25Issue

February 2014

ContentsChief Executive Officer AddressPrince Saud bin Naif Inaugurates New AFICO Factory in DammamZamil Industrial Fourth Quarter 2013 Financial ResultsZamil Steel Completes GCCIA Project in JubailZamil Steel Egypt Announces Expansion into New African MarketsZamil Air Conditioners Launches SmartVan Automated Service in Saudi ArabiaZamil Air Conditioners in List of ‘Top 100 Saudi Brands’Zamil Industrial HR Department Receives Asharqia Chamber HonorsZamil Industrial Receives Certificate of Appreciation from the Saudi ArabianCultural Bureau in CanadaZamil Air Conditioners Factory Wins Best Safety Performance AwardKhalid Al Zamil Shares His Professional Expertise with Dammam Collegeof Technology StudentsPolish Ambassador Visits Zamil IndustrialZamil Structural Steel and Process Equipment Participate in ADIPEC 2013Zamil Steel Vietnam Participates in MYANBUILD 2013Zamil Industrial Employee Satisfaction Survey Zamil Industrial LPD Achievements During the 4th QuarterSafety Message

For further information please contactCorporate Communications Department

Fax: (+966 13) 810 8190 | Email: impact@zamilindustrial.comwww.zamilindustrial.com

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1

Dear Colleagues,

Greetings and welcome to the latest issue of Impact.

We were recently honored by the visit of HRH Prince Saud bin Naif bin Abdulaziz, Governor of the Eastern Province, to officially inaugurate the new Arabian Fiberglass Insulation Co. Ltd. (AFICO) factory in Dammam Second Industrial City. The Prince graciously participated in the ceremony, accompanied by the Minister of Commerce and Industry Dr. Tawfiq Bin Fawzan Al-Rabiah and a group of distinguished senior officials and businessmen from the Eastern Province. HRH expressed his pride and admiration for this advanced industrial facility and its contribution to the support of existing industrial projects in the Kingdom.

On behalf of the members of the Board of Directors, I would like to extend my sincerest thanks to the Prince for his committed support of such ventures aimed at the development of the industrial sector and at the achievement of overall economic development in the Kingdom. I would also like to thank the Minister of Commerce and Industry for his great support to local businesses and industrial sectors in the Kingdom, and the government officials and businessmen who joined us at the inaugural celebration.

I am pleased to announce that Zamil Industrial has finished 2013 while posting an excellent net profit. Thanks to our strategic decisions to focus on innovation and diversification while growing our portfolio of products and services, Zamil Industrial businesses have overcome adverse economic conditions and successfully navigated the complexities of regional business environments. As a result, we should remember the past year with a sense of accomplishment and pride in our performance.

I would like to extend my sincere thanks to all employees and management at Zamil Industrial for their hard work and dedication to transferring our company’s core values and vision into reality in today’s challenging business world.

As we move forward, let us continue to perform our duties and expand our businesses in ways that demonstrate our commitment to the fulfillment of our responsibilities to customers, coworkers and communities in every market that we serve.

I hope that you enjoy reading this issue of Impact, and as usual, we appreciate your comments and suggestions for future editions.

Kind Regards,

Abdulla M. Al ZamilChief Executive Officer

MESSAGE

2 STRATEGIC GROWTH

HRH Prince Saud bin Naif bin Abdulaziz, Governor of the Eastern Province, officially inaugurated the new Arabian Fiberglass Insulation Co. Ltd. (AFICO) factory in Dammam Second Industrial City on Wednesday, 15 January 2014. Minister of Commerce and Industry Dr. Tawfiq bin Fawzan Al-Rabiah and a group of distinguished senior officials and businessmen from the Eastern Province were also in attendance. AFICO is a member company of Gulf Insulation Group, a sector business of Zamil Industrial.

Prince Saud bin Naif InauguratesNew AFICO Factory in Dammam

2 STRATEGIC GROWTH

3STRATEGIC GROWTH

Upon his arrival at the venue, Prince Saud cut the ribbon to mark the opening of the new state-of-the-art manufacturing facility. He then toured the plant and listened to a detailed description of the workings of the factory, including its production lines and packing and shipping processes. The new factory has successfully completed the pilot production process and has commenced the commercial production of fiberglass insulation materials for a variety of customers in local and regional markets.

The Prince spoke briefly, expressing his pride and admiration for this advanced industrial facility and its contribution to the support of existing industrial projects in the Kingdom, and praising the efforts of the founders of this exciting project.

