We are pleased to present our Sustainability Statement for third 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 2019 to 31 January 2020, unless indicated otherwise, it has been prepared in accordance to the Global Reporting Initiative (“GRI”) G4 Guideliness.
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, playing an integral part in delivering Malaysia’s ambitions of becoming a high-income, developed nation by the year 2020.
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:
Roles and Responsibilities
- 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|
We continue to consider the key sustainability matters identified last year as relevant to KYM and along with 2 newly added focus on talent attraction, growth and retention as well as community engagement:
|Economic||Sustainable and Innovative Products|
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
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, healtier and safer working environment for our customers and higher efficiency in handling and transportation.
We partnered with major paper suppliers to strengthen our technical capabilities with new and innovative products for our customers and upskill our people of the Multiwall Industrial Paper Sacks Division.
Annual Customer Satisfaction Survey was carried out by the Carton Box Division to assess the effectiveness of delivery, price, quality, certification and services.
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 Global Reporting Index (GRI) that are applicable to KYM Group, we will be prioritising the following key environmental matters that are pertinent to our business and stakeholder.
- Sustainable Sourcing
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.
During the FY2019, a supply agreement with a world leading provider of primary fibre based packaging materials was signed 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 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.
- Waste Management
We strive to reduce our waste disposal to the landfill and are committed to ensure compliance with the local regulations.
|What we did in FY2019||Performance in brief|
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 FY2020 were mainly glue waste, ink sludge, waste ink and printing block waste.
The total hazardous waste discharge for the year under review was 42.01MT, a slight increase was mainly attributable to the increase in ink sludge. The customers’ demand for higher printing specification coupled with smaller orders resultant in more frequent ink wash to prevent colour contamination.
We shall continue the monthly waste control and chemical exposure monitoring.
- 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.
- 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 continued to implement our energy conservation initiatives to reduce consumption, control and monitor electricity bills and retrofitting of existing appliances with energy-efficient systems.Energy Efficiency
- Launch eco program to improve energy efficiency at the head office and all Strategic Business Units (SBU)
- Document Digitisation program to reduce paper usage
|ELECTRICITY USE REDUCTION||
|CONTROL AND MONITORING||
The main source of energy consumption of our manufacturing plant is electricity. KYM has continuously strive to minimise our energy consumption in order to reduce the impact on climate change. We have closely monitored our electricity consumption whilst optimising our manufacturing process by implementing energy-saving initiatives and rectifying energy loss.
For FY2020, our Multiwall Industrial Paper Sacks division and Carton Box division achieved a reduction of 23% and 18% respectively in electricity consumption compared to the FY2017 baseline.
- Business Ethics and Compliance
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 (“MCCG 2017”) and MMLR 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 establishing an appropriate anti-corruption policy and procedure including awareness training for all concerned at the subsidiaries level.Anti-corruption is further emphasised by Hasrat Meranti Sdn Bhd’s Business Relationships Policy which states business transactions are to be conducted in a fair and transparent manner. Employees are encouraged to report any misdeeds or unfair transactions. We do not condone any collusion agreements made between our employees and the supplier to secure business transaction. Suppliers that are found to have infringed the Policy will be blacklisted or terminated.As a responsible Group, we comply with all the relevant laws and regulations set by government and the local authority. 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.
- Business Ethics and Compliance
- Our People
At KYM, a positive work environment is created where our employees can learn, grow and most importantly, work safely. 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.
- Our People
- Occupational Health and Safety
Our Safety & Health Policy sets out our commitment to manage health and safety at the workplace. The Policy aims to achieve a zeroaccident 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.
- Occupational Health and Safety
|ZERO fatalities||92% reduction in lost time injury against the FY2017 baseline|
During the financial year, the Group continuously educate its employees by conducting series of health and safety-related trainings for both management and non-management staff. 1,026 training hours are related to occupational health, safety and environment training programme provided are summarised below:
- External training on EHS modules
- Activities and programme of EHS
- PPE training
- Chemical handling training
- Fire Drill
- Job Safety & Product Safty – Sanitation Requirements;
- Basic Operators’ Safety Trainingg
- Industrial Accident Prevention Programme
- Employee Diversity
The Group has a workforce of 238 employees, of which the Multiwall Industrial Paper Sacks Division accounts for the highest proportion of workers (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. For the FY2020 male employees constitute 63% of the workforce meanwhile 37% were female employees. Our trend in employee distribution in terms of genders has remained the same since FY17. Men dominate our workforce due to the nature of our business in manufacturing operation.
As for our age group, employees in the age group of 30 to 50 years old forms the largest group which indicares that KYM Group employed experienced and skilled workers. To add on, the second largest age group comprised employees aged 30 years and below. This showed that KYM group provided a suitable platform for the young generation to gain experience in the industry.
- 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 29% 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 knowledge 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.
Number of people directly employed Training and Development Total Hours of Training 238 RM43,577.84 2,303.5 hours
- Employee Engagement
Keeping our employees motivated and enthusiastic about the work they do, is important in our efforts towards ensuring employee wellbeing. 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. In 2019, we continued the practice of having annual appreciation dinners and monthly birthday celebration for employees to thank them for their efforts.
- Improve our talent recruitment and talent retention strategy and focus our resources to groom young talent
- Encourage employee participation in CSR programmes
- Our Customers
Our business success is highly dependent on our ability to fulfil the needs and requirements of our customers. Customers 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.
Our division involved in the manufacturing and printing of multiwell industrial paper sacks, Hasrat Meranti Sdn Bhd is ISO 9001:2015 certified by Intertek Certification Limited and the certification is valid till 30 January 2023. Additionally, our division involved in the manufacturing of corrugated carton boxes, KYM Industries (M) Sdn Bhd 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.
- Community Engagement
The Group continues to do its best to support and help strengthen the local communities through job creations and volunteer works. During the financial year, our employees from the Carton Boxes Division participated in Gotong-Royong and blood donation campaign organised by the local community in Beranang, Selangor.
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.