2017

CORPORATE

SOCIAL

RESPONSIBILITY

REPORT

CHINA STEEL SUMIKIN VIET NAM

JOINT STOCK COMPANY

I. INTRODUCTION

1.1. Overview

1.2. Chronology of Major Events

1.3. Awards

1.4. Organizational Structure

1.5. Our Business

II. OUR PEOPLE

2.1. Overview

2.2. Employee Welfare and Fringe Benefits

2.2.1. Transportation

2.2.2. Training and Development

Opportunities

2.3. Employee Activities

III. ENVIRONMENT MANAGEMENT

3.1. Environment Management

3.2. Environment and Energy Management

Committee

3.3. Key EMS Program

3.4. Promotion of environmental risk

management

3.5. Promotion of environmental performance

3.6. Energy and green process

3.7. Campaign spreading a green plant

IV. SAFETY&HEALTH

MANAGEMENT

4.1. Culture & Management System

4.2. Management Committee

4.3. General activities

4.4. Education

4.5. Featured activities in 2017

4.6. Performance index

V. MARKETING AND PRODUCT

DEVELOPMENT

5.1. Overview

5.2. New Product Development and

Promotion

5.3. Product Marketing

VI. CONTRIBUTION TO SOCIETY

6.1. Overview

6.2. Employee Engagement

6.3. Contribution to Local Communities

TA

BL

E O

F C

ON

TE

NT

From the very first beginning, CSVC has been

fully aware of the importance of corporate social

responsibility to the sustainable operation of any

enterprises. Therefore, we have non-stop

committed to exercise it and maintain good

relationship with all stakeholders of the

Company.

During 2017, CSVC had to endure severe price

competition from Chinese imports as well as

local Vietnamese re-rollers. In addition, the low

price offered to EU customers had an impact on

CSVC’s revenue and made the total profit fall

short to our expectation. In the export market, the

investigation of Section 232 and the Anti-

Circumvention case of CR and CORE triggered

by US Department of Commerce (USDOC) had

obviously dampened CSVC business in the US

market. However, with all the efforts of CSVC’s

leaders and employees, the Company has not

only overcome this crisis but also met our

commitments of CSR promises and gained

significant achievements in 2017.

Specifically, with substantial contribution to

national and regional economic prosperity in the

progress of international economic integration,

on May 7th, 2017, CSVC was granted “Asia-

Pacific Outstanding Brand 2017”. Besides

creating economic value, CSVC has always been

intimately connected to healthy social and

environmental systems. In Dec 2017, CSVC

managed to pass the final audit of the

Certification Body TÜV Rheinland for ISO

50001:2011 Certificate and expected to obtain

the Certificate in Mar 2018. This is a proof for

our endeavor in innovating technologies to be

friendly to the environment. Especially, by

meeting all sustainable development criteria in

economic, environmental and social aspects, on

Dec 6th, 2017, CSVC won hundreds of excellent

enterprises in Vietnam to be awarded in “Top

100 Vietnam Sustainable Enterprise in 2017”.

This CSR report summarizes our efforts and

activities carried out in 2017. We hope through

this report, it will encourage our key audiences a

greater commitment to promote sustainable

living in the future.

CHEN, CHUNG-SHIN

CHAIRMAN AND GENERAL DIRECTOR

STATEMENT FROM

THE GENERAL DIRECTOR

I. INTRODUCTION 1.1. OVERVIEW To catch up with the rapid flow of development in steel market within East

Asia, on May 17th, 2009, on the basis of a joint venture between famous steel

companies in the industry's global steel production in Taiwan and Japan,

which are notably China Steel Corporation (CSC) and Nippon Steel &

Sumimoto Metal Corporation (NSSMC), China Steel Sumikin Vietnam Joint

Stock Company (CSVC) was established with headquarters located at Ba Ria

– Vung Tau Province, one of the key economic zones of Southern Vietnam.

With the total investment capital of 1,148 billion US dollars and high-tech

equipment transferred from mother companies, after 4 years going into

official operation, CSVC has gradually affirmed its brand to become one of

local leading companies in the field of manufacturing high quality steel plates.

This achievement also results from the effort of the Company in enhancing

waste and pollution reduction processes as well as providing positive

improvements towards our community and employees. Besides focusing

attention on establishing a management system of international standard

which can thoroughly handle all safety issues and continuously improve labor

environment, CSVC has been continuously innovating the steel production

lines and productivity to widen product range, create superior quality

satisfying all demand of customers. We are actively promoting the 04 core

products: Pickled and Oiled Steel Coils (PO), Cold Rolled Steel Coils (CR),

Galvanized/ Galvannealed Steel Coils (CG) and Electrical Steel Coils (ES).

As protectionism intensifies in almost all areas around the world, CSVC has

diversified export market portfolio and expanded from the existing markets of

ASEAN and USA to others such as Europe, Middle-East and South-Asia etc,

to reduce our reliance on just a few markets and avoid trade risks.

VISION

“OUR QUALITY, YOUR

BETTER LIFE”. Customers’

benefit will always be our

concern. CSVC believes that

high-quality products,

technology and services will

create a better future and

improve the quality of life of

customers and stakeholders.

CSVC tends to be a

trustworthy steel company

with high-quality products

and competitive price in steel

market.

MISSION

With the concept “Customer’s

Trust”. CSVC turns technology

and knowledge into value for

the customer’s benefit.

With over 800 outstanding

professionals working together,

CSVC will satisfy the

customers with brands and

products that are good for them

and good for environment.

CSVC will develop the unique

process for each customer,

which will meet the customer

needs and exceed customer

expectation.

May 12, 2009

Ba Ria-Vung Tau Industrial Zone

Authority (BIZA) issued the Investment

Certificate to CSVC.

