Hanesbrands Environmental Stewardship

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					USAID-CCAD CAFTA DR
ENERGY CONFERNCE
San Salvador
March 16-18, 2011

Energy Management
at Hanesbrands Inc.

                    Thursday, March 17, 2010
       Achieving Energy Efficiency Through Superior Energy
                          Management



                          Kurt Schwalbe, PE
       Director of Facilities Engineering and Energy Demand
                           Hanesbrands Inc.



                  Energy Management at Hanesbrands            03/17/2011
About Hanesbrands
•   Hanesbrands Inc. is a world-class consumer goods
    company with more than a century of history and a
    portfolio of leading apparel essentials brands including
    Hanes, Champion, Playtex, Bali, L’eggs, Just My Size,
    Barely There and Wonderbra.

•   Hanesbrands Inc. (NYSE:HBI) began operating as a
    separate, independent, publicly traded company on
    Sept. 5, 2006, and regular trading in its common stock
    on the New York Stock Exchange began Sept. 6, 2006.

•   Our brands can be found in eight out of 10 American
    households, and they are sold in hundreds of stores,
    plus internet and catalog sales.

•   More than 50,000 employees

•   Headquarters: Winston-Salem, N.C., U.S.

•   More than 300 facilities, outlet stores and offices in
    more than 25 countries

•   Publicly traded on the New York Stock Exchange as
    “HBI”

•   Net sales $4.3 billion in 2010

•   No. 532 On Fortune 1,000 list of companies

•   To learn more log onto: www.hanesbrands.com


                                 Energy Management at Hanesbrands   03/17/2011
Energy Management Starts with A Commitment
                           “HbI will effectively manage it’s global operations to
                           minimize energy consumption, reduce operating costs,
                           and continually reduce emissions to the environment.”
                                                                 Rich Noll, CEO


                                                       •Senior leadership
                                                       support
                                                       •Demonstrates HBI’s
                                                       commitment to Energy
                                                       Management
                                                       •The foundation for
                                                       setting the course
                                                       •Defines Roles and
                                                       Responsibilities
                                                       •Step 1 in ENERGY STAR
                                                       Guidelines for Energy
                                                       Management




              Energy Management at Hanesbrands                 03/17/2011      3
What So Different?
Historical Approach
•   Energy tracked but primarily managed through implementation of new technology project
     • Limited conservation focus
     • Limited employee involvement (gains achieved through projects)
•   Fragmented Scope without Strategic Focus
     • Each plant focused on cost reductions without consideration of GHG emissions or renewable energy
       options
     • Limited use or sharing of Best Management Practices

Current Approach
•   A corporate strategy to manage energy and GHG emissions
     • Plants are encouraged to understand variances and to react
     • Kaizen Events target waste and helps to develop an Energy Management Culture
•   Energy Management Strategy is Consistent
     • Plant reduction targets are aligned with corporate goals
     • Energy management approach is the same at all location
     • Application of new technology coupled with ongoing energy conservation efforts results in
        sustainable gains
•   US EPA ENERGY STAR
     • Proven Continual Improvement Process
     • Best Management Practice resources
     • Energy Management tool – Self Assessment Metrics, Guidelines to Energy Management, Portfolio
        Manager,
     • ENERGY STAR PARTNER Network
            – Benchmarking Opportunities
            – Technical Resources




                                 Energy Management at Hanesbrands                     03/17/2011
  Strategic Deployment – A Global Commitment
Align Strategies- Strategic Deployment
     • Establish Corporate Policy – Adopted US EPA
       ENERGY STAR continual Improvement Process
     • Set Goals and Strategy to Achieve Goals – Mother
       A3

•Plant A3’s – Aligned with Corporate A3
     • Establish Site Specific Strategy to achieve
       Corporate Goals
     • Commitment to Conduct Specific Kaizen Events –
       GAP Analysis
     • Site Projects
     • Monthly Tracking

•Kaizen A3’s – Maintain the Gain
     • GAP Analysis
     • Action Plans
     • Implement Plan
     • Track Results

• Established Goals (over 4 year LRP)
      • Reduce energy consumption by 20%
      • Increase renewable energy portfolio to 30%
      • Reduce carbon emission intensity by 15%
      • Reduce water use intensity by 15%




