We are pleased to present our Sustainability Statement for fourth (4th) consecutive years. It covers our diverse achievements in creating economic, environmental and social value for a wide array of stakeholders. This statement refers to the financial year from 1 February 2020 to 31 January 2021, unless indicated otherwise, it has been prepared in accordance to the Global Reporting Initiative (“GRI”) G4 Guidelines.
This statement focus on the Group’s business operation of marketing and manufacturing of multiwall industrial paper sacks and corrugated carton boxes which includes its manufacturing factories in Selangor and Perak.
Based on our Group’s corporate vision statement, we have drawn out our sustainability strategy focusing on the three pillars of sustainability: economy, environment and society. In contributing to these pillars, we focus our efforts and resources on innovative technology, quality assurance and human capital development.
We aim to be a trusted global player in delivering industrial, property and construction solutions to an international and local clientele.
By being thoroughly committed to innovation, technology, human capital and sustainable development, we aim to be critical enablers to an environment in which businesses thrive and communities are enriched
To build financial strength and deliver sustainable shareholder returns.
To mitigate any negative environmental impact and conserve the surrounding environment.
To foster a robust, diverse and capable workforce, and create a safe workplace.
SUSTAINABILITY GOVERNANCE STRUCTURE
We are cognisant of the importance of having a robust governance structure to ensure the seamless integration of sustainability initiatives within our business operations. To this end, we have established a sustainability governance structure comprising the Board of Directors (“BOD”), the Chief Executive Officer (“CEO”) and the Sustainability Committee (“SC”).
While the SC monitors and reports the progress of implemented sustainability initiatives to the CEO, the CEO plays an advisory role to the SC, providing guidance and overseeing the Group’s sustainability performance. The BOD, at the apex of the structure, is ultimately responsible for the endorsement of the sustainability strategy and related policies and initiatives within the Group.
The roles and responsibilities of the BOD, CEO and SC within the governance structure for sustainability are described below:
- Reviews and approves the Group’s sustainability strategy and related policies and initiatives
- Endorses the proposed sustainability initiatives and progress, and the annual sustainability statement
- Guides and advises the key departments on the development of sustainability strategies and initiatives
- Reports to the BOD on the proposed sustainability initiatives
- Reports to the CEO on progress of the Group’s sustainability efforts
- Presents the annual sustainability statement for review and comments
- Monitors data to evaluate the Group’s sustainability progress
- Conducts management meetings with key departments to discuss the progress of sustainability-related initiatives and programmes
Over the years, we have fostered our stakeholders by concentrating on prioritizing our stakeholders, the quality of our goods, the social impact we have made, the economic success we have accomplished, and our consistency in compliance with applicable legislation and regulations. The following table covers a list of key stakeholder groups, various methods of engagement and key issues raised.
|Our Key Stakeholder||Our Engagement With Them during the Reporting Period||Frequency of Engagement||Issues Raised|
|Suppliers and Vendors||
|Regulatory Agencies and Statutory Bodies||
We have identified the sustainability matters that are mapped to the GRI indicator and material to our multiwall industrial paper sacks and corrugated carton boxes segments. We periodically update the assessment to ensure it remains current, accurate and relevant to our businesses.
|Material Sustainability Matters||Applicable GRI Indicator(s)||Relevant Stakeholder Group(s)|
|Corporate Governance||GRI General Standards Disclosures||Investors, Regulatory Agencies and Statutory Bodies|
|Financial Performance||GRI General Standards Disclosures||Investors, Suppliers and Vendors, Customers|
|Supply Chain Management||Procurement Practices||Suppliers, Vendors and Customers|
|Innovation||GRI General Standards Disclosures||Customers|
|Energy Efficiency||Energy||Local Communities|
|Sustainable Raw Materials||Supplier Environmental Assessment||Suppliers and Vendors, Customers|
|Waste Management||Effluents and Waste||Regulatory Agencies and Statutory Bodies|
|Wastewater and Effluent Management||Water||Local Communities|
|Regulatory Compliance||Emissions||Local Communities|
|Community Engagement||Effluents and Waste||Regulatory Agencies and Statutory Bodies|
|Quality Control and Quality Assurance||Product Service and Labelling||Customers|
|Labour Practices||Diversity and Equal Opportunity||Employees|
|Ethics and Integrity||Anti-Corruption||Shareholders/Investors|
|Customer Satisfaction||Product Service and Labelling||Suppliers and Vendors, Customers|
|Occupational Health and Safety||Occupational Health and Safety||Employees, Suppliers and Vendors|
|Products Services and Responsibility||Product Service and Labelling||Suppliers and Vendors, Customers|
|Training and Development||Training and Education||Employees|
|Employee Well-being||Diversity and Equal Opportunity||Employees|
The list was then prioritised and formed the basis for the Group’s sustainability strategy and focus. The factors that were identified as highly significant in its impact on KYM’s business and stakeholders, are listed below:
Our performance in FY2017 will be served as a baseline to guide us in strategising and setting our sustainable development objectives in the coming years.
