sustainability report 2012 - cscmalaysia.com source/csr2012.pdfsustainability report 2012. table of...
TRANSCRIPT
Cold Rolled Steel Coils (CR) Pickled & Oiled Coils (PO) Galvanized Steel Coils (GI) Pre-painted Galvanized
Steel Coils (PPGI)
CSC STEEL
HOLDINGS
BERHAD
Sustainability Report 2012
Table of Content
2012 Sustainability Report
About This Report 1 Statement from the Group Managing Director
4
1. Company Profile
1.1 An Introduction to CSC Steel Malaysia............................................................. 1.2 Production Process Flow Chart.......................................................................... 1.2.1 Cold Rolling Process................................................................................. 1.2.2 Continuous Hot-Dipped Galvanizing Process........................................... 1.2.3 Continuous Color Coating Process............................................................ 1.3 Finished Product Specification...........................................................................
5 7 8 9 10 11
2. Management Philosophy
2.1 Our Vision and Mission...................................................................................... 2.2 Our Core Value................................................................................................... 2.3 Management Approach....................................................................................... 2.3.1 PDCA Cycle applies to Our Business Policy............................................. 2.3.2 Application of Problem Solving Model in Management...........................
2.4 Stakeholder Engagement.................................................................................... 2.4.1 Communication with stakeholders............................................................ 2.4.2 CHB Stakeholders Matrix Diagram in 2012............................................. 2.5 Related Party Transactions.................................................................................
13 14 15 16 17 18 18 23 26
3. Corporate Governance
3.1 Corporate Governance Framework..................................................................... 3.1.1 Organization Structure...............................................................................
3.2 Shareholder Structure......................................................................................... 3.3 Board of Directors (BOD).................................................................................. 3.4 Audit Committee................................................................................................. 3.5 Corporate Ethics................................................................................................. 3.6 Audit................................................................................................................... 3.7 Risk and Crisis Management.............................................................................. 3.7.1 Crisis Management.................................................................................... 3.7.2 Risk Management...................................................................................... 3.7.3 Financial Risk............................................................................................ 3.7.4 Raw Material Risk..................................................................................... 3.7.5 The Risk of Human Resources.................................................................. 3.7.6 The Risk of Plant and Equipment..............................................................
28 29 30 31 32 33 34 35 35 35 35 36 36 36
3.7.7 The Risk in Engineering Project................................................................ 3.7.8 Information Security Risk.......................................................................... 3.8 Business Performance......................................................................................... 3.9 Dividend Distribution Policy..............................................................................
4. Economic and Product Development
4.1 Sales and Marketing…………………………………………………………… 4.1.1 New Iron and Steel Policy………………………………………………. 4.1.2 Competition Act 2010…………………………………………………… 4.2 New Product Development................................................................................. 4.3 Technical Development...................................................................................... 4.4 New Technologies Investment...........................................................................
4.4.1 Push Pickling Line (PPL) Revamping....................................................... 4.4.2 Electrolytic Cleaning Line (ECL) Revamping........................................... 4.4.3 Green Purchase..........................................................................................
4.5 Green Production Process.......................................…………………………… 4.6 Main Raw Materials Consumption.................................................................... 4.7 Customer Satisfaction………………………………………………………….
5. Our Human Capital
5.1 Workforce Profile............................................................................................... 5.2 Human Resource Management........................................................................... 5.2.1 Employee Turnover……………………………………………………... 5.2.2 Malaysia Minimum Wage Policy……………………………………….. 5.2.3 Minimum Retirement Age………………………………………………. 5.2.4 Employee Relations & Communication………………………………… 5.2.5 Proposal for Improvement………………………………………………. 5.3 Talent Development and Training...................................................................... 5.3.1 Employees Performance Appraisal………………………………………
5.4 Employees Activities Committee....................................................................... 5.5 Employee's Welfares and Fringe Benefits.......................................................... 5.5.1 Free Meal………………………………………………………………... 5.5.2 Employee Annual Health Check Up…………………………………….. 5.5.3 Sport Facilities…………………………………………………………...
6. Values to Society
6.1 Blood Donation.................................................................................................. 6.2 Donation and Sponsorship: Give Back to Communities.................................. 6.3 Trees Trimming................................................................................................. 6.4 Internship Opportunities....................................................................................
36 37 38 40 41 41 41 42 43 44 45 46 47 48 49 50 51 53 54 55 55 56 57 58 58 59 61 62 63 64 66 68 70 71
7. Environmental, Energy, Safety and Health Management
7.1 Safety, Health and Hygiene Management.......................................................... 7.1.1 Environment, Safety and Health Policy Statement…………………….... 7.1.2 Safety and Health Credo………………………………………………… 7.1.3 Safety and Health Committee (SHC)………………………………......... 7.1.4 Safety and Health Task Force Committee (TFC) ……………………… 7.1.5 Transporters Safety……………………………………………………… 7.1.6 Task Implementation……………………………………………………. 7.1.7 Removal of Basic Cause of OSH Hazard……………………………….. 7.1.8 Procurement and Contractors’ OSH Management……………………… 7.1.9 Employee Safety and Culture Management…………………………......
7.1.10 Occupational Health Risk Management.................................................. 7.1.11 Occupational Safety and Health Mentor-Mentee Program……………. 7.1.12 Safety Performance……………………………...................................... 7.1.13 ESH Competency and Training............................................................... 7.2 Environmental Management............................................................................... 7.2.1 Environmental Program…………………………………………………. 7.2.2 Environmental Management Team……………………………………… 7.2.3 Performance Indices..............................................……………………… 7.2.4 Schedule Waste Management…………………………………………... 7.2.5 Biodiversity……………………………………………………………... 7.3 Energy Management........................................................................................... 7.3.1 Energy Policy Statement………………………………………………… 7.3.2 ISO 50001: 2011 Energy Management System (EnMS)…...…………… 7.3.3 Energy Conservation Committee……………………………....………... 7.3.4 Energy Saving Activities………………………………………………... 7.3.5 Conserving Resources – Reduce electricity wastage……………………. 7.3.6 Energy Efficiency Action Plan………………………………………….. 7.3.7 Future plan for Energy Conservation……………………………………. 7.3.8 Energy Baseline and Target………………………................................... 7.3.9 Electricity Consumption Monitoring Tool………………………............ 7.3.10 Energy Utilization Performance……………………………………...... 7.3.11 Electricity Consumption……………………………………………......
GRI INDEX TABLE
73 73 75 76 77 78 78 79 80 81 82 83 84 85 86 86 87 87 90 91 92 92 92 93 95 95 95 96 97 98 101 102 104
1
2012 Sustainability Report
About This Report
This is our second sustainability report highlighting our sustainability performance for
the year 2012. This report includes detailed descriptions and information related to CHB
and its subsidiary company, CSC Steel Sdn. Bhd. activities. Both companies are
physically located at 180, Ayer Keroh Industrial Estate, Ayer Keroh, 75450 Malacca,
Malaysia.
(Latitude: 2.146 / Longitude: 102.175)
.........................................................................................................................................................
Reporting Period
This Sustainability Report contains CHB Malaysia activity from January 1 to December 31, 2012. However, selective historical data may have been included for the purpose of comparative information and to help public identifying trends and business sustainability activities.
................................................................................................................................................
Reporting Scope
This Sustainability Report is limited to CHB Malaysia activities for the year 2012. Financial figures are in Ringgit Malaysia, quality and environmental management are based on the International Organization for Standardization ISO9001: 2008, ISO14001: 2004 and ISO50001: 2011. International universal indicator is used to measure the performance of economic, environmental and social.
CSC STEEL HOLDINGS
BERHAD
CSC STEEL SDN. BHD.
CONSTANT MODE SDN. BHD.
(Non-core business)
CSC BIO-COAL SDN. BHD
(Non-core business)
2
Reporting Guidelines
This Sustainability Report is based on Global Reporting Initiative GRI 3.1 guidelines (www.globalreporting.org/) and Mining &Metals Supplementary Sector (MMSS) Frame work and which stakeholders’ inclusiveness, materiality, sustainability context and
relevance are given high priority.
Firstly, we are in the process of developing a structured mechanism for engaging with all our stakeholders. Consequently, agenda that emerged with respect to our stakeholder engagement were discussed internally. Secondly, our task force is involved in identifying and setting indicators which are most relevant to our economic, environmental, labor practices, society and product responsibility performance in this Sustainability Report.
Application level of this report is Level A, without an external assurance engagement.
.................................................................................................................................................
Reporting Principles
In preparing our second Sustainability Report, we still trying to keep in mind the principles of internal audit ability, completeness, relevance, transparency, accuracy, clarity and have attempted to place our performance in the sustainability context in which our business operates.
..........................................................................................................................................................
Approach to Sustainability Reporting
CHB is committed to Sustainability Reporting annually as part of a continuous process of implementation. Besides the disclosure of related information, this process also provides us an opportunity to evaluate other performance areas and our sustainability. This report has undergone the following internal verification process:
1. Sustainability Reporting Task Force: Members are formed by representatives from each department, including Human Resource, Utility, Commercial, Finance, Production Department and reporting to Departmental General Managers, Assistant Vice Presidents, Division Vice Presidents and Group Managing Director.
2. Meeting: In the process of editing this report, Sustainability Reporting Task Force Members have gone through a series of meetings, data finding and verification.
3. Finally, it is submitted to the General Manager of each department, Vice Presidents and approved by Group Managing Director.
3
The process of Sustainability Report as below:
.................................................................................................................................................
Reporting Feedback
We would appreciate your feedback on this Sustainability Report. Please do not hesitate to contact us at: CSC Steel Holdings Berhad 180, Ayer Keroh Industrial Estate, Ayer Keroh, 75450 Malacca, Malaysia. Phone: (6) 06- 231 0169 Fax: (6) 06- 231 0167 Website: www.cscmalaysia.com
Data Source and Management
Approach
Refer to Global Reporting Initiative
3.1 Guidelines & Mining and Metal Sector Supplement
(MMSS)
Brainstorming
Information from Production, Commercial,
Finance Division and
Administration Department
Primary and Secondary Data
Task Force Meeting
Sustainability Report 2012
4
Statement from the Group Managing Director
Corporate Social Responsibility (CSR) is undoubtedly part and parcel of today’s business world as the
activities being carried out by any corporation would have an impact to its surrounding, environment, community, cultural, etc. This is one of the reasons that we would like to share our commitment and experience with the public on the things we had done in promoting a better living.
It is undeniable that the advancement of technology has improved the living standard of human being as well as the efficiency and effectiveness of individuals or corporations in performing certain tasks. However, there is downside of technology advancement where it has also caused climate change which leads to unpredictable disasters such as floods and drought. Hence, it is essential to preserve the environment before it’s being out of control.
