Eco-Efficiency / Raw Materials Use

Efficient raw materials use has environmental and economic benefits. Baxter tracks the raw materials it uses in manufacturing, such as plastic resins, corrugated materials and chemicals.

Overall raw materials usage increased 32% from 2005 to 2010 (see table), and increased 1% indexed to revenue. From 2009 to 2010, raw materials usage rose by about 11% due in part to increased demand for sodium chloride for solutions and amino acids used in Baxter's nutritional products. This change also reflects more complete data collection in 2010 compared to previous years. Varying year-to-year inventory levels and other factors influence raw materials purchasing as well. This makes it challenging to draw meaningful conclusions regarding material use efficiency based on annual purchasing data.

As the cost of many raw materials continues to rise, Baxter is implementing more aggressive materials-efficiency and waste-reduction efforts. Historically, the company has focused on scrap reduction and reuse through its Value Improvement Program. This initiative encourages manufacturing facilities to identify and implement cost-savings projects, often related to enhancing production efficiencies. For example, many plastic processing sites regrind and reuse pre-consumer plastic scrap to save money and materials.

Baxter's purchases of plastics and resins increased 10% from 2009 to 2010. The high cost of plastics increases Baxter's incentive to use it as efficiently as possible. If plastic cannot be reused on-site, Baxter evaluates it for possible reuse at other locations. If that is not feasible, the company sends it off-site for recycling.

While many Baxter container systems incorporate as much as 35% reground plastic from the manufacturing process, regulatory requirements prohibit Baxter from using post-consumer plastics in manufacturing. Some of Baxter's leading reusers of plastic are its facilities in Waluj, India; Cuernavaca, Mexico; Aibonito, Puerto Rico; and Mountain Home, Arkansas, and Marion, North Carolina, in the United States.

Major Materials Purchased for Manufacturing (Metric Tons)
Material*, **, ***	2005	2006	2007	2008	2009	2010
Amino Acids	1,000	1,000	1,000	1,000	1,000	1,300
Corrugated Materials	42,900	47,600	47,400	47,500	46,600	46,600
Dextrose	17,900	17,900	18,500	19,300	19,500	25,500
Pharmaceuticals (drugs)	100	100	100	100	100	100
Plastics/Resins	67,400	68,800	76,600	84,600	90,000	99,000
Sodium Chloride (salt)	13,100	12,600	12,500	12,600	12,000	15,700
Total	142,400	148,000	156,100	165,100	169,200	188,200

*	Amino acids have many functions in metabolism, and act as the building blocks of proteins. At Baxter their application includes biotherapeutics, regenerative medicines and vaccines. Corrugated materials are widely used in the manufacture of corrugated boxes and shipping containers used to package Baxter products. Dextrose is a simple sugar used to make solutions, which include Baxter's nutrition and intravenous (IV) products. Pharmaceuticals (drugs) are chemical substances intended for use in the medical diagnosis, cure, treatment, or prevention of disease. Plastics/resins are used to make film for bags or accessory parts such as port tubes and over pouches and for solution sets in Baxter's Renal products. Sodium chloride (salt) is mixed with other liquids for Baxter's parenteral solutions used for injection.
**	Data for amino acids, dextrose, pharmaceutical drugs, and sodium chloride purchases are not available for the Latin America region prior to 2010. Data for corrugated materials purchases are not available for the Latin America, Europe, Middle East and Africa, and Asia Pacific regions.
***	Does not include raw materials usage from Baxter's BioScience business.

Packaging

As illustrated in the table above, product packaging represents one of Baxter's main uses of materials. The company continues to implement packaging reduction projects, with an emphasis on high-volume product lines. The type of materials used is another area of focus. The vast majority of the corrugated material Baxter uses contains 30-75% post-industrial and/or post-consumer recycled content.

In 2010, Baxter continued to modify its environmental, health and safety information management system to capture information related to packaging reduction projects and enhance the company's ability to spread best practices across the organization. See Packaging for more details about the company's initiatives and the Natural Resource Use Priority Update for information about Baxter's progress against its packaging reduction goal.