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Business Performance
Rio Tinto's adjusted earnings declined ten percent in 2003, but its stock continued to perform strongly compared to its competitors'. Borax's profitability contributes to Rio Tinto's ability to create value for its shareholders. In 2003, the company's expressed its profitability target as an index of 100. Although our performance fell two percent below that target, Borax remains fiscally healthy, and an important asset in Rio Tinto's portfolio.
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We also measure our performance through Earnings after Capital Charge (EACC). EACC measures earnings minus an interest charge for the capital we invest - in other words, we ask ourselves if we're getting a return on the money we spend to conduct business. In 2003, our performance was slightly below target. |
Employee Productivity
To evaluate how maintaining a well-trained, well-paid workforce contributes to society, Borax measures productivity per employee, or, how much product we can make for the amount of money we pay in wages and benefits. In 2003, our goal was to maintain baseline productivity levels, and we exceeded our target by two percent.
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Value Creation
Borax also measures the value it creates through new borate technologies and markets. We determine that value by measuring what our customers are willing to pay for our products and services. In 2003, we exceeded our sales target by two percent.
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We believe successful commercialization of new boric acid applications, mineral conversions and increased intensity of use will continue to drive growth in demand into the future:
- Borate wood preservatives are gaining acceptance in the United States as a substitute for heavy-metal based treatments, most of which have been banned from the marketplace. Borate preservatives are now used for 85 percent of all wood-frame homes in Hawaii. In the mainland U.S., where termites and decay cause more than $3 billion of damage every year, the number of treatment plants using borate preservatives recently doubled to meet growing demand.
- Ceramic frit manufacturers are converting from minerals to refined borates to capture product quality gains, and to address environmental concerns related to impurities in minerals.
- Borax also commercialized a new borate application in ceramic tile body manufacture. In plant trials, adding borates to tile bodies can reduce costs by 10% and CO2 emission by up to 22%.
- There has been increased intensity of borate use in thin film transistors and liquid crystal displays - the building blocks of the world's most progressive electronics - as well as textile fiberglass, particularly in Japan, Korea and Taiwan.
- World fertilizer consumption is also increasing with developing economies and growing world populations. Boron deficiency is the most widespread of all crop deficiencies; Borax agronomists have made significant inroads in China, Brazil and India to help growers replenish soils and crops.
Community Contributions
We are proud to contribute one percent of our pre-tax profits to support programs that sustain communities surrounding our operations. This chart shows cash, time and in-kind contribution levels. For more information on the programs and partnerships Borax supports, visit our library on www.borax.com.
Business Benefits
Borax's commitment to sustainable development makes us a reliable business partner, reduces our business risks and their associated costs, and streamlines efforts to introduce new technologies into the marketplace. For 2004, Borax will continue to find empirical ways to demonstrate the business benefits of its Sustainable Development program to employees and customers, and to enhance its own criteria for choosing suppliers based on social and environmental criteria, as well as economic considerations. Click here for Rio Tinto Procurement Supplier Business Practices Standards.
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