October 1, 2009

Staffs of CSC and NSSMC officially

moved to the Representative Office in Ho

Chi Minh City, Vietnam.

February 28, 2011

The Board of Management elected Dr. Wong,

Chao-Tung as CSVC Chairman and General

Director.

May 26, 2011

The first pile was erected in the Blessing

Ceremony at 09:16 a.m.

September 8, 2011

CSVC celebrated the Ground Breaking

Ceremony.

October 1, 2012

CSVC’s second largest shareholder,

Sumitomo Metal Industries, merged with

Nippon Steel Corporation as NSSMC which

became the second largest steel corporation

in the world.

At the end of December 2012

The installations of CAL, CGL and ACL

were finished completely, and their

individual tests were started totally on

January 2, 2013.

April 23, 2013

The Annealing and Coating Line (ACL, The

first production line in ASEAN) produced the

first qualified Electrical Steel coil (ES).

October 14, 2013

CSVC celebrated the Grand Opening

Ceremony.

November 29, 2013

BSI issued the ISO 9001 Certificate to CSVC.

In December 2013

PLTCM smoothly achieved three indexes of

the rolling technology, 0.2mm thick strip (the

thinnest strip of the equipment specification),

50CSV470 coil (the highest steel grade of ES)

and 780Y coil (the highest strength steel grade

with the low yield ratio).

2009

2011

2012

2013

1.2. CHRONOLOGY OF

MAJOR EVENTS

From June to August 2014

CSVC passed the product certifications of

Malaysia (SIRIM), Indonesia (SNI) and Thailand

(TISI).

May 07, 2014

CSVC started offering dormitory to national

employees, serving about 400 people.

October 07, 2014

CSVC was formally granted Certificate of

conformity by Quality Assurance and Testing

Center 3 (QUATEST 3) for PO, CR, GI, GA

products.

October 11, 2014

Vietnam Steel Association came to CSVC to

discuss GI anti-dumping case.

October 30, 2014

CSVC finally got all PINK COVERS (Certificates

of land use rights, house and land-attached assets)

for whole plant from DONRE.

March 31, 2015

CSVC was granted a Certification as a DA

(Digital Appliance) member of Samsung

Electronics Co., Ltd.

July 17, 2015

Sumitomo Corporation (SC) officially transferred

all its shares to China Steel Corporation (CSC).

Up till this moment, CSVC has 6 founding

Shareholders: CSC, NSSMC, NSSBC, FHS, Hsin

Kuang and Chun Yuan.

September 2015

CGL line reached full capacity.

September 23, 2015

CSVC achieved shipment volume of 1 million

tons for finished products.

November 25, 2015

CSVC was honored to receive “Golden Brand

Award” from Ministry of Industry and Trade

(MoIT)

January 15, 2016

The Board of Management elected Mr. Chen,

Min-Hun as the new Chairman and General

Director of CSVC.

March 12, 2016

CSVC got ISO/TS16949:2009 for Automotive

Quality Management Systems

December 1, 2016

The Board of Management elected Mr. Chen,

Chung-Shin as the new Chairman and General

Director of CSVC.

March 1, 2017

CSVC passed the final audit of SGS Certification

Organization and achieved OHSAS 18001.

April 13, 2017

CSVC had the honor to receive merit certificate

from the provincial People’s Committee for

many achievements in safety & health activities

in 2016.

May 7, 2017

CSVC was granted “Asia-Pacific Outstanding

Brand 2017” and given QR code for product

identification worldwide.

Dec 6, 2017

CSVC won hundreds of excellent enterprises in

Vietnam to be awarded in “Top 100 Vietnam

Sustainable Enterprises in 2017”

2014

2015

2016

2017

n May 7th, 2017, CSVC was granted “Asia-

Pacific Outstanding Brand 2017” for

substantial contribution to national and

regional economic prosperity in the progress of

international economic integration. This event has

offered CSVC an opportunity to join in a voluntary

activity of installing 10 water purifiers for several

primary schools and kindergartens in difficult and poor

area in Binh Phuoc Province and Son La Province,

allowing the children here to have clean water to drink

and save them from several serious diseases that may

lead to death such as diarrhea, bacterial infections…

orporate Sustainability Index (CSI) is one of VCCI’s initiatives to promote sustainability in the

business community as a gauge of corporate value based on sustainable development criteria in

economic, environmental and social aspects. CSI is also a tool to identify measurable objectives

and administer changes for greater sustainability.

The Index was developed and advised by top-

notched sustainability specialists from VCCI,

governmental agencies, domestic and

international organizations, VCCI members and

other independent experts.

By meeting the following conditions: (1) Have

comprehensive sustainable development strategy,

(2) Understand the benefit of sustainable

development as the main framework for the

business to build operating apparatus and

optimize business processes and supply chains,

(3) Have economically effective operations, on

Dec 6th, 2017, CSVC won hundreds of excellent

enterprises in Vietnam to be awarded in “Top 100

Vietnam Sustainable Enterprise in 2017”.

The award accordingly helps enhance reputation

and competitiveness of CSVC as well as facilitate

the process of international integration.

O

C

ASIA-PACIFIC OUTSTANDING BRAND 2017

1.3 AWARDS

TOP 100 VIETNAM SUSTAINABLE ENTERPRISE IN 2017

CSVC Chairman at the Announcement Ceremony of

Asia-Pacific Outstanding Brand 2017

CSVC Chairman received the Award

1.4. ORGANIZATIONAL STRUCTURE

1.5. OUR BUSINESS

Thanks to the relentless efforts and devotion of skillful and experienced staffs with professional

knowledge, advanced and modernized production facilities, excellent product quality and diligent

customer service in line with the motto “Our Quality, Your Better Life”, CSVC has recorded

spectacular growth rate. Customer satisfaction has been successfully achieved and continuously

MANAGEMENT DIV. PRODUCTION DIV. COMMERCIAL DIV.