- Sustainable and Innovative Products
We manage our procurement practices responsibly and maintain transparency across our supply chain. Our preference to engage local suppliers over non-local suppliers, encourages local businesses and plays a role in contributing to the local economy. However, there are some limitations on local procurement with regard to sustainable raw material as we only procure from certified paper mills that source wood and fibre from sustainably managed forests which are not available in Malaysia.
We are committed to adopting green procurement practices as part of our business in the industrial paper sacks and corrugated carton boxes industry. By integrating environmentally sound decisions into the supply-chain management of our manufacturing process, we are able to produce packaging that is sustainable and of low environmental impact.
Multiwall Industrial Paper Sacks
It is important to source sustainable raw materials from certified suppliers. 90% of our raw material for the manufacturing of multi-wall industrial paper sacks, Sack Kraft paper are certified under the Programme for the Endorsement of Forest Certification (“PEFC”) or the Forest Stewardship Council (“FSC”). Both PEFC and FSC provide certification of forests that are managed sustainably. This ensures that the material sourced has not been harvested illegally, or in violation of traditional or civil rights, or in a way that threatens high biodiversity conservation value areas.
We collaborate with a world leading provider of primary fibre based packaging materials for a sustainable procurement of major raw material i.e. high quality sack kraft paper for our industrial sacks manufacturing in the next 5 years.
Corrugated Carton Boxes
KYM’s corrugated carton boxes are made from 100% recycled material and where applicable, with food grade certification, and therefore uses considerably less energy than producing new products from raw material. 100% of the raw material for the Corrugated Carton Boxes division is sourced from local certified paper mills with RoHS Compliance. The corrugated carton boxes produced are recyclable which means we reduce the quantity of waste material to the landfill. The cardboard material we utilise is biodegradable and therefore we can reduce our impact to the soil and groundwater.
KYM’s superior quality products meet the customers’ needs with excellent performance in food safety and security practices. We are one of the few in South East Asia passes the rigorous Yum! Supplier Food Safety Assessment (FSA) audit.
⦁ Sustainable and Innovative Products
Innovation plays a vital role in the growth of KYM. We constantly find new ways to increase the efficiency of our business to improve profitability. We invest heavily on innovative technology and machinery as it leads to production efficiency and an increase in product quality.
With the state-of-the art machines, we increased raw material efficiency for multiwall industrial paper sacks i.e. minimise scrap and deliver the required lower basis-weight without compromising bag strength. We are working with major customers to reduce material consumption of their packaging. Our innovation also helps customers to improve sustainability work. The strength of our bags help generate a cleaner, healthier and safer working environment for our customers and higher efficiency in handling and transportation. We continue to work with key suppliers to continue to innovate our products to better serve our existing customers as well to develop new customers. Examples of the results of some of these new products are the Multiwall Industrial Paper Sacks Division’s Top Deaeration system, the Rain Safe Sack and the D-Sacks.
We partnered with major paper suppliers to strengthen our technical capabilities and upskill our people of the Multiwall Industrial Paper Sacks Division.
It is our Group’s mission to continuously play our part in the conservation and protection of our environment. We are committed to minimise our environmental footprint by operating our manufacturing factories sustainably.
Based on the list of environmental matters in the GRI that are applicable to KYM Group, we will be prioritising the following key environmental matters that are pertinent to our business and stakeholder.
⦁ Waste Management
We adopt the “Reduce, Reuse and Recycle” concept in our waste management. We strive to reduce our waste disposal to the landfill and are committed to ensure compliance with the local regulations.
The hazardous wastes that are generated at our manufacturing facilities are stored, handled and disposed in accordance to the requirements of the Environmental Quality (Scheduled Waste) Regulations, 2005. In line with the regulations, offsite disposal or recycling of the scheduled waste is carried out only by our appointed scheduled waste contractors who are approved by the Department of Environment (“DOE”).
Our scheduled wastes for the FY2021 were mainly glue waste, ink sludge, waste ink and printing block waste.
The liquid waste of the Corrugated Carton Boxes division is higher as compared to solid waste as it does not have a wastewater treatment plant. The liquid waste will be sun dried to become solid waste for proper disposal.
The Group shall continue the monthly waste control and chemical exposure monitoring.
We improved the quality of the paper sacks packing per pallet to reduce the consumption of pallets, reused the pallets that were delivered by customers and repaired the broken pallets for reuse.
⦁ Wastewater and Effluent Management
Our manufacturing factory in Perak has its own wastewater treatment plant to treat effluent before discharge into the river. We conduct monthly monitoring by engaging an independent third party certified laboratory to analyse the quality of the final discharge released from our treatment plant. This to ensure compliance to the Standard B limits stipulated in the Environmental Quality (Industrial Effluent) Regulations, 2009.