On this celebrated occasion, Khalid Abdullah Al Zamil, Chairman of Gulf Insulation Group, delivered a speech, during which he acknowledged the keen interest and participation of the Kingdom leadership and His Royal Highness in support of this and other ventures aimed at the development of the industrial sector and at the achievement of overall economic development in the Kingdom. He stressed that the establishment of the new plant is a key part of the company’s strategic plan to develop Saudi Arabian industrial capacity and to meet the growing demand for high-quality insulation materials for use in industrial, commercial and residential projects.

3STRATEGIC GROWTH

Al Zamil also stated that the new factory has an installed capacity of 24,000 MT, increasing the company’s total manufacturing capacity in its combined plants to 37,000 MT per annum. The new plant will manufacture products primarily for use in the different segments of the construction industry. The additional production capacity will also enable AFICO to introduce energy-efficient, environmentally friendly fiberglass insulation products to the marketplace. These products are expected to assist local governing authorities in the GCC countries in the implementation of more stringent building code requirements aimed at increasing energy efficiency and improving fire safety standards.

Finally, Al Zamil praised the role of the Ministry of Commerce and Industry in supporting the private sector in general and the industrial sector in particular, since the industrial sector is the main engine of economic growth and job creation for Saudi citizens.

At the conclusion of the inaugural ceremony, special souvenirs were presented to the Prince and the Minister of Commerce and Industry in commemoration of the occasion.

FINANCIAL RESULTS4

Zamil Industrial Posts SAR 235.4 Million Net Profits in 2013

Comparison Charts of 2011-2013 Financials (twelve months)

Zamil Industrial Investment Company (Zamil Industrial) has announced its consolidated financial results for the period ended 31 December 2013.

Net profits for the fourth quarter of 2013 were SAR 60.1 million (USD 16.1 million), compared with SAR 61.4 million (USD 16.4 million) during the same period in 2012, a drop of 2.1 percent, and compared with SAR 48.9 million (USD 13.1 million) posted in the previous quarter (Q3), an increase of 22.8 percent.

Gross profits for the fourth quarter of 2013 were SAR 326.2 million (USD 86.9 million), compared with gross profits of SAR 367.8 million (USD 98.1 million) for the same period in 2012, a decrease of 11.3 percent.

Operating profits during the fourth quarter were SAR 102.2 million (USD 27.2 million), compared with SAR 114.4 million (USD 30.5 million) for the same period in 2012, a decrease of 10.7 percent.

During the twelve months ended 31 December 2013, net profits were SAR 235.4 million (USD 62.8 million), compared with SAR 201.5 million (USD 53.7 million), an increase of 16.8 percent over the same period in 2012.

Earnings per share grew to SAR 3.92 (USD 1.1) from SAR 3.36 (USD 0.90) during the same period in 2012.

Gross profits for the twelve months were SAR 1,306.8 million (USD 348.5 million), compared with SAR 1,165.1 million (USD 310.7 million) for the same period in 2012, an increase of 12.2 percent.

Operating profits for the twelve months were SAR 400.4 million (USD 106.8 million), compared with SAR 365.2 million (USD 97.4 million) for the same period in 2012, an increase of 9.7 percent.

4,727,695 5,354,874 5,413,984

Revenues(SAR 000’s)

1,051,235 1,165,120 1,306,814

Gross Profit(SAR 000’s)

154,190 201,454 235,356

Net Income(SAR 000’s)

2.57 3.36 3.92

Earnings Per Share(SAR)

1,582,789 1,708,122 1,880,681

Stockholders’ Equity(SAR 000’s)

201320122011 201320122011 201320122011

201320122011 201320122011

5STRATEGIC GROWTH

The scope of the contract called for the design, fabrication, supply and erection of more than 230 MT of pre-engineered steel buildings, including two warehouses and an office storage building owned by GCCIA and located in the eastern region of Saudi Arabia.

This project marks the first complete EPC turnkey venture for the company. Zamil Steel provided complete engineering, procurement and construction services as an EPC Contractor for the entire project. The company

was responsible for the design, supply and erection of two steel warehouse buildings that included fire suppression and racking systems, along with a concrete administration building and all supporting utility services and external works.

“Zamil Steel has been extensively involved with leading regional and multinational companies, supplying pre-engineered buildings and structural steel components for important projects that are complex

in nature. This initial EPC turnkey project for Zamil Steel Construction Co. provided customized and integrated delivery solutions that also adhered to strict principles of safety and quality in design. The warehouse complex has been officially transferred to the client, who has expressed satisfaction with both the quality of work and completion time, which we can proudly say occurred ahead of schedule,” said Nawaf Al Zamil, VP of Zamil Steel’s Building Products Group.