                                   Energy Management at Hanesbrands   03/17/2011   5
                       Global Social Responsibilities




Facility Compliance                       Product         Global Business
                                           Safety            Practices
     Fair Labor
    Association
    Joined 2/2008
   Undergoing 2 year
     accreditation




                       Energy Management at Hanesbrands          03/17/2011   6
Energy Organization
                                                Executive CSR Steering
                                                     Committee

                                                     Tactical Energy
                                                          Team

                                            Director of Engineering/Energy
                                                Corporate Energy Mgr




   Central America                                             Commercial
                     Caribbean Basin      US Mfg & Dist.                           China            SE Asia
    Cluster Leader                                           (DTC & Offices)
                      Cluster Leader      Cluster Leader                       Cluster Leader    Cluster Leader
                                                              Cluster Leader
    Jorge Madero     Francisco Razo       Phillip Henson                          Mike Ma       Jakkrit Phongsri
                                                              Brett Andrews




   Next Steps:
        • Empower Cluster Leaders
        • Energy Website – post A3, energy matrix, program KPIs, & BMPs
        • Energy Management Monthly News Letter & Continue Common
        Thread Articles




                                       Energy Management at Hanesbrands                            03/17/2011
  Tools of Energy Management
                                                                                       ENERGY STAR Self
                                                                                       Assessment Matrix

                                                                                       ENERGY STAR® Energy Management Assessment Matrix

                                                    Hanesbrands - Corporate Worlwide
                                                                                             Little or no evidence (1 Point)           Some elements (2 points)                   Fully implemented (3 points)                          Next Steps
                                                      10/08/2009    score: 100%
                                                 Make Commitment to Continuous Improvement
                                                                                                                                                                                                                          Corporate Policy in place outlining roles
                                                                                        No central or organizational resource   Central or organizational resource not      Empowered central or organizational
                                                 Energy Director                                                                                                                                                              and responsibilities; continue
                                                                                        Decentralized management                empowered                                   leader with senior management support
                                                                                                                                                                                                                          leadership to operational management
                                                                                                                                                                            Active cross-functional team guiding           Regular scheduled meetings, sharing
                                                 Energy Team                            No company energy network               Informal organization
                                                                                                                                                                            energy program                                            best practices
                                                                                                                                Referenced in environmental or other        Formal stand-alone EE policy endorsed          Energy Policy signed by CEO and his
                                                 Energy Policy                          No formal policy
                                                                                                                                policies                                    by senior mgmt.                                            direct reports
                                                 Assess Performance and Opportunities
                                                                                                                                                                                                                           Each facility required to submit data;
                                                                                                                                Local or partial                            All facilities report for central               migration from excel spreadsheet to
                                                 Gather and Track Data                  Little metering/no tracking
                                                                                                                                metering/tracking/reporting                 consolidation/analysis                          Access Database, opportunities for
                                                                                                                                                                                                                                  improved data collection
                                                                                                                                                                                                                          BTU/mfg unit; Some mfg normalizing -
                                                                                                                                Some unit measures or weather               All meaningful adjustments for
                                                 Normalize                              Not addressed                                                                                                                       Yarn data normalized for count, KPI
                                                                                                                                adjustments                                 organizational analysis
                                                                                                                                                                                                                               identified with good correlation
                                                                                                                                                                            Standardized organizational base year          Understanding of historical spending
                                                 Establish baselines                    No baselines                            Various facility-established
                                                                                                                                                                            and metric established                          and usage - CY2007 HBI's 1st year
                                                                                                                                                                                                                              Internal and External - ATMES
                                                                                                                                                                                                                                (American Textile Managerial
                                                                                        Not addressed or only same site         Some internal comparisons among             Regular internal & external comparisons         Engineers Society), Parkdale Mills,
                                                 Benchmark
                                                                                        historical comparisons                  company sites                               & analyses                                    Frontier Yarns, Kimberly-Clark; Industry
                                                                                                                                                                                                                           Energy Performance Indicators (EPI)
                                                                                                                                                                                                                                           needed
                                                                                                                                                                                                                          Some plants analyze and manage peak
                                                                                                                                Some attempt to identify and correct        Profiles identifying trends, peaks, valleys
                                                 Analyze                                Not addressed                                                                                                                          loads; Utility data analysis tools,
                                                                                                                                spikes                                      & causes
                                                                                                                                                                                                                           internal metering, procedural changes

