Download - NTPM Holdings Berhad _Mini Project_
2014
Master of Business Administration
(MBA)
By, Chen Keng Kit SGSM 0137/13 Khor Xin Yun SGSM 0152/13 Lew Ai Chien PGSM 0106/13 Loh Chia Sin PGSM 0023/13 Teoh Teik Woei PGSM 0147/13 Wong Wei Yun SGSM 0056/13
Supervisor : Dr. Salmi Mohd Isa
[ NTPM HOLDINGS BERHAD]
AGW 624 BUSINESS ISSUES AND SUSTAINABILITY
DEVELOPMENT
AGW 624 BUSINESS ISSUES AND SUSTAINABILITY DEVELOPMENT NTPM Holdings Berhad
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Table of Contents
Page
1.1 Executive Summary 2
2.1 Introduction
2.1.1 Company Background 3
2.1.2 NTPM Organizational Structure 5
2.1.3 History of NTPM 5
3.1 Sustainability Competencies In Management Decision Making Process 8
3.1.2 Environmental, Economic and Social Development 10
3.1.2 Sustainable Business Practices 12
4.1 Corporate Social Responsibility (CSR)
4.1.1 Go Green 14
5.1 Issues and Challenges 17
6.1 Recommendations 20
7.1 References 23
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1.1 Executive Summary
NTPM Holdings Berhad (NTHB) and its subsidiaries are primarily involved in
manufacturing, paper and personal care products trading. Famous brand name under paper
products include PREMIER, ROYAL GOLD and CUTIES. Besides those big name, other
commercial personal care and incontinent products under their flagship are INTIMATE,
DIAPEX. In addition, the company also provides tissue products, soaps, and dispensers to
companies and institutions under the brand name of CONV and ROYAL GOLD Corporate.
As part of their Corporate Social Responsibility (“CSR”) efforts to ensure the Group’s
sustainable growth, the Board and Management are committed to the carrying out few CSR
program which are in line with firm’s believe in preserving and protecting the environment.
Mainly, the Group has implemented various eco-friendly initiatives throughout our
production processes and operations, as such, reconstruction and upgrading of the waste
water treatment plant at our newly acquired Bentong tissue plant is a prime example of
NTPM environmental consciousness and commitment towards sustainable development.
Close monitor waste water quality, air emission levels, management of waste storage and
licensed disposal as well as energy conservation. In line with CSR agenda to minimize the
adverse impact on the environment and to achieve continuous improvement of our plants
environmental performance, the Nibong Tebal tissue plants are certified with the international
environmental management systems standard, ISO 14001.
Changes in technology, lifestyles, and the business landscape have brought the Fast Moving
Consumer Goods (“FMCG”) industry to an inflexion point in its evolution where the retailing
landscape in Malaysia has grown in breadth and depth over the last decade. A desire for
greater convenience and product variety has driven the rise of different retail formats,
competition rivalry is intensifying and NTPM is constantly competing with the bigger FMCG
international conglomerates, and of late the advent introduction of private label products.
Despite intensive challenges in the growth of the emerging market, the group has taken
initiative adding new products to their existing product lines. To ensure be able to compete
more broadly in FMCG industry, yet with continuous efforts to compliance of health and
safety policies and make sure effective implementation and continuously improvement.
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2.1 Introduction
2.1.1 Company Background
NTPM (Nibong Tebal Paper Mill Sendirian Berhad) is a consumer goods and paper company
with the aim to enhance personal hygience in every household and enable the brands to make
a strong presence in the Malaysia and international market. NTHB Group (Nibong Tebal
Holdings Berhad Group) subsidiaries include Nibong Tebal Enterprise Sendirian Berhad,
Nibong Tebal Paper Mill Sdn Bhd, Nibong Tebal Personal Care Sdn Bhd, Nibong Tebal
Logistics Sdn Bhd and Nibong Tebal IT Sdn Bhd. On November 24, 2008, NTHB
incorporated a wholly owned subsidiary, Nibong Tebal Paper Products Sdn Bhd (NTPP) to
further diversify their business to broader aspects.
NTHB Group was started its operation through NTPM in 1975 which was founded by
Mr .Lee See Jin, who are the managing director of NTHB. NTHB is principally involved in
the manufacturing and trading of tissue paper and other paper related products and trading of
cotton and investment holding. NTPM was established in 1978, which has emerged as one of
the largest manufacturer and exporters of tissue products. NTPM is provided a full range of
quality tissue products at competitive cost with superior services. NTPM started its
commercial production in the paper rolls business with the production capacity of five tonnes
per day by using only one paper making machine in the end of 1979. Since its operation
persistently growth, NTPM started to expand its product into Singapore in 1986.