Zamil Steel Construction Company Completes First EPC Turnkey Project for GCCIA in Jubail

Zamil Steel Construction Company recently announced that it has successfully completed the engineering, supply and erection of several customized pre-engineered steel buildings for the Gulf Cooperation Council Interconnection Authority (GCCIA) in Jubail, Saudi Arabia.

6 STRATEGIC GROWTH

The new factory operates with an annual production capacity of 24,000 MT, which will increase to about 50,000 MT after the second planned production line is added within a year’s time. The state-of-the-art manufacturing facility, which spans a total area of 30,000 square meters, employs 350 people and is expected to reach 700 workers within the next two years.

The facility produces and supplies high-end pre-engineered steel buildings, steel structures and other steel products for its targeted customers located in more than 30 African and European countries as well as in the free zones in Egypt.

“We are proud of this new facility and of the diligent efforts that have

brought us to this point in the production process,” said Khaled Saad, general manager of Zamil Steel Egypt. “The demand for high-quality, cost-effective steel building solutions is rising in Egypt and throughout the region. Zamil Steel Egypt has been a trusted provider of pre-engineered buildings and structural steel products and solutions to clients in Egypt and neighboring African countries since 2002. The addition of this new facility to the company’s main factory in the 6th of October City strengthens our commitment to meeting this demand in the years ahead.”

Zamil Steel Buildings Co., Egypt, announced that the company has begun shipping operations from its new Northern Egyptian factory located in Sadat City. Product orders with a total tonnage of 2,500 MT have been shipped to three African countries (Algeria, Ethiopia and Togo).

Zamil Steel Egypt Announces Expansion into New African Markets

Egypt

Ethiopia

Algeria

Togo

7 EXPANDING CAPABILITIES

The new service is designed so that customers can initiate service with a single call to the Zamil Air Conditioners call center at 920000468. The new service system then generates a case record and automatically assigns the new work order to the next available skilled field technician.

The new system operates as a valuable tool for communicating customer needs to the field technicians. Status notifications such as case open, scheduled or resolved are sent to the customers’ mobile devices to keep them updated on technician appointment times and other aspects of the case in accordance with the logged information. Trained SmartVan technicians then handle the service request with the utmost professionalism, equipped with quality assurance tools such as automated field worker logs and the ability to communicate immediately with home office personnel if necessary. The target turnaround time for each case resolution is currently set at 48 hours, which the company believes will be the most popular aspect of the new SmartVan service according to customer feedback.

The new SmartVan system also allows technicians to access important case information online and determine the type of expert assistance required by the customer at the site. The company will continue to develop and upgrade the services provided by the SmartVan automation system in accordance with customer expectations as expressed through comments and other input mechanisms.

The Zamil Air Conditioners SmartVan Solution will eliminate unnecessary service order processing time and reduce wait time for customers. It will also improve response time and enable the workforce operating in the field to maximize resources while creating consistent customer goodwill and improving communications within the organization. The new system offers valuable opportunities to maximize first-call closure rates, stay within service level agreement (SLA) times, drive customer satisfaction and create new revenue opportunities due to a decisive marketing edge over the competition. Implementation of this new solution will create a smarter, more efficient and more customer service-oriented field service than ever before.

“Zamil Air Conditioners is the first in the region to launch mobile app technology in an effort to provide customers with state-of-the-art service options. The SmartVan automation service will enable technicians to increase productivity and efficiency while providing an ever-widening range of services and ensuring the highest possible level of customer satisfaction,” said Zaki Sabbagh, CIO of Zamil Industrial ITG.

The SmartVan system offers key advantages that benefit both service technicians and customers, including iPad-equipped technicians with GPS directional capabilities, automatic assignment of work orders to the appropriate technician in order to reduce response time, monitoring of workload and SLA times, and constant communication with the customer via Arabic/English SMS notifications sent at opening, scheduling and resolution points within the service process.

Personnel charged with planning and scheduling are now able to continuously communicate with and monitor field worker performance, ensuring that the highest possible quality of service is provided to Zamil Air Conditioners customers.

Zamil Air Conditioners has recently launched its SmartVan Automated Service for customers located in Saudi Arabia.

Zamil Air Conditioners Launches SmartVan Automated Service in Saudi Arabia

8 RECOGNITIONS & AWARDS

Zamil Air Conditioners was recently chosen as one of the top 100 Saudi brands in the Kingdom of Saudi Arabia. The honor was presented during an awards ceremony organized by the Assir Foundation for Publishing and Printing, under the patronage of His Excellency the Minister of Culture and Information Dr. Abdulaziz bin Mohiuddin Khoja, and in the presence of HRH Prince Bandar bin Khalid Al-Faisal, Chairman of the Board of Directors of Assir Foundation. The event was held on Sunday, December 22, 2013, at the Al Faisaliah Hotel in Riyadh.

