永豐餘en-單頁csr-2-0912 · another critical pillar for yfy´s work is all our colleagues. we...

2016 YFY Sustainability andSocial ResponsibilityReport

Contents

Together We Can—Moving Forward Together

Innovation and Green Pathway to Sustainability, Abundance, and Prosperity

A Glimpse at 2016

Our Culture of Sustainability Starts with Our People

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Sustainability09

No Safety, No Factory – Launch of the Occupational Safety and Health Management Platform

Be Responsible for the Safety of Your Own and Others´

Panoramic Safety Inspections, Panoramic Workplace Safety

[Workplace Safety Inspector on the Ground] Education and Safety Goes Hand In Hand

Colleagues in Xinwu Welcome New Residence Halls

″Stay Fit″ Invites Employees to Live Healthier Together!

″The fragrance always stays in the hand that gives the rose.″ – Consumer Products Group ″STAR″ Project

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Abundance22

Finding the Real Value in All Materials — Leading the Shift to Circular Economy

Breaking down Plastic: Returning to the Basics

Rebuilding the Paper Dryer at Qingshui Mill: A First in Taiwan´s History

Improving Water Processing at Yangmei Mill Reduces Water Pollution Fees by 95%

nPulp Wins Silver at the 2016 World Green Design Grand Award

Hualien Mill´s Hydrogen Energy Wins Green Leadership Award at the Asia Responsible Entrepreneurship Awards

Earth Day: Promises to Our Planet

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Prosperity32

″May Hope Overcome the Storm″: Planting Seeds of Hope for Taitung

″Taitung Academy″ Enters Its Second Year: Our Annual Bookworm Gathering

Giving Resources to Those Who Need Them the Most: the Consumer Products Group´s Charity Donations

Guji-Guji: Charity Performance Brings Joy to Xinwu Community

Creativity, Art, and Environmental Protect: The Cardboard War Contest Project

Hualien Mill and Guanghua Elementary School: Good Neighbors Who Succeed Together

YFY GRI Report42

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Company Profile

Reporting Boundaries & Stakeholder Engagement

Corporate Governance

About YFY

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Energy Plan

Raw Material Usage

Handling of Solid Production Residual Material (PRM)

Air Quality Control and Monitoring

Climate Adaptation and Environmental Sustainability Investments

Water Resource Use

Discharge Water Processing

Environmental Aspects

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Occupational Safety and Health Management at YFY

Employee Care

Local Community Engagement

YFY Product Responsibility

Social Aspects

64 YFY Market Presence

Economic Aspects

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Report Profile

GRI G4 Index

SGS Assurance Statement

Appendix

In every step of YFY´s planning, we have never forgotten our responsibility to our society and our environment. We put sustainability at the forefront of our management philosophy. YFY´s roots in the paper industry have made us especially cognizant of Taiwan´s lack of energy and natural resources and extreme dependence on imports. At the end of last year, we launched a small ″revolution of the mind″ within our organization – to change the way we communicate internally at YFY, rethink the very idea of ″trash″ in our language our minds as ″resources″. At the same time, we expanded our platforms for managing water resources as well as the reuse of energy sources. By integrating our professionals and coordinating our group´s resources, we seek new ways to save energy, water and promote recycling and reuse of energy resources – rediscovering the value of what is traditionally thought of as ″trash″.

Ninety years old and still going strong, YFY knows full well the importance of adjusting to new trends in the face of new battlefields. 2016 was the hottest year ever in recorded history. From the Paris Agreement taking effect to the implementation of revisions to water and air pollution and greenhouse gas management legislation here at home, taking immediate action to fight climate change has clearly become a challenge for every country alike. YFY´s efforts to promote environmentalism, seek sustainability of resources, and reduce its environmental footprint have never ceased. In 2016, we won several awards, including the 2016 Electricity Saving Enterprise Group Award as well as the 2016 Green Procurer for Private Enterprise and Organizations Award. In addition, the Hydrogen Energy Project, launched to reuse the hydrogen byproducts produced during the pulp production process, won the Asia Responsible Entrepreneurship Awards (AREA) Green Leadership Award.

Together We CanMoving Forward Together

Over the past year, the government, academia as well as various organizations have begun floating the idea of a ″circular economy″ and possible ways to implement this idea. Having approved of YFY´s efforts on its products and technologies, the Environmental Protection Administration, the Ministry of Science and Technology, and the Industrial Technology Research Institute (ITRI) has actively worked with us to explore the possibility of reusing the byproducts of our production process. It is our hope that, in the future, we will be able to integrate more diverse resources and expertise to seek the best way to build a circular economy together and improve Taiwan´s overall competitive strength.

Another critical pillar for YFY´s work is all our colleagues. We work hard to create a pleasant and safe working environment to ensure that every single one of our colleagues can work hard and perform at their best. As a company working in a traditional industry, putting safety first is unquestionably the basis of our operation. In 2016, our group improved our security level, establishing a workplace safety and sanitation management platform across our various industries. We seek decentralization of responsibility to strengthen and shape our culture of safety and safeguard the health, safety, and life of our colleagues.

This year, our new Xinwu mill and its cogeneration equipment will formally begin operations. This will be the largest investment in the paper industry since the $10 billion roadmap back in the 80s. It will also be one of the most closely watched projects in recent years for the Taiwanese paper industry, with YFY taking concrete action to demonstrate its support for this island. Having worked in Xinwu, Taoyuan for 30 years, our state-of-the-art equipment and safe working environment coupled with the best energy efficiency create the best corrugated cardboards in the world with the help of local experts.

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Chairman, YFY Inc.

To accommodate the expansion of the Xinwu mill and the restructuring of the Cheng Kung mill, we worked hard to plan an accommodation and relocation plan, acting responsibly and in good faith to take care of our colleagues. This restructuring plan, which recognizes the value of expertise, has garnered support.

In accordance with our zero-waste and zero-emission goals in production, YFY continues to commit itself to researching and experimenting with recycling solid waste materials as well as increasing the use of recycled water through water processing facilities at mills. With regards to corporate governance, in response to increased relevance of mobile and the cloud as well as improve data transparency and risk management and control, we have continued with a full upgrade to our Enterprise Resource Planning (ERP) system. This will significantly improve our analysis capacity, shorten the reaction time, strengthen our competitiveness in the market and help us take advantage of our resources.

Take what we deserve, give what we should. Maximize positive impact on society and minimize our footprint on the environment. Simultaneously turning the three keys cogs of sustainability (employees, society and the environment) remains YFY´s social responsibility and goal as a corporation. And YFY´s big challenge in 2017 is to find ourbest lineup and management strategy. Employees are the most important assets to any company, and they are the foundation of sustainable management at YFY. We will accelerate our commitment to nurture a new generation of experts and strengthen our foundations. This will put the excellent managers we nurtured at a position to lead our teams forward with energy and momentum. It is only by standing together, seeking to maximize our organization´s interests and resources, and rethinking ourselves in the context of trends in greater society, that we can face challenges head on and seize the moment.

Together , We can !

32016 YFY Sustainability and Social Responsibility Report

Produced Taiwan's first piece of coated art paper and laid the cornerstone for YFY as the largest cultural paper manufacturer.

1960

1955

Produced Taiwan's first piece of crepe toilet paper.

1972

Produced Taiwan's first adhesive stamp sheet.

1974

Established Taiwan's first and only "Paper Production Research Center" to promote the research and innovation of paper production technology.

1980

Proactively involved in reforestation, committed to the conservation of water, soil and tree species, and planted over 2 million trees in Taiwan.

Since the 1980s

First case in Taiwan´s paper industry of exporting entire mill´s products overseas.

1984

Produced Taiwan's first environmentally friendly recycled paper and applied for Taiwan's first Green Mark eco-label (Xin He Recycled Paper).

1984

Successfully developed and produced typing paper using sugarcane bagasse to replace imported paper and exported a considerable amount.

Innovation and Green Pathway to Sustainability, Abundance, and Prosperity

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Established a task force specializing in green technology.

1996

Became Taiwan's first paper manufacturing company certified by the International Forest Stewardship Council (FSC) to have fulfilled its social responsibilities for reforestation and forest protection.

2008

Hualien mill´s Hydrogen Energy Project wins the Asia Responsible Entrepreneurship Awards (AREA) Green Leadership Award.

2016

Established "Green & Safe" and officially entered the organic food sector 2008.

2000

Produced Taiwan´s first greaseproof cardboard for food without laminating or plastic toxicity -- Fresh Clean greaseproof cardboard.

2011

Officially mass-produced the straw bio pulping – nPulp® -- at Yangzhou mill.

2013

2014 nPulp® straw bio pulping won the Silver medal of the American "Edison Award" for Environment Sustainable System.

2014

Hualien mill reclaimed electrolytic salt by-products during the pulping process and established Taiwan's first "Hydrogen Energy Demonstration Facility" in the industry.

2014


A Glimpse at 2016

Reduced carbon emissions by 174,342,000 kilograms

In 2016, YFY added 32 new measures in combatting carbon dioxide emissions, which reduced our use of coal fuel by 10,585 tons, and our production of steam during the manufacturing process by 3,316 tons, as well as our electricity use by 266,484 kWh. In total, we estimate that our reductions in energy use have led to reduced greenhouse emissions.

Reused 2,497,336 tons of water resources

Actively strengthened water resource reuse system, reduced use of water by production units and increased recycling rates. In total, we reused 2,497,336 tons of drain water.