NTPM introduces 3-ply range products because of the higher demand in pulp quality paper.
The products marketed under the brand name “ROYAL GOLD” included facial tissue, toilet
paper and kitchen rolls in 2002 and the brand name “PREMIER” included facial cotton
manufactured under Original Equipment Manufacturer (OEM) in March 2002. In 2004,
NTHB Group has further expanded the female sanitary napkin product under the brand name
“INTIMATE” and the brand name “DIAPEX” included baby diapers manufactured under
Original Equipment Manufacturer (OEM) in October 2004. Today, NTPM has a production
capacity of 30 tonnes a day or approximately 90,000 tonnes per annum with a total of sixteen
paper-making machines. Currently NTPM is operating at approximately 2/3 of its production
capacity. NTPM intends to continue upgrade its machinery to further increase its production
capacity.
Besides manufacturing, NTPM also involved in trading paper and cotton products, tissue
papers, toilet rolls, paper towels, sanitary products and diapers; information technology
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related business; paper product and printing related business and general trading, as well as
provides integrated logistics services. Further, the company is engaged in research and
development of production technology and biotechnology and recycling of waste materials
related to paper industry.
Todays, NTPM has a production capacity of 250 tonnes a day or approximately 90,000
tonnes per annum with a total of sixteen (16) paper-making machines. With clear vision and
mission complement together with promising development and capabilities, NTPM Holdings
Berhad is currently actively operates in Singapore, actively involving in beef up its presence
in establiched market in Southeast Asia and Ocenia region, such as Thailand, Vietnam, Hong
Kong, Brunei, the Philippines, Africa, Australia, New Zealand and the United States.
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2.1.3 NTPM Organizational Structure
Updated as per 27 April, 2014, the key directors and management team are as follows:
Managing Director, Executive Director Lee See Jin
Company Secretary Thum Sook Fun
Executive Director Lee Chong Choon
Non-Independent Non-Executive Chairman of the Board Teoh Boon Beng
Non-Independent Non-Executive Director Teoh Teik Toe
Independent Non-Executive Director Chang Kong Foo
Senior Independent Non-Executive Director Lim Han Nge
1.3.2 History of NTPM
1975
NTHB Group started its operation through NTPM which was founded by Mr. Lee See Jin.
1979
NTPM started producing and selling jumbo rolls, a type of semi-finished product to paper
converters. Mr. Lee See Jin discovered the potentials in producing jumbo roll from recycled
wastepaper, thus NTPM invested in a paper-making machine imported from Taiwan. With
only one (1) paper-making machine, NTPM started its commercial production in the paper
rolls business in end of 1979 with the production capacity of five (5) tones per day.
1981
Despite the intense competition from market players, the business operations of NTPM
continue to grow over the years. NTPM began to convert them into tissue papers and toilet
rolls and sold to the market directly.
1983
NTPM has already established its own distribution network under NTE, its distribution
company to expand its domestic market. It also began to set up sales offices throughout
Malaysia and sell directly to retailers which resulted in significant growth in its sales. At the
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same time, it started investing in transportation equipment in order to service other market
segments all over the country.
Mr Lee See Jin introduced a significant technology breakthrough for NTPM by venturing
into tissue paper production using the de-inking system. The de-inking system allows NTPM
to produce higher quality paper from recycled wastepaper and process them into tissue paper
for end-user consumption. With the new technology, NTPM was able to expand further into
the upper market segment servicing retailers and end-users instead of only paper converters.
By then, NTPM was able to record sales exceeding RM 10 million.
1986
With the continuous growth in its operation, NTPM began to expand into Singapore. NTPP
was set up. At this point, the demand for NTPM’s products was well over its supply. This has
helped NTPM in surviving through the economic recession then. In order to meet the
increasing demand and growth in its sales, NTPM continuously invest in acquiring new
machinery to increase its production capacity.
1995
NTPM further expands its supplies to local supermarkets under its distribution company,
NTE that implements an effective computerized delivering system.
In the same year, apprehending the need of powerful branding, NTPM began to focus on its
sales and marketing effort by branding its tissue products under the brand name “PREMIER”.
1996
NTHB was incorporated under the name Bypass Structure Sdn Bhd to be the investment
holding company to better manage all the companies under one stable. Since then, NTPM,
NTE and NTPP became the subsidiaries of NTHB.
2000
Foreseeing the direction of its future expansion, NTHB Group acquired Jia In, a printing
business to complement its paper operations by supplying tissue boxes for packaging of its
finished goods.