Zamil Air Conditionersin List of ‘Top 100 Saudi Brands’

The ceremony was attended by some of the Kingdom’s wealthiest and most famous people, including representatives of relevant government agencies and the media, and the corporate representatives of the winning brands. Dr. Khoja presented awards and certificates of appreciation to the representatives of the companies whose brands were deemed most popular in the Kingdom during 2013.

The list of winning brands included many national trademarks of companies that have achieved significant success in strengthening their roles and competitive advantage. These 100 business leaders have built a strong presence in the Saudi and global markets, and many have also surpassed foreign brands in terms of recognition and popularity.

Zamil Air Conditioners was selected as one of the Top 100 Saudi brands in the Kingdom as the result of an opinion poll and a special study conducted by an international company specializing in market research.

The research findings revealed the most popular brands among Saudi consumers in markets that have become heavily dependent on local products and services provided by national companies. Leaders were named to the Top 100 list and the ceremony recognized them for their excellence and value.

9RECOGNITIONS & AWARDS

The Human Resources Department at Zamil Industrial has been honored by the Asharqia Chamber Employment Center (ACEC) for its contributions to the success of the Chamber’s initiatives aimed at the recruitment of qualified Saudi nationals in various professional fields.

Zamil Industrial HR Department Receives Asharqia Chamber Honors

Asharqia Chamber organizes job fairs at its headquarters in the Eastern Province in order to connect job seekers with employment opportunities at major industrial and commercial companies across the region.

Zamil Industrial has participated in all Career Fairs sponsored by the Asharqia Chamber, and received a positive response to the large number of employment opportunities presented in the various sectors of the company.

During the year 2013, Zamil Industrial held more than

52 employment meetings, organized in cooperation with governmental and private organizations, to attract qualified Saudi nationals engaged in various professional disciplines. The company is a frequent participant in training and education programs held in conjunction with world-class universities, and provides specialized training programs for many students from Saudi Arabia’s top universities and technical colleges as part of the company’s annual summer and cooperative training programs.

10 RECOGNITIONS & AWARDS

The Saudi Arabian Cultural Bureau in Canada recently honored Zamil Industrial with a certificate of appreciation for the company’s active participation in the commencement ceremony and career day event held for the graduates of the King Abdullah bin Abdulaziz Scholarship Program, which took place from January 24 to 26, 2014 in Ottawa, Canada.

Zamil Industrial Receives Certificate of Appreciation from the Saudi Arabian Cultural Bureau in Canada

For the second time, Zamil Industrial took part in this annual event, which showcased the accomplishments of hundreds of scholarship students in various science and engineering disciplines. The ceremony and career fair were held under the patronage of the Saudi Ambassador to Canada, Naif Bin Bandar Al-Sudairi, and the Saudi Cultural Attaché Dr. Ali Mohammed Albishri, in the presence of HE Dr. Khalid Bin Mohammed Al-Angari, Minister of Higher Education, and his accompanying delegation.

During the event, Dr. Khaled Al-Angari paid a visit to the Zamil Industrial booth, where

he praised the company for its dedication to initiatives that demonstrate commitment to social responsibility. He also complimented Zamil Industrial for the company’s positive support of the Kingdom’s projects and plans to improve the educational levels of Saudi students preparing to launch careers in various developmental fields.

The company is a frequent participant in training and education programs held in conjunction with world-class universities. Zamil Industrial also operates its own multi-discipline training institute and sponsors scholastic teams and career fairs at events held around the world.

11RECOGNITIONS & AWARDS

It is the first time that the award has had a back-to-back winner – for 2012 and 2013 – since the introduction of the program in 2010.

This remarkable achievement was made possible by the sincere commitment of factory management, led by Robert Rayappen (Director of Production), and the full support of ZAC U&A team members. The ZAC U&A factory earned an average performance rating of 98.60%. The team attained a grade of A+ in most of the key aspects and criteria defined in Safety Key Result Areas (SKRAs) & Safety Key Performance Indicators (SKPIs).

In winning the award, the team demonstrated an excellent rapport and synergy in attaining performance excellence in the Safety, Health & Environment Management System, which every business unit can seek to emulate in the years ahead.