Won the Ministry of Economic Affairs Electricity Saving Enterprise Group Award

By taking concrete actions such as replacing motors with higher efficiency equivalents, lighting equipment with LED equivalents, as well as installing windmill and motor frequency control equipment and improving water pump volume setting and deep water aeration in drain water, YFY saved 18.11 million kWh of electricity, the equivalent of reducing CO2 emissions by 9,433 tons. For these efforts, we were commended by the Bureau of Energy, Ministry of Economic Affairs for our energy savings.

Invested $NT 330 million in environmental protection facilities

We now spend $NT 333,773,000 annually for environmental protection. 83.36% of this sum is investments in water processing facilities, while 1.81% goes to investments in air quality control and 14.83% to investments to reduce solid byproducts in our manufacturing process.

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Hualien mill again wins award

Our Hualien mill has again been recognized by the Industrial Development Bureau, Ministry of Economic Affairs for its voluntary reductions in greenhouse gas emissions. Per measurements reviewed by third parties, our emissions in 2016 were down 45,833 tons of carbon dioxide equivalents (CO2e) from 2011, a reduction of more than 18.1%.

Jiutang mill again wins award

Chung Hwa Pulp´s Jiutang mill has participated in the government´s green purchasing initiatives. In 2015, our green purchases amounted to $NT 956 million and won the Kaohsiung City Award for Green Procurers for the fifth year in a row.

Xinwu mill wins award

Our Xinwu mill has been recognized by the Taoyuan City Government for excellence in its river adoption efforts. The mill has long passionately devoted itself to the protection of the local Nankan river, even adopting a section of the nearby Shezi river, near where it flows into the sea.

Yangmei mill wins award

Our Consumer Products Group´s mill in Yangmei won two prizes in the City Government´s health and anti-obesity initiative. 67 of our colleagues participated in the program, resulting weight losses of 393.6 kilograms in total.


Sincerely,

Ronald AllenYFY Chief Sustainability Officer

• Established a management platform for Occupational Safety and Health that resulted in improved working conditions and a safer environment in our paper mills.

• Improved recycling practices in the manufacturing process. YFY´s commitment to a ″circular economy″ improved our nPulp production residues recycling, as we continued to improve on our capability to turn all of our raw materials into a resource and ensure that 100% of residuals and by-products are used without creating further waste.

• YFY received the AREA (Asia Responsible Entrepreneurship Award) for the work done by our subsidiary, CHP. CHP successfully recycles the by-product created from the electrolysis of Sodium Chloride (salt), which is used in the process of pulp production. After collection, CHP purifies it into Hydrogen Energy with 99.99% purity that is completely CO2-free energy. The Hydrogen is used to fill hydrogen batteries for fuel cell electric vehicles (FCEV) and can also replace heavy oil as fuel to produce steam.

• During the Earth Day 2016 campaign, 3,736 YFY colleagues from 22 mills committed to their own Earth Day vows.

Even with our current list of accomplishments, we believe YFY can go much further on our sustainability journey. As we integrate more of our colleagues into the sustainability chain, I am more excited than ever for our company´s ability to make faster progress to our business goals by making greater contributions towards a safer, cleaner planet. That is good for all state-holders; shareholders, customers, our employees, and the communities in which we do business.

Today, even as more companies worldwide deepen their commitment to the ideas of sustainability and to adopting more sustainable business practices, they find themselves operating in a business and political environment that presents considerable challenges to achieving these new standards.

The world is a different place from even a year ago: many major governments have decided to move away from long-standing economic policies that promote a global approach to trade and ensure environmental protections. In the midst of these changes, it is more important than ever that companies adopt and nurture a strong culture of sustainability that promotes sustainable business practices, motivates their workforce and achieves measureable results.

In its fourth year of operation I am very proud to say that YFY, Inc.´s Office of Sustainability and Social Responsibility has made definitive progress towards creating a corporate culture that has transformed our view of sustainable business practices and energized our professionals to achieve real changes that have impacted our business and improved environmental and safety standards for the communities in which we do business.

The real key to evaluating our performance as a sustainable company starts with making sure everyone is on board with the organization´s goals. It also requires commitment by leadership to performance measures that help to evaluate our progress. As a result of our cultural commitment to sustainability, YFY, Inc. made several achievements:

Ray Anderson, Founder/Chairman of Interface, Inc. and Industrial Ecologist

Our Culture of Sustainability Starts with Our People

″ Sustainability is a journey…A long commitment that fundamentally changes an organization ″

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Sustainability




[Workplace Safety Inspector on the Ground] Education and Safety Goes Hand In Hand



″The fragrance always stays in the hand that gives the rose.″ – Consumer Products Group ″STAR″ Project



Per statistics from the Ministry of Labor, a staggering 4,869 workers died of occupational injuries between 2001 and 2015. That is to say, on average, one worker every 27 hours, one worker dies of occupational hazards! Every colleague of ours plays an irreplaceable role in their families. Their health and security are critical to every family and every company. Therefore, ensuring that every one of our colleagues can return home safely is our unwavering promise to them and their families. To protect the health and security of our employees on a Group-wide level, YFY launched its Occupational Safety and Health Management Platform in July 2016.

Our Occupational Safety and Health Management Platform, whose office is at our headquarters and reports to the Chief Strategy Officer, must integrate the resources of the entire Group to plan and protect the safety and health of our colleagues. However, due to the diverse production processes utilized by each of Business Groups and the complicated realities on the ground at the mills, we simultaneously incorporate both bottom-up and top-down management processes as well as decentralization of responsibility to allow the platform to operate at its best.

• Decentralization of Responsibility: The first layer is our Workplace Safety and Sanitation Management Platform. Its responsibilities include operations relating to the safety and sanitation of all business bodies of the Group. The platform is home to Safety and Sanitation working groups, which allow experts in workplace safety and sanitation to directly oversee the safety and sanitation policies of each business group as well as its management policy and concrete actions. The second layer consists of each of the business groups. Each business group houses a supervisor specializing in safety and sanitation policy to report to the platform, set safety and sanitation guidelines for mills in each of the Business Groups, as well as undertake the training, overseeing and auditing of safety and sanitation policies. The third layer consists of safety teams on the ground at the mills, who are directly responsible for the implementation and monitoring of workplace safety policies on the ground.

• Simultaneous Top-down and Bottom-up Management Processes: The agenda and the form of safety and sanitation policies at YFY are set by the platform, while the specific content of such regulations is planned at the mills and provided to the platform where the platform sets out making changes if necessary and ensuring that each project fulfills a practical need of our colleagues. The platform sets the annual projects, important strategic goals and auditing timetables for each mill, which is then sent to workplace safety teams at each Business Group to plan and implement. At each monthly and quarterly workplace safety and sanitation meeting, each mill and Business Group reports implementation results on the ground and discusses potential solutions to each issue. This is then used by the platform to adjust the requirements for projects and connect mills to share experience and expertise.

A working environment only deserves to exist if it is safe.

YFY has the responsibility and the obligation to protect the health and security of every member of this big family. We must focus on this issue, execute solutions with conviction, and take real action to rebuild a safety-first workplace culture. Felix Ho, Chairman, YFY Inc.

Sustainability10

Per the first line in YFY´s Safety Promise, people are at the core of YFY. Occupational safety and health do not allow for compromises. After the launch of the platform, we decided to take a series of measures designed to sow the seeds of a culture of workplace safety in each of our colleagues. The first of which is putting each of us on duty for monitoring workplace safety.

When someone is ″on duty″, this means that during a specific time period, they must conduct a panoramic workplace safety inspection of a specific area at regular intervals. They must undergo training and use the Safe Behavior Checklist to note down the safety concerns that they observe on the ground and submit reports of their inspection.

We know full well that the support of supervisors is key to promoting workplace safety consciousness. Therefore, to show our determination to protect workplace safety, YFY requires its supervisors at the highest level to take on workplace safety duty. Those who are required to go on duty include the President of the Group, the highest level supervisors and deputy supervisors of the Business Groups. Each supervisor must conduct safety inspections per the required frequency as outlined in its implementation plan, correct unsafe practices on the ground in real time, and submit the results of the inspection. If they discover issues with regards to the workplace environment or the facilities themselves, they must file a relevant report on the details to the Workplace Safety and Sanitation directors at the mill, which will then be referred to the Occupational Safety and Health Management Platform for further improvements.

The first wave of rollout included the Xinwu and Huliaen mills as well as the Consumer Group´s Dingfung mill, where a workplace accident took place in the past year. At these 3 factories, all supervisors must spend an hour each day or 4 hours per month on workplace safety duty. In addition, Chairman of YFY Inc., Felix Ho´s first act as chairman was visiting the Xinwu mill in his capacity as President of the Containerboard and Packaging Group on August 14th, 2016, having just been inaugurated that same Friday. He took on four hours of workplace safety duty, from the paper recycling storage area to the paper machines, and from the steam power plant to the site undergoing construction.

The workplace safety duty program, which began in August of 2016, have seen 3,701 people serve on duty, logging a total of 3207 hours and discovering 975 safety issues. Through the periodic workplace safety and sanitation meetings within the Business Groups and at the platform, new measures designed to strengthen safety protections are discussed monthly and shared with each mill.

