Sustainability Statement

About This Statement

We are pleased to present our Sustainability Statement for fifth (5th) 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 2021 to 31 January 2022, unless indicated otherwise, it has been prepared in accordance with Bursa Malaysia Sustainability Reporting Guide 2nd Edition and the Global Reporting Initiative (“GRI”) Standards.

Statement Scope and Boundary

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.

Sustainability Strategy

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.

CORPORATE VISION

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

SUSTAINABILITY STRATEGY

ECONOMIC
To build financial strength and deliver sustainable shareholder returns.

ENVIRONMENTAL
To mitigate any negative environmental impact and conserve the surrounding environment.

SOCIAL
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:

Roles and Responsibilities
BOD

Reviews and approves the Group’s sustainability strategy and related policies, initiatives, priorities and targets
Endorses the proposed sustainability initiatives and progress, and the annual sustainability statement

CEO

Guides and advises the key departments on the development of sustainability strategies, initiatives, priorities and targets
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 relationship with 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.

Stakeholder Engagement

Our Key Stakeholder	Our Engagement With Them during the Reporting Period	Frequency of Engagement	Issues Raised
Investors	Annual General Meeting Company’s website Financial results announcements Annual reports Press releases Press conference	Annually Continuous Quarterly Annually As needed As needed	Group’s financial and business performance Business strategy Corporate governance Investment return Share price performance
Employees	Town hall sessions Management meetings Staff appraisals Staff engagement activities (e.g. festive celebration, annual dinner)	As needed Monthly Annual Continuous	Performance evaluation and management Remunerations Training and development programme Career development and progression opportunities Employees’ needs and wellbeing
Customers	Customers meeting Feedback sessions Customer Satisfaction Surveys Audit by Customers Community and networking events	Continuous Continuous Continuous Continuous Continuous	Product quality and safety Customer-company relationship management Reliable delivery Business practices and ethics
Suppliers and Vendors	Evaluation and performance reviews Contract negotiation Open tenders	Continuous As needed As needed	Reliability of supply Product quality Pricing of services Green sourcing of materials
Regulatory Agencies and Statutory Bodies	Inspection/audit by local authority Compliance with Bursa Malaysia’s requirements. Direct consultation with local regulators Participation in workshops and events organised by regulatory agencies	Continuous Continuous Continuous Continuous	Environmental management and compliance Governance compliance Occupational safety and health Labour practices
Local Communities	Community engagement CSR programmes Press releases	Continuous Continuous As needed	Social Issues Impact of business operations Transparency and accountability Environmental impacts

Materiality Assessment

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. During the financial year, we have reached out to our internal stakeholders to understand their expectations on sustainability matters that are material to the business and evaluated the importance and significance of the material sustainability matters. We have updated the assessment to ensure it remains current, accurate and relevant to our businesses.

Material Sustainability Matters	Applicable GRI Indicator(s)	Relevant Stakeholder Group(s)
Sustainable Sourcing	Procurement Practices Supplier Environmental Assessment	Suppliers, Vendors and Customers
Diversity	Diversity and Equal Opportunity	Employees
Energy Efficiency	Energy	Local Communities
Waste Management	Waste	Regulatory Agencies and Statutory Bodies
Water Management	Water and effluents	Local Communities
Community Engagement	Effluents and Waste	Regulatory Agencies and Statutory Bodies
Labour Practices	Diversity and Equal Opportunity	Employees
Business Ethics and Integrity	Anti-Corruption	Shareholders/Investors
Safety at Workplace	Occupational Health and Safety	Employees, Suppliers and Vendors
Sustainable and Innovative Products	GRI General Standards Disclosures	Customers

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:

Economic	Sustainable Sourcing Business Ethics and Integrity Sustainable and Innovative Products Digitalisation
Environmental	Waste Management Energy Efficiency
Social	Safety at Workplace Labour Practices Diversity

We have reviewed the measurement and tracking method and shall use FY2021 as a baseline to guide us in strategising and setting our sustainable development objectives in the coming years.