During the financial year, the Multiwall Industrial Paper Sacks division engaged with the existing waste management contractors to recycle waste water and reuse it for ink wash. The independent third party continued to analyse the quality of the final discharge.
The Carton Box division tried to reduce the usage of water to clean the printing block and machines. However, the consumption of water increased due to frequent cleaning of printing block between prints for different models. They continue the monitoring on the usage of water per cleaning to ensure that they are able to control water consumption.
⦁ Energy Efficiency
High energy consumption results in an increase in greenhouse gas emissions. KYM has established an Energy and Water Conservation Policy to reduce energy consumption and generate savings at our corporate office and manufacturing facilities. We regularly manage and monitor our energy consumption and efficiency strictly to reduce consumption, control and monitor electricity bills and retrofitting of existing appliances with energy-efficient systems.
The main source of energy consumption of our manufacturing plant is electricity.
For FY2021, there was a total reduction of 278kWh compared to the previous year of 1,899kWh. The Multiwall Industrial Paper Sacks division showed a reduction of electricity consumption mainly due to lower production and operational shutdown during the Movement Control Order period. Meanwhile, Corrugated Carton Boxes division recorded an increase of 15% due to higher overtime.
The plant in Beranang has replaced all the high bay lights at the production floor with LED lights. Timer is used to cut off the electricity supply automatically. The proposed installation of a new 30HP compressor to reduce energy consumption has been postponed to FY2022 due to the COVID-19 pandemic.
The Multiwall Industrial Paper Sacks division is changing the fluorescent high bay lights at the production floor to energy efficient LED lights gradually. The replacement of high bay lights with LED lights was 30% completed in Kanthan plant and 15% completed in Tapah plant. Regular machine preventive maintenance is performed to optimise the performance and reduce wear and tear that may increase energy consumption.
The Group has managed to gradually reduce the electricity consumption in the past five (5) years. We shall continue to monitor our electricity consumption whilst optimising our manufacturing process by implementing energy-saving initiatives and rectifying energy loss.
⦁ Business Ethics and Compliance
As a responsible Group, we comply with all the relevant laws and regulations set by government and the local authority. We are pleased to informed that our Multiwall Industrial Paper Sacks division complied with the OSHA 1994/FMA 1967 Act, Environmental Quality Act 1974, Kualiti Alam Sekeliling (Buangan Terjadual) 2005 and Fire Services Act 1988 (FC). We go beyond compliance by practising sustainable manufacturing practices and adhering to stringent regulations. We committed to full compliance of Restriction of Hazardous Substances (RoHS) Directive. Our food packaging products are made from high quality food grade paperboard.
KYM is committed to ensuring a high standard of corporate governance by adhering to the principles and recommendations set out by the Malaysian Code on Corporate Governance 2017 and Main Market Listing Requirement issued by Bursa Malaysia.
KYM’s Whistleblowing Policy was established to provide all directors and employees of KYM Group a platform to raise concerns or disclose any wrongdoing that may adversely impact the Group without fear of suffering retribution and to provide a transparent and confidential process for dealing with concerns.
We are determined to ensure our employees, at all levels of the Group and subsidiary companies, are committed to fighting corruption, and opposed to any form of bribery. During the financial year, the Group’s Anti-Bribery and Corruption Policy (“ABAC Policy”) was formalised on 26 March 2020. KYM adopts a zero-tolerance approach to corruption and bribery.
Training was conducted for the management of the subsidiaries at the factory in Beranang, Selangor and Kanthan, Perak in July 2020. Extensive explanation was given to ensure that the management is able to disseminate the information to all of their subordinate and external parties.
A follow up on the implementation of ABAC Policy was carried out in November and December 2020 to ensure all employees and vendors of the subsidiaries are aware of, understand and adhere to the ABAC Policy.
⦁ Our People
At KYM, a positive work environment is created where our employees can learn, grow and most importantly, work safely. Our people are simply the most valued resource we have. We recognise the important role they play in our current success and long-term growth. To this end, we have developed people-centric policies and practices, so as to create a supportive and safe environment, conducive both for work and professional growth.
Due to the pandemic related operational shutdown, the comparison of electricity consumption between FY2021 and FY2020 will not provide an accurate assessment of the energy management initiatives employed.
⦁ Occupational Health and Safety
We emphasise the need for safe working environments, regular review and access the safety of our work conditions which must meet with our corporate standards. Our Safety & Health Policy sets out our commitment to manage health and safety at the workplace. The Policy aims to achieve a zero-accident rate at our manufacturing facilities. To manage occupational, safety and health issues, we have established an Emergency Response Team and Occupational Health, Safety & Environment (OHSE) Committee at our manufacturing facilities in Perak and Selangor respectively.