Awadh E. Al-Ghamdi, Corporate LPD Director, commended all business unit heads and leaders for exerting the effort required to attain more robust improvement in the Safety, Health & Environment (SHE) performance of their respective factories year after year. Zamil Industrial, as a whole, exceeds the minimum recommended SHE rate improvement of 5%, with an actual improvement rate of 43%.

Every year, Zamil Industrial, through the Loss Prevention Department, recognizes and commends the factory that achieved and maintained the best safety performance. This recognition program is designed to stimulate interest in promoting a comprehensive health, safety and environmental management system in all business units. The company-wide system is a success – for four continuous years, Zamil Industrial has achieved an actual improvement of 29% on the SHE rate.

Zamil Industrial Loss Prevention Department (ZI-LPD) recently announced that Zamil Air Conditioners Unitary & Applied Division (ZAC U&A) is the 2013 winner of the company’s Best Factory Safety Performance Award.

Zamil Air Conditioners FactoryWins Best Safety Performance Award

12 EVENTS

Participants at the gathering discussed the successful professional experiences of Khalid Al Zamil in particular and Zamil businesses in general. The audience enjoyed the discussions, as they added value to their own personal experiences.

Al Zamil responded to student questions about his outstanding success in the world of business and the continued success of Zamil Industrial as evidenced by the company’s continuous growth and expansion.

Khalid Al Zamil also advised the students concerning the importance of the personal desire for career accomplishment and warned them to avoid creating obstacles or barriers that could affect the ultimate achievement of their goals.

He stressed the need to respect others, especially those speaking from experience, and listen to their guidance in regard to dedication, excellence, honesty and cooperation.

On Monday, 13 January 2014, Khalid A. Al Zamil, Chairman of Zamil Industrial, met with a group of students from the Dammam College of Technology at the Zamil Higher Institute for Industrial Training in Dammam. The meeting was attended by Mr. Ahmed bin Abdulkarim Al-Thunayan, the Dean of Dammam College of Technology, and Dr. Mohamed Sharif, the Director of the Institute.

Khalid Al Zamil Shares His Professional Expertise with Dammam College of Technology Students

13EVENTS

The delegation was received by Abdulla M. Al Zamil, CEO of Zamil Industrial, who delivered a presentation about the history of the company and its various operations.

Later, the visitors proceeded to the Zamil Air Conditioners factory, where they toured the plants and observed the production lines and manufacturing operations. The delegation also visited the Zamil Steel Pre-engineered Buildings plant and was accompanied by engineers who provided a detailed briefing on the plant’s operations and state-of-the-art production equipment.

During the visit, the delegates discussed potential areas of cooperation and ways to strengthen economic and

trade cooperation between the Kingdom of Saudi Arabia and Poland. The discussions also included potential investment opportunities for Saudi companies in Poland. Both groups focused on the goal of improving commercial relations and promoting joint investment projects that will further enhance the business relationship between the two countries.

The visiting delegation was impressed by the advanced level of operations at the Zamil Industrial manufacturing facilities and the wide variety of products and services provided by the company. At the end of the visit, Abdulla Al Zamil thanked the Polish delegation for their visit. Both dignitaries also exchanged souvenirs on the occasion.

On Wednesday, 5 February 2013, the Polish Ambassador to Saudi Arabia, Mr. Witold Smidowski, accompanied by Polish First Counsellor of Economic Affairs, Mr. Marek Malarski, paid a visit to Zamil Industrial in Dammam.

Polish Ambassador Visits Zamil Industrial

14 EVENTS

The ADIPEC 2013 exhibition, which was organized under the theme “Energy for All in a Changing World,” was inaugurated by Shaikh Hazza Bin Zayed Al Nahyan, National Security Adviser of the UAE. The event included an expanded technical conference and a new dedicated business conference, at which CEOs from the world’s biggest energy companies presented and discussed global energy security, modernization of infrastructure, and the need for an efficient supply value-chain for sustainable development of the sector and the economy as a whole.

ADIPEC 2013 also emphasized the important role of women in the gas and oil industry by offering a dedicated women-in-industry panel, and featured “Young Adipec,” a comprehensive program of events, outreach and education designed to encourage the industry’s future leaders.

The Zamil Structural Steel / Process Equipment booth attracted global energy leaders, policy makers, innovators,

technicians and research scholars, and the event provided the perfect opportunity for both companies to showcase their ranges of reliable and innovative products. Zamil Steel representatives spent the successful four-day session cultivating new contacts and addressing visitor inquiries as well as strengthening existing relationships with key customers.