Steel production especially upstream and midstream is an energy intensive manufacturing process, as such we have placed great importance on energy efficiency. Energy efficiency is not only about dollar and cent but also vital in preserving the environment. Many initiatives being taken by us as to better utilize the energy in a more efficient way. In addition, we had set various goals to be achieved in 2012 and one of the key highlights was adopting the Energy Management System (EnMS), ISO 50001:2011. I am very proud of our people as they demonstrated strong passion and commitment in accomplishing all the tasks. One of the key notes was meeting the standards and requirements of ISO 50001 as the external audit was carried out in December 2012 by SGS (Malaysia) Sdn. Bhd. We are the first company in the Malaysian steel industry that applying the certification of ISO 50001: 2011. By adopting of the EnMS system, we are confident that it could help in creating synergy for the company to achieve another great height.
This is our second Sustainability Report that aiming to provide a clear overview on the efforts we had put together in 2012, which was aligned with the increasing of shareholder’s value, the increasing of societal value and the decreasing of environmental impact of our products.
Thank you.
Chen, High-Pinn 陳海平
Group Managing Director 集團董事總經理
5
1 Company Profile
1.1 An Introduction to CSC Steel Malaysia 1.2 Production Process Flow Chart 1.3 Finished Product Specification
________________________________________________________________________ 1.1 An Introduction to CSC Steel Malaysia
CSC Steel Holdings Berhad (CHB) (formerly known as Ornasteel Holdings Berhad) at 180, Ayer Keroh Industrial Estate, Ayer Keroh, 75450 Melaka, Malaysia was incorporated in Malaysia on 20 January 2004.It occupies land size of 19.126 hectares and located at Lot:
a) No. 5214, PN 7009 b) PT No. 3701, HS (M) 348 c) PT No. 6108, HS (D) 30872, and d) PT No. 3698 and 3699, HS (M) 346 and 347
The major products of CSC Steel Sdn. Bhd. (CSCM) are pickled and oiled steel coil, cold rolled steel coil, galvanized steel coil & pre-painted galvanized steel coil. The combined production capacity is approximately 500,000 tons per annum.
The operational structure of the organization as below:
CSC Malaysia Group
Company
Registration
Number
Formerly known as Year of
Establishment
CSC Steel Holdings Berhad 640357-X Ornasteel Holdings Berhad 2004
CSC Steel Sdn. Bhd. 228899-P Ornasteel Enterprise Corporation
(M) Sdn. Bhd
2008
Constant Mode Sdn. Bhd. 922516-W - 2008
CSC Bio-Coal Sdn. Bhd 272448-P Ornaconstruction Corporation 2011
Source: www.cscmalaysia.com
6
CSC Steel Sdn. Bhd. Trade Mark and Corporate Identity
Above is company trade mark which is a combination of a "smiling M" in the center of
the CSC Group logo. This means, China Steel Corporation is always keeping Malaysia in
mind, and Malaysia responds with a sincere smile, that brings harmony and happiness to
all parties. The transliteration and translation of the Chinese characters appearing in the
markis 中鋼馬來西亞 meaning “China Steel Malaysia”. Malaysia Intellectual Property
Organization (MyIPO) has officially accepted this trade mark registration
(www.myipo.gov.my).
7
1.2 Production Process Flow Chart
Hot Rolled Steel Coil
(Raw Material)
Push Picking Line
(2) Cold Rolling Mill
(6) Recoiling Line & Tension Leveler
CR Coil
(5) Temper Mill
(4) Annealing Line
(3) Electrolytic Cleaning
Full Hard CRC (As known as "ASCR"
Coil)
The diagram below shows cold rolled steel production process flow: chart:
8
1.2.1 Cold Rolling Process
The chart below shows cold rolling process:
9
Continuous Color Coating Process
Continuous Hot-Dipped Galvanizing Process
PPGIC oil
GI Coil
The diagram below shows continuous hot-dipped galvanizing and color coating process:
10
1.2.2 Continuous Hot-Dipped Galvanizing Process
1.2.3 Continuous Color Coating Process
Furnace Section
• Oil and iron residues on the incoming strip are removed before proceeding with the Annealing Process.
Zinc Pot
• The annealed strip will be coated by dipping in the Zinc Pot.
Skin Pass and Leveller Section
• To eliminate yield point, achieve required surface finish and flatness.
Pre-Treatment Section
•Preparation of strip surface before coating, that is, degreasing, rinsing and chromating.
Primer Coater
•Pre-coating of Primer on the top and bottom surface of the strip to strengthen the corrosion resistance and the adhesion of paint and base metal.
Primer Over Section
•Allow the Primer coatings to cure at a certain temperature.
Finish Coater
•Final coats, subject to requirement of specifications and colours, shall be coated on the top and bottom surface of the strip.
Finish Oven Section
•Allow the Finish coatings to cure at a certain temperature.
The illustration below shows continuous color coating process:
The illustration below shows continuous hot-dipped galvanizing process:
11
1.3 Finished Product Specifications
Our product specifications as below:
Product Market Specification
Design Capacity
Matrix Ton Per
Annum (MTPA)
Cold Rolled Steel Coils (CR)
Service center, drum makers, manufacturer of pipe and tube, automotive industry and galvanizing mill and etc.
Domestic and export.
JIS G3141- SPCC - SPCD - SPCEN
- SPCF JIS G3135- SPFC JIS G3311- SK85M/S30/35/45/50CM (Or equivalent specification) Thickness: 0.176 – 2.60mm 444,000
Pickled & Oiled Coils (PO)
Service center, automotive industry and etc. Domestic and export.
JIS G3113- SAPH JIS G3131- SPHC/D/E JIS G3101- SS330/SS400 JIS G3132- SPHT (Or equivalent specification) Thickness: 1.40 – 4.00mm
Galvanized Steel Coils (GI)
Service center, channel and truss manufacturer, plantation / poultry industry and etc.
Domestic and export.
JIS G3302- SGCC -SGCD -SGC340~570
(Or equivalent specification) Thickness: 0.176 – 2.00mm Surface treatment :
passivation chromate and
tinted thin organic coating
(TOC)
240, 000
12
Pre- painted Galvanized
Steel Coils (PPGI)
Manufacturer of roofing, cold room, sandwich panel, ceiling tee, roller shutter, advertising board and etc.
Domestic and export.
JIS G3312- CGCC - CGC340~570 (Or equivalent specification) Thickness: 0.176 – 1.20mm Paint Sys: Polyester Exterior, PVdF
120, 000
13
2 Management Philosophy
2.1 Our Vision and Mission 2.2 Our Core Value 2.3 Management Approach 2.4 Stakeholder Engagement 2.5 Related Party Transactions
2.1 Our Vision and Mission
Remarks -Red-Already updated -Yellow-Unchanged -Similarity 80% (change design) -Task force lead recommendation by in charged department
rewrite or maintain?
OUR VISION
To be a trustworthy and one of the best flat steel manufacturers in South East Asia along with parent company (CSC Group Taiwan).
OUR MISSION
In order to achieve this vision, CHB strives to achieve the following mission objectives:
To continuously improve productivity. To constantly develop higher value-added products
and environmentally friendly products. To continually pursue excellence in quality
and service exceeding customers’ expectations. To fulfill commitments to corporate social
responsibility
14
2.2 Our Core Value
Entrepreneurial
Approach
Pursuit of
innovation
Down-to- earth
Teamwork
Teamwork means replacing internal rivalries with coordination and cooperation with a common goal in mind the corporate objectives.
Down-to-earth means the state of being practical and realistic as well as making sensitive decisions to deal with problems effectively.
Pursuit of innovation means managing the people and processes through research and development that turn new ideas into profit. Being innovative keeps a company abreast of the latest development of an industry.
Entrepreneurial approach means that a company runs the business by stressing efficiency for the day-to-day operation to preserve the growth. It has responsibility to provide superior products and services to its customers, an environment for its employees to grow professionally and intellectually as well as satisfying return on shareholder investment.
CHB emphasis on value of teamwork, down-to-earth, pursuit of innovation and entrepreneurial approach as our "guiding beacon "directing the process of company development, growth and sustain. Our core values as illustration below:
15
The illustration below shows PDCA approach:
Plan: Understanding of the opportunities and changes in theprogram cycle to begin collecting data and explain the problem to besolved.
Do: Change in the test. To carry out a small-scale research. Once theplan is prepared, the next step is to perform the activities described.
Check: Monitoring and comparing plans to check the test resultsaccording to the results achieved.
Action: If the results are different from expectations and problemsare not resolved, look at the problem and take action on the basis ofthe analysis steps.
Plan-Do-Check-Action (PDCA) is our management approach applies in CSC Malaysia for continuous improvement cycle of processes, products and services.
16
Step
No.
Plan
Do Check Action
1 Strategic marketing and business partnership approach to sustain customer retention and broaden market reach
CSC Steel Holdings Berhad execution of the share sale and purchase agreement and shareholders’ agreement in escrow by
CSC Steel Holdings Berhad (“CHB”) in
respect of purchase of 8,000,000 ordinary shares of RM1.00 each representing 20% of the issued and paid-up share capital of TattGiap Steel Centre Sdn. Bhd. from TattGiap Group Berhad (“PURCHASE”).
CHB has reviewed share buying status of the Share Sale and Purchase Agreement with TattGiap Group Berhad.
CHB taking action and awaiting to seal the deal.
2 Talent cultivation to enhance management skills and emphasize on professionalism
CHB has launched in-house training, external training and oversea training which complied with Training Need Assessment Objectives.
Collect feedback from trainee about the learning process and review quarterly training performance report.
CHB has assessed the performance of training and reevaluated training achievement after training evaluation.
3 Towards operation optimization through cost reduction and strengthen competitive factors
CHB has launched a cost down activities and commercial activities to reduce costs and strengthen competitive factors.
Each department has provided cost down implementation performance for every month to check the progress of activities.
CHB made cost savings tracker though budgeting and costing meeting and review cost reduction activities.
4 Venture into green technology with the execution of Bio-Coal Project
In year 2011, CHB has set up its bio-coal pilot plant through its subsidiary, CSC Bio-Coal Sdn. Bhd.
CHB has reviewed work in progress of CSC Bio-Coal Sdn. Bhd in every month.
The bio-coal pilot plant is under commissioning and testing.
CHB had study Strengths, Weaknesses, Opportunities and Threats (SWOT) to adopt 2012 Business Policy. CHB 2012 Business Policy contains four objectives and the all objectives were implemented in year 2012 and continuous improvement in order to achieve. Table at the right showed the PDCA Cycle for our Business Policy:
2.3.1 PDCA Cycle applies to Our Business Policy
17
2.3.2 Application of Problem Solving Model in
Management
A process improvement model (PDCA) is useful as a methodology for process improvement activities. Besides that, in our workplace, problem solving models are needed to solve many issues that came up on a daily basis. CHB has employed the Problem Solving Model. This problem solving model must be followed step by step. Moreover, the steps in the process are repeatable and continuous as below:
Steps Descriptions
1 Identify the problem CHB has defined the problem by broad review of the current situation and discussed the symptoms and scope of the problem. CHB may use tools such as brainstorming or meeting to gather information.