• The Director of the Occupational Safety and Health Management Platform Chong-Chi Sheng said, ″From the first day on the job, I´ve been very careful in treating every single safety inspection and audit with care. That is because I know full well, that there is no gray area in safety. It´s either safe, or it´s dangerous. It´s either an A or an F. There are no other grades. It is only by working hard, meticulously and continuously – that we can ingrain a culture of workplace safety in people´s hearts.″

• Supervisor of Occupational Safety and Health at the YFY Containerboard and Packaging Business Group Yuan-Tsi Yu said, ″Among those who are injured on the job here, injuries caused by stackers, improper handling of machines, falling from high altitudes are the most common. These are mostly caused by poor working habits that violate the rules in favor of convenience. From today on, let us work together to end these atrocities and accidents so we do not have to see any more properties or lives lost. Together with the platform, let us achieve workplace safety by exercising care and patience.″


The stacker is one of the main safety concerns at our mills. This is the working environment of the stackers at the Xinwu mill. From the drivers´ equipment, the speed and route of the stackers, to the warning signs when backing up and the interactions between the staff members and the stacker, everything must be meticulously observed and noted down.

The monitoring instruments and systems are a part of the production process that not many get to take a look at. In fact, all YFY mills now have advanced computer control systems to ensure that machines work as they should. It is only by clearly understanding what is being measured at these locations and what these numbers entail that we can identify potential dangers.

The responsibilities of our colleagues include daily operations, machine repairs as well as emergency response. When conducting safety inspections, it is important to observe where our colleagues are working at, their protective gear, and their tools in addition to the production process itself, so that potentially unsafe practices can be identified.

Although most major construction is outsourced, workplace safety management remains an important responsibility of ours. When conducting safety inspections, it is important to observe where our facilities and colleagues are located, their protective gear, whether their special procedures have been preapproved, and whether they are abiding by the standard procedure in workplace safety management are important things to watch.

By stopping and observing at every location along the production process, from the storage of recycled paper to the production process, to the cutting of the paper, we can find the safety concerns at our mills.

Per the workplace safety guidelines, each stacker must have a fire extinguisher on board. However, the spirit of safety inspections requires not only an inspection on the face of it (namely, that there is a fire extinguisher), but also that these safety precautions can actually take effect in times of distress (such as, whether the fire extinguisher has expired, or whether it is still functioning).


Sustainability12

Structure of the Occupational Safety and Health Management Platform

Chairman

Chief Strategy Officer

Occupational Safety and Health Management Platform

Packaging and Containerboard Group

Forest Products and Fine Paper Group

Shin Foo

ng Sp

ecialty and

Ap

plied

Materials

UPC

Paper

Printing B

usiness Gro

up

Bo

ardTek Electro

nics Co

rp.

Jiutang M

ill

Taitung M

ill

Hualien M

ill

Ever Gro

wing

A

griculture B

iotech

Qing

shui Mill

Yangm

ei Mill

Co

ntainerbo

ard M

ill

Industrial Pap

er Mill

Vietnam

China

PEOPLE ARE AT THE CORE OF YFY. "SAFETY" AND "HEALTH" CAN NOT BE COMPROMISED.

ALL WORK INJURIES ARE PREVENTABLE.

NO SAFETY NO EMPLOYMENT. ALL STAFF MUST RECEIVE SAFETY TRAINING.

THE SAFETY STANDARDS OF THE CONTRACTORS ARE THE SAME AS OURS.

YFY SAFETY PROMISE

Consumer Products Group

Overseas Other Businesses


Sustainability14


Since the launch of the Occupational Safety Platform in the Paper Container Division of the Containerboard and Packaging Business Group, there have been quarterly inspections at the mills. Members of the platform also convene every month to uncover potential safety concerns at mills. These monthly meetings are attended by the director of the five largest mills along with their occupational safety team, who share their experiences with inspections and projects related to workplace safety and health. This helps develop unified documents and guidelines for paper container mills nationwide.

To help everyone at the mill understand the importance of workplace safety, manager of the Northern Region Kevin Lee set his eyes on the guardhouse at the front gate, where everyone passes by. ″If we had a catchy workplace safety mantra posted at the guardhouse, it must be pretty effective.″ And voila, after several meetings, the Taoyuan Mill Occupational Safety Team, led by Mill director Ching-Hua Chen, set its workplace safety mantra as ″Be Responsible for Your Own Safety, But Also Take Responsibility for Others´ Safety″. They also devised a series of warning signs to improve the efficiency of this communication. Not only does the group want to promote consciousness of workplace safety through inspections, audits, and workplace safety projects, they also hope to promote a culture of safety through slogans and mantras. It is their hope that all of our colleagues can ingrain the importance of safety in their core values and work hard to protect their own safety and others´ safety.

And it was as such that, since the late fall of 2016, the guardhouse at the main gate of the Taoyuan mill not only serves for access control, but also has the added purpose of promoting our workplace safety mantra. Everywhere in the factory, there are traces of workplace safety warnings, which warn of the main risks of being in that area. It is our hope that every one of our colleagues and contractors can be vigilant and exercise compassion for their colleagues. The only way to safety is through caring. Let´s watch for workplace safety, for ourselves and others too!



Manager Anchor Hung has spent several months teaching safety inspection training at the mills. He always starts off with a question, ″What do you most care about during work? Production results? Efficiency? Quality? Or safety?″

Even though they know it is a class about safety, our colleagues are usually thinking of the first two. Hung doesn´t directly point this out, but instead points out these statistics:

1. In Taiwan alone, more than 300 workers die every year due to workplace injuries.2. More than 90% of workplace injuries are caused by unsafe behavior.3. Behind every major workplace injury, there are 30,000 unsafe acts left undiscovered.

At this point, many of our colleagues are surprised, as if they cannot believe that unsafe behavior is the main cause of workplace injuries, but it is so. Dangers are omnipresent in our workplaces and our lives. If we can be more cognizant of the presence of these dangers, we can effectively manage or avoid these risks. The worst thing to do is to be completely unaware of these dangers or to act dangerously even while knowing the risks involved.

In fact, when we pull away and conduct workplace behavioral safety inspections from the view of an outsider, we can clearly see the dangers at our workplaces surface one by one. This is how we can prevent workplace injuries.

Building a culture of workplace safety is no easy task. Through real case re-enactments and the launch of workplace safety duty, we hope to train good judgment among our colleagues with real hands-on experience. This will help them see the dangers in their everyday work and sow the seeds of workplace safety consciousness through practice.

A common saying among experts in workplace safety and health goes: ″Workplace behavioral safety inspections is to workplace safety, as a knife is to a chef.″

How do I conduct a ″workplace behavioral safety inspection″?

A so-called workplace behavioral safety inspection involves entering an area of work and staying there for a period of time, during which you conduct a panoramic survey of the workplace. In this process, you must actively record the safe and unsafe practices observed on site. Through feedback, discussion and follow-up, you can then seek to eradicate unsafe practices.

A valuable safety inspection should involve the following five steps and five main areas of observation:


1STEP

2STEP

3STEP

4STEP

5STEP

Five steps

Decide where to observe and what the route will be.

Stop at certain points and observe: You should stand at a certain location for 5 to 10 minutes.

Look out for the five main areas of observation.

Provide feedback about the safe and unsafe practices uncovered. If you see safety precautions which were not previously seen, commend it on the spot.

Follow up on the results.

Observers should enter the site quietly and observe the reaction of the staff on site when they first see the observer. If they act unnaturally, this usually means there are unsafe practices on site. Common unnatural reactions include:1. Sudden changes in working locations.2. Sudden adjustments to personal protective gear.3. Stopping what he/she is currently doing.

Look for the 15 possible causes for concern in a working environment: falling from heights, falling, collisions, objects falling from heights, objects collapsing, being hit in collisions, rolled into machines, bruises or cuts, stepping through roofs, drowning, extreme temperatures, toxic items, electricity, fires, explosions, and chemical spills.

1. What protective gear should the staff on the ground have on?2. Did they correctly put it on?3. You must point out and remedy the incorrect use of protective gear on the spot if seen. 1. Are they working under safe working conditions? (safety precautions, safety chain, and

a clean workplace)2. Are they using the machines correctly?3. Are they using the correct tools?

1. Are there any unsafe practices?2. Are they following the workplace safety and sanitation guidelines?3. Did they request approval for special procedures? (using fire, hanging, or operations

with limited space)4. Are they following the standard procedure?5. The procedure itself must be checked, including whether the procedure is complete, clear and easily understandable.

Main area of observation

Observe reactions

Look around the area

Watch for protective gear

Check tools and facilities

Confirm procedure

Tips

Five main areas of observation

Sustainability16


Workplace Safety Inspector on the Ground -Education and Safety Goes Hand In Hand

Senior supervisors on the ground at the mill are not only technically proficient; they are incredibly compassionate towards their colleagues. What kind of compassion, you may ask? Their compassion manifests itself in their trying to protect their colleagues from being fined.

The other day, I was at a mill conducting a regular inspection, when I heard a supervisor say, ″Hey, Red Hat is back… Quick, come down, you aren´t buckled up. If they get a photo of that, they´re going to take your bonus away.″

Red Hat? I look up at my hat – it´s red indeed! Bingo, I didn´t realize my code name was ″Red Hat″ up until that point. Seeing that the supervisor was panicking, I walked up and explained, ″Don´t worry, I won´t take a picture, and we won´t take your bonus! Climb down slowly, and make sure to grab tightly on the A-shaped ladder.″

″Sir, sorry! That conveyor belt up there fell off, and I asked A-Mao to climb up and fix it. I thought it would only take a while, didn´t realize that you were here. I´m very sorry.″ On the supervisor´s tan face, you could see his simple and honest smile. Although workers often know how to get things done, they also often neglect their own safety. They are the epitome of the hardworking and earnest Taiwanese, yet they make those of us who work on workplace safety a little worried.

