intan serah yong jin kun - malaysiastock.biz filecarbon management is a direct measure of the...

YONG JIN KUNNational Taekwondo Athlete

INTAN SERAHNational Futsal Athlete

9.0MINIMISING

ENVIRONMENTALHARM

Environmental responsibility is vital

to SCGM Bhd’s commitment to

sustainable development. We track

and monitor our impact on the

environment through a combination

of initiatives, from planning, to the

final stages of our manufacturing

process and as well as our

development of our factory.

OLIVIA TAINational Rhythmic Gymnast Athlete

KOK JUN EENational Taekwondo Athlete

SARAH YAPNational Taekwondo Athlete

Environmental performance is evaluated by monitoring the overall results for the Division as well as individual

performance by township or business unit.

9.0 Minimising Environmental Harm

Subscribing to ISO14001:2004

Environmental Management

System certification for FY2019

Quarterly environmental

indicators testing and

monitoring

Inclusion of environmental

clauses in contract

documents

Environmental education

and training

Monthly ESH site verification

by ESH representatives

Environmental risk assessment

and scheduled waste

management compliance

guided by our Standard

Operating Procedures (SOPs)

Environmental Management

Plan compliance

WE MINIMISEOUR ENVIRONMENTAL

IMPACTS THROUGH

ISO14001:2004

We spent RM125,000 on

environmental education and

training in this reporting period

SCGM BHD | Sustainability Report 2017

52

Issue Mitigation Initiative

Materials Ensuring toxic materials used in our operating units and construction sites

(if any) are handled and disposed properly

Tracking and monitoring of waste generation, as well as recycling

activities are carried out across our operating units and construction sites

Noise monitoring tests are carried out at site to monitor noise levels

Effluent Monthly inspection to check on the quality of water discharged

Noise

Waste

As a responsible manufacturer, SCGM Bhd endeavour to be environmentally compliance in achieving the goals

and target of zero environment incidents.

During our manufacturing process, we monitor our activities via ESH performance monthly reporting and

management review during internal audits. We have also organized training for our staffs, stakeholders, and

vendors to ensure compliance in areas of scheduled waste handling.

Through our environmental compliance programme, SCGM Bhd has identified several issues relating to the

environment that may result from our operations. These issues have been listed below with the associated

mitigation initiative being applied.

In the reporting period, SCGM Bhd had no significant fines and non–monetary sanctions for non–compliance with

environmental laws and regulations.

9.1 Environmental Compliance


53

Carbon management is a direct measure of the sustainability of our operations footprint. Carbon emissions also impact the

environment. SCGM Bhd is aware of the potential risks of changing environment as a result of climate change, involving

exposure of extreme weather events and the need to emphasize our resilience in our business value chain and products.

SCGM Bhd will start our carbon management programme and carbon footprint reporting in next financial year using this year

as a baseline. Under this initiative, we will report our greenhouse gas emissions associated with our manufacturing plant in

Malaysia. Our carbon inventory is updated on an annual basis and calculated according to calendar year.

To illustrate, the graph depicted below shows the amount of energy purchased during the FY2017. Based on the coefficients of

0.631kg CO2/Kwh, thus the emission of CO2 is shown below.

Other sources of emission such as trucks, HVAC, diesel and

gasoline consumption by staffs, management etc. will not be

taken into this year reporting due to unavailability of data.

However, we will make our duo effort to have this

information included in the next financial year. Based on the

table above, 1,304,475 kg/hour of CO2 is emitted during our

financial year.

9.2 Carbon

January

February

March

April

2, 1 56,023

2,082,296

2,290,461

2,098,733

1360.45 1

13 1 3.929

1445.28 1

1324.579

Kw/hourCO2 emission/

ton/hourYear of2017

May

June

July

August

September

October

November

December

2,127,362

1 ,99 1 ,666

2,062,344

1 ,966, 1 74

2,043,07 1

2, 1 18,820

2,063,1 72

2, 1 10,082

1342.365

1256.741

1301 .339

1240.656

1289. 178

1336.975

1301 .862

1331.462


ton/hourYear of2016

Our carbon reduction initiatives in the future will

focus on purchased electricity. We will look into

purchasing more energy efficient machines for

our production as well as looking at the peak and

non-peak hours. Planning our production working

hours will also affect the way we reduce our

purchased electricity.