2 Identify the causes CHB has identified the causes by collecting information about the nature of the problem. CHB may use tools such as the Fishbone diagram or Pareto analysis to determine the root causes of the problem.
3 Brainstorm solutions CHB has developed alternative solutions before reaching a conclusion. At this step, CHB will generate as many potential solutions as possible and link each solution to the problem causes. CHB used force field analysis for preliminary screening of this solution field.
4 Select the best solution
CHB has to select the best solution by identifying each potential solution for its strengths and weaknesses. An effective solution is good technical quality to resolve the problem and acceptable to those who will have to implement it.
5 Implement a solution plan
CHB has implemented the solution after selecting a best alternative. In the implementation stage, CHB used action planning according to 5W1H which included what, who, when, why, which and how.
6 Follow up, evaluate, monitor progress
CHB has evaluated the outcome. The evaluation is to monitoring any related needed issue and to ensure the timing is achieved, costs are contained and work is completed. Planning additional feedback mechanisms are needed to detect midcourse corrections and to ensure that the problem is solved without creating new problems. If the solution is not performing as expected, then repeat an earlier step.
Problem Solving Model
18
2.4 Stakeholder Engagement
CHB stakeholder engagement is a vital part of the Sustainability Report with the aim of achieving three goals which are to increase shareholder value, to increase societal value and to decrease environmental impacts of our operation. It provides opportunities to further align business practices with societal needs and expectations, assisting CHB to long term sustainability and providing greater value to shareholders’. Hence, CHB has been putting an effort to establish trust with stakeholders including government, customers, employees, board of director, shareholders and investors, suppliers, contractors and transporters, iron and steel industry peers, local communities and non-government organizations, media and universities/ colleges.
2.4.1 Communication with stakeholders
The main agenda of the Sustainability Report had been identified during Sustainability Report task force meeting with Managing Director, Division Vice Presidents and General Managers of each department. The priority agendas had been set which contribute to Sustainability Report and focus on Sustainability Report agendas raised during the process of stakeholder communication.
During the process of stakeholder engagement, CHB has been communicating with stakeholders directly or indirectly which concern on main agenda through participation in government policy conferences and seminars, customer satisfaction survey, attentive to customer complaint and customer visit, employees’
dialogue with Managing Director, employee activity committee and make use of e-bulletin board as communication tools, board meeting in quarterly basis, shareholder annual general meeting and company financial statement through Bursa Malaysia Announcement. The agenda for each stakeholder, concern and company response or action conducted is shown on the next page:
19
Stakeholder Agenda Concern Company Response or Action
Government Energy saving and Environmental protection
Energy savings Preparation for ISO 50001 audit by SGS as well as preparation for ISO 9001 and ISO 14001 surveillance audits
New Iron and Steel Policy
Removal of duty exemptions for import of 18 grades of Hot-Rolled Coils (HRC) for local market
Enforcement of mandatory standards on steel products importation
Strengthen domestic market and forecast the market demand
To produce a wide range of products and to participate in steel industry value chain
To enhance operational efficiency and to decrease production cost for competitiveness
Competition Act 2010 (Enforced since 1st January 2012)
Prohibition from the cartel agreement which restricts business practice and abuse of dominant positions
To avoid anti-competitive behavior
The price sensitivity issue should be alerted while dealing with commercial activities
Minimum Wages Policy (Made on 16th July 2012) (Enforced since 1st January 2013)
Minimum wage: RM 900 for workers in
Peninsular Malaysia RM 800 for workers in
Sabah and Sarawak
CHB had adjusted the employees’ minimum
wage for local workers on 1st July 2012 and foreign workers on 1st January 2013. Thus, CHB must ensure its production line becomes more efficient and provide higher value–added activities and products to solve the issue on higher cost of production
20
Minimum Retirement Age Act (Made on 18th December 2012) (Enforced since 1st July 2013)
The minimum retirement age shall be 60 for Malaysia citizen
CHB had extended the retirement age from 55 to 60 as act requirement. The implementation of this Act has minor impact on company’s Human Resource
Employees’ Social Security
( Amendment ) Act 2012
Employee to be insured until age of 60
CHB has contributed the social insurance scheme for employee who service until age of 60
Customers
Strategic marketing and business partnership approach to sustain customer retention and broaden market reach
Strategic business partnership with TATT GIAP GROUP BERHAD to broaden the market reaches.
Aims at long term
engagement with purpose of encouraging customer loyalty and advocacy through competitive pricing, product delivery and product quality
Execution of the share sale and purchase agreement and shareholders’ agreement in
escrow by CSC STEEL HOLDINGS BERHAD (“CHB”) in respect of purchase of 8,000,000
ordinary shares of RM 1.00 each representing 20% of the issued and paid-up share capital of TATT GIAP STEEL CENTRE SDN. BHD. From TATT GIAP GROUP BERHAD (“Purchase”)
Customer visit Technical service and support Customer satisfaction Survey Entertain customer grievance/complaint Production scheduling
Employees Talent cultivation to enhance management skills and emphasize on professionalism
Opportunities for growth of staff through training and career advancement
In-house training, external training and oversea training
Employees have discussion with top management semi-annually.
Employee Performance Appraisals Employee Activity Committee
21
Board of
Director
To ensure that CHB is driving in the right direction and a sustainable business
Deciding important business matters and monitoring the Managing Director’s
execution of the duties
Enhance and strengthen the effectiveness of the corporate governance
Shareholders and
Investors
Dividend Distribution Favorable dividend distribution to shareholders and investors
The Board of Director expects to declare and pay annual dividends of not less than 50% of annual profit after tax
Suppliers Supplier Performance
Supplier delivery, supplier quality, supplier service and Environmental Performance
Perform Supplier Assessment twice a year with the objective of achieving at least 88%
Contractors and
Transporters
Contractors and Transporters safety and health program
Contractors and transporters safety and health issues
Signed memorandum of understanding with the purpose to collaborate, establish and develop the environment, safety and health (ESH) exchange and co-operation in order to improve ESH practices, activities, training and development
Iron and Steel
Industry Peers
As a council member of The Malaysian Iron and Steel Industry Federation (MISIF ) Participation in Occupational Safety and Health Mentor-Mentee Program
Participation in The Malaysian Iron and Steel Industry Federation (MISIF ) activities
Mentor for Micro Nano Precision Sdn. Bhd.
As a member of the Malaysia Iron and Steel Industry Federation (MISIF)
As Coated Steel Group Committee Chairman Develop business networking with Iron and
Steel Industries Participation in occupational safety and health
mentor-mentee program which organized by Department of Occupational Safety and Health, Melaka
22
Sharing information of Environment, Safety and Health with Small Medium Enterprise (SME)
Local Community
and Non-
Government
Organizations
Maintain rapport relationship with our community and neighbors and provide humanity aids
Interaction with resident association around CHB such as Taman Pelangi Apartment, Taman Muzaffar Shah Height, Kampung Tun Razak
Trees planting Blood Donations Charities and sponsorships
Media Maintain a good relationship with the media
Press media and online media for company special events and financial announcement
Announcement of company financial performance and important news to public.
Universities/
Colleges
Cooperate closely with local higher education institutions for knowledge sharing and internship placement
Universities and colleges
Internships Job opportunities for interns
23
2.4.2 CHB Stakeholders Matrix Diagram in 2012
To identify the impact and relationship between CHB and stakeholders, we used a mapping and prioritization in Stakeholders Matrix Diagram to illustrate the stakeholders based on their interest and potential influence or impact on our business. Through this activity, we were able to identify and prioritize our stakeholders group and to enhance our understanding of stakeholders’ expectations and interests. Through this Sustainability Report task force internal review and assessment, we recognized stakeholders impacting our business based on current issues. The interests and influences of each stakeholder illustrated in the following matrix diagram:
5
6
9 10
11
3
2
4
Les
s Im
porta
nt
M
ediu
m Im
porta
nt
Ver
y Im
porta
nt
Low Impact Medium Impact High Impact
Current issues and potential impact on CHB
1
7
Imp
ort
an
t to
Sta
keh
old
ers
8
24
1
2
3
Priority Stakeholder Agenda
Government Energy saving and Environment protection New Iron and Steel Policy Competition Act 2010 Minimum Wages Policy Minimum Retirement Age Act Employees’ Social Security ( Amendment ) Act 2012
Customers
Strategic marketing and business partnership approach to sustain
customer retention and to broaden market reach
Employees Talent cultivation to enhance management skills and to emphasize on professionalism
Board of
Director To ensure that CHB is driving to the right direction and
sustainability
Shareholders
and Investors
Dividend Distribution
Suppliers Supplier Performance
4
5
6
25
Contractors and
Transporters Contractors and Transporters safety and health program
Iron and Steel
Industry Peers As a council member of The Malaysian Iron and Steel Industry
Federation (MISIF) Participation in Occupational Safety and Health Mentor-Mentee
Program
Local
Community and
Non-
Government
Organizations
Maintain rapport relationship with our community and neighbors and provide humanity aids
Media Maintain a good relationship with the media
Universities/
Colleges Cooperate closely with local higher education institutions for
knowledge sharing and internship placement
7
9
10
11
8
26
2.5 Related Party Transactions
Related Party Nature of Transaction Address
China Steel Corporation
(CSC)
http://www.csc.com.tw
Purchase of raw materials, spare parts, rollers and chemicals from CSC
Purchase of equipment from CSC
1 Chung Kang Road, Siaogang District, Kaohsiung 81233, Taiwan, R.O.C. Tel : 886-7-802-1111 Fax : 886-7-802-2511/ 886-7-801-9427
China Steel Global Trading
Corporation (CSGT)
http://www.csgt.com.tw
Purchase of machinery, spare parts, rollers and chemicals from CSGT
31F, No.8, Ming-Chuan 2nd Road, Kaohsiung 806, Taiwan. Tel : 886-7-332-2168 Fax : 886-7-335-6411
China Steel Machinery
Corporation (CSMC)
http://www.csmc.com.tw
Purchase of machinery and spare parts from CSMC
3 Tai-Chi Road, Hsiao Kang, Kaohsiung, Taiwan. Tel : 886(7)8020111 Fax : 886(7)8063833
China Ecotek Corporation
(CEC)
http://www.ecotek.com.tw
Purchase of equipment from CEC
8F, No.8, Ming-Chuan 2nd Road, CianJhen Dist., Kaohsiung City 80661, Taiwan (RDC). Tel : 886-7-330-6138 Fax : 886-7-339-4016
InfoChamp Systems
Corporation (ISC)
http://www.icsc.com.tw
Purchase of computer hardware, software and industrial equipment and machinery from ISC
11F, No.6 Ming-Chuan 2nd Road Chien Chen Kaohsiung, 806 Taiwan. Tel : 88607535/0101 Fax : 886075350110
Our related party transactions are as below:
27
Chung Hung Steel
Corporation (formerly
known as YiehLoong
Enterprise Co Ltd) (CHSC)
www.chsteel.com.tw
Purchase of raw materials from CHSC
317, Yu Liao Road, ChiaoTou District, Kaohsiung City 82544, Taiwan, R.O.C Tel : 886-7-6117171 (10 lines) Fax : 886-7-6110594
CSGT (Singapore) Pte. Ltd.