The Group continuously educates its employees by conducting series of health and safety-related trainings for both management and non-management staff. During the financial year, 1,628 training hours related to occupational health, safety and environment training programme were provided as follows:
⦁ PPE training
⦁ Chemical handling training
⦁ Basic Operators’ Safety Training
In light of the COVID-19 crisis and its impact on businesses, the Group adhered to the Standard Operating Procedure (SOP) issued by the Ministry of International Trade and Industry and Ministry of Health to safeguard of our employees’ health and safety and to ensure business continuity:
⦁ Daily temperature screening at factory entrance;
⦁ Mandatory wearing of face mask;
⦁ Provision of hand sanitizer;
⦁ Practice physical distancing;
⦁ Prescheduled daily sanitizing of the workplace and common areas;
⦁ Virtual meeting where possible
Staff at corporate office were segregated into two (2) teams to work in office and work from home by rotation to minimise potential infections at the workplace. All of the foreign workers have taken the COVID-19 screening test as per the mandatory instruction from the Malaysian National Security Council effective 1 December 2020. All employees are provided with Personal Protective Equipment (PPE).
We also ensure the living condition of our foreign workers comply with the amended Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446) which became effective on 1 September 2020. Our hostels have been inspected by the Department of Labour Peninsular Malaysia, pending approval and issuance of certificate.
⦁ Employee Diversity
The Group has a workforce of 219 employees, of which the Multiwall Industrial Paper Sacks division accounts for 63% of the Group’s total headcount. KYM embraces diversity in the workforce. Our employees are hired based on merit and credibility and we do not condone any form of discrimination based on race, age or gender. The distribution of our workforce demographics is displayed below:
As for our age group, employees in the age group of 30 to 50 years old forms the largest group which indicates that KYM Group employed experienced and skilled workers. The Group is committed to local employment where practical. Only 18% of our total workforce are non-Malaysian.
⦁ Fair Employment Practices
We comply with the requirements of the Employment Act, 1955 and the Minimum Wages Order 2020. Child labour is strictly prohibited in our business operation as we do not employ anyone below the age of 18.
Collective bargaining is a key means through which employers and trade unions can establish fair wages and working conditions. KYM protects workers’ rights by allowing them to participate in decision making in areas which are of vital interest to them such as wages, allowance, sick leave, annual leave, etc. Approximately 33% of KYM’s workers are covered under the Collective Bargaining Agreement.
⦁ Training and Development
Satisfied and motivated employees secure the future of any organisation and contribute to the formation of a knowledgeable society. We view our employees as an important asset. We attract and retain talent by investing heavily in training and development as we believe the business efficiency, product quality and productivity of KYM hinges on the skill proficiency and competency of our employees. We empower and invest in strengthening our people at all levels with relevant skills and knowledge through training, professional development and engagement activities. Due to the COVID-19 pandemic, total hours of training reduced as certain trainings were not available online.
⦁ Employee Engagement
Keeping our employees motivated and enthusiastic about the work they do, is important in our efforts towards ensuring employee well-being. We rewarded those who perform their tasks and assigned jobs with excellence. Best Staff Awards were given in recognition of our employees’ positive contributions. Long-Service Awards were given out in recognition of employees for their tenure within the organisation.
We organise activities such as festive celebration, annual appreciation dinners, birthday celebrations etc. that will foster team work, cohesiveness and engagement with our employees. Unfortunately due to COVID-19 pandemic, such celebrations and staff activities have been halted to avoid the spread of virus at workplace.
⦁ Our Customers
Our business success is highly dependent on our ability to fulfil the needs and requirements of our customers. Customer satisfaction is a top priority for us and in order to gauge customer satisfaction levels, we conduct a customer satisfaction survey annually. The survey covers various aspects of our business, including delivery time, price, product and service quality. By garnering customer feedback regularly we are able to make improvements, where needed and meet the expectations of our customers.
An important measure to ensure customers get consistent, good quality products and services, which in turn brings many business benefits, is to abide by stringent quality control and quality management principles. Our efforts in this direction have earned us International Organisation for Standardisation (“ISO”) Quality Management System certifications.
The Multiwall Industrial Paper Sacks division is ISO 9001:2015 certified by Intertek Certification Limited and the certification is valid till 30 January 2023. Our Corrugated Carton Box division is ISO 9001: 2015 certified by SIRIM QAS International Sdn Bhd. In order to be certified and maintain the ISO certifications, our divisions are regularly audited by an independent certification body
This statement describes our sustainability initiatives and our approach to addressing the material sustainability matters that are embedded in the Group’s value chain. Moving forward we will continue to progress in our journey towards sustainability, in a focused and meaningful way to build a better tomorrow for our future generation.