2500000

2000000

1500000

1000000

500000

0

CO2 Emission/Kg/Hour Kw/Hour

May ‘16 June ‘16 Jul ‘16 Aug ‘16 Sept ‘16 Oct ‘16 Nov ‘16 Dec ‘16 Jan ‘17 Feb ‘17 Mar ‘17 Apr ‘17

CO2 Emission/Kg/Hour


54

Energy efficiency management is one of our core factors in reducing our carbon footprint. Moving forward, we will monitor and

report on absolute energy consumption and energy intensity for our manufacturing plant in Kulai. As with any manufacturing

plan, purchased electricity contributes the largest sources of energy.

In this reporting period we have not tracked our energy efficiency and intensity as we have just established our baseline. In our

coming reporting period we will be tracking different sources of energy and how we can implement a system to save energy.

9.3 Energy

2500000

2000000

1500000

1000000

500000

0

Quantity/Kg Kw/Hour

May ‘16

June ‘16

Jul‘16

Aug ‘16

Sept ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

Mar ‘17

Apr ‘17

Energy Consumption Kw/hour

January

February

March

April

2, 1 56,023

2,082,296

2,290,46 1

2,098,733

927,457

1,037,543

1,235,369

Kw/hourYear of2017

Quantity/kg

May

June

July

August

September

October

November

December

2, 127,362

1 ,99 1 ,666

2,062,344

1 ,966, 1 74

2,043,07 1

2, 1 1 8,820

2,063, 172

2, 1 1 0,082

1,298,5 10

1,252,320

1, 1 32,449

1, 1 1 1 ,430

781 ,884

1,048,729

897,562

1,021,648

Kw/hour Quantity/kgYear of2016

-


55

Water is vital to our planet and the most important resources

to our planet as well as our community. At SCGM Bhd, we

strive to minimise and recycle the use of water and to access

our water consumption throughout our operations and

identify opportunities to mitigate water related risks. The

table below shows the water consumption for the reporting

period.

9.4 Water

SCGM Bhd WaterManagementProgramme

To manage water

consumption and risks

SCGM Bhd WaterManagementGuidelines

To monitor and establish

water usage and quality

To assess risks/

opportunities

WaterInventoryReporting

To measure water

usage and costsWater Inventory Reporting is a

platform to track water usage and establish our water baseline

Total Water Consumption (M3)

14,595

Built UpArea (M2)

21,853

Intensity (M3/M2)

0.667872

3000

2500

2000

1500

1000

500

0

May ‘16

June ‘16

Jul‘16

Aug ‘16

Sept ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

Mar ‘17

Apr ‘17

775 764740 755

2,765

1,682

1,970 1,817 1,815

732 683

97

Water Consumption (M3)


56

SCGM Bhd primary waste is divided into paper, Hydraulic Oil, and waste containers. Based on the chart below, we expect the

paper waste to increase significantly in tandem with our revenue growth. However SCGM Bhd is taking steps to modernize the

use of papers by going e-statements, invoices etc. within the next 3 years to reduce the amount of paper consumed.

As for the Hydraulic Oil, waste container and oil rags waste, measures are taken into account to address this issues and a waste

management plan will be put in place in the next reporting period to reduces their usage.

Waste management and reduction is important for us as

our activities can generate large volumes of waste. We also

recognise the importance of waste reduction and

management to our communities and other stakeholders

who see us as a socially responsible company.

9.5 Waste

2500

2000

1500

1000

500

0

May ‘16

June ‘16

Jul‘16

Aug ‘16

Sept ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

Mar ‘17

Apr ‘17

846

1,960

1,100

880 855

1,630

1,135

2,250

460

1,000

1,200

470

Paper Waste/kg

3,600kg

FoodWaste

13,786kg

PaperWaste

105kg

WasteContainers

244kg

Oil RagWaste

1,045kg

HydraulicOil Waste

Waste is an inevitable issue in all aspects of our

life and a proper waste management is required to

ensure all waste are treated and disposed properly

so as to minimize the damage to our environment.


57

In line with the 4R Concept, SCGM Bhd has created an awareness to guide the staffs to segregate

the waste as show in the diagram below. We aim to provide more trainings on the importance of

general waste segregation and to achieve minimal harm to the environment.

Plastics cannot be recycled forever Plastik tidak boleh dikitar semula tanpa had

An Inconvenient TRUTH ... HAKIKAT KEBENARAN ...