No.1 Sales

No.2 Sales

Procurement &

Transportation

Human Resources

Finance & Accounting

General Affairs & Public

Relationship

Information Technology

Safety & Environmental

Management

Cold Rolling

Annealing & Galvanizing

Electrical Steel & Finishing

Quality Control & Assurance

Maintenance & Engineering

Production Control & Logistics

Utility

General Director Office

CHAIRMAN

DEPUTY GENERAL DIRECTORS

SHAREHOLDERS

BOARD OF

MANAGEMENT

GENERAL

DIRECTOR

Special Assistant

Labor Safety & Health Committee

M1

M2

M4

M5

P1

P2

P6

P7

P8

P3

P4

P5

C3

C2

C1

maintained as demand on CSVC’s products is robustly booming and stably flourishing in both

domestic and export markets.

During 2017, CSVC managed to gain annual profit for the second consecutive year, which is

substantially higher than the whole year 2016.

In fact, the annual profit achieved last year is inevitable outcome of (1) the optimism over steel

demand bolstered by recovery in global economy, (2) the improvement in the market price, (3) the

efforts of CSVC in expanding export market with favorable sales price and high demand and

developing market share in domestic market where demand on CSVC’s products is high with

stable increase in price.

The improvement in CSVC’s trading status through years can be seen clearly as below table:

Unit: USD

Year 2014 2015 2016 2017

Revenue 356,943,760.00 287,861,439.00 432,741,169.00 563,428,108.00

Loss/Profit after Tax -58,307,683.00 -83,853,053.00 1,052,370.00 1,917,161.00

Loss/Profit Per Share -0.06 -0.09 0.00 0.00

Dividend 0.00 0.00 0.00 0.00

II. OUR PEOPLE

2.1. OVERVIEW

CSVC is a multinational company with over

800 employees. We create a very unique

culture and international working

environment which is friendly, cooperative,

unified and motivating. CSVC makes every

effort to train, support and enhance

employee’s capabilities and develop skills

through their work so that they can achieve

individual growth.

All employees in CSVC have gradually

overcome the difficulties ahead, strive to

fulfill production and business target and

achieve high results such as: Ensure timely

shipment; increasingly consolidate product

quality to meet customer’s demand;

promote innovation and creativity in

working methods, improve methods of

evaluating the ISO quality, constantly

explore, learn to increase production

efficiency, product quality and

consumption indicators of products.

2.2. EMPLOYEE WELFARE AND BENEFITS

2.2.1. Transportation

The company provides daily commute bus to all employees in nearby areas including Ho Chi Minh

City (Thu Duc District & District 1), Bien Hoa City and Ba Ria - Vung Tau Province to make sure

the employees can conveniently reach the workplace.

In addition, CSVC also offers shuttle bus free of charge to those employees having demand to

travel from Vung Tau to Ho Chi Minh City or vice versa at weekend for entertainment or any

personal issues.

CSVC always takes time to listen to our staff. We try to understand their requirements, aspirations

and work out the best way to improve the management and quality of vehicles. It was proved when,

last year, the Company considered changing the new car for Ho Chi Minh route immediately after

receiving requests from employees.

With the motto “LUON AN TOAN”, CSVC also strengthens the inspection and maintenance of

shuttle bus monthly to handle in time and minimize any problem occur during use. Seatbelts for

all passengers and procedures of solving emergency are pasted on vehicles to always bring a sense

of security and peace of mind for everybody.

2.2.2. Training and Development Opportunities

In order to fully equip knowledge and skills, as well as create conditions for staff development,

CSVC always pays attention on human resource training and development.

Besides on-job training

courses conducted by

superiors, CSVC employees

also have opportunity to

attend specialized training

courses with professional

external lectures. We believe

that this policy will not only

help the employees feel more

satisfied with their current

work, but also enhance their

sense of responsibility and

contribution to the increase

of labor productivity and higher profitability for the Company.

In 2017, CSVC spent in total 2,627 man-days on conducting training courses. From the chart below,

we can see that last year the training program of CSVC was allocated quite equally with great

concern to the three fields: Environmental, Safety & Health; Manufacturing/ Production and

Performance Development, which accounted for 32%, 25% and 26% of the total training hours

respectively. Training courses on Quality/Assurance are organized frequently to make sure the

products provided to our customers always in the best quality. We also focused on some courses

which enhanced management skills for management positions.

The Newcomers Training has been improved to welcome and equip the basic knowledge, to create

better conditions for newcomers. On-the-job training, professional training and skills training are

also regularly held to update knowledge and improve skills on time.

With the goal of comprehensive development for employees, CSVC has built up a Training

Structure, drawing a long-term training and development path for employees. The Training

Structure has defined the knowledge and skills that employees need to be equipped (determined

by rank, position or by topic).

32%

25%8%

26%

2%

7%

TRAINING DISTRIBUTION CHART

Environtmental, Safety and Health

Manufacturing/Production

Management

Performance Development

Human Resources

Quality & Assurance

2.3. CSVC’S ACTIVITIES

Besides giving relaxing

moments that can create a

greater sense of harmony

and balance in the current

busy work-life and bring

everyone together, the most

important meaning of

activities organized by

CSVC is to improve and

make a positive impact on

society.

CSVC Soccer

Tournament 2017

CSVC Sports

Day 2017

International Women’s

Day 2017 at CSVC

CSVC Year End

Party 2017

III. ENVIRONMENT REPORT

3.1. ENVIRONMENTAL MANAGEMENT

We strive to become a truly environmentally friendly corporation by conducting business activities

from an environmental and ethical perspective.