″Money is finite, a life is forever.″ Everyone on the ground knows this, but with all that´s going on, it often goes out the head. Our mission is to patiently and repeatedly remind them of these simple yet incredibly important safety precautions so that our colleagues and contractors can all go home safely, and our factories can operate smoothly.

″Supervisor, if you´re working at a height of more than two meters, you need to be buckled up! That´s just law. Those pipes up there are so slippery. What if they fell off?″

The supervisor patted his head, trying to hide the awkwardness with a smile. ″I know, I know, you´re right! But even if he did want to buckle up, I don´t know where to buckle the belt. I tried climbing up with a ladder to ask him to be careful.″

″Supervisor, there must be other ways to get around this and keep A-Mao safe, like safety ropes. Oh yes! The contractors over there are also doing work up there using hydraulic aerial cage. Wait here, let me try to borrow it for you.″

″Thank you!″

And just like that, with the help of the hydraulic aerial cage and the driver, A-Mao was able to adjust the conveyor belt with all the necessary safety precautions.

The supervisor was delighted that he/she had learned something new to help make work as safe and smooth as possible. ″Wow, I didn´t know there was this kind of equipment. Let me ask my supervisor for approval to purchase them. Thank you, director. Seeing someone with a red hat, I thought they would get us in trouble again. I was wrong -- you were a great help!″

This kind and sincere compliment delighted me too. ″Don´t worry about it. The point of the company´s occupational safety and health platform is exactly to help each mill build strong guidelines. Inspections are an important part of our job, but of course, we would rather communicate the ideals of workplace safety than get you in trouble. Rather than single-handedly trying to combat the problem, it is only by combining the forces of each business body across the Group that we can achieve the goal of eradicating workplace injuries...″

I hadn´t finished what I was saying, when the supervisor asked A-Mao to come over and said, ″In the past, we only knew about production. We don´t stop and think about whether it´s safe. It´s time we changed that.″ Hearing that, I couldn´t help but add, ″Yes, Chairman Ho has been telling us for a while now, that safety is our top priority. Safety is the cornerstone of the sustainable development of a company. After that, we can worry about quality and quantity.″ As my colleagues earnestly nodded in agreement, I knew we were one step closer to the goal of zero workplace injuries.

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What is your expectation for the staff quarters? Is it a bed so comfortable that you forget the exhaustion of the day? A window that allows you to see the beauty of the rivers? A social space comparable to a fashionable café? Or professional treadmills and pool tables like a hotel?

YFY took these suggestions to heart and worked tirelessly to realize these expectations through the 2016-17 Xinwu Staff Quarters Renovation Project.

The Xinwu staff quarters are divided into three buildings, named the A, B, and C buildings. These quarters, built in 1990, are located 5 minutes from the mill by car. Over the past 30 years, they have been a second home to all our colleagues from outside the area. By 2016, the air conditioning and furniture were scheduled for replacement, and the expansion of the Xinwu mill, with the launch of its 3rd machine and the new steam systems, meant that there were more of our colleagues who needed to find new living quarters. With the help of the Construction Department, the Xinwu Mill Management Office launched its staff quarters renovation project in July 2016.

If we´re going to do it, let´s do it well

First up was the C building. From the floor to the walls, from the lights to the showers, from the utilities to Internet and TVs, from the main gate to the furniture, we renovated everything we could. With a limited budget, the planning and design staff took the needs of our employees to heart, including many creative, intriguing ideas.

″We try our best to meet our employees´ expectations. Although we can´t say we´re as luxurious as a five-star hotel, we´re working hard to make sure that apart from work, our employees can enjoy a comfortable lifestyle at the campus.″

Ken Lu, Xinwu Mill Management Office Deputy Director


The A and B buildings, which began construction somewhat later, were successfully completed in the first quarter of 2017. We only have one rule when it comes to the design of public spaces: make people want to spend time here. Therefore, whether it be hardware and facilities or the arrangement of the spaces, we listen to the needs of our colleagues. Whether you want to sit by yourself and read, watch a sports game with some friends, talk with your family members when they visit or even throw a huge party, we have you covered.

Besides, there are treadmills, pool tables, and ping pong tables in the basement. After work, play some games with a few friends and get some hot pot in the social hall to talk about work and life. What a great life!

″I´ll be honest. I didn´t have high hopes when it came to the staff quarters. So when I saw the renovated quarters, I was really surprised. I never imagined employee quarters could be this pretty. One day, I was sitting in the social hall by myself reading a magazine, and the setting sun poured into the room through the windows. There was this vague sense of elegance, and I felt this sensation… that I felt like a different person now,″ said Jen-Chen, an employee at the Xinwu mill, laughing.

Returning to the quarters after work, pick up a nice book and delve into your very own world.

Fashionable and Functional Furniture

As most of the employees that live in these living quarters are young males, we chose a fashionable style that we believe would appeal to them. For our furniture, we adopted a fashionable functional style, building a unique sense of fashion with simple lines and textures. This also allows our colleagues to bring in their own personalized furniture and decorations.

Even in public bathrooms, the yellow light projects a warm sense of community in the space.

Lighting with a Warm Tone

Although many would choose to adopt lighting with light steel frames and fluorescent tubes, we wanted to project a sense of family and community. Therefore, whether it be public spaces, hallways, or rooms, we chose to use yellow LEDs as our light source. We even adopted indirect lighting in our rooms, giving our staff a design experience the parallels luxurious hotels.

The company also purchased pure cotton, lime green bed sheets alongside wooden single and double beds. This provides our colleagues with the hospitality of nature in these private spaces.

Creative and Minimalistic Bedding

To provide quality sleep for our colleagues, we purchased Scandinavian-styled wooden bed frames and bedsteads, as well as minimalistic pure-cotton bedding. In our living quarters, our employees will feel the comfort of being immersed in a forest of trees.

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The point of this is not the contest, but a healthier and fitter lifestyle. We will continue to promote healthier living habits. We hope that, soon, every one of us can live life with confidence and elegance every day.


As the average age of our employees grew, the 3 Hs (high blood pressure, high blood sugar, high cholesterol level) have become unavoidable topics of conversation. The most basic and most fundamental way to stop these threats is, naturally, to stay fit and lose weight. However, while losing weight may sound easy, without determination and the support of peers, it is very difficult to persevere. Therefore, in 2016, the Human Resources Department launched its ″Stay Fit″ program, inviting employees to participate in a 24-week weight loss program in teams of three.

Wen-Chi Fang, a member of the ″I Wasn´t This Fat Before″ team, which won during the 12th week, said, ″Teaming up in groups of 3 really does help for those of us who want to lose weight but are worried about our lack of determination. We will encourage each other and help hold each other accountable. Every time I was going to buy fried chicken or bubble tea, it was as if I could see the disapproving faces of my fellow team members. It´s a timely reminder -- such an effective tool!″

Real health does not just mean losing weight. It is a lifestyle. To help employees develop a healthier lifestyle, we held 13 health seminars, on topics related to daily life, ranging from fitness, exercise, weight loss, and food safety to preventing cancer. This program has been received with wide acclaim among employees across various mills, and we have seen a large number of our colleagues take it to heart, changing their dietary habits.

During the half year contest, every three weeks there were self-checkups, and every six months there were weight measurements. This not only tests the numbers on the scale, it also tests the determination of those who are participating in the contest. ″The reason why we are making it a 24-week program is that we hope all of us can lose weight healthily with a balanced diet and regular exercise. Actually, a weight loss of only 0.5 kilograms per week is all that it takes to hit the mark. It´s not about how much weight you lose in a short time, but rather, it is about ridding yourself of the poor dietary and lifestyle habits and adopting a healthier lifestyle,″ explained Ling-Yu Tseng, an employee in the HR department who was responsible for the event.


″The fragrance always stays in the hand that gives the rose.″Consumer Products Group ″STAR″ Project

Scenario 1: Lee is responsible for an interdepartmental project. Several meetings in, Alex from the department next door really felt that Lee had demonstrated an incredible ability for strategizing and thought. Even though he had already complimented Lee in person, Alex couldn´t help but wonder whether there was a better, more formal way of recognizing Lee for his good work. Writing Lee´s supervisor seems a bit weird…

Scenario 2: Tommy has been incredibly busy planning several simultaneous projects. Listening to his complaints, his friend and colleague, Sam, saw the Tommy´s devotion to his job and dedication to all the individual projects. He also heard enough about Tommy´s problem-solving skills and ability to coordinate. Apart from supporting Tommy as a friend, Sam really wants a way to commend Tommy for his superb performance on the job…

Want to express your gratitude or support for a colleague, but don´t know how? The Consumer Products Group´s STAR project was launched for exactly that purpose. In April of 2016, we launched the STAR platform. If you find that a colleague has demonstrated devotion and performance worthy of recognition, you can get on the platform and send a virtual ″star″ card to them, to express your gratitude and approval. At the same time, the supervisor of the recipient will also get the message simultaneously. It is our hope that through these stars, not only can we encourage those who are commended to keep up their excellence, but also nurture a culture of complimenting each other and create a cycle of kindness.

The STAR project encourages everyone to commend colleagues for excellent behavior across all seven core professional abilities and sustainable management practices. The core professional abilities include: execution, problem-solving, communication, collaboration, strategizing, leadership, and innovation. In order to make the compliments concrete and clear, the project´s name STAR refers to the four components of a message that we hope our colleagues will clearly point out: Situation (S), Task (T), Action (A), and Result (R). This can help make their feedback more concrete, rather than platitudinal.