01

02

03

04REUSE

RECYCLE

RETURN

REDUCE

Reduce worldwideshopping bags usage

from 1 million per minute

Mengurangkanpenggunaan beg plastik

membeli-belah diseluruh dunia

dari 1 juta setiap minit

Waste ToEnergy

DegradablePlastics

Reuse as garbage bag

Penggunaan semulasebagai beg sampah

Return to earth throughdegradation process

Menjadi sebahagiantanah melalui

proses degradasi

Recycle waste toenergy andnew products

Kitar semula sisa plastik untukmenjadi bahan tenagadan produk plastik baru

Toleran sifar untuk pembungkusan plastik yang melebihi kitaran hayat yang diperlukanZero tolerance for plastics lasting beyond

its useful life cycle


Through proper handling and disposal of scheduled waste

Scheduled waste as per Scheduled Waste Regulations 2005

Through segregation of construction waste and domestic waste and proper disposal

Solid waste

Be Responsible,

Bertanggungjawab,

SeparateYour Waste

MengasingkanSisa Anda


10.0DELIVERINGSUSTAINABLEPRODUCTWe are in the business of becoming a sustainable packaging manufacturer towards our

sustainability pillars of People, Planet and Environment.

For us sustainability means incorporating our mindset into our manufacturing process from the

inception to finished products. We also ensure our vendors and customers adopt the same notion

of sustainability by engaging them to enhance our sustainability process by further integrating it

into delivering sustainable product.

SCGM Bhd has a diverse and inter-connected supply chain. As in any business, the dependent on our supply

chain plays a critical role in ensuring that our business operations are not affected and minimize business

interruption during our normal course of business.

The principles of good procurement governance are sustained through the guidance policies from SCGM Bhd,

such as:

SCGM Bhd’s GPPA incorporates procurement objectives and SCGM Bhd’s corporate objectives. It also includes

procurement best practices such as:

Through the COBC, our vendors are expected to adhere to standards of behaviour aligned to promote a fair,

honest and ethical business environment where corruption is not an acceptable practice.

10.1 Sustainability Led Business

Sustainable Procurement

(GPPA)Group Procurement

Policies and Authorities

The Code of

Business Conduct(COBC)

Vendor Letter of

Declaration process(VLOD)

Driving

value creation

Minimising total

cost of ownership

Increasingprocurement

process

EfficiencyEnhancing

transparency


62

Quality is the life blood of our business. We manufacture products in giving our consumers the peace of mind and

at the same time ensuring that our consumers are assured that they get the best products.

In line with the group code of business conduct, SCGM Bhd has adopted the ISO 9001 standards, food safety

standards, GMP to ensure that SCGM Bhd makes good reputable products.

Quality

We aim to have less than 0.01% defects

in our manufacturing process.


63


64

The SCGM Bhd Quality Policy ensures that quality is at the heart of

everything we do. The Quality Policy matches customers’ needs

with highest quality products and services, and requires us to:

We then share the lessons learnt from these assessments widely throughout the business, as well as ensuring that

any defects are addressed as we manufactures our products.

Over the years, we have shown progressive and outstanding performance towards our goals of achieving zero

defects within the tolerance limit.

QUALITY

Adopt and operationalise Lean Six

Sigma as a business management

strategy for continuous improvement

(to be rationalised in the new

manufacturing plant in FY2019)


65

Innovation in Improving Our Services

The table below shows a list of innovations and how they have

been improving the lives of our consumers.

We are using technology in smart ways to improve our services. To be implemented in FY2019, this initiative

encourages us to go paperless as all invoices, bills, statements will be digitised.

Product Innovation

Our innovation initiatives in the reporting period

spread across our business value chain, from

sustainable product design to improving

customer experiences and services, as well as

marketing communications.

In addition to improving our product design, we

are in the preliminary stage to improve our

products to meet the new discerning lifestyle of

today’s consumers.

SCGM Bhd aspires to have its brand

reflect innovation and sustainability –

and this goes deeper than a mere

branding exercise.

designs are registered under Intellectual Property Office Of Singapore (IPOS)

57designs are registered under Intellectual Property Office Of Malaysia

61

Enhanced locking system to prevent spillage

of food when carry the trays

Patended design for better handling trays

Design spill proof

Environment friendly trays for consumers

who are environment conscious

Keep up to date on the latest innovative trays

for generation Y and Z

LockingSystem

Degradable

SpillProof

Design

BetterHandling

NewLifestyle

Innovation Description


66

We actively pursue cost management and efficiency

through cost reduction methodology, a collaborative

team– based approach to reducing wasteful practice,

processes and waste materials, and improving quality

and productivity. SCGM Bhd focuses us on delivering

our products on time and defects free. The basis for

SCGM Bhd is developing a collaborative team effort to

remove waste and reduce defects in production and

processes.

Cost Management and Efficiency

Our commitment to operational excellence is underpinned by our adoption of best practice and

continuous improvement methodologies throughout the business.