(CSGTS)
www.csgt.com.tw
Payment of sales commission to CSGTS
#14-01, Mas Building, 10 Shenton Way Singapore 079117 Tel : (65)6223877728 Fax : (65)62256054
Himag Magnetic
Corporation (HMC)
http://www.himag.com.tw
Sales of iron oxide to HMC 24-1, Chien-Kuo Road, Nei-Pu Industrial Dist. Ping-Tung County, Taiwan. Tel : +886-8-7780222 Fax : +886-8-7780226
Dragon Steel Corporation
(DSC)
www.dragonsteel.com.tw
Purchase of raw materials 434 Taichung City the Longjing District Longchang Road 100, Taiwan. Tel : +886-4-26306088 Fax : 886-4-26306066
CSC STEEL SDN. BHD
http://www.cscmalaysia.com
Subsidiary company 180, Kawasan Industri Ayer Keroh, Ayer Keroh 75450 Malacca, Malaysia.
CSC BIO-COAL SDN. BHD
http://www.cscmalaysia.com
Subsidiary company Lot 391, MK12, Kawasan Perusahaan Valdor, 14200 Sungai Bakap, Penang, Malaysia.
CONSTANT MODE SDN.
BHD
http://www.cscmalaysia.com
Subsidiary company Registered office at : 110, Jalan Melaka Raya 25 Taman Melaka Raya, 75000 Malacca, Malaysia.
28
3 Corporate Governance
3.1 Corporate Governance Framework 3.2 Shareholder Structure 3.3 Board Of Directors (BOD) 3.4 Audit Committee 3.5 Corporate Ethics 3.6 Audit 3.7 Risk And Crisis Management 3.8 Business Performance 3.9 Dividend Distribution Policy
3.1 Corporate Governance Framework
CHB is a listed company on the main market of Bursa Malaysia. We developed suitable corporate governance structure and implemented standard practices in order to provide the benefits of shareholder’s equity, to strengthen the functions of the Board of Directors and the Audit Committee,
to protect the interested parties’ right and interests, and to enhance information transparency goals. The corporate governance organization is divided into the Board of Directors, Audit Committee, and General Meeting of Shareholders. Board of Directors is the executive body for the business. It is monitored by the audit committee to oversee the operation of the company. General Meeting of Shareholders, on behalf of the company, is the highest authority. Through the mechanism of “check and balance” to each other of these three bodies, the purpose of Corporate Governance could be achieved.
The Malaysian Code on Corporate Governance 2012 (MCCG 2012) focuses on the independence of independent directors, compare to other things. The code recommends that the tenure of an independent director cannot exceed nine years. After nine years, he can sit on the board only as a non-independent director.
29
3.1.1 Organization Structure
Our organization structure as below:
30
3.2 Shareholder Structure
The company’s major shareholders include local body, foreign body and individual shareholders. The top 10 of major shareholders are: China Steel Asia Pacific Holdings Pte Ltd, Gan Thian Chin, Lembaga Tabung Haji, Enterlight Investments Pte Ltd, Lee See Jin, Citi Group Nominees (Asing) Sdn. Bhd., Maybank Nominees (Tempatan) Sdn. Bhd., Neoh Choo Ee & Company, Sdn. Bhd., How Sin Son, Nar Swee Kim and Nam Thah Tsai. The pie chart below shows shareholders structure:
The board is entrusted with and is responsible for the group’s overall strategy, growth and direction including its financial performance. The board provides direction and guidance to management and has effective control of the group. It maintains full control of the group’s activities through the matrix
of authority filtered down into the various components of the group. The board and management recognize the importance of good corporate governance in running the operations of the group and in all of its dealings. It is ever mindful of the trust and expectations placed upon its shoulders by the shareholders and stakeholders. Corporate governance principles are therefore adopted in activities undertaken by the group and the board endeavors to comply with the best practices of good corporate governance as set out in the Malaysian Code on Corporate Governance (www.bursamalaysia.com). In fulfilling our fiduciary duties, principles of transparency, integrity and professionalism are incorporated into all levels of the group’s corporate hierarchy. It is hoped that through this common
5.42%
50.03%44.55%
Shareholders Structure as at 31 December 2012
GovernmentAgencies/Institutions
Body Corporate
Individual
*Remark Body Corporate Consists of: 1. Bank and Investment Trusts: 0.09% 2. Industrial and Commercial: 49.935
31
value system, shareholder's rights and interests will not only be safeguarded but the performance of the group will be further enhanced and will be brought up higher. The board will ensure that the company’s strategies promote sustainability. The board is obligated to
report to the shareholders the manner of application of these principles contained in the Malaysian Code on Corporate Governance and the extent of compliance with statutory requirements. The chair of the highest governance body is also an executive officer of the company.
3.3 Board of Directors (BOD)
The Board Composition and Category of Directors as of 31st December 2012 are as below:
CSC Steel Holdings Berhad:
CSC Steel Sdn. Bhd.:
Mr. Liang, Hsiu-Chang@ Liang Shu Charng (Resigned on 1st November, 2012)
Group Managing Director
Mr. Chen, High-Pinn(Appointed on 1st November 2012) Group Managing Director Mr. Tan Chin Teng Executive Director Mr. Nee, Lung-Yuan Non Independent Non-Executive
Director Mr. Liu, Jih-Gang Non Independent Non-Executive
Director Mr. Pang Fee Yoon Independent Non-Executive Director Mr. Chong Khim Leong@ Chong Kim Leong Independent Non-Executive Director Brig. Gen. (R) Dato’ Mohd Zaaba@ Nik Zaaba Bin Nik Daud
Non Independent Non-Executive Director
Mr. Liang, Hsiu-Chang@ Liang Shu Charng (Resigned on 1st November, 2012)
Group Managing Director
Mr. Chen, High-Pinn(Appointed on 1st November 2012) Group Managing Director Mr. Liu, Jih-Gang Vice President Mr. Nee, Lung-Yuan Non Independent Non-Executive
Director Mr. Leou, Jiing-Kuen Vice President Mr. Lee, Chien-Ming General Manager
32
Key Management Staff:
3.4 Audit Committee
The group has put in place a formal, comprehensive and streamlined audit processes both internally and externally with its auditors. The Audit Committee serves to assist the board in ensuring the effectiveness of the group’s system of internal control, risk management and financial reporting
practices of the group. It comprises Mr. Pang Fee Yoon (Chairman) (Independent Non-Executive Director), Mr. Chong Kim Leong (Member) (Independent Non-Executive Director) and Brig. Gen, (R) Dato’ Nik Zaaba Bin Nik Daud (Member) (Non-independent Non-Executive Director).
The board has a formal, professional and transparent relationship with both the internal and external auditors of the group. The external auditors have direct access to the board and the Audit Committee and thus, contentious interference from potential management influence. Conversely, the Audit Committee has the liberty to meet with the external auditors when deemed necessary.
Mr. Liang, Hsiu-Chang@ Liang Shu Charng (Resigned on 1st November, 2012)
Group Managing Director
Mr. Chen, High-Pinn(Appointed on 1st November 2012) Group Managing Director Mr. Tan Chin Teng Vice President, Finance Division Mr. Kenny Ten (Appointed on 1st July 2012) Vice President, Commercial Division Mr. Leou, Jiing Kuen(Appointed on 1st March 2012) Vice President, Production Division Mr. Huang, Chu-Kai Assistant Vice President, Financial
Division Mr. Koh Kang Guan Assistant Vice President, Production
Division Mr. Lee, Tai-Lin(Appointed on 16th July 2012) Assistant Vice President, Commercial
Division
Chairman(Independent Non-Executive
Director)Mr. Pang Fee Yoon
Member (Independent Non-Executive
Director)Mr. Chong Kim Leong
Member(Non-Independent
Non-Executive Director)Brig. Gen. (R) Dato' Nik Zaaba
Bin Nik Daud
33
3.5 Corporate Ethics
In order to conduct our business responsibly and sustainably, we are committed in maintaining the highest standards of business ethics. Our Code of Conduct serves as a guideline for all our employees to ensure the highest levels of transparency and accountability within our organization and in our dealings with external parties.
Standard Ethical Codes of Conduct
for Senior Management Personnel
The ethical codes for senior management have been drafted to ensure senior management remains aware at all times of their ethical duty to the company and its business as well as to ensure transparency in governance systems of the company. The senior management referred to Managing Director, Vice President, Assistant Vice President, General Manager, Assistant General Manager and advisors of the company.
The general code of conduct precludes and prohibits senior management from sharing unpublished information and commits them to preserve confidentiality of information pertaining to the company’s business that may violate shareholder value should the information be, intentionally or unintentionally, allowed to circulate. This includes but is not limited to disclosure of sensitive business information regarding proprietary manufacturing technologies that were internally developed or any such proprietary information belonging to the company.
Senior management must never compromise the positions they hold in the company and must maintain business dealings above board with honesty, without intent of deception at all times, and only enter into such dealings with the company’s interests at heart. This
commitment to safeguard the company assets should always be upheld to avoid direct negative impact to the company’s
profitability from theft and negligent behaviour.
Standard Ethical Codes of Conduct for
Employees of CSC Steel Holdings
Berhad and CSC Steel Sdn. Bhd.
The following governance standards have been established to promote high levels of corporate integrity at all levels of staff within the company. Employees shall, at all times, endeavor to be self-starters, demonstrate initiative, and adhere to 4 broad principles of Teamwork, Entrepreneurial Spirit, being Down to Earth and commitment to a relentless Pursuit of Innovation. Employees have been made aware that any abuse of position for personal gain constitutes a breach of the code of conduct, and may result in termination of employment with the company.