EMPLOYEE

To encourage behaving in a

responsible manner and

maintaining sound

environmental practices. The

company will offer education and

awareness-raising programs for

employees, disclose

environmental information on an

adequate and timely basis to

remain always trusted and highly

appreciated by society.

COMPLIANCE

To meet the requirements of

relevant legislation in the

country and region in which we

operate. CSVC understands that

many coming challenges in

Vietnam can only be solved with

coordination and support from

the Government authorities. By

following their policies, CSVC

could ensure our development

business in ethical way.

IMPROVEMENT

To improve the Environmental

performance of our processes

and products through research

and development of new

technologies, preventing and

reducing emissions and

releases, minimizing waste,

energy consumption etc. and

controlling noise.

SYSTEM

To make primary approach for addressing

environmental aspects during operation.

Besides complying with environmental law

and regulations, CSVC cooperate with

customers and suppliers in promoting activities

to reduce Environmental impacts at every stage

of business activities from production

processes to transportation, further improving

environment preservation, efficiency of

resources and energy, enhancing reduction and

recycling of waste in/outside the company.

COMMUNITY

To respond to the increasing concern of local

authorities and other interested parties on

environmental issues as well as to protect the

general environmental and wildlife habitats in and

around CSVC sites. Focusing efforts on

developing modern technologies which can deal

with the future issues of the environment and

natural resources and provide society with

products that contribute to Environmental

preservation, Energy & resource conservation.

1 2 3 4 55

1 Further enhancement and

promotion of

Environment & Energy

management

3

Promotion of reducing

Hazardous waste and Energy

preservation

2 Promotion of adequate

actions to prevent

Environment accidents 4

Contribution to the

awareness of Employees

about EMS

Medium-Term Environmental Management Plan for 2018

MESSAGE FROM TOP MANAGEMENT

Strategies and policies deliver sustainable value

In CSVC, we are sharpening our focus on raising employees’ awareness of a management philosophy

rooted in continuous innovation, with a long-term and forward-thinking perspective. I hope and believe our

strategies and policies will soon deliver sustainable

value and returns for the Company. Mr. Chen, Chung-Shin

Chairman/ General

Director

Enhance individual

responsibility

Improve smooth

communication

between relevant

departments

Hold awareness

training courses on

EMS for employees

Set and maintain

general standards in

EMS for leadership

Enhance competency

& qualification

CSVC

Environmental

Management

Vision and

Strategy

CSVC

VISION

3.2. ENVIRONMENT & ENERGY MANAGEMENT COMMITTEE

CSVC operates an Environmental Management Committee which is chaired by Chairman. The

Committee reviews the overall environmental management of CSVC (i.e. details of implementation

plan, achievement, difficulty etc.) and holds regular annual meetings to analyze the environmental

trends. In addition, it helps guide medium-to-long term environmental strategies in CSVC.

Specifically, any issues identified as critical to the development of CSVC are decided upon as part

of overarching business strategy, and then will be reported at monthly meetings and Management

Review Meetings, both chaired by Chairman.

Chen, Chung-Shin Chairman

Toru Kaneko DGD

Leou, Jiing-Kuen DGD

DGD

Hu, Chih-Sheng GM

Lee, Chien-Hui MVP

Hideaki Mochizuki MAVP

Katsumi Okutani PVP

Chen, Hsi-Kun PAVP

Chou, Chi-Hung CVP

Head of EMS

EMS Coordinator

EMR

EMS Manager EMS Manager EMS Manager EMS Manager EMS Manager

ducation - Environmental Awareness

Training

CSVC provides various programs to

enhance our employees’ understanding and

awareness of environmental protection.

Environmental management training is

provided and opened to

outsourcing and suppliers as

well. All related

departments’ employees

are encouraged to

participate in

environmental

activities. Training

on ISO 14001

internal auditing is

annually provided to

managers in CSVC as

well as outsourcing

workers.

idening - Environmental

Information Exchange

Under provisions of our mother

companies, CSC, an environmental technical

meeting is annually held targeting environment

within operation. The meeting is a place for

communication and exchange to enhance the

capabilities of environmental managers through

discussions. In addition, CSC operates and

remains a website to enable managers in charge of

the environment at CSVC to exchange and collect

information contributing to the environmental

management system.

ominate - Environmental

Management Awards

To create competitiveness in

environmental management,

“Environmental Management

Awards” is held by Human

Resources Department to

award employees who

achieve an outstanding

environmental

performance. We hope

that these awards

encourage corporate-

wide awareness on

environmental

management and can

lead to better

environmental

business achievements.

ubstance - Environmental Risks

CSVC annually analyzes and manages

risk to minimize their impact on the

environment, as well as the

environmental impact on management. We

consider changes on internal issues (i.e. products

and services, structure, roles, responsibilities,

leadership, cultures etc.), external issues (i.e.

political, economy, technical service, legal, law

etc.). Cooperation between relevant departments

and environmental management department

enables us to identify environmental risks. We

then evaluate and review the highest risks to

those environmental aspects, after that minimize

their impact to environment. In addition, to

respond to relevant potential risk such as energy

usage, global warming or pollution prevention,

CSVC continuously monitors and identifies

potential risks to contribute toward developing

reasonable environmental policies.

E

W

N

S

3.3. KEY EMS PROGRAM

3.4. PROMOTION OF ENVIRONMENTAL RISK MANAGEMENT

CSVC is promoting management of environmental risk with the aim of continually enhancing and

controlling environmental aspects causing the potential risks to environment, which differ by each

operational period and factory. Since qualifying for ISO 14001, the international standard for

environmental management system, beginning from 2015, CSVC has conducted evaluation with

relevant departments on an annual basis. Once a year, before management review meeting, our

environmental management department will implement an internal inspection. The results are

reported to top management and utilized in making newly changed environmental strategies and

setting objectives for an efficient environmental management system.

