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


21

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


22

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

ntpm holdings berhad _mini project_

Documents

business issues

paper rolls business

sustainability development

paper company

ntpm organizational

sustainable business

trading of tissue paper

sendirian berhad