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2001
Acknowledging the higher demand in pulp quality paper, NTPM introduces a 3-ply pulp
range products. The products marketed under the brand name “ROYAL GOLD” include
facial tissue, toilet paper and kitchen rolls.
2002
NTHB Group included facial cotton manufactured under Original Equipment Manufacturer
(“OEM”) arrangement under the brand name “PREMIER” in March 2002.
2003
In the subsequent year, NTHB Group has further expanded the personal care category with
the introduction of the female sanitary napkin product under the brand name “INTIMATE”.
2004
NTHB Group included baby diapers manufactured under Original Equipment Manufacturer
(“OEM”) arrangement under the brand name “DIAPEX” in October 2004.
Today
NTPM has a production capacity of 250 tonnes a day or approximately 90,000 tonnes per
annum with a total of sixteen (16) paper-making machines. Currently NTPM is operating at
approximately 2/3 of its production capacity. NTPM intends to continue to upgrade its
machinery to further increase its production capacity. Currently, NTE has eight (8) sales
offices cum delivery centres of which six (6) are located in Peninsular Malaysia, one (1) in
Sarawak, one (1) in Sabah and one (1) in Singapore.
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3.1 Sustainability Competencies In Management Decision Making Process
Sustainability refers to an organization’s activities that demonstrate the inclusion of social
and environmental concerns in operations and in interactions with stakeholders (Van
Marrewijk, 2003). Such sustainable principle is required to change the thinking, knowing and
doing, especially for the leadership within the company management. These fundamentals are
summed up as developing sustainable thinking, building a sustainable knowledge base and
learning the latest sustainable framework for use in organizations. (Rogers K.S 2011).
Sustainable thinking has 3 basis characteristics: (1) moving from short-term thinking to
taking a long view of decision making; (2) moving from thinking of the economy as
something from outside nature to an economy integrated with and supported by nature; and (3)
moving from thinking about a linear flow of resources to thinking about the ways resources
flow through a system. Key sustainability competencies are learning the basics of
environmental science, creating ethically sustainable guidelines for its stakeholders, applying
intention to sustainable leadership activities and designing a system response to
organizational issues. When systems thinking is employed in sustainability reasoning, the
issues arisen from non-sustainable shall be easier to address from a longer term perspective.
Sustainable frameworks which could be suitable to the company such as ecological footprint,
natural capitalism can be applied accordingly to the actual situation (Rogers K.S. 2011). The
energy and momentum needed for creating sustainable value is massive. The process is akin
to a paradigm change and needs the concerted efforts of policy makers and business leaders.
(Thatchenkery T et.al 2010).
For NTPM, the management team has realized the importance of sustainability as above for
long term survival and thus started such initiatives since 2008. NTPM has pursued and was
accredited ISO-14001:2004 on 26th May 2008. It showed that the company has actually
committed to be an environmentally responsible organization by complying with legislative
requirements, pollution friendly to the environment and ensuring continuous improvement to
its manufacturing process towards environmental conservation.
NTPM even published its annual report 2008 using the theme “Embracing a Greener
Lifestyle” and more earthy and environmental graphic as compared to previous years annual
report with company products or general theme without specific message. This show the
company’s commitment towards the sustainable development for long term. The 2008 report
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has also inserted a Corporate Social Responsibility (CSR) page to inform the stakeholders on
the activities and direction for the CSR.
In its inaugural CSR report, NTPM has reaffirmed that its corporate philosophy is embedded
with sustainability and have a core value with guiding principles guides to the Group
employees at all levels in conducting its business activities as a good corporate citizen.
NTPM has strived to become economic, intellectual and social asset to its local communities.
It has detailed out the environmental protection and preservation efforts such as controlling
the disposal of waste, prevention of air pollution, minimize waste emission which complies
with the regulatory regulations. The waste water treatment plant is designed to properly treat
all liquid waste generated from the tissue paper production and then recycle back to the
production process.
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3.1.1 Environmental, Economic and Social Development
Since 2008, all the annual reports from 2009 till date are printed with “Let’s Go Green”
theme. We shall identify other sustainable developments in NTPM by the following table:
Before 2007
2008 2009 2010 2011 2012 2013
A. Environmental Integrity 1. Mined/Manufactured Products
that have a less environmentally harmful impact than in previous years or than its competitors.