Air

management

CSVC applies

various systems

to improve air

emission quality before

discharging through our stacks.

First, our system sets a lower

standard compared to

environmental regulations and

standards. Secondly, we insert

absorption system to reduce

the concentration of indicators

before discharging through

stacks. Specifically,

understanding the importance

of dust in ambient air, CSVC is

taking measures to insert

effective equipment, including

equipment that could less

discharge dust into air. The

result is shown that within 3

years, CSVC already achieved

to reduce the concentration of

TSP in jobsite area, not only

ensuring our employee’s

health, but also effort to reach

our concern to civilization

living nearby. We also conduct

annual monitoring and

periodically measuring

ambient air parameters to

ensure that no abnormal

emissions are released into the

environment.

Water

management

CSVC uses

appropriately

1,2 mil m3 of

freshwater a

year in all of our

administrative works and

factory. This big amount

contains a significant damage

to the water resources. In order

to reduce the bad significant

impact on natural resources,

we try to re-use and re-

circulate the fresh water

provided to the cooling water

system.

Soil

management

With respect to

environmental

preservation

specifically for soil and

underground water, we are

responding appropriately in

compliance with regulations of

local government. Normally,

environmental department will

patrol and inspect the status of

soil around factory. If soil is

contaminated, we will hold an

emergency response drill

immediately.

Twice per year, we invite

competent authorities to

evaluate the soil parameters

and make reports to the

Government. If soil

contamination is detected, we

take appropriate action in

accordance with instructions

issued by Ministry of Natural

Resources and Environment.

ow good quality we produce, if our health,

safety and environment management system is

not good, our effort will become zero. Safety

and environment are our first priorities at work.

Comprehensive control of discharge

Normally, wastewater discharging during operation

of plant is enormous (i.e. cooling water, industrial

water arising from production process, domestic

waste and rainwater runoff). Except rainwater

runoff, all kinds of wastewater generated from the

operation phase have been sent to the wastewater

treatment system to meet the local regulation before

discharging into centralized wastewater treatment

system of My Xuan Industrial Zones. Under the

supervising of utility department, we ensure

thorough control by checking the balance including

the amount of chemical substances concerned, the

amount discharging to environment, and disposal

volume. According to the regulation from

Department of Industry and Trade, annually we

report the amount of chemical substances

manufactured.

Considering the importance of preventing water

pollution, we have installed equipment, devices such

as censors, detectors, shut-off valves or emergency

pits; established safety job procedure to work them

effectively; provided periodical training so that

wastewater will not be discharged outside our

factory in emergency.

In addition, we make daily effort to monitor and

inspect the wastewater quality, as well as maintain

and improve the performance of our equipment in

wastewater treatment process.

MESSAGE FROM TOP MANAGEMENT

Clean environment is a matter of public health As the owner of this plant, what we do concern is

not only employees’ health but also the living of nearby residents. Being honest and taking

responsibility for what we’ve done is the key point

for our future better improvement MESSAGE FROM TOP MANAGEMENT

Worthless without environmental protection As an expert from one of the most popular steel worldwide, we understand that no matter how

good quality we produce, if our health, safety and environment management system is not

good, our effort will become zero. Safety and

environment are our first priorities at work.

Mr. Okutani

Katsumi

Vice President of

Production Division

Mr. Chen, Hsi-Kun

Assistant Vice President

of Production Division

15%

54%

23%

0%

8%

NON-CONFORMITIES

IN 2017

Polution, water, air, soil Classification

Documentation Training

Minor

3.5. PROMOTION OF ENVIRONMENTAL PERFORMANCE

CSVC has built an environmental management

system to reduce environmental risks, which are

promoted by combining external and internal audits

and rotating the plan-do-check-act (PDCA) cycle.

Management system

CSVC effectively rotates the management cycle of

PDCA under the Environmental Management

Committee, which convenes meetings annually to

promote environmental performance. Besides,

regular meetings are also held for General Managers

of relevant departments to discuss about

environmental issues. In particular, with respect to

dust, drainage and waste that pose critical

environmental risks, experts from each field will

conduct a meeting to devise measures for risk

prevention and reduction.

Currently, CSVC control environment in accordance

with ISO 14001:2015 which is the international

standard for environmental management system and

the most widely used EMS in the world, with over

thousand organizations certified worldwide.

Achieving ISO 14001 certification shows the

commitment of the board of management and staff to

reduce our environmental impacts and to

continuously improve the sustainability of our

business operations. It has aligned our business

process with our strategies of using energy efficiently

and manufacturing products friendly with the

environment.

Environmental audits

In accordance with the International standard ISO

14001, CSVC has built an environmental

management system, in which General Managers of

relevant departments serve as the responsible person.

Environmental department also participates in these

audits to cross-check. Any non-conformities will be

figured out and solved immediately. Annually, the

final report will be submitted to top manager for

reviewing the situation.

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or

QU

AN

TIT

Y

TREND OF NON-CONFORMITIES

2015 2016 2017

MESSAGE FROM TOP MANAGEMENT

Better than the best

Enhance responsibility of each one individual

are core values of 2017. Let’s work as effective

team, as well as protecting environment when

working. Together, we will be better than the

best. Mr. Leou, Jiing-Kuen

Deputy General Director

Hazardous waste control

CSVC has recognized the importance of hazardous

waste effect on the environment of local community and

thus strengthened the producing process to minimize the

amount of hazardous waste generated. To minimize risk

factors accompanying hazardous waste, CSVC has been

developing the technologies, which can reduce the

amount of waste generated or can re-use it. In 2017,

CSVC already achieved the target to reduce 7%

hazardous waste generated compared to 2016. This is an

achievement of all production lines and environment

department to reduce the impact caused by hazardous

waste. Furthermore, to raise awareness and enhance

spirit of employees about environmental protection, we

will maintain the objectives to reduce 10% hazardous

waste generated compared to 2016. Through this scheme,

we can not only contribute to the sustainable

development in region by miles but also

prove that we serve as a public example for

providing and maintaining the sustainable

working environment within operation.