                                                                                                                                                                                                                          Energy Management Program Rollout
                                                                                                                                                                                                                            and resulting A3 & Kaizan Events;
                                                                                                                                                                            Reviews by multi-functional team of
                                                 Technical assessments and audits       Not conducted                           Internal facility reviews                                                                       Informal Walkthrough's by
                                                                                                                                                                            professionals
                                                                                                                                                                                                                          intercompany experts, some facilities
                                                                                                                                                                                                                            formal third party audits in the past

                                                 Set Performance Goals
                                                                                                                                                                                                                          Corporate Energy Management Policy
                                                                                                                                Short term facility goals or nominal        Short & long term facility and corporate      and goal applicable to all locations 5%
                                                 Determine scope                        No quantifiable goals
                                                                                                                                corporate goals                             goals                                         reduction/year x 4 years=20%-adopted
                                                                                                                                                                                                                                       by each site
                                                                                                                                Specific projects based on limited          Facility & organization defined based on      Associate and Engineering knowledge
                                                 Estimate potential for improvement     No process in place
                                                                                                                                vendor projections                          experience                                    of the process and business operations
                                                                                                                                                                                                                          Corporate Energy Management Policy
                                                                                                                                                                            Specific & quantifiable at various            and goal applicable to all locations 5%
                                                 Establish goals                        Not addressed                           Loosely defined or sporadically applied
                                                                                                                                                                            organizational levels                         reduction/year x 4 years=20%-adopted
                                                                                                                                                                                                                                       by each site
                                                 Create Action Plan
                                                                                                                                Facility-level consideration as             Detailed multi-level targets with timelines    A3 Strategy to guide actions; Kaizan
                                                 Define technical steps and targets     Not addressed
                                                                                                                                opportunities occur                         to close gaps                                                 Events
                                                                                                                                                                                                                              Projects are submitted by the
                                                                                                                                Informal interested person competes for Internal/external roles defined & funding         manufacturing locations, allocation and
                                                 Determine roles and resources          Not addressed or done on ad hoc basis
                                                                                                                                funding                                 identified                                        of money at the corporate level; Tough
                                                                                                                                                                                                                                     Economic times
                                                 Implement Action Plan
                                                                                                                                                                                                                            Plan & org. developed, continuous
                                                                                                                                                                                                                          effort in implementing plan - Roll-out,
                                                                                                                                                                                                                           Energy Steering Committee, Energy
                                                                                                                                Tools targeted for some groups used         All stakeholders are addressed on              Tactical Teams, Plant level Energy
                                                 Create a communication plan            Not addressed
                                                                                                                                occasionally                                regular basis                                 Management Teams, Data Base; Web
                                                                                                                                                                                                                          site with Best Management Practices
                                                                                                                                                                                                                               and Cost Savings needs to be
                                                                                                                                                                                                                                          developed
                                                                                                                                                                                                                          Energy Management Presentations to
                                                                                                                                                                                                                            all levels of the organization - from
                                                                                                                                                                            All levels of organization support energy
                                                 Raise awareness                        No promotion of energy efficiency       Periodic references to energy initiatives                                                 executive and senior management all
                                                                                                                                                                            goals
                                                                                                                                                                                                                                 the way to hourly associate
                                                                                                                                                                                                                              presentations at the plant level
                                                                                                                                                                                                                          Training through LEAN principles; A3's
                                                                                                                                                                            Broad training/certification in technology     kaizen Events, Continuous Education,
                                                 Build capacity                         Indirect training only                  Some training for key individuals
                                                                                                                                                                            & best practices                              benchmarking, networking, and sharing
                                                                                                                                                                                                                              of best practices is encouraged.
                                                                                        No or occasional contact with energy    Threats for non-performance or periodic Recognition, financial & performance                Performance called out and verbally
                                                 Motivate
                                                                                        users and staff                         reminders                               incentives                                                       recognized
                                                                                                                                                                                                                          Monthly Review of A3 and other Energy
                                                                                                                                                                            Regular reviews & updates of                       Management Key performance