0 1 1 1 1 1 1
2. Mined/Manufactured products with less environmentally damaging input than in previous years or than its competitors.
0 1 1 1 1 1 1
3. Chose inputs from sources that are remediated or replenished.
0 1 1 1 1 1 1
4. Reduced environmental impacts of production processes or elimated environmentally damaging processes.
0 1 1 1 1 1 1
5. Eliminated or reduced operations in environmentally sensitive locations.
0 1 1 1 1 1 1
6. Attempted to reduce likelihood of environmental accidents through process improvements.
0 1 1 1 1 1 1
7. Reduced waste by streamlining processes
0 1 1 1 1 1 1
8. Used waste as inputs for own processes
1 1 1 1 1 1 1
9. Disposed waste responsibly 1 1 1 1 1 1 1 10. Handled or stored toxic waste
responsibly 1 1 1 1 1 1 1
TOTAL 3 10 10 10 10 10 10 B. Economic Prosperity 1. Worked with government
officials to protect the company's interests
1 1 1 1 1 1 1
2. Reduced costs of inputs for same level of outputs
0 1 1 1 1 1 1
3. Reduced costs for waste management for same level of outputs
0 1 1 1 1 1 1
4. Differentiated the process or product based on the marketing efforts of the process/product's environmental performance
0 1 1 1 1 1 1
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5. Sold waste product for revenue 0 0 1 1 1 1 1 6. Created spin-off technologies
that could be profitably applied to other areas of the business
0 1 1 1 1 1 1
TOTAL 1 5 6 6 6 6 6 C. Social Equity 1. Considered interests of
stakeholders in investment decisions by creating a formal dialogue
1 1 1 1 1 1 1
2. Communicated the firm's environmental impacts and risks to the general public
0 1 1 1 1 1 1
3. Improved employee or community health and safety
0 1 1 1 1 1 1
4. Protected claims and rights of aboriginal peoples or local community
0 1 1 1 1 1 1
5. Showed concern for the visual aspects of the firm's facilities and operations
0 1 1 1 1 1 1
6. Recognized and acted on the need to fund local community initiatives
0 1 1 1 1 1 1
TOTAL 1 6 6 6 6 6 6 • Adopted from Mani A.(2013)
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3.1.2 Sustainable Business Practices
Perry, M.(2012) examines that improving environment performance offers a continuous
opportunity for strengthening profitability of the organization. The evidence of the
relationship can be obtained from examine the performance of business that have invested in
environmental improvement would relate positively to the performance of the business
bottom line.
For NTPM, the relationship has been proven positive by the following revenue and operation
profit generated since the implementation of sustainability since 2008.
2008 RM’000
2009 RM’000
2010 RM’000
2011 RM’000
2012 RM’000
2013 RM’000
Revenue 306,173 358,557 383,123 420,227 449,786 480,567 Operation Profit 43,999 60,719 76,531 69,426 63,028 71,522 Profit Before Tax (PBT) 41,618 58,677 75,445 67,126 59,540 67,363 Net Profit Attributed to Shareholders of the company
34,108 46,222 59,320 52,063 44,781 49,132
Net Dividends 25,272 29,426 32,572 32,572 16,286 32,191 Earning Per share (Sens) 3.04 4.12 5.28 4.64 3.99 4.39 Dividends Payout Ratio, % 74.09 63.67 54.91 62.56 36.37 66.00
With the positivity shown from the bottom line of the overall business operation, NTPM’s
stakeholders shall be strengthened further to embrace sustainable development in
implementing various eco-friendly initiatives throughout the production processes and
operation through better waste management, reducing energy cost, water and steam
consumption which will eventually reduce carbon footprints during the manufacturing
process. There has been measurement of the results of such initiatives, which is recorded on
annually basis. For example, the improvement of 3% electricity consumed, and the saving of
water consumption from 81cubic meter to 68 cubic meter over one metric tonne paper
produced as compared to previous year is recorded in the 2009 annual report.
In 2009, NTPM tissue products have passed one of the highest rated environmental
assessments in the world, i.e product certification by Environmental Choice New Zealand
(ECNZ), which indicated and recognized NTPM effort in improving the quality of the
environment by minimizing the adverse environmental impacts generated by the production,
distribution, use and disposal of products.
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In their manufacturing policy, NTPM is committed to produce recycled tissue products with
at least 5% post-consumer content while its virgin fiber products are sourced from plantations
or forests licensed under the Forest Stewardship Council. All the chemicals used in the
manufacturing processes are also biodegradable, chlorine free and without EDTA and other
heavy metals content that indicate health risk. This manufacturing policy in fact puts NTPM
on track into Green Supply Chain practices which is an important element in sustainability
developments in industries.