34
3.6 Audit
The Audit Committee drives the collaboration between its internal and external auditors, formulates the audit plan, evaluates and reports on the system of internal controls. The finance audit is conducted by Deloitte & Touche (www.deloitte.com/my) and operations audit is conducted by Needsbridge Advisory Sdn. Bhd effective from 4th January 2013and internal auditors from CSC Taiwan. All audits are conducted in half yearly basis except for CSC Taiwan; which audit once a year. As a good corporate citizen and in line with the Securities Commission’s standards, the
company carries out various audits into the functions of finance and budgeting management, related party transactions, subsidiary performance, Board resolution processes, information security, and prevention of insider trading. Internal audits concurrently implementing to verify that actual working practices comply with the specified process flows and to ensure proper governance of such systems are in place. The group’s audit process also helps to identify
areas of improvements in its internal systems and controls, ensure its efficiency and effectiveness and determine if corporate responsibilities have been assigned to suitable and capable parties via carrying out checks into operational performance, financial report reliability and regulatory compliance matters. The group’ internal audit is undertaken by CSC Taiwan.
Executives who are responsible for developing business relationships must be mindful of extravagant and wasteful corporate entertainment spending, and should endeavor to ensure spending practices are prudent and commensurate with the outcome pursued. No employee is allowed to engage in discrimination of any sort nor exhibit personal favoritism or preference in any situation. Financial schemes which may result in compromise of integrity and lead to situations detrimental to the company like borrowing and lending money, forming or participating in illegal annuity schemes are to be avoided. The code of conduct also strictly prohibits employees from influencing other parties for personal gain. The company strongly encourages all its personnel to report illegal and unethical conduct via the proper channels, which will then result in a full and comprehensive investigation whereby violators may face termination of service if found guilty.
35
3.7 Risk and Crisis Management
3.7.1 Crisis Management
In order to manage the different nature of crisis, the Managing Director will convene and establish a Crisis /Emergency Management Team immediately to conduct a meeting to track and review until the crisis lifted, and develop emergency response plan (ERP) and major epidemic prevention plans for natural or man-made disasters. The plan scope includes the epidemic collection, advocacy of employee epidemic prevention, preparation of disease prevention materials, wearing mask and wash hands, body temperature measurement, environmental disinfection, and other prevention measures for the purpose of reducing disease hazards. All the staffs should participate in disaster drills and fire drills which is conducted periodically so as to have the capability of emergency response, ensure the safety of employees, plant and machinery, and maintain the normal operation of the company.
3.7.2 Risk Management
The board recognizes that an important element of a sound system of internal control is to have in place a risk management framework in order to identify principal risks and implement appropriate controls to manage such risks. The present process of identifying and addressing risk is conducted continuously during weekly management meetings.
On strategic level, strategic business strategies are formulated by Managing Director and Senior Management and presented to the Board for review purpose to ensure proposed strategies are in line with the Group’s risk appetite with update
of the implementation progress of the strategies approved by the Senior Management in subsequent Board’s
meetings for the Board to follow up and review.
On daily basis, the representative Heads of Department are responsible for managing the risk of their management. Changes in the key business risks faced by the Group or emergence of new key business risks and the corresponding internal controls are discussed during management meetings.
3.7.3 Financial Risk
The financial summary of the group in the past 5 years showed that it was financially strong. The group is in good liquidity position with its current liabilities well covered by current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a zero geared company, the group virtually has no financial risk as it is mainly dependent on its internal funds to finance its business needs. In spite of the difficult and challenging business environment, the group's competitive capability is strong and it is adapting well to meet the challenges of this sector.
36
3.7.4 Raw Material Risk
The local regulation has restricted CHB to procure certain percentage of our main raw material that is Hot Rolled Coil (HRC) requirement from local manufacturer, which may have some influence to the raw material risk. However, being a subsidiary company of China Steel Corporation (CSC) in Taiwan, it had given us advantage in better condition than others in terms of the reliable supply of HRC, punctual delivery and excellent quality to enable us to produce good quality of finished product which is conducive to the company's long-term business development.
3.7.5 The Risk of Human Resources
The implementation of employee bonus and welfare system has improved employees’
satisfaction and centripetal force. Every employee has been aware of the code of ethic. The code of conduct and the article of avoid conflicts of interest established also clearly defined rules such as:
1. Employees intended, prefixed or accepted a bribe from business activities such as supplier, interest parties’
entertainment, misappropriate or misuse of the company fund.
2. Employee intentionally misled,
manipulated or unfairly obtained advantages to seek benefits for him/herself or others parties.
3. Employee must not obtain illegitimate
profits by making untrue statements about important matters by means of manipulation, concealment or abuse of information learned by using the authority had on his or her positions.
Employee who failed to abide by these codes will be subjected to appropriate disciplinary actions. Employees have been made aware that any abuse of position for personal gain constitutes a breach of the code of conduct, and may result in termination of employment with the company. Therefore, the risks of human resources could be effectively reduced.
3.7.6 The Risk of Plant and Equipment
Our factory plant and machinery such as furniture, fittings, equipment, spare parts, and raw materials have been covered with risks insurance. Each plant has an emergency respond plan and the emergency drill will be conducted on a yearly basis to reduce the disaster harm. 3.7.7 The Risk in Engineering Project
In addition to comply with the requirements of ESH, provision insured employer’s liability insurance for the
major engineering project.
37
Information Security Risk
3.7.8 Information Security Risk
CHB concerns about the increasing risks of information safety. Therefore, through internal self-control and external auditing, a more comprehensive information security policy can be created and a better information security management can be implemented. The above-mentioned implementation covers network firewall, virtual private network, hardware redundancy and software backup, computer antivirus system, data security control, periodic software auditing, uninterrupted power supply and backup generator set power supply. Upon implementation of the above, the continuous computer system operation, secured information transmission and network security can be achieved.
The board has overall responsibility in maintaining a sound system of internal controls, internal procedure and guidelines that together, serve to provide a reasonable assurance of an effective and efficient operation and comply with the relevant laws and regulation.
The internal controls are meant to safeguard the group’s assets, shareholders’ investments and
stakeholders’ interests. A key component in carrying out this responsibility is to ensure that risks are appropriately and adequately managed within the group.
It must however be noted that such a system is designed to manage the group’s risks within an
acceptable risk profile rather than eliminate the risk of failure to achieve the policies and business objectives of the group. Such controls by their nature can only serve to mitigate and provide a reasonable assurance against risks but are not absolute assurance that risks will not occur.
38
3.8 Business Performance
The Group’s business remained resilient for the year 2012, thanks to the relatively stable demand
from the domestic market. The Group’s export market however, had declined significantly due to
stiff competition from China, Korea, Japan, particularly in the Southeast Asia region. In addition, we expect there will be more trade remedies such as “anti-dumping” and “safeguard” to be
imposed against unfair competition in the region. The Group will be taking all necessary steps to minimize the impact on the Group, whilst also seizing opportunities arising from these trade remedies.
The Group has undertaken various initiatives to improve the Group’s market share and
profitability include enhancing existing and introducing more new products through R&D activities by both the Company and our parent company in Taiwan as well as making better grade materials to move up the higher value chain. The Group is also vigilant in pursuing product differentiation by continuously innovating and evolving along with the changing market trends to maintain its competitive edge. Apart from strengthening competitive edge, the Group is keen on strategies to entrench customer relationship include working closely with customers to tailor make products specific to their requirements and embarking on strategic alliances with local downstream players to forge stronger working relationship with its customers.
As for the financial performance ended 31 December 2012, the Group’s financial
performance had declined marginally from the year ended 31 December 2011. Overall revenue reduced by about 7% to RM1.127 billion due to lower selling prices of the Group’s steel
products. The Group’s profit before tax registered a smaller decline of about 3% to RM37.5
million.
39
* In year 2012, gross profit had declined due to lower selling price of steel products.
Share Value
Stock Exchanges Listed Bursa Malaysia Securities Berhad Main-Market: Industrial Products (Stock Name: CSCSTEL) (Stock Code: 5094)
Number of Shareholders (2012) 8425
Capital Employed/RM (2012) RM 380 million
Revenues (2012) RM 1,127 million
Revenue and Gross Profit
0
200
400
600
800
1000
1200
1400
2010 2011 2012
Year
(RM
Mill
ion)
Revenue
Gross Profit
The graph below shows the CHB revenue and gross profit from year 2010 to 2012:
40
3.9 Dividend Distribution Policy
The Board expects to declare and pay annual dividends of not less than 50% of annual profit after tax. However, any declaration and payment of dividend as well as the timing and amount of any dividend will be depending on the discretion of the Board and based upon the earnings, sufficient cash flow, capital requirement of the Group, the consults of the Group’s bankers and financiers (where
applicable), and any other conditions that the Board claim relevant.
The graph below shows earning per share and dividend for last three years:
Earning per share
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
2010 2011 2012
Year
(Se
n/
Sh
are
)
Earning per share
Dividend
0%
2%
4%
6%
8%
10%
12%
14%
2010 2011 2012
Year
Div
ide
nt P
erce
nta
ge
Dividend
41
4 Economic and Product Development
4.1 Sales and Marketing
4.2 New Product Development
4.3 Technical Development
4.4 New Technologies Investment
4.5 Green Production Process
4.6 Main Raw Materials Consumption
4.7 Customer Satisfaction
4.1 Sales and Marketing
4.1.1 New Iron and Steel Policy
As for the domestic steel market, the Ministry of International Trade and Industry (MITI) has issued “The Statement on the Iron & Steel Industry” in early 2013 as part of the restructuring of the steel
industry undertaken by the Government to achieve the fair steel trade practices in Malaysia. The domestic steel market will be benefited from this latest iron and steel policy as the importation of steel products will be strictly controlled, and this policy will promote local iron and steel products. With this positive development, the group’s products will be more competitive and is expecting to enjoy a better market share.
4.1.2 Competition Act 2010
CSCM, with our high organization strength and capability, has reformed and adopted our business environment well to comply with the rules and regulation of the Competition Act 2010 which has been enforced since 1st January 2012.
42
4.2 New Product Development
We are rebranding the galvanized steel product namely Enhance specially developed for Steel Roof Truss System which passivation chromate and tinted thin organic coating (TOC).
Enhance
The Enhance: Specialty developed for the Steel Roof Truss System
Enhance is a galvanized steel (GI) that specially developed for better corrosion resistance for outdoor exposure. Besides that, Enhance also has many advantages such as good formability, attractive appearance, high strength, light weight, recyclable and so on.
Enhance more suitable for roof truss compared to conventional GI. Conventional GI guarantees Salt Spray Test is 100 hours (< 5% white rust), but Enhance guarantees Salt Spray Test is 250 hours (<5% white rust).
43
4.3 Technical Development
The table below shows the progress of Technical Development:
Commencement
date Status Technical Development Objective and Scope
Process Improvement
January 2010 Ongoing Study and reduce the pickled and oiled steel coil break issue in order to upgrade the end product quality.
April 2011 Ongoing Improvement on cold rolled structural quality mechanical stability by replacing with new raw material type.
August 2011 Ongoing Improvement on cold rolled deep drawing quality mechanical stability by replacing with new raw material type.