The project started in April of 2016. Between then and December, a total of 619 messages were sent. The mill with the most uses was Qingshui mill. Associate Manager Hands Ban for the Retail Department has sent 35 STAR cards, the most among our colleagues, while Li-Wei Chiang of the Purchases and Administration Department has received 18 STAR cards, marking the highest number of cards received so far.

Li-Wei, who has almost amassed compliments across all seven core professional abilities, is herself a STAR enthusiast. ″I was probability the first to use the platform. Because when I found out this project launched, I was very excited, and I immediately sent STAR messages to Wen-Chi and Yi-Fang, who were the masterminds behind this project, to thank them for creating this internal mechanism for compliments!″

Associate Manager Ban, who won a Collectible Edition EasyCard in a lottery for his participation in the program, noted that this platform allows him to give compliments to colleagues outside his department. ″Formal messages are more encouraging than verbal compliments, and they leave records! I even tell my colleagues – they can use these cards to identify which of the core professional abilities they are being recognized for and how they can demonstrate and improve on the other ones. To be an excellent manager, the seven core professional abilities are like seven pillars – you need them all.″ Interesting! The STAR project can even be a tool for examining one´s own core professional abilities!

The STAR project has been incredibly well received at the Consumer Products Business Group. We have planned for this project to be expanded to the entire Group. They say ″the fragrance always stays in the hand that gives the rose.″ – Let us shape a corporate culture of not being shy to compliment each other!

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Abundance


Breaking down Plastic: Returning to the Basics

Rebuilding the Paper Dryer at Qingshui Mill: A First in Taiwan´s History



Hualien Mill´s Hydrogen Energy Wins Green Leadership Award at the Asia Responsible Entrepreneurship Awards

Earth Day: Promises to Our Planet

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90 years strong, YFY started out as an agricultural business. We know full well that the energy that keeps us going strong originates from the land. When we take from the land, we must give to the land and protect the land. Therefore, using minimal resources to create maximal value and building a sustainable business that can sustain the environment are the questions that YFY has never stopped thinking about.

YFY and the Circular Economy

An old adage goes: ″There´s always a reason why something was born.″ This is not only the wisdom of our ancestors, but also the unwavering belief of YFY´s founders and employees. For us, what some call ″waste products″ just means resources that we have not yet found a use for. In 2015, we launched a campaign to remove the character for ″waste″ in our internal communications, to ask our colleagues to rethink the concept of ″waste″ and look for new ways to leverage all of their resources.

The Spirit of the Circular Economy

The Industrial Revolution brought a competition of seeking maximum production and maximum consumption by using a large amount of resources and promptly disposing of them. This untempered pursuit of quantity, size, efficiency, and quality has caused consequences such as the depletion of resources, staggering greenhouse gas emissions, global warming and climate change. The concept of the circular economy endeavors us to think back while we look forward — to think through the environmental effects of production and redesign products, production processes, and business models to reduce resource use and waste products and reuse waste products.

What is a Circular Economy?

A circular economy is a business model in which all products and resources can be reused in a cycle. Rather than the linear economic model of going from production to consumption to disposal, a circular economy can allow all resources to be effectively used. And when all resources are effectively used, our resource use will finally be sustainable, and the sustainability of the environment becomes possible.

Everything that God creates has value, but humans are lazy animals. We are only willing to use what we already know we can use directly. It´s very unfortunate.

SC Ho, Former Chairman of the YFY Group

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In addition, in order to integrate the full energy of the Group and seek more diverse ways of reusing resources, the Energy and Resource Recyling Platform was launched at the end of 2014 and officially started operations in 2015. To date, it has worked on more than ten major projects and has seen tremendous progress on its main goals of reducing energy waste, recycling production byproducts and seeking renewable resources:

• Reducing the use of resources

Ever since the establishment of the Energy and Resource Recycling Platform, we have set a goal of reducing energy use Group-wide by 1% per year. Starting the year 2015, we gradually improved our energy efficiency by replacing motors that were performing poorly and monitoring pipe temperatures, air pressure, and steam systems. In 2016, the Consumer Products Group saw reductions of 9.7% in electricity use per ton of paper produced, a truly incredible result.

Water resources are also an important area of concern for YFY. The Water Resource Reuse Platform, established in 2015, improves water resource management through by recycling water fiber byproducts, saving water, and improving water processing.

• Recycling solid byproducts

Recycling solid byproducts has always been an important policy for YFY. Our rates for reuse has long surpassed 70%. Our zero-waste policy of recycling 100% our ingredients and byproducts has always been one of our Group´s main visions. The Chenggong mill became the first mill in the Group to reach that goal in 2016, recycling and reusing all byproducts. In addition to reusing used mud and dross as biofuels and coal ash as material to make concrete, here are two of our specialty reuse programs:

- Zero-Emission Hydrogen Fuels Replace Emissions-Intensive Heavy Oils: We use purification technology to reuse the electrolytic salt byproducts in the production of pulping agents as hydrogen energy. Not only have we been tasked by the Bureau of Energy, Ministry of Economic Affairs to help produce hydrogen batteries and build a hydrogen energy demonstration base, we have also been collecting it ourselves and sending it off for CO2 free incineration to replace the use of heavy oils.

- Organic Sludge Reused as Fertilizer: The Hualien mill reuses organic sludge and combines it with sawdust, which is then fermented together, producing organic fertilizer. Experiments have confirmed that this fertilizer can help adjust the pH and increase the proportion of organic matter in the soil. This fertilizer has been recommended by the Agriculture and Food Agency for Excellence in Organic Fertilizer among Taiwan Brands.

In addition, starting in 2010, we have been applying for approval to reuse green sludge as material for making concrete. In 2015, we officially signed a reuse agreement with Taiwan Cement´s Hualian mill. With respect to the reuse of dross, we are experimenting with systems to break down plastic into petroleum. In the future, applying experience from abroad, we will continue to promote fly ash and bottom ash as material for making concrete.

• Promoting renewable energy

Taiwan heavily relies on resources from abroad. More than 90% of our energy comes from imported sources. Harnessing more of the potential of biofuel and renewable energy sources has always been one of our goals. In addition to waste sludge and dross, and hydrogen energy, which can be used for fuel and electricity generation, we are looking to harness the biogas produced in the anaerobic digestion process of water used in the production process. In addition, when the plastic decomposition project succeeds, it will replace heavy oil as clean, sulfur-less and low nitrogen fuel source for our five paper container mills in Taiwan.

Our resources are finite, but our desires are infinite. The reason why YFY launched its energy resource and water resource platforms is to ensure that we consider the efficient use of resources in every step of the production process. No misplacement of any resources. All byproducts will return to the cycle to form a sustainable, green production system. As the push for a circular economy intensifies, more and more resources will be devoted to this process. We look forward to working with experts internally and externally to make zero-emission and zero-waste business models possible for once!



Dong-Fa Ho from the Yangzhou mill: ″In the past, our mills worked by themselves. When we faced issues, at most, there were some discussions among mills of the same Business Group. It´s very difficult to have a way to communicate and share expertise. That is the main function of the platform – it brings together the people and expertise to resolve difficult problems. We can teach each other and help each other improve. In addition, when we face issues, the views of the professionals on the ground often clash with the views of the supervisors of the mill. This is when the platform can step in and provide backing for us – when our colleagues at the mill provide suggestions, the platform will step in to voice their concerns and fight for resources to solve the issue.″

Pulp,Paper andBoard mill

Wetland

Forest

Non-recyclableResidues

Fertilizer

EnergyPlant

VirginFibers

WoodChip

Paperand BoardProducts

RecoveryPaper and

Board

RecoveredFibers

PlasticSludge

SludgeWoodDust

CO2

My Views on Energy Resource and Water Resource Platforms

Pulp and Paper Mill Zero-emission Cyclical Diagram

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Breaking down Plastic:Returning to the Basics

The main raw material for producing industrial paper containers is recycled paper, both imported and domestic. However, recycling systems both here and abroad are not 100 percent precise, leaving metals and plastics in the paper in various amounts. The metal and plastic that cannot be used in the papermaking process inevitably becomes a byproduct in our production process, otherwise known as waste.

The recycling of byproducts in the papermaking process has always been one of our main priorities. The metals can easily be extracted and recycled with magnets, but plastics are much more difficult to deal with. After many years of research, starting in 2016, YFY is working with the ITRI to invest $NT 50 million to build cutting edge technology that will break down plastic byproducts into petroleum through the process of wind winnowing and decomposition, making it a ″NEW″ resource.

The construction process began in Q1 of 2016 at the Xinwu mill. The recycling process can be divided into two systems. The first is the wind winnowing system, which capitalizes on the weight differences between plastic and fiber byproducts in the production process to separate them. After going through the winnowing system, the plastic enters a system designed for decomposition. In an anaerobic environment, the plastic is heated to extremely hot temperatures, allowing the plastic to decompose into petroleum, wax and carbon. This also allows us to collect the flammable gases produced during the process, which is used as fuel for the reactor.

Our winnowing and decomposition systems are now in a test phase of production. When it is operated at maximum capacity, we estimate that it will be able to process five tons of plastic byproducts daily. The petroleum produced in the process can hopefully become a sulfurless, low-nitrogen clean energy source for YFY´s five paper container mills in Taiwan, replacing heavy oil.