Widely known as the largest exhibition for the Middle Eastern oil and gas industry, ADIPEC is supported by Abu Dhabi National Oil Company (ADNOC) and the UAE’s Ministry of Energy. More than 1,500 exhibiting companies from 50 countries participated in the four-day exhibition and conference, attracting more than 50,000 visitors from 80 countries. Every year, the event represents a valuable opportunity for oil and gas industry professionals to get together to share experiences, discover new innovations, participate in networking events, and discuss and debate core industry issues.

Zamil Structural Steel Co. Ltd. and Zamil Process Equipment Co. Ltd. showcased a number of their most innovative products at the 16th edition of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), the largest oil and gas exhibition in the Middle East, held from November 10 to 13, 2013, at the Abu Dhabi National Exhibition Center (ADNEC).

Zamil Structural Steel and Process Equipment Participate in ADIPEC 2013

15EVENTS

Organized and supported by the Myanmar Construction Entrepreneurs Association and the Myanmar Engineering Society, Myanbuild is widely recognized as one of the largest and most influential international exhibitions in Myanmar. The event showcases the latest technologies, products and services available to the building and construction industry. At the 2013 exhibition, 246 exhibitors participated, attracting more than 5,000 trade buyers and decision makers,

including architects, developers, consultants, contractors, engineers and designers.

The construction industry in Myanmar is experiencing a high rate of growth driven by increased government expenditures in infrastructure and expanded efforts at attracting foreign direct investment. Zamil Steel Vietnam hopes to take advantage of these opportunities by raising its presence in the market to a new

level, including the establishment of a regional representative office that will serve as the main link to a growing number of potential clients.

Zamil Steel Vietnam participated in the International Building & Construction Industry Exhibition & Conference (MYANBUILD 2013), which was held at the Tatmadaw Exhibition Hall in Yangon from November 26 to 28, 2013.

Zamil Steel VietnamParticipates in MYANBUILD 2013

16 EVENTS

Zamil Industrial EmployeeSatisfaction Survey 2013

The survey questions, which were available in five languages and used a four-point rating scale, were developed based on the predefined objective of increasing employee satisfaction in order to improve efficiency and productivity in the workplace. The data from this survey will help management accurately measure employee attitudes and opinions and gain insight into the current employee perception of the work environment.

More than 5,170 employees from all Zamil Industrial sectors within the Kingdom, GCC and other countries participated in the survey, most of whom have been working with the company for three to five years. The results of the survey showed high satisfaction levels, especially in

response to questions about the company, manager/supervisor relations and working conditions.

At the conclusion of the survey, Yaser Al-Saeed, Director of Corporate HR, awarded new iPad tablets to the winners of a special drawing.

Zamil Industrial Corporate HR regularly conducts employee satisfaction surveys, which are an effective means of assessing the state of the company while increasing employee loyalty and productivity. The high rate of participation in these surveys is an indication that employees are interested in sharing their views, thereby bringing management and staff together and serving to keep both groups focused on the task of moving the company forward.

As part of its continuous efforts to improve the workplace environment and employee relations, the Human Resources Department at Zamil Industrial recently conducted a comprehensive employee satisfaction survey across all sectors and business units to gauge employee satisfaction with respect to key workplace issues, such as compensation and benefits, training and career development, working conditions, and effective communications.

17

Zamil Higher Institute for Industrial Training

• Assisted in preparation and execution of the Emergency Action Plan (EAP) drill.

• Checked and arranged safety requirements in preparation for the visit of royal dignitaries.

Zamil Air Conditioners - Consumer Products Division

• Provided assistance for the EAP drill.

• Prepared scope of work for ZAC1 Water-based Fire Protection System upgrade.

Zamil Air Conditioners - Unitary & Applied Products Division

• Provided assistance for the EAP drill.

• Conducted safety orientation for new employees and special projects.

• Studied safety requirements for plasma welding.

• Participated in assessing fire protection for Al-Sagri Building.

• Reviewed gas flux layout and enclosure.

• Provided Health, Safety and Environment Management (HSE) statistics for ZAC U&A - Riyadh Sales Safety PQQ for the Riyadh Metro project.

• Reviewed HSE Procedures 001 to 005.

Zamil Pre-EngineeredBuildings Co.

• Prepared and submitted safety statistics for client pre-qualification requirements for the Fatah EPC Project in Abu Dhabi and Qatar.

• Provided pre-qualification requirements (EAP & Civil Defense) for Zamil Steel Construction Co.

• Provided assistance for the EAP drill.

Zamil Structural Steel Co. • Reviewed the fire protection

system for proposed Site 3 new building.

• Provided assistance for the EAP drill.