Energy A3
                                                 Track and monitor                      No system for monitoring progress       Annual reviews by facilities
                                                                                                                                                                            centralized system                            Indicators in Monthly Operations Report
                                                                                                                                                                                                                                          Meetings
                                                 Evaluate Progress
                                                                                                                                                                            Compare usage & costs vs. goals,
                                                 Measure results                        No reviews                              Historical comparisons                                                                             Monthly Review of A3
                                                                                                                                                                            plans, competitors
                                                                                                                                                                            Revise plan based on results, feedback
                                                 Review action plan                     No reviews                              Informal check on progress                                                                         Monthly Review of A3
                                                                                                                                                                            & business factors
                                                 Recognize Achievements
                                                                                                                                                                                                                          Plans for internal publications and Web
                                                                                                                                                                                                                          site; functional area recognition during
                                                                                                                                                                            Acknowledge contributions of
                                                 Provide internal recognition           Not addressed                           Identify successful projects                                                              Monthly Operational Review Meetings;
                                                                                                                                                                            individuals, teams, facilities
                                                                                                                                                                                                                              Sharing of and Cascading Best
                                                                                                                                                                                                                          practices across the entire organization

                                                                                                                                                                                                                          US EPA Energy Star Publication "How
                                                                                                                                                                                                                          to Promote Your Organization’s Green
                                                                                                                                                                            Government/third party highlighting              Practices with ENERGY STAR";
                                                 Get external recognition               Not sought                              Incidental or vendor acknowledgement
                                                                                                                                                                            achievements                                   Energy Star Partner and participation;
                                                                                                                                                                                                                          ATMES (American Textile Managerial
                                                                                                                                                                                                                                    Engineers Scoiety)




                                                 Go to Next Steps




              Energy Management at Hanesbrands                                                                                    03/17/2011
Tracking Energy Usage Metrics




              Energy Management at Hanesbrands   03/17/2011
Kaizen Events – Developing an Energy Management Culture




                 Energy Management at Hanesbrands   03/17/2011   10
Energy Management A Part of Our Culture

  Energy organization, a team approach
                                                           World Energy Engineering Congress

  Kaizen events identify waste                            WEEC 2010

                                                           Developing an Energy Culture
                                                           at Hanesbrands Inc.




  Corrective action tracked monthly                                        Wednesday, December 8, 2010
                                                                 Session M1: Engaging Everyone in Energy Management




   with A3’s                                                                         Kurt Schwalbe, PE
                                                                  Director of Facilities Engineering and Energy Demand
                                                                                      Hanesbrands Inc.




                                                                             ENERGY STAR – Steel Industry Focus          1




  Employee involvement promotes learning,
   team work and sensitivity to energy use

  Recognition of accomplishments and sharing
   of BMPs promotes continual improvement

  Permeates through the supply chain,
   growing to includes key suppliers


                                                         ENERGY CONSERVATION PROGRAM HBI HONDURAS 2010




                      Energy Management at Hanesbrands                       03/17/2011                                      11
          Internal Communications




           Common
           Thread
           Internal
           Publication




        Energy
        Star                       HbI Zone
        banners                    Intranet Site


Energy Management at Hanesbrands          03/17/2011
 Importance of Recognition
 2010 President’s Energy Efficiency Awards
                       Administrative   Energy Improvement Renewable Energy     Water Conservation
                        (20 Points)       (Up to 40 points) (up to 20 points)    (up to 20 points)
                                                                                                              Eligible Award
                                                 Energy                                    Water                   Level
                       Energy Program % Energy Reduction                                 Reduction            silver = 50 - 64
                        Administration Intensity Points      Renewable Energy % Water     Points     Total     Gold = 65 - 79
Facility Name          Points Awarded Reduction Awarded       Points Awarded Reduction   Awarded     score   Platinum= 80-100                          Comments

US Facilities
                                                                                                                                 Good Support of program, kaizen events, 22% Natural
                                                                                                                                 Gas and 13% Water Reductions; 30% GHG Emission
Clarksville                  19.4        -3.5%       20             20          -13.1%       15       74.4         Gold          Reductions