Hazardous waste chemical control

To avoid potential risks associated with

hazardous waste chemical, CSVC has built

Acid Regeneration Plant, which can re-use

or re-circulate the hazardous waste acid.

With the basic effort, we also increase the

number of educated managers and

employees with chemical degree in

operation and make a periodical

emergency response to cope with chemical

leakage. Furthermore, employees working

in ARP condition were provided special

health check to actively control their

respiratory.

3.6. ENERGY AND GREEN PROCESS

Steel is one of the pillars of the well-being of modern

societies and it continue to play an important role in the

21st century. This nature basic material is one of the most

environmentally benign mass products due to its high

recycling rate and comparatively low quantities of

energy for its making. However, the emission of CO2 is

a serious problem for steel industry because steel

industry relies heavily on fossil fuels as energy sources

and limestone for the purification of iron oxides. Steel

industry contributes around 6-7% to total anthropogenic

emission of CO2. Understanding this theoretical

program, our mother company, CSC, has strived to

promote the green process within operation by increasing

productivity through the adoption of more efficient and

cleaner technologies in the manufacturing sector to be

effective in merging economic, environmental, and

social development objectives. Inherit the awareness

about importance of reducing emission CO2 from our

mother company, CSVC intends to take effort in

minimizing this side effect. We try to contribute to the

productivity growth, sustainable development against

global warming and CO2 emission. In addition, in 2017, CSVC already achieved ISO 50001:2011 certificate to serve as an example of

enterprises put endeavor to change technologies to be friendlier to environment.

Steel industries have always played a crucial role in the socio-economic development of a country. They

have contributed primarily to increase prosperity, greater employment and livelihood opportunities. On

the other hand, steel industries are accused of accelerating the consumption of scarce fossils fuels and of

polluting the local, regional, and global environment by releasing solid, liquid and gaseous pollutants to

their surroundings.

P2-PL, 5%

P2-TCM, 35%

P2-ARP , 1%

P2-RS, 0%

P3-CAL, 13%

P3-CGL, 12%

P4-ALL, 9%

ADM & No.1

office, 1%

P81, 20%

P82, 3%

ENERGY CONSUMPTION BY AREA IN 2017 (KWH)

P2-PL

P2-TCM

P2-ARP

P2-RS

P3-CAL

P3-CGL

P4-ALL

ADM & No.1 office

P81

P82

3.7. CAMPAIGN SPREADING A GREEN PLANT

Beginning from 2014, CSVC launched the campaign spreading green cover on province. We try

to promote and cooperate with Government agencies to contribute to the ecosystem in Ba Ria -

Vung Tau province by planting trees surrounding. The greatest benefit from this activity is the

conversion from CO2 to O2 and the amazing cooling effect.

3.8. ENERGY SAVING ACTIVITIES IN 2017

In addition to concerned effort to reduce CO2 emission in manufacturing process, CSVC has

implemented a regulation about lights-out during lunch breaks, no-working days, and work side,

drive side etc., as part of the energy saving activities (i.e. improved production yield, waste heat

recovery, lighting and air conditioning system control, compressor system optimization).

To summarize our results, energy performance indicators (EnPIs) of electricity consumption in

2017 decreased significant through months. We will further strive to improve this activity by

identifying the most significant electricity usage area, then focus strongly on those areas.

SAFETY CULTURE

In CSVC, greeting whenever whoever

wherever by “LUÔN AN TOÀN” is

company culture to together exchange wishes

of safety.

Implemented since the end of 2014 up to

now, “LUÔN AN TOÀN” has been common

greeting applied for all activities, meetings…

at CSVC for the past 3 years. Cohesion and

team work with the commitment of “LUÔN

AN TOÀN” has been transferred to each

employee of CSVC.

Greeting “LUÔN AN TOÀN” with clear and

loud voice together with prime and strict

posture help to create focus spirit, unity and

safety for everyone anytime anywhere in

CSVC as well as display discipline and

fighting spirit in work at all CSVC members.

Greeting “LUÔN AN TOÀN” is applied for

all persons including employee to employee,

employee to contractor, contractor to

contractor, employee to guest, etc. building

up connection between all members in

company.

SAFETY & HEALTH MANAGEMENT

SYSTEM

Aiming to manage thoroughly different

safety issues, improve continuously labor

environment and meet international standard,

CSVC has strengthened and maintained

continuously our safety management system

in accordance with OHSAS 18001 using

Plan-Do-Check-Act Process. By the best

effort of all CSVC’s Top Management

Board, Managers and Members, CSVC

passed 2017 surveillance audit of SGS

certification organization and maintained

OHSAS 18001 certificate successfully

4.1. CULTURE & MANAGEMENT SYSTEM

Kaneko Toru

Deputy S&H Chief Executive Director (DGD)

Leou, Jiing Kuen

Lee,

Chien Hui

Chen, Chung Shin

S&H Chief Executive Director

(Chairman, GD)

Mochizuki

Hideaki

Okutani

Katsumi

Chen,

Hsi Kun

Chou,

Chi Hung

Hu, Chih-Sheng

Representative S&H Manager (VP & AVP of each Division)

S&H Manager (GM of each Department)

Deputy S&H Manager (SM of each Section)

S&H Leader (Foreman of each workplace)

Executive S&H Manager

(P1 GM)

Safety & Health (S&H) is the

first priority concern of CSVC.