Zamil Process Equipment Co.

• Prepared and submitted HSE requirements for ALSTOM and other clients.

• Reviewed and provided recommendations regarding radiographic test concerns.

• Provided assistance for the EAP drill.

Zamil Towers & Galvanizing Co.

• Provided assistance for the EAP drill.

Zamil Air Conditioning & Refrigeration Services Co. (Zamil CoolCare)

• Studied Ministry of Commerce and Industry requirements for hazardous shipment.

• Prepared and submitted the Safety Statistical Data of CoolCare according to the SAMREF client HSE requirements.

Zamil Inspection and Maintenance of Industrial Projects Co. (ZIMIPCO)

• Prepared a safety plan for SAFCO Project (Urea, Ammonia and utility plant).

Armacell Zamil Middle East Co. (AZMEC)

• Provided assistance for the EAP drill.

Rabiah & Nassar and Al Zamil Concrete Industries Co. (Ranco Zamil)

• Prepared a safety action plan for the factory and construction site.

• Provided assistance for the EAP drill.

• Revised EAP General Instructions.

• Conducted a safety inspection and provided recommendations.

During the fourth quarter of 2013, Zamil Industrial Loss Prevention Department (LPD) has been involved in the resolution of a number of safety issues across the company. The department worked to find solutions to problems, streamline approaches to incident reporting, and assist business units in developing and implementing various workplace safety programs. These are the most significant achievements of the period:

Zamil Industrial LPD Lists Achievements for the Fourth Quarter of 2013

HEALTH & SAFETY

18 HEALTH & SAFETY

Arabian Fiberglass Insulation Co. (AFICO)

• Attended KFUPM progress report presentation on AFICO EMS evaluation and participated in the discussion.

• Reviewed the fire pump set system’s technical submission (Non UL/FM approved pump).

• Provided assistance in the EAP drill.

Zamil Steel Ras Al-Khaimah

• Provided assistance in preparation and implementation of the Emergency Action Plan.

• Conducted an HSE inspection and provided recommendations.

Zamil Steel Egypt

• Provided assistance in the preparation and implementation of an Emergency Action Plan.

Saudi Rockwool Factory Co. (SRWF)

• Conducted HSE inspection and provided recommendations.

Major Loss Prevention and Safety Achievements in 2013

Much has been accomplished in 2013. Safety, Health and Environment (SHE) rates have improved 43% over the year before as compared to a targeted minimum of 5%; incident free days improved by 30% year-on-year; and the frequency and severity rates saw marked improvements of 77% and 52% respectively in comparison to the previous year’s performance. During 2013, 404 SHE Training and Awareness sessions were held, attended by a total of 5,067 participants with each employee attending 2.54 hours of training as compared to a target of 2.5 hours.

...Zamil Industrial LPD Lists Achievements for the Fourth Quarter of 2013

Fire drills in all Zamil Industrial business units, including joint venture operations, were carried out in Saudi Arabia, Vietnam, Egypt and the United Arab Emirates on two occasions during the year. Numerous on-site SHE surveys, technical assessments, reviews and consultations as well as safety inspections were undertaken throughout the twelve month period. In support of employees and their families outside the workplace, a Home Safety Handbook was prepared and distributed.

Civil Defense Permits were obtained for Zamil CoolCare in

Dammam First Industrial City, Zamil CoolCare Shop in Dammam, the Zamil Higher Institute for Industrial Training, and the Zamil Air Conditioners consumer warehouse in Al-Khaldiyah.

Looking back over the year in statistical terms: 8,386 SHE operations were undertaken, as were 2,924 fire protection operations and 26,164 security operations, the latter comprising security patrolling, audits, visits, inspections, surveys, investigations, risk assessment reviews, reporting, and ambulance inspections. In addition, 669 technical studies were made.

19HEALTH & SAFETY

All compressed gas cylinders present a physical safety hazard because the contents are under pressure of more than 2,000 pounds per square inch (psi). The potential energy packed inside the cylinder is powerful enough to inflict damage similar to that of a bomb. Bumping, tipping or dropping could damage the cylinder. If the valve gets knocked off or the cylinder ruptures in a fire, it can act like a missile with the ability to penetrate concrete walls. For these reasons, it is important to always keep cylinders in an upright and secured position during storage and use.

Compressed gases present a unique hazard. Depending upon the type of gas in use, there is the potential for simultaneous exposure to both mechanical and chemical hazards. Gases may present hazards because they are flammable or combustible, explosive, corrosive, poisonous, or a combination of all these things.