                                                                                                                                 Over 10% Energy Intensity Reduction ($800K/year); 40%
Mount Airy                   10.6       -14.3%       40             0           -42.7%       20       70.6         Gold          Water reduction - Improved chiller operations
                                                                                                                                 Good support of program, 10% energy intensity
Almondridge                  13.0        -9.7%       40             0                        0        53.0        Silver         reduction, initiative in lighting and hvac controls
                                                                                                                                 Proactive management of energy as a variable cost;
Canterbury                   7.1        -20.8%       40             0           -20.1%       20       67.1         Gold          20% energy intensity reduction

Caribbean Facilities

                                                                                                                                 20% water reduction; Nearly 100% renewable energy,
Dos Rios                     14.6        -1.2%        5             20          -20.6%       20       59.6        Silver         Management commitment

                                                                                                                                 10% energy intensity reduction; chiller replacement,
Camuy                        11.7       -10.7%       40             0            -8.1%       10       61.7        Silver         compressed air and lighting reductions
                                                                                                                                 28% energy intensity reduction ($880K/year) boiler
                                                                                                                                 improvments, lighting reductions, compressed air
Humacao                      14.8       -28.5%       40             0           -32.8%       20       74.8         Gold          management

Central America Facilities

                                                                                                                                 Over 10% reduction in energy intensity; Active
Villanueva Cutting           19.6        -4.9%       30             20                       0        69.6         Gold          participation - lighting compressed air, vacuum

                                                                                                                                 Over 10% reduction in energy intensity; Active
Villanueva Sewing            19.6       -14.4%       40             20                       0        79.6         Gold          participation - lighting compressed air, vacuum




                                                           Energy Management at Hanesbrands                                                        03/17/2011                      13
How Are We Doing?
   Since 2007, we have reduced the energy we use to
    make our products by over 16%.
   By the end of 2010, over 30% of the energy we used
    came from clean, renewable sources.
   In 2009, HBI facilities around the world recycled 71%
    of waste materials from operations. That’s more
    than 18,000 tons of recycling.
   Through innovative heat recovery technologies,
    Hanesbrands has reduced fuel oil usage by more than
    45,000 barrels per year
   Hanesbrands has received Leadership in Energy and
    Environmental Design (LEED) Certification from the
    U.S. Green Building Council for six facilities and is on
    track to have two additional facilities certified in 2011.
   Hanesbrands has earned the U.S. EPA ENERGY STAR
    Partner of the Year Award in 2010 and 2011 and is a
    member of the U.S. Green Building Council.




                             Energy Management at Hanesbrands    03/17/2011   14
      Key Performance Indicators Improvement
                   Hanesbrands Energy Intensity                                                     2011 YTD Energy Usage Portfolio
                    (KBtu / Manufactured Unit)
  4
         Energy Star                                     16.5%
                                                         Reduction                               Propane
         Partner
                                                         2010 vs. 2007                            4.1%                  Coal
3.5
                                                                                                                        7.1%
        3.208            3.105                                                                                                                                 Renewable
                                                                              Natural Gas
                                                                                10.4%                                                                          Electricity
  3                                      2.959                                                                                                                   14.8%
                                                                                                                                  Renewable
                                                          2.678
                                                                                                                                   Energy
                                                                                                                                    33.3%
2.5



  2
                                                                                      Fuel Oil
                                                                                       21.1%                                                       Renewable
1.5                                                                                                                                                 Biomass
                                                                                                                                                     17.5%
                                                                                                          Electricity
                                                                                                            18.2%
  1
       CY '07            CY '08         CY '09            CY '10




         Hanesbrands Water Usage                                                             Hanesbrand Carbon Emissions
                  (000 gals / Manufactured Unit)
                                                                                                            (Metric Ton / Manufactured Unit)
 3                                                                           0.0003
       2.689            2.670                                                               0.000257                    0.000253
                                        2.257                               0.00025
2.5
                                                                                                                                              0.000221

 2
                                                         1.932               0.0002                                                                            0.000188


1.5                                                                         0.00015


 1                                                                           0.0001


0.5                                                                         0.00005


 0                                                                               0
       CY '07           CY '08         CY '09           CY '10                                   CY '07                  CY '08                CY '09            CY '10




                                                 Energy Management at Hanesbrands                                                             03/17/2011                     15
         Thank You!

          Questions?




Energy Management at Hanesbrands   03/17/2011

				
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