In 2010, NTPM has continuously improved its 3R process, i.e Recycle, Reuse and Reduce
with investments more than RM 5million in capital expenditure in machineries that could
provide technology in line with the above direction. In addition to that, using biomass to
produce energy seems like a particularly compelling solution as it potentially offers a
powerful mix of sustainable practices and economic development opportunities to
communities. (Cartes, D. 2011). NTPM has also ventured into biomass project in their latest
plant acquisition of Bentong tissue plant in 2012. To par with environmental friendly aim, the
company’s initiate via introducing EcoWorld range of environmental friendly stationary
products with raw materials sourced from recyclable paper.
High commitment towards socially conscious corporate culture, the company has also
encouraged personal development and equality of opportunity as well as health and safety of
the employees at the workplace. With practice, NTPM provides a healthy working condition
for the employees and support workers. NTPM has revamped its Health and Safety
Committee in 2013 to set out the best practices to ensure the safety polices are effectively
implemented and continuously improved. The company also has signed a new memorandum
of agreement with its employee representative union to improve the income of allowances,
incentives, medical coverage and a new minimum salary scale. In 2012, NTPM has started to
qualify itself for the OHSAS 18001 certification as a proven recognition for providing safe
working environment for its employees.
At NTHB, their values behooved to listen to customers and respond to what they hear. The
‘No Plastic Bag Day’ campaign has left consumers frustrated although many applauded the
move. NTPM took this opportunity to educate the consumers by distributing 800,000 of non-
woven recycled shopping bags as complimentary gifts with every purchase of Cutie Compact
Toilet Rolls or Kitchen Towels during on-going ‘green’ campaign. In doing so, NTPM
indirectly educate and promote the importance of environmental conservation to consumers.
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4.1 Corporate Social Responsibility
4.1.1 Going Green
NTPM corporate social responsibility (“CSR”) efforts are to ensure the Group’s sustainable
growth by having the Board and Management committed to carry out the responsible
business practices that have positive impact on all our stakeholders which includes our
customers, suppliers, employees, community and environment in which we operate.
In term of preserving and protecting the environment role which dedicated to maintain
sustainable business practices, the NTPM Group has implemented various eco-friendly
initiatives throughout their production processes and operations, which they continually
monitor and improve on in order to abide by current environmental regulations. The
reconstruction and upgrading of the waste water treatment plant at NTPM newly acquired
Bentong tissue plant is a prime example of environmental consciousness and commitment
towards sustainable development. The Group has improved the treatment efficiency of our
Bentong waste water treatment plant in order to meet the Malaysia Sewage and Industrial
Effluent Discharge Standards “A” so that the capacity of the plant can be efficiently utilized.
Capacity of the plant efficiently utilized means higher output compared to the past and
increase the company revenue and also profit in an indirect way.
Besides increasing the company revenue and profit by reconstruction and upgrading the
waste water treatment plant at Bentong tissue plant, the Group also constructing a biomass
boiler at our Bentong tissue plant, which already stated in final stages. This biomass boiler is
actually in support of the Government’s drive to reduce greenhouse gases and it operates
using wood chips which will cut down the carbon dioxide output from the two existing fuel
based boilers which they have inherited from the previous owner, which will be left idle
completely on the site, as well as making significant monetary savings. In other hand, NTPM
had improved their compressed board production process that generates solid waste from
tissue manufacturing. The Group is able to eliminate the use of glue usage and reduce the
chemical contents used in their compressed board production and also new ways to market
the compressed boards, which are to make Medium-density fiberboard (“MDF”) Board in the
coming financial year. For this, they have added two new lines of compressed board making
machines to the existing 5 lines towards the end of the last financial year, which will increase
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their yearly capacity to 1.200 metric ton per month as part of their on-going CSR efforts to
ease landfill congestion.
Overall, their increasing awareness of environmental issues has put green initiatives high on
their business agendas. These initiatives broadly are as follows:
• Investing in more-energy efficient tools and equipment in companywide;
• Upgrading and consolidating manufacturing technology to eliminate redundancies
and improve efficiencies;
• Efficient use of resources like water, paper and energy in the plant;
• Proper waste management; and
• Manufacturing and designing new recyclable paper related products and extracting
In NTPM, the group strongly believe that internal stakeholders are the most important value
to their own organization. In line with this, they encourage personal development by
recognizing achievements and by looking after their employees’ well-being. The Group is
committed to ensuring equality of opportunity and the health and safety of their employees in
the workplace. The Group has recently revamped the Health and Safety (“HS”) Committee
on 5th April 2013 as part of its best practices to ensure that health and safety policies are
effectively implemented and continuously improved. Both internal and external first aid
training, health and safety talks, fire drills and plant evacuation exercises are regularly
conducted to safeguard employees and to create awareness on the importance of having a safe
and healthy work environment. At the Group’s manufacturing locations, they had continued
to ensure that equipment and building systems are functioning properly and are well
maintained also.
