Esteemed Stakeholders,                                                                                                                                                                                Dear Friends of Sütaş,

As our world faces threats such as global warming, rapid depletion of natural resources, pollution, food security and famine, it is high time that each of us, including governments, companies, non-governmental organizations and individuals, should act to "leave a habitable planet for next generations”.

Fortunately, during recent years, we witnessed important developments worldwide to which Turkey actively contributed in terms of sustainability. Action plans put in place by global giants as well as many national and international companies give us hope that we will see progress in the short, medium and long term. 22 countries, including Turkey, presented their Voluntary National Reviews demonstrating the progress made towards the 2030 Sustainable Development Goals at the 2016 UN High-level Political Forum on Sustainable Development. The United Nations reiterates its goals of “end hunger, achieve food security and improved nutrition, promote sustainable agriculture and ensure healthy lives and promote a sustainable future for all at all ages” at the annual Sustainable Development Conferences. The importance of acting together was emphasized during the 2016 and 2017 G20 Summits. These goals represent the basic steps in achieving a better and sustainable future for each of us.

We are extremely pleased to see that our approach to sustainability overlaps perfectly with the national and international efforts in terms of sustainability. Based on our mission of "spreading the goodness and abundance of milk", we feel responsible for protecting natural resources, operate in line with our social responsibilities and aim to achieve economic development. Thanks to our integrated business model "From Farm to Table", we can foresee the risks along the milk value chain and create solutions.

We shared our first Sustainability Report with you in 2015. In the first report, we set certain difficult-to-achieve goals for 2020 at social, economic, environmental and corporate levels.

In this year's report, by taking one step further, we did not only updated our goals for 2020, but also checked them for consistency with the 17 Global Sustainable Development Goals that form the baseline for sustainable development and were adopted by the United Nations in 2015.

As per our goals for 2020, our employees at every level have redefined all business processes under their control by reviewing them from the perspective of sustainability. Thus, we have put exemplary and leading practices in place at every step that we take in all decision making and production processes, including the use of water and electricity, satisfaction of our employees, improvement of our stakeholders, practices aimed at increasing productivity and reducing the impact of our footprint. These goals will naturally serve as a guide for us in the years to come.

I am honored to share the progress that we have made on sustainability in the last two years.

The Tire integrated facilities, that we established by investing 80 million USD and equipped with environment-friendly technologies, began their operations in 2016. We also take pride in the fact that the facilities utilize natural resources more efficiently, offer high energy efficiency and use production equipment developed by our engineers and our native stakeholders. In the same year, in Aksaray we established the largest agricultural biogas power plant in Turkey in line with our "Zero Waste" goal.

Thanks to these investments that we made in 2016, we achieved progress on many goals, including reducing greenhouse gas emissions and recycling the wastes, generating all the power that we need, including those needed as office use and for logistics, from biogas plants.. In 2017 our biogas facilities met 89% energy demand of production facilities, 66% of overall group energy demand and thus achieved greenhouse gas emission reduction equivalent to the figure that 6 million trees could suck.

We increased the efficiency of the logistics operations and reduced their environmental footprint by making further improvements in all of our logistics operations in 2016 and 2017.

In spite of an increase in our marketing volume, we saved 12,4 million kilometers.

Consumers expect more from us every day. They would like to have clear and transparent product labeling. They do not only prefer the brands who meet their requirements but also those who invest in personal and social values. We shape our products, our organizational structure, our business conduct and communication approach in line with these expectations.

In 2016, we established the first R&D center of the dairy industry in Karacabey facilities to support innovative product development and practices. More than 40 experts, employed in this center, work to create new products and processes, develop new production techniques, improve existing production techniques and increase the productivity of our entire operation, focusing on dairy production.

We generate electricity and thermalenergy, and make organic fertilizers by processing the manure from our farms and the organic waste from our plants. In 2017, we began producing organomineral fertilizers in addition to organic fertilizers to contribute to the sustainability of agricultural production capability of agricultural lands.

We always acknowledge the importance of partnerships in achieving the sustainability goals. In 2017, we also began studying the use of organomineral fertilizers in agricultural fields and potential areas of application in cooperation with the TEMA Foundation. As the first step of this process, we held a workshop to demonstrate the views of academics on organomineral fertilizers and compile the studies done in this subject area. We shared the papers presented during the workshop with the general public by collecting them in a book.

With the training programs towards the milk producers launched in 1996 under public-industry-university partnerships to contribute to the development of dairy husbandry, the number of trained dairy producers increased to 18.736, helping us come even closer to our 2020 target in that respect.

While our training programs, along with feed and fertilizer production, help dairy farmers to produce high quality milk, we also achieved significant progress towards our goal of increasing the productivity of farms.

We strive to spread the goodness and abundance of milk and will continue to do so by maintaining our strong corporation structure in order to achieve our goal of creating a prosperous society with happy individuals and a healthy environment.

I would like to thank all our stakeholders, in particular our employees, who share their love of milk, our values and goals and pronounce “So Natural to Care About” with us .

Kind regards,                                                                                                                                                                                 

Muharrem YILMAZ                                                                                                                                                                                        Chairman of the Board