Product Development
January 2010 Ongoing Develop cold rolled high carbon steel sheet for producing carbon tool steel usage, among are hanger spring part, automotive handbrake inner fastener, and etc.
April 2010 Ongoing Expand pickled and oiled product range to steel structural (SS), steel automotive press hot (SAPH) and steel plate hot tube (SPHT) type.
July 2010 Ongoing Develop high corrosion resistance pre-painted steel sheet using high DFT (total 1 side coating >100 (m) PVdF paint, the projects related are power plant, boiler house, and etc.
January 2011 Ongoing
Develop zero spangle galvanizing product for end user require even spangle and higher surface requirement products, among are drawer slide, poultry farm system, filter frame, and etc.
May 2012 Ongoing
Develop tinted Thin Organic Coating ( TOC)
galvanizing product for structural products, among are
steel truss, purlin and etc.
44
4.4 New Technologies Investment
CHB’s capital investment (CAPEX) RM 28.9 million in property, plant and equipment in the year 2012 is focused on activities aimed at improving energy efficiency and operational effectiveness, as well as plant operational safety.
In order to retain as one of key steel manufacturers in Malaysia, relevant CAPEX dedicated to upgrades and technological improvement is necessary.
The main CAPEX for the year 2012 for projects and purpose is shown below:
No Related To Item
i. Equipment Revamping a) Batch Annealing Furnace base control unit revamping b) Tension Leveller revamping which includes spare parts,
supervision, tension reel, belt wrapper and mechanical & electrical installation
c) Continue Galvanizing Lines Revamping such as entry ac drive revamps which include supervision and installation for facility sustainability.
d) PPL& ECL Revamping 2011/2012
ii. Production capacity increase or quality upgrade
a) Inspection Light b) 1.5t Electric Reach truck c) 3t Diesoline Forklift d) Continue Galvanizing Lines Revamping such as
electrolytic cleaning tank
iii. Re-engineering of business process and competitiveness(automation & computerization)
a) Data color System for strengthening color control. b) Set up Active Directory & DHCP Solution and Device
Management Control c) Computer Peripherals & Software
iv. Industrial safety and environment protection
a) Furnace Hood with Scrubber System at laboratory b) Inverter Compressor (i.e. installation cost) c) CRP Cooling Tower Revamping d) Crane 6-3 & 10-1 Hoist Motor Replacement e) Crane 2-2 End Truck Modification f) Crane 9-2 Crab Trolley Replacement g) Reverse Osmosis water supply control system revamp h) Canteen’s kitchen deep fryer
45
4.4.1 Push Pickling Line (PPL) Revamping
CHB are committed to continuously improving its machinery performance and environmental issue. Push Pickling Line had undergone revamping project that had replaced pickling tank, rinsing tank & fume exhaust system which is completed in March 2012.
The new pickling and rinsing tank structure & equipment were re-designed to increase production capacity, to enhance product quality requirement and to minimize acid fume emission to the environment. In line with this, the fume exhaust system with gas scrubber was designed to meet this requirement and also complied to hydrochloric acid (HCl) gas emission standard limit of <400mg/Nm3 under Malaysian Clean Air Regulation Standard C.
Gas scrubber design capacity with 12,000m3/hr featuring vertical tower equipped with emergency spray, high efficiency drop separator with 2 sets of water circulation pump. The systems are also equipped with online measuring instrument to monitor performance of the system. As the result, we have minimized acid fume emission, thus improved our working environment and operation safety.
*Under Malaysian Clean Air Regulation Standard C
Year Month
HCl gas emission
(mg/Nm3)
Monitoring
results
Regulation
limit*
2012
March 3.42
<400 June 3.55
Sept 4.98
Dec 5.23
PPL gas scrubber HCl gas emission results as below:
Push Pickling Line overview.
46
4.4.2 Electrolytic Cleaning Line (ECL) Revamping
Electrolytic Cleaning Line
The Electrolytic cleaning process is to clean the surface of cold rolled coils, the strip will be cleaned through flushing, brushing and electrolytic cleaning with alkaline solutions to remove residue oil and iron fines. Then, the strip will be brushed with water spray & rinsed with water to remove the alkaline solution from strip and dried with hot air. In order to maintain strip surface cleanliness, Demineralized Water (DI) is constantly discharged and re-filled in the rinse storage tank.
Electrolytic Cleaning Line (ECL) has undergone revamping project for gas scrubber, rinsing circulation tank, Demineralized Water (DI) tank and rinsing system in October 2012. New cascade type rinsing circulation tank, DI water tank and scrubber units are designed to improve product quality and to reduce DI water consumption. Under the new process flow, DI water is stored in a cascade type rinsing circulation tank and charged to the rinsing unit. Then, the DI water is re-circulated in rinsing circulation tank and re-used in the scrubber unit for further cleaning. On-line conductivity also installed to monitor and control the water quality.
After the revamping, the DI water consumption reduces from average 105 l/t to 5 l/t. Strip surface cleanliness keeps improving to >85% with new brushing and rinsing system.
The table below shows ECL’s DI water consumption (l/t):
112 111 108
92
9 3 3
0
20
40
60
80
100
120
Jun July Aug Sep Oct Nov Dec
DI
Wa
ter
un
it c
on
sum
pti
on
(l/
t)
Year 2012
After RevampingBefore Revamping
47
4.4.3 Green Purchase
CHB started green purchase in the year 2012 for items used in production. We are committed to purchasing and utilizing products and services that are environmentally friendly. In order to promote the purchasing of products that has minimum impact to the environment, CHB has established an “Environmental and Energy Saving Guidelines For Vendors” that outlines some basic
guidelines for suppliers regarding green purchase. We promote purchasing on this basis with the understanding and cooperation of suppliers. In year 2012, CHB had spent RM 131,476 on green purchase for the following products: The purchase of environmentally friendly items should be balanced with performance, availability and cost. CHB’s purchase decisions are made by considering multiple factors. It is the intent of CHB to integrate environmental considerations with equal weight into every aspect of acquisition, while maintaining cost, safety and value standards. These purchasing decisions will include economic criteria as well as a strong commitment towards sustainability. CHB will continue to practice and promote the purchase of environmentally sustainable products from year to year.
1) T5 (fluorescent lamp / light) 2) LED (high bay light, flood light, spot light, lamp) 3) Induction Light / Lamp and 4) EFFI (motors)
48
4.5 Green Production Process
Energy saving and carbon emission reduction will be achieved through developing green products and improving the material life cycle (LCA; Life Cycle Assessment) which also in line with ISO9001:2008 Quality Management System, ISO14001:2004 Environmental Management System and ISO50001: 2011 Energy Management System.
The products compliances are as below:
No. Finish Product Descriptions Compliance 1. Cold Rolled
Steel Coil Hot- Dipped
Galvanized Steel
Pre-Painted Galvanized Steel
Hot-Rolled Pickled & Oiled Steel
REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) is a regulation of the European Community about chemicals and safety application, by controlling the concern substances (SVHC) to prevent serious harm to humans and the environment.
RoHS (Restriction of Hazardous Substances) is EU’s legislation
enacted mandatory standard which mainly used for the specification of materials and process standards for electrical and electronic products, to make it more conducive to human health and environmental protection. The purpose of the standard is to eliminate the electrical and electronic products which might contain lead, mercury, cadmium, hexavalent chromium and polybrominated biphenyls, focus on the provisions that the lead content not exceed 1000 ppm.
Non toxic substances: REACH or RoHS Control Regulations
2. Pre-Painted Galvanized Steel
This product which having features like thermal insulation, anti-dust and high anti corrosion coatings. Registered trademarks Ever Cool and Ever Fresh are to promote our finished products which are environmental friendly choice of materials, to extend the products life span and to achieve energy saving as well as carbon emission reduction.
In-house brand which feature for Environmental Protection and Energy Saving
3. Hot-Dipped Galvanized Steel
Pre-Painted Galvanized Steel
Based on British BS476 Regulation, fire spread through and surface spread of flame classification test is to assess the fire performance of material at high temperature, to extend the construction materials or components life span, with the objective of reducing waste.
Enhance with passivation chromate and tinted thin organic coating (TOC).
BS476 Fire Regulations
4. Cold Rolled Steel Coil
Hot-Dipped Galvanized Steel
Pre-Painted Galvanized Steel
Hot-Rolled Pickled & Oiled Steel
Enhancing the durability of material used and construction efficiency helps to reduce energy consumption and improve the safety of the structure.
JIS G3302 SGC 340, 400, 440, 490, 570 JIS G3312 CGC 340, 400, 440, 490, 570
49
4.6 Main Raw Materials
i). As an associate company of CSC Taiwan, the CSC Malaysia benefits from the opportunity in obtaining high quality Hot Rolled Coils and other specification steel products from CSC Taiwan, in order to meet production and market requirements.
Delivery of Hot Rolled Coil from CSC Taiwan to Melaka Port through sea and by land transport to CSC Malaysia plant.
ii). The raw materials of CSC Malaysia are mainly sourced from the parent company, CSC as well as local suppliers in Malaysia, which to produce Pickled and Oiled Coils, Cold Rolled Coils, Galvanized Steel Coils and Pre-painted Galvanized Steel Coils.
The delivery of Hot Rolled Coils from Megasteel to CSC Malaysia.
50
4.7 Customer Satisfaction
Customer Satisfaction survey of year 2012 was conducted by Sales Department. The main measurements were Product Quality, Delivery and Sales and Customer Service. As compared to year 2011, the overall performance of year 2012 was improved, from 74.80 to 75.60. The table below shows the customer satisfaction rate in year 2010, 2011 and 2012:
The trend of the customer satisfaction for last three years as below:
Customer Satisfaction Rate from year 2010 to 2012
2010 2011 2012
PRODUCT QUALITY 75.8 74.6 74.6
DELIVERY 77.8 75.2 76.6
SALES & CUSTOMER SERVICE 74.0 74.6 75.6
TOTAL AVERAGE 75.6 74.8 75.6
60
70
80
90
100
2009 2010 2011 2012 2013
Ra
tin
g
Year
Customer Satisfaction Trend
PRODUCT QUALITY
DELIVERY
SALES & CUSTOMERSERVICE
TOTAL AVERAGE
51
5
Our Human Capital 5.1 Workforce Profile 5.2 Human Resources Management 5.3 Talent Development 5.4 Employees Activities Committee 5.5 Employee’s Welfares and Fringe Benefits
5.1 Workforce Profile
CHB employed 639 employees, which includes 571 (89.36%) male employees and 68 (10.64%) female employees. As compared to the year 2011, the total number of employees of CHB in the year 2012 has increased by 12 employees and the percentage has increased about 1.91%. 575 or 89.98% employees of CHB are Malaysians, following by two other groups of foreign workers from Indonesia 27(4.22%) and Nepal 33(5.16%). Total number of Malaysian and Nepalese employees is increase; however Indonesian employees decreased due to the expiration of service contract.