During the financial year ended 30 April 2013, the Group generously gave out cash
contributions of more than RM100,000 to various worthy causes. Some of the organisations
which they have helped included St. Nicholas Home, Pusat Kebajikan Kanak-Kanak
Istimewa (Daerah Seberang Perai Selatan), Persatuan Bekas Murid-Murid Sekolah Pai Teik,
PIBG Sekolah Kebangsaan Sungai Kechil, Kesatuan Pekerja Bomba Dan Penyelamat, PIBG
SMK Tunku Abdul Rahman and Sin Hwa Kindergarten.
At the company, their management is find ways to alleviate the social-economic burden
brought by the price hike of essential commodities on their middle-low income group of
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employees. The Group renewal of the 7th Memorandum of Collective Agreement (“CA”)
was concluded in 2011, signed and filed within four months of its inception in a most family-
friendly manner spurred by the good faith negotiations between the concerned parties. This is
a testament to their pledge of making a difference and putting their worker’s minds at ease.
At their costs, the recently concluded CA brings the following additional benefits to their
employees:
• Introducing for the first time, meal allowance of RM2 per each day in attendance;
• Improving the minimum rate of conversion in between 7% to 13% on salary
adjustment upon renewal of each CA;
• Improving the contracted bonus paid out from 1 month to 3 months depending on
the year of service;
• Increasing the medical benefits entitlement;
• Granting two additional paid public holidays from the existing sixteen days; and
• Improvement to other types of allowances such as monthly attendance allowance,
call back allowance, shift allowance and etc.
The indictors such as various recognition and accreditation of certificates in sustainable
development have encouraged the on-going policies and business practices for NTPM to
become a environmental friendly focus leader by setting a good example in making the
initiative “go green” movement.
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5.1 Issues and Challenges
Sustainable development describes as meet the needs of the present without compromising
the ability of future generations. The more radical green approaches tend to look on
environmental protection and in some case social reorganization. Environmental and social
approach may be the most crucial in the future planning.
NTPM is one of the best example in demonstrating the impact of the social and
environmental in their decision making, As well known, NTPM has emerged as one of the
largest manufacture of tissue paper in Malaysia. It is producing more than 100 types of tissue
paper jumbo rolls and has capacity of producing 250 ton tissue paper jumbo rolls per day. As
part of their effort for Group sustainable growth, the Board of Management are committed to
promote the effective protection of environment, prudent use of natural resource and
developed green initiatives within the Group. It is a part of their social responsibility as well.
The increasing awareness of environment issue has become their main consideration on their
business agendas. In year 2012, they spend a lot in investing more energy efficient tools and
equipment. They replaced higher horse power motors and pumps with lower energy horse
power motors. Then, they replaced all the old machinery parts and upgrading existing
machines equipment with energy efficient versions. It is clear show that they carrying out of
business responsible practices that have positive impact on environment.
In order to save the energy and eliminate redundancy, they decide to install synchronous
timer for the operation of dispersing agent agitator at the paper making machines with auto
switch off features during defined idle time. In addition, they deployed inverter technology
for paper making ventilation fans that monitors and adjust the required temperature whenever
needed, installing energy efficient light for illumination the workplace. NTPM’s new sales
office cum warehouse building in Malacca is fully fitted with energy efficient light.
The population of Malaysia is approximately 28,310,000 while society consumption rate of
plastic bag is estimated over 50billion annually or almost 1 million per minutes. That is a
huge number of plastic bags used per day. It must be controlled well before our environment
become worst. That is a part of NTPM conscious as well, hence they decide to remove and
reduce the post consumption plastic bags littered on street by giving away the non-woven
recycled shopping bag during their product trade shows and marketing event. In the market,
more than 800,000 of non-woven recycled shopping bag-packed with NTPM’s eco-friendly
tissue products had been freely distributed to their consumer over the past few years.
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Instead of above, NTPM also have set a budget for research and development which focus in
extensive research and development initiative on designing new recycle paper related product
and extracting materials for recycling activity. For example, recently they recover the fiber
content of pre-consumer baby diapers reject from various sources to be used as an input for
tissue product. That is an opportunity for them to divert the waste stream and recycle it.
During process of paper manufacturing process, waste water flow into the river and this issue
became a major caused of water pollution. As an environmental consciousness and
commitment towards sustainable development believer, NTPM has taking this issue seriously.