Rebuilding the Paper Dryer at Qingshui Mill:A First in Taiwan´s History

The dryer in the paper machine is worshipped almost like a divine being at Qingshui Mill. Therefore, Qingshui Mill hosted a farewell ceremony for the dryer, thanking it for having produced 300,000 tons of toilet paper for us over the past 26 years. Only then did the construction process start. In addition to being the first case in Taiwanese toilet paper history of renovating only the dryer in a paper machine, we also needed to ensure that machine #8, which is in the same space, continued to operate normally. Therefore, the project proceeded under very difficult circumstances. ″Interestingly, the original design did not have a digital file. When we reconstructed the digital version from the design itself, we discovered that many dimensions and measurements have shifted after 26 years of use. As we cannot end production, we had to take pictures and enlarge them on a screen for measurement. This was an arduous process,″ shared Jay Tsai, manufacturing manager at Qingshui Mill.

The main body of the dryer, which was previously cast iron, has been redesigned to use stainless steel. Not only did the weight drop by 15%, it has better thermal conductivity. Higher steam pressure and temperatures have dramatically strengthened the drying capacity. In order to improve overall efficiency, we also changed the original 277kW circulation fan into a 22kW ventilator, saving more than 90% of the energy required. These improvements reduce our use of steam energy by 5,700 tons and energy use by 1.52 million kW annually. Our steam consumption per ton of paper is down 21.5%, energy use by 16%, in turn reducing our carbon emissions by 2,400 tons.

The machine #7 at Qingshui Mill will face the challenges of the new era with a new and much stronger heart!

The dryer, which removes the moisture from the paper and allows it to fully come into its shape, is the heart of the toilet paper machine. In the summer of 2016, to improve our energy efficiency and meet our electricity savings goals, YFY decided to launch the process of replacing the core of machine #7 at Qingshui Mill and rebuilding its dryer.

Paper machine #7 was built in 1990. Its 12-feet cast iron dryer is the oldest dryer in use among the 14 toilet paper machines used by the Consumer Products Group. However, its energy and steam efficiency is admittedly poor compared to present energy saving technology. Therefore, after much deliberation, when machine #9 was ready for production, we decided to design a new dryer for machine #7 to better suit our energy needs.

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For many businesses, stricter environmental regulations may symbolize higher costs of operation. But for YFY, they push us to commit to environmental investments, improving facilities and operation procedures to optimize for sustainability.

On the surface, Taiwan seems to be an island with ample water resources, with low costs of acquiring water. Traditionally, whether it be businesses or individuals, the public mostly lack a mindset of water resource management, not to mention additional investments for water savings. Therefore, to rouse awareness of the scarcity of water resources among businesses and the public, in March of 2015, the Environmental Protection Administration finally launched ″Water Pollution Control Fee Collection Regulations″, eventually beginning to collect water pollution fees in May.

Yangmei Mill´s Engineering Manager Rex Jiang shared, ″In early 2015, we heard that they were collecting water pollution fees. The amount wasn´t large, but we knew it was a great opportunity for us to communicate internally the importance of improving water management. Therefore, we immediately began to plan to lower key indicators such as COD (chemical oxygen demand) and SS (suspended solids).″

After consulting with colleagues and external experts alike, we built a strategy to combat both SS and COD.

• SS (suspended solids): After several different coagulants were tried, the Yangmei mill decided to employ high-charge polymer polymerization to help father mud. It can quickly catch the small fibers in the water discharged during the production process, even those as small as feathers. The larger fibers are more likely to settle and can reduce the burden on the water treatment systems.

• COD (chemical oxygen demand): We noticed that the bioconcentration of the bio-pool is the key to reducing the chemical oxygen demand. To improve the biological concentration with the spirit of science, our colleagues at the Yangmei Mill conducted a number of tests seeking the best solution. Our colleagues in Engineering Dept. designed the first generation of a biological retention network, rolling a net into a cylindrical shape. However, this had little effect on bioconcentration. The second generation was therefore designed to dramatically increase surface area with a rectangular surface. After a year of testing and improvements, we have successfully increased our MLSS value 75-fold. "We can see that our network has not only succeeded in attracting creatures to settle down, but also their wives and children, even their grandchildren," said Huang Yu-chung humorously, who was dubbed the mother of the Yangmei Mill Bio-pool.

After more than a year of work between 2015 and 2016, Yangmei Mill´s SS indicator has dropped by more than 60% and its COD value has dropped by more than three-fourths, saving 95% of its water pollution fees. ″Our next step is to push our values to below 10% of water pollution standards, to avoid having to pay water pollution fees altogether,″ vowed David Liu, Occupational Safety Director at Yangmei Mill.



Inheriting the papermaking spirit of Cai Lun from the Han Dynasty, nPulp was inspired by horse manure. After 12 years of tireless research and development, nPulp is now YFY´s patented straw bio pulping technology. nPulp puts straw, something that has been incinerated by farmers, causing air pollution in China, through a three-step process of dividing and filtering for fibers and scraps. The fibers extracted are then put through a chemical-free production process, with added heat, machinery and enzymes – all culminating in the production of straw bio pulp. This bio pulp can then be used to manufacture various paper products, and even in architecture. While byproducts cannot be used to produce pulp, they are rich with organic matter. This is used as natural fertilizer for the fields, using the essence of the straw to revitalize the soil. This embodies the laws of nature, joining in the cycle of life, avoiding the air pollution associated with burning the straw.

The World Green Design Forum hosted by the World Green Design Organization (WGDO), first hosted in 2011 in Europe, is widely acclaimed and has become a major global environmental gathering in recent years. In 2016, it attracted several thousand participants from nearly 30 countries and regions around the world. The new World Green Design Grand Award, established in 2014, focuses on recognizing new green technologies and products that have made an important contribution to environmental protection, and is otherwise known as the Oscars for green design. After being recognized at the Edison Awards in the US in 2014, this win at the World Green Design Grand Award clearly demonstrates that nPulp has set a new bar for the papermaking industry.

The innovative nPulp technology (comprehensive utilization of straw) spearheaded by YFY has again won recognition by an international award, winning silver at the 2016 World Green Design Grand Award!

Representing YFY at the awards ceremony, nPulp Mill Manager RZ Huang has been instrumental in the research and development of nPulp since he was a PhD student. Seeing the many years of research come to fruition, RZ was excited to accept the award on YFY´s behalf and reiterated YFY´s determination to continue to make strides towards the goals of Zero-Waste and a Circular Economy.

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Hualien Mill´s Hydrogen EnergyWins Green Leadership Award at the Asia Responsible Entrepreneurship Awards

Our Hualien Mill made a first in the industry by adopting a purification technology to harness electrolytic salt by-products from the pulping process to produce hydrogen energy. This project won the Green Leadership Award at the 2016 Asia Responsible Entrepreneurship Awards, an honor often called the ″Sustainability Nobel″.

The Hualien Mill Hydrogen Energy Project is divided into two parts: the Hydrogen Energy Demonstration Base and the Petroleum-Replacing Hydrogen Fuel. With regards to the Hydrogen Energy Demonstration Base, at the request of the Bureau of Energy at the Ministry of Economic Affairs, we worked with Asia Pacific Fuel Cell Technologies (APFCT) to produce a hydrogen-powered battery and develop relevant applications to build a Hydrogen Energy Demonstration base. As to the Petroleum-replacing Hydrogen Fuel project, we designed a hydrogen gas recapture system in our mill, collecting the hydrogen gas for incineration in a lime kiln, producing steam without the need for petroleum. The system has been in operation since April 2015. In 2016, the amount of hydrogen gas recaptured amounted to 885,398 m3, saving 204,436 liters of petroleum and reducing our carbon emissions by 636 tons.

For YFY, not only is the Hydrogen Energy project part of a global trend towards renewable energy, it is also the best manifestation of our ″there is a use for everything″ philosophy. The hydrogen gas used in our project is usually simply an electrolytic byproduct from our pulping process that never gets another look. After purification, we can now use it as an energy source with both environmental and economic value. This is yet another step we are taking towards our vision of a zero-emission future.

Hydrogen purification technology can help revitalize our industries and promote recycled energy sources. More importantly, this technology demonstrates YFY´s determination and sense of duty towards local communities. It is our hope that as our technology matures, the Hydrogen Energy Demonstration Base, based in the Hualien Mill, will continue to expand, ultimately forming a hydrogen energy industry hub and building new ways to commercialize hydrogen energy. It is our hope that the boom of the hydrogen energy industry will allow Hualiein to become a shining beacon of urban development fueled by hydrogen energy, in Taiwan and the beyond. In addition, we will continue to invest in researching the purification and recapture of hydrogen gas to work with the government to contribute to reducing carbon emission and promoting industrial growth.

Asia Responsible Entrepreneurship Awards

The Asia Responsible Entrepreneurship Awards (AREA) was launched in 2006 by the non-governmental organization Enterprise Asia. Its awards include the Green Leadership Award, the Investment in People Award, the Health Promotion Award, the Social Empowerment Award, the SME CSR award, and the Responsible Business Leadership Award. These six awards push Asian businesses to fulfill their corporate social responsibility. 28 countries participated in this year´s awards, including Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Taiwan, India, Sri Lanka, Bangladesh, the United Arab Emirates, Turkey, etc. This demonstrates the international community's continued dedication to the issue of corporate social responsibility.


Earth Day: Promises to the Our Planet

In contrast to the many businesses launching one-time beach and mountain cleanups or switching off lights for an hour, on Earth Day 2016, YFY invited our colleagues to make a promise to our planet, to contribute to sustainability on the job and in their daily lives.