The graph below shows the employees by gender and citizenship for last two years:
0
100
200
300
400
500
600
2011 2012
Nu
mb
er o
f E
mp
loy
ees
Male
Female
Employees by Gender
Year
0
100
200
300
400
500
600
2011 2012
Nu
mb
er o
f E
mp
loy
ees
Malaysian
Taiwanese
Nepalese
Indonesian
Employee by Citizenship
Year
52
In year 2012, non-executive category contained the greatest number of employees which was 454; it was increased by 4 employees as compared to the year 2011. In these two years, the highest age range is 30-39. In contrast, the lowest age range is 50 and above. Average age of CHB employees is 35 years old. The average service seniority is 9.5 year (2012) compared with 8.93 year (2011). In CHB, most of the employees' education level is secondary school. Only a small group of employees' education level is primary school. Meanwhile, the numbers of Master and Degree holders are increasing in CHB.
The graph below shows the employees by category, age and education level for last three years:
050
100150200250300350400450500
2011 2012
Nu
mb
er o
f E
mp
loy
ees
Year
Employees by Category
Board ofDirectorTopManagementExecutive
Non-executive
0
50
100
150
200
250
2011 2012
Nu
mb
er o
f E
mp
loy
ees
Year
Employees by Age
Below 30
30-39
40-49
50 & Above
0
50
100
150
200
250
2011 2012
Nu
mb
er o
f E
mp
loy
ees Master/Degree
Diploma/STPM
Certificate/SPM/SKM
Secondary Education
Primary Education
Employee by Education Level
Year
53
5.2 Human Resources Management
We are member of the Malaysia Employer Federation (MEF) (www.mef.org.my) and adopting fair employment practices is about recruiting and treating employees on the basic of merit, competency, such as skills, experience or ability to perform the job. Our principle of fair employment practice as below: Recruit and select employees on individual merit. Treat employees fairly and with respect and implement progressive human resource management
system like establishment salary grade, performance appraisal, promotion, reward and punishment procedures.
Provide training, education and development with equal opportunity to help employee achieve their potential.
Employee’s ability, performance, contribution and experience will be rewarded fairly. Abide by employment act, applying fair employment and human right practices. These fair employment practices will benefit us in multi-culture and ethnic society in Malaysia.
Interview: Human Resource screening interview
54
5.2.1 Employee Turnover
2011
2012
10.85%
13.6%
1.44%
0.6%
Number of Employees
Yea
r
Employee Turnover by
Gender
Female
Male
2011
2012
8.3%
10.2%
2.9%
3.1%
1.1%
0.9%
Number of Employees
Yea
r
Employee Turnover by Age
40-49
30-39
Below 30East Malaysia
Peninsular
Malacca
3.92%
29.41%
66.67%
6.49%
27.27%
66.23%
59.63%
2.80%
37.60%
Turnover By Region/ Country
2012 2011 2010
Probationary employees are required to serve 24 hours’ notice without providing any reason during the probation period. Upon confirmation, the termination notice period will be as follow: i) 4 weeks’ notice with less than 2 years service. ii) 6 weeks’ notice with less than 5 years service. iii) 8 weeks’ notice with more than 5 years service. Percentage of employee turnover for year 2011 was 10.85% male employees and 1.44% female employees while it increased to 13.6% male employees and decreased to 0.6% female employees in year 2012. The turnover for male employees’ turnover was higher than female employees for last two years. New employees and age below 30 stands the highest portion of turnover. The graph shows the turnover rate by gender, region and age for last three years:
55
5.2.2 Malaysia Minimum Wages Policy
5.2.3Minimum Retirement Age
Malaysia first-ever minimum wages policy that requires employers to payat least RM900 per month for workers in Peninsular Malaysia andRM800 per month for workers in Sabah and Sarawak is set to be effectivefrom 01 January 2013.Due to this policy, CHB had planned ahead for local employees’minimum wage adjustment by 01 July 2012 in order to prevent jobturnover on existing workers. Meanwhile, minimum wage adjustment forforeign workers will be implemented according to policy’s effective date,01 January 2013.The regulation of the minimum wages requires the company to pay morefor hiring the production operators. This will inevitably lead to highercost of production. Therefore, the management has to push the operationtowards greater efficiency and higher value-added activities and products.
http://www.federalgazette.agc.gov.my/
The Minimum Retirement Age Bill was passed by Malaysia Parliament on 27 June 2012 and Upper House on 17 July 2012. It was gazetted on 16 August 2012. The Minimum Retirement Age Act for the private sector will be implemented on 01 July 2013. The Act stipulates that the minimum retirement age of employees shall be 60 for Malaysia Citizen. Currently, CHB’s employee retirement age is 55 and will be extended the retirement age to 60 as Act requirement. The implementation of this act has minor impact on a company’s human resource because the average employee age is 35 years old. The Employees’ Social Security (Amendment) Bill (SOCSO) has been
tabled to pave the way for employees to be insured until age of 60. The amendment covers both death and invalidity pension coverage for employees in tandem with the Minimum Retirement Age Act, which has been raised from 55 to 60. The Employees’ Social Security Act 1969 (Act 4), Regulations and Rules (Amendment as 2012) will take effect from 01 January 2013 and the company has the obligation to contribute to this social insurance scheme for employees who service until age of 60.
56
5.2.4 Employee Relations & Communication
We believe applying communication tools with employees is important as it will reap rewards, resulting better productivity and to prevent miscommunication. CHB is fair and consistent; treat all our employees equally to avoid the occurrence of harassment or preferential treatment. The different types of communication tools will be applied accordingly and as below:
Conduct, Counseling and Cautions
In order to maintain a productive working environment, the company clearly communicates reasonable rules and standard of conduct with employees and consistently and equitably enforces them. If any employees committed in misconduct or disciplinary problem, counseling session will be held immediately, in private while the problem is manageable and under control. The supervisor may wish to reinforce the communication in writing by giving an advisory or warning letter. If serious misconduct occurs, then it will be proceeded for domestic inquiry and further action. We make use of Employee Performance Improvement Program (PIP) as a communication tool to correct workplace behaviors that affect performance, productivity or staff relationships. Application of PIP is to provide employees an opportunity to change the negative situation rather than implementing more serious action in the disciplinary process. PIP is also related to our employee performance appraisal. Hence, the employees who are unable to meet the target are given an opportunity to improve it through this PIP.
Counseling: Foreign worker attending counseling session
57
5.2.5 Proposal for Improvement
We introduced Employee Proposal Operation Procedure in order to drawn up this scheme that helps to develop motivation, innovation and creativity of all employees and act as a bottom-up approach for production improvement.
Through this scheme, our employees are encouraged to participate it and monetary reward will be given if the proposal is accepted and implemented. The management is commited to this scheme and has allocated resources to evaluate the proposal. Further consideration will be taken especially that is a chance for improvement and sustainability. Our company received nine employees’ proposals for the year 2012.
The Employee Proposal as below:
No Proposal
1 Cleaner plate at feeder roll, PPL 2 Trial run CR-based Thin Organic Coating (TOC) GI for structural usage- Green Color 3 CCL weld hole detector change to fiber optic laser sensors to DTS hole detector sensor 4 Aging test and new routing trial run 5 PPL ploy block heat exchanger 6 PPL gas scrubber unit pump 7 TLL oiler modification 8 To keep turbo compressor which has the highest efficiency as base load 9 Using MS SAE1008 HR to produce PPGI CGC440 products
58
5.3 Talent Development & Training
CHB believes that talent development is important for business performance and sustainability, such as hiring, developing and retaining exceptional talent. Talent development is aligned with future business strategies and business expansion. The ability of company to compete depends upon the performance of all its key talent personnel. In order to achieve and maintain a competitive advantage for the company, CHB is emphasizing on employees’ training, education and development. In year 2012, around RM130, 000 was invested in this area. The average hours of training per employee are 25.9.The main training scopes are job competency skills, technical knowledge upgrade, soft skills development, ISO standard application, on the job training, safety and health training, employee code of conduct and ethics, government laws, rules & regulations and which is relevant to business sustainability.
5.3.1 Employees Performance Appraisal
In the area of performance, communication is essential. Employee needs regular feedback on their work. Through the mid-year and year-end employee performance appraisal, it can help to facilitate the communication between management and employees. We use employee performance appraisal to aid in work motivation such as the use of reward systems and other benefits to encourage the individual employees becoming more productive. The table below shows types of disciplinary action has been taken in the year 2012:
Disciplinary or corrective action is a process of communication with employees to improve unacceptable behavior or performance. Firstly, our company will issue an advisory letter to the employee who has poor performance. If the employee fails to improve performance, a verbal warning letter will be given to the particular employee. A verbal warning letter is usually followed by a written warning letter which is a preliminary disciplinary document in the personnel files of employees. Employee performance appraisal is to provide employees a clear understanding of their work and performance requirements.
Types of Disciplinary Action 2012 Number of employees
Verbal Warning Letter 14
Written Warning Letter 6
Employee Performance Improvement Program (PIP) 3
59
5.4 Employees Activities Committee
The objective of our Employees Activities Committee (EAC) is to identify, plan and organize activities that will provide welfare to the employees. The committee will be responsible for planning employee events to enhance employee relationship and interaction between employees and management staffs as well as local communities. EAC’s activities fund is come from the management budget and disposal packaging materials like paper, plastic and other recovery materials under 3R program.
In year 2012, EAC has organized the activities as below:
Annual Dinner: Company Annual Dinner was held at Orna Golf Resort and Country Club for the entire employees to celebrate the effort and contribution during tough economic times. The most favorable and expectation of the employees is the lucky draw during this Annual Dinner event.
2012 Annual Dinner Celebration
From right to left: 1. Orna Resort Berhad’s Managing Director, Mr. Vincent Yao 2. CSC Group Chairman, Mr. Tsou, Jo-Chi 3. EAC Chairman, Mr. Farm Siang Deng 4. CSC (M) Group, Managing Director, Mr. Liang, Hsiu- Chang@ Liang Shu Charng 5. Non Independent Non-Executive Director, Y.B. Dato’ Nik Zaaba Bin Nik Daud 6. CSC Group President, Mr. Sung, Jyh-Yuh 7. Independent Non-Executive Director, Mr. Pang Fee Yoon 8. Independent Non-Executive Director, Mr. Chong Khim Leong @ Chong Kim Leong .
Lucky Star: Financial Assistant Vice President, Mr. Huang, Chu-Kai presenting lucky draw voucher to Miss Loke Chooi Peng.
60
Charity: EAC committee members also actively participate in Melaka State Economic Corporation Industrial Liaison Unit’s sport activities and charity programs, such as visiting to poor and senior citizen and the disable people.
Table tennis: Table tennis is the most favorite sport.
Badminton: Badminton court rental is sponsored by the company.