Hence, they come out with decision to reconstruct and upgrade the waste water treatment
plant at their newly Bentong tissue plant. By setting a prime example, the group has
improved the treatment efficiency of Bentong waste water treatment plant in order to meet
the Malaysia Sewage and Industrial Effluent Discharge Standards “A” so that the capacity of
the plant can be efficiently utilized. In support of the Government’s drive to reduce
greenhouse gases, the Biomass Boiler operates using wood chips which will cut down the
carbon dioxide output from the two existing fuel based boilers which they have inherited
from the previous owner, which will be left idle completely on the site, as well as making
significant monetary savings.
As a business driven entity yet with aim to preserve environment for future generation,
NTPM is obviously taking the initiative reducing pollution through actions. Steps are taken
by the group to closely monitor their waste water quality, air emission levels, management of
waste storage and licensed disposal as well as energy conservation. Their environmental
management systems are constantly being reviewed and adapted to improve the quality of the
environment. Part of their movement are as such, they continue to find ways and means to
improve their compressed board production process that generates solid waste from tissue
manufacturing. Continuously, the group eliminate the usage of glue and reduce the chemical
contents used in board compressed production. Added two new lines of compressed board
making machines to the existing 5 lines towards the end of the last financial year 2013, which
will increase this year’s capacity to 1.200 metric ton per month as part of the group on-going
CSR efforts to ease landfill congestion.
Due to large capacity of production involve massive usage of electricity, water and steam
consumption at the tissue plant. The group continue to search for alternatives to conserve and
reduce energy costs especially electricity, water and steam consumption. Some of their
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success stories for the year include optimization of the vacuum pumps, ventilation fan and
screening processes at various papers making machines; installation of the Multi Media Filter
System for internal water recycling process; and installation of a thermo compressor system
to reduce steam consumption.
Social and environmental business strategies are both continuous sustainability actions that
could be controlled within the group business strategies and effort. Economic, however is the
biggest challenge for the group. In view of the intense competition in Malaysia consumer
market, high volatility in prices of commodities or raw materials, inflation cost pressure and
soon, ^% standard goods and services taxes “GST” will be imposed by government on
imports material which may impact the group’s top and bottom line results. Against to this
backdrop, the group would implement tighter cost control measurements in further improving
its production efficiency. More diversification and development of new products to penetrate
new markets are key to for the group to continue to explore viable, synergies and profitable
business venture and business operation performance and financially performance.
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6.1 Recommendations
NTPM has shown its commitment in sustainability development from social, economy and
environmental perspective with various strategic implementations as discussed in earlier
chapter. Riding on the wave of globalization, the competitiveness has never been so fierce
among businesses. NTPM has to constantly improve the business processes with sustainable
development to create a unique competitive advantage for the business. Here are some
recommendations for NTPM in improving the sustainable development from the perspective
of efficiencies of decision-making process and communication channel.
According to the information made available to public, NTPM does not have an expert who
specifically deals with sustainability development issues. NTPM may appoint an
Environmental Manager who possesses qualifications and expertise in environmental issues
to be solely dedicated to sustainability development of the company. Appointment of an
Environmental Manager does not have other operation responsibility other than fully in-
charge of sustainability development will enhance the decision making process, efficiency
and effectiveness of the management and policy implementation. The Environmental
Manager shall report directly to the Director to ensure minimal bureaucracy and effective
information conveyance for such important policy to the top management of the company.
Sustainability development in a company does not only involve a single department;
multidisciplinary efforts from all representatives in different business areas may contribute to
a more comprehensive development. The cross-functional, multidisciplinary team may report
directly to the Director. The main objective of the multidisciplinary team is to gather inputs
spanning across different business areas in contributing to policies strategic planning and
development of sustainability development in the most cost-effective way. The team may
share the result of assessments and planning to all levels of the company thereby ensuring
transparency and promoting awareness to all its stakeholders. Appointment of Environmental
Manager and multidisciplinary team may facilitate communication with the various
stakeholders of NTPM. Sustainability development assessment, strategic planning,
implementation and execution requires a team effort where multiple relationships have to be
established with NTPM stakeholders, namely shareholders, employees, customers, suppliers,
society and community at large. Environmental Manager who works closely with the top-
management will be able to play the role as the main-key-person for NTPM in addressing
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these issues, leading the sustainability development drive as well as representing NTPM in
replying the stakeholders. The Environmental Manager may act as the gatekeeper in
assessing and reviewing the quality of the raw materials; thereby justify the approval certified
suppliers. With standard and quality information, the role of Environmental Manager will
assist the decision making of NTPM in business issues without compromising the other
business operations.
Other than meeting environmental expectation via human resource management. Effective
communication with different stakeholders of NTPM is essential in ensuring a smooth-
flowing of information conveyance and transparency of policies and management. As
aforementioned, restructuring of company organizational structure will facilitate the
sustainability development management of the company. NTPM has been progressive with
various strategic planning and innovative business processes for sustainability development.