ECONOMIC

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. 100% of our 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. Save for the sack kraft paper, the remaining raw materials for the Multiwall Industrial Paper Sacks division are sourced from the local suppliers.

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. 98% 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 board material we utilise is biodegradable and therefore we can reduce our impact to the soil and groundwater.

⦁ 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 continue to develop with our major customers on stronger paper sacks with lower substance. 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 innovate and improve 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, the D-Sacks and the coated paper.

We partnered with major paper suppliers to strengthen our technical capabilities and upskill our people of the Multiwall Industrial Paper Sacks Division.

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.

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.

Business Ethics and Compliance

As a responsible Group, we comply with all the relevant laws and regulations set by government and the local authority. The 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 2021 and Main Market Listing Requirement issued by Bursa Malaysia.

KYM adopts a zero-tolerance approach to corruption and bribery. Employees, vendors and customers of the subsidiaries are made aware of, to understand and adhere to the Group’s Anti-Bribery and Corruption Policy.

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.

Digitalisation

The COVID-19 pandemic triggered the KYM Group has embarked on digital transformation of our core business to future-proof ourselves, to improve the sustainability and operational efficiency as well as to tap new growth opportunities. Our first phase of the digitalisation initiatives include, among others, digitalise the major raw material movements and supply chain management, and to create a management dashboard. We are also collaborating with UiTM to implement smart manufacturing in the factory located in Beranang.

ENVIRONMENTAL

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.

Our scheduled wastes for the FY2022 were mainly glue waste, ink sludge and waste ink. All scheduled waste generated at our manufacturing facilities are stored in a specially constructed Scheduled Waste Storage Room prior to the disposal, handled and disposed in accordance with 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).

The increase of solid waste in Multiwall Industrial Paper Sacks division was attributable to the increase in ink sludge due to high number of ink change over for small quantity orders to prevent colour contamination. We are reducing ink change over frequency by better production planning, running small quantity orders in single production run.

The Carton Box division generated much lower ink sludge since the water treatment plant ceased operations. As such, the liquid waste of the Corrugated Carton Boxes division is higher as compared to solid waste. The liquid waste will be sun dried to become solid waste for proper disposal to the appointed scheduled waste contractor.

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.

The Group shall continue the monthly waste control and chemical exposure monitoring.

⦁ 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.

The Carton Box division has installed a new 30HP compressor to back up the existing 30HP compressor to reduce energy consumption. Despite running an additional machine to cope with the increased orders during the financial year, the Carton Box division consumed less energy based.

The Multiwall Industrial Paper Sacks division showed a reduction of electricity consumption partly due to the operational shutdown during the Full Movement Control Order period and better production performance. The division will continue to perform regular machine preventive maintenance to optimise the performance and reduce wear and tear that may increase energy consumption.

We shall continue to monitor our electricity consumption whilst optimising our manufacturing process by implementing energy-saving initiatives.

SOCIAL

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.

⦁ Safety at Workplace

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.

In light of the COVID-19 pandemic and its impact on the businesses, the Group continues to observe the Standard Operating Procedure (SOP) issued by the Ministry of International Trade and Industry and Ministry of Health from time to time to safeguard of our employees’ health and safety and to ensure business continuity during the financial year:

Daily temperature screening at factory entrance;
Mandatory wearing of face mask;
Undertaking RTK self test fortnightly;
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.

We ensure the living condition of our foreign workers comply with the amended Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446). We have obtained the Certificate for Accommodation issued by the Department of Labour Peninsular Malaysia for our workers’ hostel.

All employees have been fully vaccinated of which 90% have received booster shots.

⦁ Labour Practices

We comply with the requirements of the Employment Act, 1955 and the Minimum Wages Order 2022. 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.

⦁ Employees Diversity

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 deplayed below:

The Group is committed to local employment where practical. 85% of our total workforce are Malaysian. Our workforce comprised a healthy mix of young and old generations. While male employees constitute 67% of the workforce, female employees constitute 33%, a gradual improvement from 21% over five years.

Conclusion

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.