The activity can be roughly divided into two parts:

The first is a petition. We invited our colleagues at our main mills and offices to write down their own sustainability promise on our petition board. All around our 22 offices and mills, 3,736 of our colleagues made their promises to the planet.

The second is the Earth-Man Photography Contest. Our colleagues documented their actions to promote sustainability in pictures and in text and uploaded them to be voted upon by their colleagues. A total of 8,113 votes were cast on the photos, electing 10 winners in total on both sides of the strait who received prize money, and 27 who received a certificate in recognition.

Our colleagues´ enthusiastic participation in our Earth Day activity exceeded our expectations and encouraged us to dedicate ourselves to reducing our environmental impact. Environmental protection starts small. It is not only the responsibility of the government, but for each of us as well. The spirit of Earth Day is to encourage every one of us to act to reduce our carbon footprint. Starting in 2016, YFY´s locations have now stopped using one-use utensils and cups as well as bottled water. In addition, we continue to seek solutions that allow us to use all of our resources to the fullest. It is our goal that when YFY turns 100 years old, we will possibly achieve our vision of zero-waste at each of our mills, putting in action the ″there is a use for everything″ philosophy that we have strived for so long.

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Prosperity


″Taitung Academy″ Enters Its Second Year: Our Annual Bookworm Gathering



Creativity, Art, and Environmental Protect: The Cardboard War Contest Project



On the morning of July 8th, 2016, Typhoon Nepartak made rainfall in Taitung City, with winds of up to 220 km/h, leaving 3 dead and 142 injured. In Taitung alone, economic losses amounted to $NT 2 billion. This was the single most destructive typhoon Taitung had seen in 60 years.

Thank You to Our Colleagues at Taitung: The Brave, Unsung Heroes

Chung Hwa Pulp´s Taitung Mill is located right in the heart of Taitung City. Inevitably, it likewise faced the onslaught of Typhoon Nepartak. All production ceased at the height of the storm. The site was ravaged by the typhoon, leaving several offices, production lines and storage facilities damaged as well as countless leaking issues. In addition, the pipes and iron doors of the manufacturing area were destroyed, not to mention the countless plants and trees taken down by the winds. Suffice it to say, the mill was badly damaged.

In addition, the houses of many of our colleagues at the Taitung mill were damaged. Movingly, many of our colleagues came to the mill at their earliest convenience to repair the damage done to the Taitung mill, even though their own houses were often badly damaged as well. Mill director Rong-Ming Lin remarked, ″Back then, the streets of Taitung City were almost all blocked by fallen trees, and the government had called the day´s work off, but many of our colleagues found ways to rush back to the mill. Although we feared for everyone´s safety, it was really moving to see the deep connection between our colleagues and the mill.″


A typhoon can take down trees and wreck roads, or even destroy our houses. But at the same time, it can also bring our hearts closer together, push us to spread compassion like concentric circles, one circle at a time, and plant seeds of hope for our communities.

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The ″abundance (yu)″ in YFY (Yuen Foong Yu) is a call to our colleagues to offer our help to our communities and society with our power. After Typhoon Nepartak, in addition to repairing the mill and the work facilities, accompanied by our representatives from YFY headquarters, our colleagues at the Taitung mill visited the ravaged communities and groups in Taitung. In order to help these children from disadvantaged families in Taitung, with the help of the Group, we planned the ″May Hope Overcome the Storm″ Typhoon Nepartak reconstruction project.

This project starts at the Taitung mill. First, we took care of the families of our colleagues, then the communities near the mill, and finally non-profit organizations across Taitung. The project was roughly divided into three parts: material resources, housing repairs, and scholarship donations. Directly following the storm, we mustered together the resources of the Consumer Products Group and donated them to 18 non-profit organizations across Taitung. In addition, when we visited, we learned that 800 families sponsored by the Taitung Fund for Children and Families (TFCF) were living in affected communities, 50 of which had their houses damaged. As this occurred during the summer vacation, many families were struggling to find money to pay tuition fees ahead of the upcoming school year due to the storm. After some discussion, the Group decided to sponsor repairs for 3 of the families affected by the TFCF and launched a matching donation campaign among colleagues for scholarship funds for the TFCF, with the hope of being able to encourage more of our colleagues to donate.

Although this was a community project centered in Taitung, donations flooded in from our colleagues across Taiwan. Because donations require filling out information online, many of our colleagues who were not familiar with the Internet called us for step-by-step guidance on filling out the form. ″Finally! I was really worried I wouldn´t be able to help them,″ one of our colleagues exclaimed when she finished filling it out. Another colleague took a day off to pack an entire truck of aid material to donate and personally drove it from Taoyuan to YFY HQ in Taipei. Another colleague kept calling us to ensure that her donations were going through. She said that she was herself the mother of two children, and wanted the disadvantaged children of Taitung to have an opportunity to go to school. At one of our mills, colleagues worked together to handwrite their donations and collected them to send it off together. Even some of our colleagues in China donated across the strait with the hope of helping the disadvantaged children of Taitung. Every single contribution for these children is testament to the generosity of YFY employees in helping others and the true epitome of our value of ″abundance (yu)″.

The ″May Hope Overcome the Storm″ project began seeking donations on August 19th, 2016. In the span of a week, we received contributions from 368 of our colleagues at 23 companies in the Group. In total, our small-dollar contributions amounted to $NT 800,000, which was matched by the Holding Group. The total $NT 1.6 million contribution will help roughly 560 disadvantaged children at the TFCF to go to school. All of this work is meant to sow the seeds of hope, in the belief that one day, they will blossom. We will not cease our efforts to extend a helping hand to local communities, and we hope to bring compassion to the most needed corners.


Helping Others with Your Power: Launching the ″May Hope Overcome the Storm″ Project


″Taitung Academy″ Enters Its Second Year:Our Annual Bookworm Gathering

″Wow, you´re so tall!″ ″Hey, where´d your teeth go?″ In August, the 20 children from the Taiwan Fund for Children and Families Center in Guanshan, Taitung are again heading up North to meet with volunteers from YFY, who they normally can only talk to through a computer screen. The sweltering summer heat made Taipei hot and stuffy, yet the volunteers and children were teeming with even more burning passion. They greeted each other with cheers and hugs, and it was like that that their two-day gathering began.

In 2015, YFY launched a three-year service project named ″Taitung Academy″. Every Wednesday afternoon, YFY volunteers and children in Taitung take 30 minutes to read a book together across video chatting. After two semesters of reading together, the volunteers and the children had developed a unique sense of mutual understanding. They had come a long way from meeting for the first time in the summer of 2015. At the 2016 gathering, the children extended their arms and greeted the volunteers enthusiastically. There wasn´t a moment of silence in the two-day schedule – everyone was so excited!

The schedule on the first day was Taipei Children´s Amusement Park. As they entered, the children grabbed the volunteers to rush to their favorite facilities. Some of them braved the ″Jungle Scream Treehouse″ (freefall). While the exhilaration of moving up and down made the children scream in joy, the volunteers were quite terrified to say the least. Spinning Teacups were yet another popular attraction. Some children crazily turned the teacups, not even letting go as they lost balance, laughing in joy with their volunteer buddies.

The big event of the second day was a gratitude dinner. The children prepared a choir performance, ″When I feel the urge to give up, there is a voice that tells me, to say thank you to setbacks. Your warm encouragement, my dearest, fills me with courage. I will persevere and work hard for my own sake. Thank you for your blessings and your love.″ This song, titled ″My Dearest″ was composed and written by children who had been helped by TFCF Taitung. The song was warm and touching. As the children sang, the volunteers couldn´t help but feel the tears coming. Hsiao Yen, one of our volunteers, said, ″it felt like a graduation ceremony, where I was their parent.″

Another highlight of the gratitude dinner were the awards. John (pseudonym), who won third place in the 3rd and 4th grade division in the ″2016 Coastal Academy″ drawing contest, drew a portrait of the volunteer Su-Li who had encouraged her with a smile for the past year. John remarked, ″The volunteer was like my mother.″ This touching remarked had Su-Li both laughing and in tears.

William Butler Yeats, a famous poet, once said, ″Education is not the filling of a pail, but the lighting of a fire.″ We will continue to support the ″Taitung Academy″ project and protect these budding flames with our company. It is our hope that these budding flames will one day become shining stars in the sky.

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While many businesses may choose to adopt a practical ″just donate the money″ philosophy when it comes to philanthropy, YFY believes that it is not easy to do good well. Taiwan´s annual charity contributions amount to a total of more than $NT 50 billion. However, most of them focus on a small number of very famous charity organizations and large projects. Many hardworking charity organizations, on the other hand, have little resources to work with due to their small size and poor brand recognition and marketing strategy.

Therefore, starting in 2011, YFY visited more than 100 charity organizations across Taiwan to understand their needs and provide useful resources, even providing marketing materials and discussing possible ways to cooperate. For YFY, it is not about their name recognition. It is not even about whether they are registered with the government. We care about whether they are doing meaningful work and whether our resources can be of help to them.

And like this, we started working with a diverse group of charity organizations, varying in size and type, across 16 counties and cities all around Taiwan. With the establishment of our eCommerce platform, YFY Shop, not only do we provide needed consumer goods, we also integrate the resources of other brands on the platform to provide the resources that are most urgently needed by the charity organization. At the same time, we also seek donations internally among our employees to provide funds to the organizations that need them most.