The progressive development would not be materialized with communication channel
established within the organization. Among the communication channels imperative to
organization like NTPM are: top-down communication between top management in
conveying instructions, expectations or assignments; lateral communication across
departments in ensuring transparency sharing of information to establish cross-departmental
efforts; and bottom-up communication channel from employee to top management to support
innovative suggestions for sustainable development. Social media platform such as intra-
organizational forums may be developed within the intranet platform large organization such
as NTPM. The establishment of forums will improve the engagement of top-management
with their fellow employees thereby facilitate information and knowledge sharing across
departments, hierarchy levels and country borders.
In addition to intra-organizational effort, NTPM should seek innovative solutions in
establishing relationship with the society and community at large. Transparency is imperative
especially when the business operations of NTPM, including its recent expansion projects to
Vietnam, involve development in local community. NTPM is a public listed company at
Kuala Lumpur Stock Exchange Market, thus, it has made its financial and annual report
publicly available at NTPM official website (NTPM Holdings Berhad, 2013). Moreover,
third-party analyst reports, e.g. Public Investment Bank, are freely accessible by public
online(Public Investment Bank, 2014). NTPM's efforts in ensuring sustainability
development is noted in the reports albeit minimally. NTPM has been certified with Hazard
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Analysis and Critical Control Point Certification accredited in 2007; ISO 14001: 2004 since
2008; Environmental Choice New Zealand (ECNZ) accredited in 2009 and Good
Environmental Choice Australia (GECA). NTPM has also been engaging in CSR activities
with sustainable business practices and maintaining relationship with schools, communities
and non-profit organizations (NTPM Holdings Berhad, 2013). However, these efforts,
recognition and awards are little to known to all.
Apart from its conventional marketing for NTPM's products, innovative marketing strategies
are essential to engage and spread the sustainability development efforts with public at large.
Malaysia has one of the highest internet coverage and social media usage in the region. The
potential of social media and internet marketing should be fully explored. NTPM's Facebook
Fans Page has been established to create company image and branding; however, it has not
been fully utilized and well-maintained. This can be seen through the number of "Likes"
which are below 300 and less frequent posts sharing by the management. NTPM marketing
department should make full use of the existing social media platform in establishing
relationship with community and society.
A detailed sustainability development report should be published to focus on the efforts in
sustainability development. The sustainability development report is mainly directed to
spread the message to community and society; therefore, this would be a separate report from
the financial report and annual report for the shareholders. Moreover, NTPM may engage
with third-party publisher, for example online magazines, newspaper such as Forbes.com,
The Edge, in reporting on their efforts in sustainability development. These articles can be
potentially virally shared across the social media platform by audiences. For example,
Monadnock Paper Mills located at New Hampshire Town has recently shared their
sustainability development plan on Forbes.com which has gained over two thousands views;
in addition, for further detailed information, they published the Sustainability Development
Report where it is fully assessable via hyperlink from the article (Monadnock, 2014; Peter
Kelly-Detwiler, 2014).
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7.1 References:
Cartes, D. (2011) Energy Systems, Economics, and Sustainability. Research in Experimental
Economics, Vol 14, 213-222
Mani, A. (2013) Evolving corporate sustainable development: a case study of Mysore paper
Mills Limited. Asian Journal of Business Ethics, 10.1007
Monadnock. (2014). The Nature of Monadnock Paper Mills: Our Sustainability Progress
Report.
NTPM Holding Berhad. 2008, 2009, 2010, 2011, 2012, 2013 Annual Report.
Perry, M., & Battisti M. (2012) Sustainable business and local economic development.
Critical studies on Corporate Responsibility, Governance and Sustainability, Vol 3,
121-147
Peter Kelly-Detwiler. (2014). Monadnock Paper Mills: Sustainability is Enlightened Self-
Interest. from http://www.forbes.com/sites/peterdetwiler/2014/03/03/monadnock-
paper-mills-sustainability-is-enlightened-self-interest/
Public Investment Bank. (2014). PublicInvest Research: NTPM Holders Berhad.
Rogers, K.S. (2011) Leading Sustainability. Advances in Global Leadership, Vol 6, 137-153.
Thatchenkery, T., Avital, M., & Cooperrider.D.L (2010) Introduction to positive design and
appreciative construction: from sustainable development to sustainable value.
Advances in Appreciative Inquiry, Vol 3, 1-14.
Van Merrewijk, M. (2003). Concepts and definitions of CSR and corporate sustainability:
Between agency and communion. Journal of Business Ethics, 44(2-3), 95-105