In order to thoroughly manage

as well as smoothly

communication for body-

content, decision, company

policy in Safety & Health,

Safety & Health Management

Committee is established.

Safety & Health Management is

responsibility of all CSVC

management members, therefore

Committee members is involved

Chairman - General Directors

(GD), Vice president (VP),

General Manager (GM), Section

Managers (SM), Foreman of

each workplace.

4.2. SAFETY & HEALTH MANAGEMENT COMMITTEE

Under operation of Safety & Health Management Committee, Safety & Health routine activities

have been organized to find out risks of equipment malfunction and risks caused by human factors.

After analyzing and evaluating all kinds of risks, we made a plan of how to manage risks, then we

carried out the plan, tracked what we have done and finally from the results obtained we make

suitable amendment to improve the risk management system. We organized OSH Committee

Meeting, OSH Department Meeting, OSH Workplace Meeting once a month, and Jobsite safety

audit patrol once a week at specified areas & focused on

critical risks.

Every month, Top Managers (Chairman, Deputy General

Directors, Vice Presidents & Assistant Vice Presidents of

each Division, General Managers of each Department and

Representative of each Department join in Safety & Health

Committee meeting including whole plant patrol to check jobsite condition, discuss body-content

in Safety & Health, report tracking content and review situation and difficulties of each item. After

all, Top managers will give suggestions and instructions on ways to improve incurred issues and

transfer information to each Department.

Weekly, each Top Manager takes turn to directly join

Jobsite safety audit patrol with mutual attendance from

other Departments. Purpose of Mutual patrol is to together

work out what are good points which can be referred and

applied to relevant Departments, and what are the defects

which need to be improved.

4.3. GENERAL ACTIVITIES

OSH COMMITTEE MEETING (MONTHLY)

MUTUAL JOBSITE SAFETY AUDIT PATROL

(WEEKLY)

To have prompt action for improving working condition

and environment, CSVC has cooperated with qualified

work environment measurement center to measure

related indicators at each workplace every year.

Work environment measurement provides basic

parameters from which appropriate health check items

will be selected in order to manage thoroughly about

working condition, ensure health of CSVC’s members as well as to timely detect any defects and

work out solutions for the problems.

To monitor health condition of each employee, CSVC

has cooperated with Medical center to organize

periodical general & specialized health check for all

CSVC members every year.

Member’s health sustainability is key factor to maintain

sustainable manpower for smooth production.

Therefore, health is one of the most concerning factor

beside safety for members.

Health check items applied in CSVC follow Vietnamese regulation including General health check

items: Physical check, Circulatory, Digestion, Nephrology-Urology, Endocrine, Muscle-Bone,

Nerves, Mental, Lymph systems, Respiratory system, Eyes check, Disease of ear, nose, throat,

Tooth-Jaw-Face, Blood test, X-ray (cardiopulmonary), Urinalysis (general).

WORK ENVIRONMENT MEASUREMENT

PERIODICAL HEALTH CHECK

62, 8%

530, 69%

164, 22%

10, 1%

HEALTH CHECK CLASSIFICATION IN 2017

Type I- Very healthy Type II- Healthy Type III- Normal Type IV- Weak

If physical hardware improvement is one of the company concerns for its safety management to

prevent accidents, safety skills & knowledge offered to CSVC members is also focused as one of

software parts. In 2017, CSVC managed to organize a variety of training courses for employees as

below table:

Training courses Amount of classes Amount of trainee

Lifting safety training 9 223

Radiation safety training 3 27

Chemical safety training 3 69

Boiler operation safety training 1 10

Welding & Cutting safety training 2 58

Newcomer safety training 3 75

General safety training (G1 & G4 as Law) 11 451

Firefighting training for employee 2 196

Firefighting drill with Police 2 40

Internal firefighting drill 6 100

First-aid Training 1 96

Real danger sensing training 61 630

4.4. EDUCATION

To strengthen spirit of individual responsibility and promote

safety and productivity in each responsible area, CSVC’s

Responsible Area Layout has been carefully considered,

discussed and unified by all managerial levels of the

Company.

According to Dept. responsible area layout in CSVC, the job

description and boundary map of responsible area for each

job code has been reviewed, edited and disseminated to all

CSVC members.

INDIVIDUAL RESPONSIBLE AREA SYSTEM

(IRAS)

REAL DANGER SENSING TRAINING

In 2017, CSVC conducted successfully real danger

sensing course for total 630 CSVC’s members

with the aim of raising employee awareness and

practical sense of major dangers in routine work.

After training, each trainee will be tested to re-

check their understanding of the training content.

The training will be regularly organized for

newcomers in the upcoming time.

4.5. FEATURED ACTIVITIES IN 2017

A trainee is

sensing

rotating

danger

Another

trainee is

sensing

indirect ground

welding danger

TARGET PERFORMANCE

Item Countermeasures

Contractor lost

time accident

1. Carry out Special Safety Activities to strengthen management on

implementation of Work permit & Toolbox meeting; organize training courses

to enhance sense of definite confirmation when releasing residual energy.

2. Strictly manage the compliance of company procedure and responsibility

area; strengthen individual responsible area system.

Mock drill Each Dept. is supposed to set up schedule in advance for Dept.’s internal mock

drill in 2018

Fire incident Check all similar equipment where incidents occurred before and change their

working capacity if necessary.