Liquefied Gases

Liquefied gases are gases that can become liquid at normal temperatures when they are inside cylinders under pressure. They exist inside the cylinder in a liquid-vapor balance or equilibrium. Initially the cylinder is almost full of liquid, and gas fills the space above the liquid. As gas is removed from the cylinder, enough liquid evaporates to replace it, keeping the pressure in the cylinder constant. Anhydrous ammonia, chlorine, propane, nitrous oxide and carbon dioxide are examples of liquefied gases.

Non-Liquefied Gases

Non-liquefied gases are also known as compressed, pressurized or

permanent gases. These gases do not become liquid when they are compressed at normal temperatures, even at very high pressures. Common examples of these are oxygen, nitrogen, helium and argon.

Dissolved Gases

Acetylene is the only common dissolved gas. Acetylene is chemically very unstable. Even at atmospheric pressure, acetylene gas can explode. Nevertheless, acetylene is routinely stored and used safely in cylinders at high pressures (up to 250 psi at 21 °C).

This is possible because acetylene cylinders are fully packed with an inert, porous filler. The filler is saturated with acetone or other suitable solvent. When acetylene gas is added to the cylinder, the gas dissolves in the acetone. Acetylene in solution form is stable.

Rules for Safe Handling, Storage and Use of Compressed Gas

• Make sure the cylinder is equipped with the correct regulator. Always use the proper regulator for the type of gas in the cylinder.

• Inspect the regulator and cylinder valves for grease, oil, dirt and solvent. Never use grease or oil to lubricate regulators or cylinder valves because this can cause an explosion.

• Open cylinder valves SLOWLY. Stand to the side of the regulator when opening the cylinder valve.

• Do not attempt to repair cylinder valves or their relief devices while a cylinder contains gas pressure. Tag or label leaking cylinders or

cylinders with stuck valves and move them to a safe, secure outdoor location.

• Use approved racks that will secure compressed gas cylinders in place during transportation. Do not drop, drag or slide a compressed gas cylinder; it must be rolled on the bottom edge or moved by using a cart.

• Install protective valve caps onto gas cylinders, whether they are empty or filled.

• Never use the valve cover to lift a compressed gas cylinder, as it could be damaged and become unattached.

Compressed gas cylinders can be extremely hazardous when misused or abused. Due to their content and pressure, they present a variety of hazards and must be handled carefully in order to avoid accident and injury.

How to Use and Store Compressed Gas Safely

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• Cylinders containing flammable gases such as hydrogen or acetylene must not be stored in close proximity to open flames, areas where electrical sparks are generated or where other sources of ignition may be present.

• Never leave the cylinder valves open when the cylinder is not in use — even if it is empty. Air containing moisture may settle inside and cause corrosion.

• Do not smoke when oxygen and flammable gas are present, as this could cause an explosion.

• Do not use acetylene gas at above 15 psig operating pressures. Follow the manufacturer’s recommendations at all times.

• Install a flashback arrestor before using a torch if it is not equipped with a built-in flashback arrestor.

• Use a friction lighter, a stationary pilot flame or other suitable source of flame to light a torch. Matches, cigarettes or welding arcs should never be used to light torches.

• Oxygen cylinders, equipment, pipelines or other apparatus should not be used interchangeably with any other gas.

• Use soapy water to test cylinders for leaks, never use a flame.

• Ensure that hose connections are fabricated to withstand twice the operating pressure without leakage, in no case less than 300psi (2070kPa).

• Ensure that compressed gas cylinders are always properly secured to prevent tipping. Use appropriate materials such as chains, commercial straps, plastic wire coated cable, etc.

• Do not store compressed gas cylinders in aisles, walkways, hallways or in any unprotected areas.

• Segregate compressed gas cylinders according to classes. Oxidizers (Oxygen) must be stored 20 feet away from the flammable gases. Compressed gas cylinders must be protected from direct sunlight and stored away from sources of heat; the ambient storage temperature should not exceed 125°F (52°C).

• Never store cylinders containing flammable gases such as hydrogen or acetylene not be in close proximity to open flames, areas where electrical sparks are generated, or where other sources of ignition may be present.

• Never store oxygen cylinders, filled or empty, in the same vicinity as flammable gases. The proper storage for oxygen cylinders requires that a minimum of 20 feet be maintained between flammable gas cylinders and oxygen cylinders or the storage areas be separated, at a minimum, by a fire wall five feet high with a fire rating of 0.5 hours. Never store greasy or oily materials around oxygen or apply oil or grease to fittings.

• Always store compressed gas cylinders within a well-ventilated area.

HEALTH & SAFETY