10.2 Operational Excellence

Our SCGM Bhd Steering Committee comprising the

Managing Director, the Chief Financial Officer and the

Head of the Sustainability and Quality Management

Department provides top–driven SCGM Bhd

leadership. The SCGM Bhd policy commits us to

develop and build SCGM Bhd competency and

capacity into our business and team to continue to

improve.

To strengthen our practices, we track our performance against the

targets set in our SLI KPIs. The tracking provides evaluation of

performance and enables us to develop action plans address concerns.


67

We take our customers complaint very seriously as our customers are our very existence. SCGM Bhd has put in

place a very rigid platform where complaints are dealt with expeditiously and efficiently.

SCGM Bhd will develop a new KPI incorporating customers’ complaints within a specific time frame and the

reporting of these complaints.

Customer Feedback and Satisfaction

SCGM Bhd takes pride in its

reputation for delivering a high

quality experience for customers

across multiple areas of operation.

ProductDeformity

Key Issues

To look into the

manufacturing process

why the product is deformed

How we address this issue


68

SCGM Bhd as a sustainable packaging manufacturer embarks on a new range of products that is environment

friendly and minimise harmful to the planet earth. This is in line with our pillars to deliver sustainable development

for our future generations.

10.3 Socio–Economic Development

Promoting Environment Friendly Products

ECO-LABELLicence No.: EL000082


69

ECO-LABELLicence No.: EL000082


Promoting “Use It Right”

1.38-1.39 g/mL

0.95-0.97 g/mL

1.16-1.35 g/mL

0.92-0.94g/mL

0.90-0.91 g/mL

1.05-1.07 g/mL

1PETE

2HDPE

3PVC

6PS

5PP

4LDPE

Plastic Type Name Properties Density CommonApplications

Tough, rigid,shatter-resistant,softens if heated

Semi-rigid,tough, flexible

Strong, semi-rigid, glossy

Flexible, notcrinkly,moisture-proof

Non-glossy, semi-rigid

Often brittle,sometimesglossy, oftenhas strongchemical reactions

PolyethyleneTerephthalate

High DensityPolyethylene

PolyvinylChloride

Low DensityPolyethylene

Polypropylene

Polystyrene

Soda, water,juice, andcooking oilbottles

Milk and waterjugs, bleachbottles

Detergentbottles,shampoobottles, shrinkwrap, pipes

Yogurt cups, margarine tubs,screw-onlids/caps

Styrofoam,egg cartons,packing pellets,take-outcontainers

Garbage bags,sandwich bags,6-pack rings

SCGM Bhd will be promoting to consumers to “Use It Right” the right type of plastics for the right applications. Many

of the consumers don’t know how to use the right plastics for the application thus harming themselves.


71

11.0PERFORMANCEMETRICSDetailed performance metrics to

meet GRI requirements, not

otherwise found in the body of

this report are provided here.

Financial Performance

Carbon Performance

0

500000

1000000

1500000

2500000

CO2 Emission Kg/hour Kw/hour

2000000

Jul ‘16June ‘16May ‘16 Aug ‘16 Sept ‘16 Jan ‘17Dec ‘16Nov ‘16Oct ‘16 Feb ‘17 Mar ‘17 Apr ‘17

CO2 Emission/Kg/Hour

Economic

Environmental

FY2017 Quarterly Revenue (RM’mil)

1Q17 2Q17 3Q17 4Q17

37

.9

42

.0

46

.0

52

.9

FY2017 Quarterly PBT (RM’mil)

FY2017 Earning Per Share (sen)#

6.4

6.5

7.1

6.6

FY2017 Quarterly PATMI (RM’mil)

5.5

5.4

7.0

5.1

FY2017 Geographical Segmentation

57

.2%

59

.5%

60

.0%

68

.3%

42

.8%

40

.5%

40

.0%

31.