In 2016, YFY Consumer Products Group donated 529,873 units of household products, worth a total of $NT 4,639,779 to 83 non-profit organizations across Taiwan.

On November 13th, 2016, on a seemingly ordinary weekend afternoon, the children of four elementary schools near Xinwu Mill and their parents were invited to a theater owned by Hsin-Yi Foundation, a YFY-affiliated organization. They participated in an afternoon of international understanding, identity, family, and art.



Performing for the children was the Spanish Puppet Theater Group Periferia Teatro. The performance was adapted from Guji-Guji, a children´s book written by Taiwanese author Ji-Yuan Chen. Guji-Guji follows the story of an alligator who was born in a duck´s nest, as he explores his self-identity. The simple drawings and the moving scenes made for a widely-acclaimed children´s book that has now been translated into 18 languages. The leader of Periferia Teatro was also inspired by the Spanish version, thus deciding to make it into a puppet show. After a nationwide tour in Spain, having arrived at the birthplace of Guji-Guji, Periferia Teatro´s team members were excited, interacting with the children in their newly learned Chinese.

The day´s performance was organized by the Hsin-Yi Foundation as well as YFY´s Xinwu Mill. We invited students, parents and teachers from Yung-An Elementary School, Ben-Gang Elementary School, Da-Po Elementary School, and Ke-Jian Elementary School, as well as the children of TFCF in South Taipei, for a total of 180 participants who experienced Guji-Guji´s adventures of compassion and love. ″Quack, quack!″

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″Thank you for inviting us!″ Zhi-Ming Yen, principal of Ben-Gang Elementary School, kept saying to the staff from Hsin-Yi and Xinwu Mill. From first through sixth grade, Ben-Gang has only 70 students. More than one-third of the students were here. They numbered 38, including their parents. The principal noted, ″This is a rare opportunity for our children to experience an international art performance. Of course, we encouraged them to sign up and participate!″

Xinwu Mill has now been around for almost 30 years, and its connection to the community is indivisible. Many of Xinwu Mill´s employees are alumni of the four elementary schools invited to the event. These schools are also where many of their children are attending. We are especially invested in the education of local children. In the past, we have hosted a number of Green Oscars film festivals, bringing environmental knowledge into the schools. This time, we bring the children outside their school, to watch an internationally acclaimed puppet theater group perform and experience a different artistic culture.

In order to bus the students to Taipei safely to watch the show, Xinwu Mill made extensive preparations, visiting and communicating details of the visit. Xinwu Mill employees were on board every single bus on the day of the event, to make sure that every single detail, from departure, watching the show, to returning home, is done right. One of our employees was herself a parent of three of the children attending the show. She served both as the bus monitor and by taking care of the other children on the bus.

Our love and compassion for our employees extend beyond Xinwu Mill. We will extend it to their families and their communities and beyond.

About Guj-Guji

Guji-Guji is an alligator who grew up in a duck´s nest. Although he had a weird appearance, the duck mother loved him and the other ducks all the same. As he grew up, Guji-Guji experienced disillusion and confusion about his self-identity. Is he a duck? Or an alligator? At the end of it all, he found his answer: he would be a happy ″alligator duck″.

Guji-Guji is a work by picture-book author Ji-Yuan Chen and published by YFY-affiliated Hsin-Yi Foundation. It has been translated into 18 languages to date and has been a bestseller among children´s books in the United States, Sweden and Korea.



Creativity, Art, and Environmental Protect:The Cardboard War Contest Project

Who says the traditional manufacturing industry can´t reach out to campuses and bring energy by collaborating with universities on projects? On May 29th, 2016, we co-hosted ″the Cardboard War Contest: Departure″, the first creative cardboard grand prix across all of Asia at Xinzhuang Stadium with the Taiwan Paper Industry Association. Not only did it bring together 38 teams and 500 young scholars across the country to become cardboard warriors, each of our mills encouraged participating students to unleash their creativity on the cardboard and pass on the paper industry´s stewardship of the environment.

2016 was also the 70th anniversary of the Taiwan Paper Industry Association. In contrast to the traditional, grandiose celebration, the association worked with us and other members to capitalize on this opportunity to build a stronger connection between the paper industry and students of the next generation – and that was how ″the Cardboard War Contest″ was board. University and college students entered the event in groups of between 10 and 20 and worked to design their own uniforms, weapons and tanks with recycled paper. At the competition, teams competed against each other two at a time, with the winning team being the first to plant a flag on the opposing team´s base or seize the opposing team´s crown.

Although the game´s rules are simple, building uniforms with cardboard was quite a challenge for students. To help students successfully complete their missions and harness their creativity, employees from YFY mills across Taiwan took part as ″cardboard angels″, mentoring participating students. They provided their expertise on a wide range of questions, from the material behind cardboard, the qualities of different types of cardboard and how much weight they can withstand, to how to make a design diagram, cut cardboard, and put it together.

On the day of the event, students showcased a diverse array of war uniforms and weapons, from Egyptian warriors to Vikings and Pirates, from firefighter heroes to poker heroes, and from indigenous warriors to the Taiwanese Toa-sian ang-a. (a god in traditional Taiwanese religions) There was even a four-meter high paper tank crushing the opponent ranks. The diverse and creative designs made out of recycled cardboards awed the audience throughout the event.

″Although we spent a lot of time those few months helping those students, we also learned a lot ourselves during the process. Basically, because students don't really understand the papermaking process, their ideas were totally out-of-the-box. They can create possibilities that we never would´ve thought of. Some of their suggestions sound absolutely crazy when you first hear about it, but when you play around with it and fix it up, a lot of their finished projects were definitely much better than what we ´professionals´ could have made,″ shared managing director Yuan-Huang Chang of Dajia Mill.

The Viking Pirates team from Chaoyang University of Technology, who won the Best Team award, was mentored by our colleagues at Dajia Mill. Looking back at the memories during this event, the students could hardly contain their excitement: ″At the time, we joke about this being a ten-credit core class. We were spending tens of hours preparing every week, basically doing everything short of camping out at Dajia Mill. We are really, really grateful for the help of those at the Design Center. We really learned a lot. This event has really opened our eyes to the infinite possibilities that paper presents!″

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Paper is the first environmentally friendly product to be invented. Paper is made from natural fibers like wood, hemp, cotton, and straw, making it easily recyclable into other forms of paper. According to statistics from the Taiwan Paper Industry Association, recycled paper consumption in Taiwan in 2016 reached 3.6 million tons, of which 80% (2.88 million tons) were recycled here in Taiwan. Apart from the little that is imported, the recycled paper in Taiwan is basically all given to the paper industry as raw materials. According to the internationally accepted method of calculation, Taiwan´s recycling rate for paper reaches 91.1%, with cardboard paper being the chief recycled form of raw material in the country.

In 2017, we will launch ″The Cardboard War Contest: Dragon Boats on Land″, an event that will continue to deepen the ties between the paper industry and students through collaborations. We hope that more likeminded individuals join us in our pursuit of environmentalism and sustainability.

Note 1: International Recycling Rate for Paper = Recycled Paper Consumption / Total Paper and

Paper Cardboard Production

BEST TEAMAWARD

2016 ″The Cardboard War Contest: Departure″ Winners

Viking Pirates,the Chaoyang University of Technology

$NT 100,000 in prize

PEOPLE´S CHOICEAWARD

Shang-Bei Special Forces, National

Taipei University of Technology

$NT 30,000 in prize

CREATIVITYAWARD

Wei-Wei Snails, National Cheng Gong University

$NT 30,000 in prize



Ever since Guanghua Elementary School was established, the Hualien Mill has never stopped investing its resources in its program. ″If Guanghua Elementary needs it, we´ll provide it,″ said Director Jen-Yong Dai. ″In the beginning, this was because many of our colleagues had children here. We wanted to take care of our colleague as well as their families. After a while, we realized it was an honor to make a contribution to the community, so we never stopped. Also, this is a remote community, and they definitely do need the resources. If we can help with their education and provide positive energy in the lives of the children, this is a very meaningful contribution.″

Our work brings children dancing with smiles on their faces.

Every year during the Chinese New Year, our colleagues at the Hualien Mill looks forward to the moment when the kindergarten students from Guanghua Elementary arrives to perform. Under the instruction of their teachers, students make their own props to perform the dragon and lion dance. Not only is it funny and, of course, childlike, it brings life to the Hualien Mill for another exciting year.

A proverb goes, ″More blessed to give than to receive.″Yes, definitely.

At the Guanghua Village Schools Sports Day in October 2016, Jen-Yong Dai, management director at the Hualien Mill, was awarded the ″Chung Hwa Pulp: 30 Years of Sponsoring the Guanghua Elementary School″ medal. This 30-year sponsorship shows the close relationship between the Hualien Mill and Guanghua Elementary School and is the epitome of YFY´s commitment to mutual prosperity with local communities.

We began by sponsoring the tuition fees of the students. Early on, the Hualien Mill was most concerned about the basics: the right to be educated. Later, because the proportion of children who were raised by grandparents rose gradually, we sponsored an after-school program at the school. Not only does this help students with their education, it also enriches their lives through extracurricular activities and hobbies. In 2014, the Hualien Mill capitalized on their specialty to provide organic fertilizer and sawdust to Guanghua Elementary and teach them how to grow plants. We helped the school set up a student farm named ″LiPaHak″, the indigenous Amis word for ″happy″, where vegetables in indigenous traditions were grown. More than sixty percent of the students had roots in the indigenous community, and this helped them learn about the agricultural traditions of their heritage through a hands-on approach.

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