net energy consumption was estimated to be eight million gigajoules, down 25 per cent on last year. Net energy consumption per tonne of production was estimated to be four gigajoules. This energy use is represented by natural gas (96.2 per cent), electricity (3.3 per cent) and other energy (0.5 per cent).

Energy use was lower this year primarily due to reduced ammonia and sodium cyanide production at Kwinana as a result of the impact from the Varanus Island gas disruption.

Our People and Compliance team, including the AV Sustainability team, provide guidance and advice to the business on current and changing legislative and public policy requirements and support the business in complying with these.

Our PVC resin facility in Victoria has a current MHF licence and our ammonium nitrate, ammonia and sodium cyanide facilities (Western Australia) have current Dangerous Goods site licences.

We are not aware of any non-compliance during the year with licensing or approval conditions or other requirements, except as set out below.

During the year, we notified the Department of Environment and Conservation in Western Australia of 23 reportable events under the Environmental Protection Act 1986 (WA) and EPA Victoria of four reportable events under the Environment Protection Act 1970 (Vic).

Of the 27 reportable events, nine were potential non-compliances with the potential for enforcement action.

Potential non-compliances related to:

• the no.1 nitric acid plant nitrogen oxides (NOx) analyser not reading correctly during a plant start-up which resulted in a letter of warning from the DEC;
• stack test result above hydrogen fluoride limit on superphosphate manufacturing plant scrubber stack;
• maximum half-hourly NOx concentration above licence limit during a start-up of the no.2 nitric acid plant;
• discharge of wastewater to ground via two holes identified in plastic lining of the no.2 prill plant wastewater storage pond;
• continuous sample not collected from the effluent stream discharge due to pump failure;
• three instances of AV exceeding the licence limit for vinyl chloride monomer emissions, two relating to the same external power failure incident;
• AV ethyl chloroformate continuous analysers failed to test and record for up to six days.

In addition, four potential non-compliances reported in previous reports are still awaiting resolution by the regulator.

As reported last year, we have potential industry-to-industry noise non-conformances on the northern and eastern boundaries of our Kwinana site. In addition, we have potential night-time assigned level residential noise non-conformances at Medina when all plants are operating. We continue to focus on environmental noise reduction through the implementation of our Noise Management Plan.

The Department of Consumer and Employment Protection in Western Australia issued one remediation notice to CSBP relating to the storage of off-specification ammonium nitrate.

WorkSafe Western Australia issued five improvement notices to CSBP while WorkSafe Victoria issued one improvement notice to AV.

We provided support to more than 100 organisations in 2008/09, either through direct financial support or through the donation of goods. In line with our sponsorship guidelines, this support was directed towards communities in which our businesses operate.

In addition to this, we supported our employees’ participation in the HBF Activ City to Surf and the HBF Freeway Bike Hike for Asthma (both in Western Australia) and Australia’s Biggest Morning Tea for the Cancer Council.

We continued our three-year partnership at Kwinana with Youth Focus, a not-for-profit organisation which assists young people at risk of suicide or self-harm, and also continued our partnership with the Western Chances Education Foundation, which assists disadvantaged young people in the western suburbs of Melbourne.

We continued our membership and involvement with key industry bodies including the:

• Kwinana Industries Council;
• Plastics and Chemicals Industries Association Inc;
• Fertilizer Industry Federation of Australia;
• Vinyl Council of Australia;
• Australian Institute of Export;
• Australian Industry Group; and
• Committee for Economic Development of Australia.

We continued to communicate with interested parties regarding the importation of phosphate rock from the Boucraa region of Western Sahara, which is used in the manufacture of superphosphate fertiliser at our Kwinana industrial complex. In October 2009 we announced the decision to invest in technology that will enable us to broaden our phosphate rock supply options.

Our products and services are inputs into a variety of Australian industries including broadacre agriculture, iron ore and coal mining, nickel and gold extraction, and construction.

In 2008/09 our revenue was $1.2 billion.

In 2008/09, AGR spent more than $9 million on the $15 million upgrade of its Kwinana sodium cyanide production facility. The upgrade will increase production to supply the new Boddington gold mine in Western Australia.

For further details on our sustainability performance, please visit www.csbp.com.au