7%

Local Export

FY2017 Customer Segmentation

56.9%

39.2%

3.9%

53.9% 54.0%

3.9% 3.6%

42.2% 42.4%

50.4%

1.7%

47.9%

Food Electronic Extrusion, Medical and Others

1Q17 2Q17 3Q17 4Q17

3.8

0

3.7

4

4.8

1

3.5

0

1Q17 2Q17 3Q17 4Q17

1Q17 2Q17 3Q17 4Q17

1Q17 2Q17 3Q17 4Q171Q17 2Q17 3Q17 4Q17

#based on 145.2 million shares

January

February

March

April

2, 1 56,023

2,082,296

2,290,461

2,098,733

1360.45 1

13 1 3.929

1445.28 1

1324.579


ton/hourYear of2017

May

June

July

August

September

October

November

December

2,127,362

1 ,99 1 ,666

2,062,344

1 ,966, 1 74

2,043,07 1

2, 1 18,820

2,063,1 72

2, 1 10,082

1342.365

1256.741

1301 .339

1240.656

1289. 178

1336.975

1301 .862

1331.462


ton/hourYear of2016


74

Energy Performance

2500000

2000000

1500000

1000000

500000

0

May ‘16

June ‘16

Jul‘16

Aug ‘16

Sept ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

Mar ‘17

Apr ‘17

Quantity/Kg Kw/HourEnergy Consumption Kw/hour

January

February

March

April

2, 1 56,023

2,082,296

2,290,46 1

2,098,733

927,457

1,037,543

1,235,369

Kw/hourYear of2017

Quantity/kg

May

June

July

August

September

October

November

December

2, 127,362

1 ,99 1 ,666

2,062,344

1 ,966, 1 74

2,043,07 1

2, 1 1 8,820

2,063, 172

2, 1 1 0,082

1,298,5 10

1,252,320

1, 1 32,449

1, 1 1 1 ,430

781 ,884

1,048,729

897,562

1,021,648

Kw/hour Quantity/kgYear of2016

-


75

Water Performance

Waste Performance

TOTAL WATER CONSUMPTION (M3) 14,595

BUILT UP AREA (M2) 21,853

INTENSITY (M3/M2) 0.667872

FOODWASTE

3,600kg

105kg

WASTECONTAINERS

HYDRAULICOILWASTE

1,045kg

OILRAG

WASTE

244kg

13,786kg

PAPERWASTEPAPERWASTE


76

FY2017 Employees by Age Group

41

116 247 5

79 47 1

18-25 26-45 46-65 <65

Local

ForeignWorker

Total

168

Total

368

FY2017 Employees by Position

300 65 12 14

70 20 49 6

Operator & other workers Leader/QA/Supervisor Office Staff HOD [Asst Mgr & above]

Male

Female

Labour Practices

Total

391

Total

145

FY2017 Employees Training by Department

360 414040

64

Heads of Department Executives Operators

FY2017 Employees by Region

27 4 42 34 209 4629

7025 491

Chinese Indian Malay Bangladesh Indonesia Myanmar Nepal Vietnam

Male

Female

Total

391

Total

145

In HouseTraining

ExternalTraining


77

12.0APPENDICES

ACCA

AM Asset Management

BSEEP

CCTV Closed-circuit TV

BSC Board Sustainability Committee

CIDB Construction Industry Development Board of Malaysia

COBC Code of Business Conduct

CSI Customer Satisfaction Index

CSR Corporate Social Responsibility

DOE Department of Environment

DSR Departmental Sustainability Reporting

EMP Environmental Management Plan

EnMS Energy Management System

ERT

ESH Environmental, Safety and Health

FY Financial Year

GBI Green Building Index

GEF Global Environment Facility

GMSC Group Management Sustainability Committee

GPA Group Policies and Authorities

GPPA Group Procurement Policies & Authorities

GRI Global Reporting Initiative

HR Human Resource

HR4U Human Resources 4 You

JKR Public Works Department

KL Kuala Lumpur

KPI Key Performance Indicator

LEED Leadership in Energy Environment Design

LSS Lean Six Sigma

LTIFR Lost Time Injury Frequency Rate

NGO Non-governmental Organisation

OSH Occupational Safety and Health

PBIT

PDPA Personal Data Protection Act

RM Ringgit Malaysia

SDGs Sustainable Development Goals

SIA Social Impact Assessment

SLI Sustainability Leadership Index

SOP Standard Operating Procedures

SMS Sustainability Management System

SOCSO Social Security Organisation

SQM Sustainability and Quality Management

SUSPI Sustainability Performance Index

TCS Townships Community Services

TI-M Transparency International Malaysia

TOR Terms of Reference

UN United Nations

UNGC United Nations Global Compact

VLOD Vendor Letter of Declaration

MACC Malaysian Anti-Corruption Commision

MD Managing Director

MPKU Majlis Perbandaran Kulai

List of Abbreviations


79

HQ :

Lot 3304, Batu 24 ½, Jalan Kulai-Air Hitam,81000 Kulai, Johor, Malaysia.

Tel: 607-652 2288 Fax: 607-652 2299

KL Sales Office :No. 1, Jalan PU 5, Taman Puchong Utama, 47140 Puchong, Selangor.

Tel: 03-8061 2219 Fax: 03-8060 5199

SCGM BHD (Company No.:779028-H)

intan serah yong jin kun - malaysiastock.biz filecarbon management is a direct measure of the...

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