INJURY RATE

4.6. PERFORMANCE INDEX

5S Model jobsite

0 Fail ✓

Real danger sensing training

673 employees ✓

Mock drill

8 Dept.

Incident

Pup coil: 0 case ✓

Fire: 1 case

Lost time accident

Employee: 0 case ✓Contractor: 1 case

5S Model jobsite

0 Fail

Real danger sensing training

673 employees

Mock drill

13 Dept.

Incident

Pup coil: 0 case

Fire: 0 case

Lost time accidentEmployee: 0 case

Contractor: 0 case

0.510 0 0

2.91

0 0

1.02

-1

1

3

5

2014 2015 2016 2017

Fre

quen

cy r

ate

Lost time injury frequency rate

(Lost time injury per million

working hours)

Lost injury frequency rate (CSVC)

Lost injury frequency rate (Contractor)

17.26

0 0 0

31.03

0 0

15.29

0

10

20

30

40

50

2014 2015 2016 2017

Sev

erit

y r

ate

Lost time injury severity rate

(Lost days per million working

hours)

Lost injury severity rate (CSVC)

Lost injury severity rate (Contractor)

CSVC continued to be the supplier of Japanese and

Vietnamese car/motorcycle makers. Besides, we also started

exporting CR/CG products to European as material of tier 2.

Automotive Industry

CSVC started business relationship with

Japan/Korea brands like Samsung, LG, Daikin.

Home appliance industry

The product CR begin export to European

in 2017.

Drum industry

The product ES begin export to China, Taiwan

and European in 2017.

Motor industry

Expand the local and export market by

developing different high tensile grade.

Construction materials industry

V. MARKETING AND PRODUCT DEVELOPMENT

5.1. OVERVIEW

In 2017, Formosa Ha Tinh Steel Corporation (FHS) officially went into operation, making

Vietnam gradually become the most significant steel producer in ASEAN. With great export tariff

advantage as the country being one of AEC (ASEAN Economic Community) members, CSVC’s

products are getting more and more competitive to Southeast Asia/ India/China regions.

Faster economic growth means more steel consumptions will be needed to make products from

cars to buildings. Vietnam’s economic growth significantly depended on foreign investment and

the recovery of the global commodities prices. In 2017, Vietnam’s GDP grew at 6.81%, which not

only exceeded the target of 6.7% but also was recorded as the highest rate since 2011.

According to the VSA, Vietnam’s steel production has grown steadily last year despite inflows of

cheap steel from China. Because the per capita steel consumption may grow further in the next

few years from just below 300 kilograms today, there is still plenty of room for steel growth,

particularly when the steel supply chain is being formed and this industry is settling with the

development of Vietnam. As Vietnam is becoming more and more important in ASEAN, CSVC

will try to improve the steel industry by providing high-quality products to fulfill the demand of

infrastructure, home appliance as well as vehicles.

5.2. NEW PRODUCT DEVELOPMENT AND PROMOTION

1

2

3

CSVC produces high-

quality products to

satisfy customer

requests and keep

looking for new

customers. The

performance of 2017

is shown in the chart

beside:

4

5

5.3. PRODUCT MARKETING

In 2017, CSVC sold 883 KT

of the products, of which 47%

to domestic customers and the

other 53% to overseas market.

In respect of company

product, PO accounted for 8%

of the total amount, while

ASCR, CR, CG, ES

accounted for 13%, 31%, 28%

and 12% respectively.

For exports, 28% of

CSVC’s products were sold

to USA, 40% to EU and

32%to ASIA.

GIVING 2017 LUNAR NEW YEAR

GIFT TO POOR FAMILIES IN MY

XUAN COMMUNE

On the occasion of Lunar New Year Festival,

on Jan 18th, CSVC coordinated with the

Trade Union and Tan Thanh Red Cross to

visit, send New Year greetings and gifts to

poor families and solitary people in My Xuan

commune. Involved in this charity trip are

CSVC General Director, Deputy General

Directors, Vice President of Production

Division, members of the Trade Union’s

Executive Board and some other members of

CSVC.

CSVC provided 45 gifts (500,000VND/set)

to the poor families and solitary people. At

the places CSVC visited, the Company’s

leaders also had some words of sharing and

encouraging households to keep making

efforts to improve living standard and

develop family economy.

VI. CONTRIBUTION TO SOCIETY

In 2017, great efforts were made to continue improving CSVC employees’ working and living

conditions, firmly strengthening employees’ trust in CSVC as well as their relations & cohesion

with the Company. Moreover, as a foreign invested enterprise in Viet Nam, we deeply

understand our responsibility and mission to the society. Besides the highly quality products

that we provide, we have also paid much attention to the long-term well-being of local

communities.

“A drop of blood to give – A lifetime to stay”. An unexpected accident

could cause you a significant blood loss and threaten your life. Imagine

it! You will truly perceive the importance and preciousness of each blood

drop. The only condition is good health and willingness to share, your

decision to donate can save 03 lives within 10 minutes of donation.

Therefore, do not hesitate to give blood whenever possible and mobilize

other people to get involved in this noble and meaningful activity!

With an effort to save life of those less fortunate, bring them light and restore their faith in the

existence of humanity, in the morning of Jul 14th, 2017, CSVC Trade Union Executive Committee

cooperated with Cho Ray Blood Transfusion Center of HCM City and Red Cross Association of

Tan Thanh District to organize the Voluntary Blood Donation Program in 2017 right at CSVC

with the approval of the Company’s Board of Management. 118 CSVC members gathered at the

Conference Room of the Administrative Building from the early morning to get consultation,

health check and proceed blood transfusion process. Among those, some had donated blood

several times before.

Currently, many hospitals are in need of blood provided by the National Institute of Hematology

and Blood Transfusion. However, a critical shortage of blood still occurs often as most of the

blood supply come from patients’ family and those who give blood for money.

VOLUNTARY BLOOD DONATION AT CSVC

Our Quality, Your Better Life

CSVC