Table tennis tournament: Our table tennis team was the winner of first runner-up during Melaka State Industrial Sector Tournament.
Sport Activities: EAC encourages employees to participate in leisure activities by providing funds and sponsorship in such activities which are table tennis, volleyball, basketball, and renting external sport facilities when it is needed. In year 2012, our organization’s table tennis players were the winner of first runner-up in Melaka State Industrial Sector Tournament.
61
5.5 Employee’s Welfares and Fringe Benefits
The employee’s welfare and fringe benefits is shown as table below:
*Statutory contribution: Employees' Provident Fund (EPF), Social Security Organization (SOCSO), Human Resource Development Fund (HRDF).
CHB Employee’s Welfares and Fringe Benefits List
Annual Leave Dental Benefits Travelling Allowance
Injured Leave Medical Benefits Company Performance Incentive
Sick Leave Group Hospital and Surgical Insurance Year-end-Bonus
Prolong Illness Leave Group Personal Accident Insurance Reward for Years Service
Wedding Leave Uniform and Personal Protective Equipment (PPE) Sport Facilities
Funeral Leave Attendance Allowance Free Meal
Maternity Leave Shift Allowance Hostel
Paternity Leave Employee Compassionate Allowance
(marriage, new born baby, death of next in kin)
Annual Dinner
Unpaid Leave Superior Compassionate Allowance Family Day Zero Interest Rate For Car or Housing Loan Environment Allowance Festival Gift Voucher
Improvement: The foreign worker hostel had been moved to Taman Pelangi Apartment.
62
5.5.1 Free Meal
The company has offered duty meals to our employees for free. Employees are able to adhere to their scheduled break periods. Since, a meal is served on the working premises and company canteen; it is no longer necessary for them to spend time commuting during their break period. Employee free meals are an essential part of our production operations. Effectively managing the employee’s canteen and free meal has a positive impact on both the employee morale and bottom line of the business. In year 2012, our canteen chiefs tried to enrich the canteen menu items like noodle soup and burger. An average 14,000 sets of meal were served per month. As part of employee participation, we formed a Canteen Supervision Committee, it is aimed of employee responsibilities include managing food hygienic & safety and propose recommendation for food service improvement.
I have been working in canteen since 1994, I will make sure that the food supply is safe, delicious and deliver on time.
Madam Siti Zaleha Binti Ishak (940102) Canteen Unit Worker Service with company since 1994
Burger: To enrich the canteen food menu, every Thursday, our canteen will prepare delicious food such as burger to the employee as their dinner.
Delicious: Variety food is prepared by company canteen to suit employees’ taste.
63
5.5.2 Employee Annual Health Check Up
CHB is a caring entrepreneur and we concerned the employees’ health during their employment. Our employees annual health check up will help them to take care of their health. Sometimes occupational health hazards are also being diagnosed and treated. In year 2012, there were 136 employees eligible for annual health check up. Employee annual health check up where if any serious diseases are diagnosed, the employee will be advised to get proper medical treatment. Free health check up will be provided to employees once a year according to their age, service year and job characteristics.
Health Check Up: Employees are attending for annual health check up.
“Prevention is better than cure.”
64
5.5.3 Sport Facilities
CHB has developed and give a truly support of sporting culture. It is easier for employees to adopt a sporting lifestyle if they are given access to sports facilities. The company has a wide range of sports facilities which is located adjoining to company premises and the employees can conveniently access this facility. Presently, we have jogging track, grass field for soccer and other team sport, basketball and netball courts, one tennis centre and 3 units of table tennis. This sports facility is maintained regularly. Through these sports facilities, it can significantly open up opportunities for sport and recreation activities. The CHB sport committee and employees do not solely depend on the company sport facilities. Whereas, they also rental other sports facilities such as badminton hall and bowling alley sponsored by the company.
The management is encouraging our sport talent participate in the company games and external tournament which organized by the Melaka State Development Corporation. In year 2012, our table tennis team won the first runner-up in Melaka State Industrial Sector Tournament.
Table Tennis: Table tennis facility is permanently set up on company premise.
Basketball: Employees are enjoying basketball games during leisure time.
65
6 Values to Society
6.1 Blood Donation 6.2 Donation and Sponsorship: Give Back to Communities 6.3 Trees Trimming 6.4 Internship Opportunities
_________________________________________________________________________
66
6.1 Blood Donation
Giving is sharing. Our practice of unselfish concerns for the welfare of others people through blood donation campaigns at working place twice a year and cooperation with Melaka General Hospital. The endorsement is participated by the management; hence, it is becoming easier for employees to donate blood. Our company had launched the blood donation campaign twice a year. Our target for each time blood donation is about 50 pints.
Our blood donation rate as below:
Year 2010 2011 2012 Average (pints)
June October June October June October Total
Number Of
Blood Donors
54 58 53 61 46 50
53.67
From the table shows that blood pint is consistently contributed.
0
10
20
30
40
50
60
70
2010 2011 2012
To
tal
Nu
mb
er o
f B
loo
d D
on
ors
Year
Blood Donation Rate
June
October
67
The generosity of employees as blood donors is most valuable give back to the community and it significantly boosted the awareness and benefits of blood donation and subsequently seen an increase of long-term blood donation and some employees as regular blood donor. We encourage our employees’ participation in this campaign as part of our contribution in humanitarian aids.
“Gift of life” ….do something amazing…GIVE BLOOD
Blood Donation: Employees are participating in the blood donation campaign
68
6.2 Donation & Sponsorship: Give Back to Communities
In year 2012 we received many requests from individuals and organizations for donations and sponsorships. Since there are more requests than we can fulfill, we focus on organizations concerned with our stakeholders especially our community. The majority of our donations and sponsorships were to non-government organizations, schools, sport clubs and business associates. Our donations and sponsorships are given without hoping to gain any advantages from them but directly in helping those needed parties. CHB’s donations and sponsorships go to sponsees is act as a communication tools that promote the engagement, involvement or participation of stakeholders’ activities. The table below shows the beneficial of our donees and sponsees and their activities:
Remark: Total RM 44,879 is donated to the above mentioned organizations.
Sector Activities
1 Non-Government Organization
Sponsorship to Teo Chew Association Chinese Orchestra
Sponsorship to Melaka State Malaysian Association of Youth Clubs (M.A.Y.C)
Sponsorship to Bukit Katil Community Service Centre for helping senior citizen, single mothers and poor person
2 School
Sponsorship for Pay Fong Middle School Cultures Activity
Sponsorship for Muzaffar Syah Science Secondary School for 'Ace Reborn' Team Project
3 Sport Club Sponsorship for Malaysian Rugby Union (MRU) Sport Activity
4 Business and Association Sponsorship for Annual Dinner
Sponsorship to Invest Melaka for Ayer Keroh Industrial Estate House Keeping Campaign
Sponsorship to Melaka State Development Corporation (MSDC) for Social and Sports Activities for Factory Workers and Industrial Night
69
Sponsorship to Teo Chew Association Chinese Orchestra
Charity Work: Mr. Sulaiman bin Abdul Hadi@ Dehadi (A00728), maintenance technician who service with the company since 2000 has actively participated in the Melaka State Development Corporation (MSDC) activities and he is visiting and giving helping for poor and senior citizens.
"No one has ever become poor by giving."
70
6.3 Trees Trimming
Tree branched trimming are done for safety reasons and controlling tree size. CHB has involved in trees trimming activity because it is very important for aesthetic reasons and to encourage the growth of strong and healthy trees. Therefore, in April 2012, we employed contractor for trees trimming in Taman Pelangi Apartment to embellish the buffer zone and beneficial for CHB and residents favour.
Trim trees: The contractor is employed to trim trees in the buffer zone
71
6.4 Internship Opportunities
From left to right
Ms. Lee Yoke Ling from Multimedia University Ms. Tan Bee Hoong from National University of Malaysia Mr. Teh Chin Kuan is the manager of the General Affairs Section, CHB Mr. Chew Ee How from Multimedia University Ms. Ng Lee Ying from Multimedia University Ms. Lim Wan Khim from Multimedia University
CHB cooperates closely with local colleges and universities to provide educational and career development opportunities in a related field or discipline like business management and engineering. In year 2012, we received 37 interns compare with 33 interns in the year 2011. The company engaged interns and they will receive internship allowance RM500 per month. Through internship opportunities, interns’ benefits from enriched skills and achieving a
contribution to the tasks assigned. In the meantime, they may also gain insights and new perspectives from professionals in a disciplined work. When they have finished their studies, they have employment opportunities with us. In CHB, the host department will nominate a supervisor for the intern and give necessary support and provide regular feedback on performance. The supervisor in charge is responsible for providing an induction training including relevant information about the department and an explanation of the tasks. Safety and health induction will be conducted by our Safety and Health Officer.
Internship: Part of the interns are enjoying their internship with Administration Department
72
7 Environmental, Energy, Safety and Health Management
7.1 Safety, Health and Hygiene Management 7.2 Environmental Management 7.3 Energy Management
73
7.1 Safety, Health and Hygiene Management
7.1.1 Environment, Safety and Health Policy Statement
CSC Steel Holdings Bhd and its main subsidiary companies, CSC Steel Sdn. Bhd., is accompany involves in the manufacturing and marketing of pickled and oiled steel, cold rolled steel, galvanized steel and pre-painted galvanized steel, and CSC Bio-Coal Sdn. Bhd., is involving in the conversion of palm bio-mass to bio-coal using the torrefaction process.
CHB actively and continually strive to improve occupational safety, health and hygiene for our employees as well as others and pursues best environmental protection practices in our business operation. We hereby unwaveringly and unreservedly express our commitment to:
.
Respect and value lives by implementing high standards of environmental protection practices and safety and health management programs thereby preventing occupational injuries, illnesses and enhancing health.
Attentive to risk evaluation and environmental aspects by strengthening risk control and pollution prevention measures with the aim of eradicating potential hazards.
Risk Management
Care for Live
Educate and inculcate workers, suppliers, contractors and other affected parties on work safety, hygiene, and green business practices and promote common awareness and value amongst all parties.
Training and Communication
74
Comply with applicable laws and regulations by proper monitoring of all operations and activities, instituting effective corrective and preventive measures with the aim of fulfilling our corporate social responsibilities.
Conduct and maintain a long-term effective environment, safety and health plan, which shall be continuously improved, so as to achieve a sustainable business operation.
Continual Improvement
Laws and Regulations Compliance
75
7.1.2 Safety and Health Credo
Company safety and health credo are published in our ERP screen server as awareness and a reminder to our employees and posted on notice boards. The details of credo as below:
Safety is my accountability, ability to assure work safety is
my pride.
All occupational accident and illness can be prevented.
Do work safely is an essential requirement for employee and
contractor.
Contractor is our safe working partner.
Management is accountable to prevent occupational accident.
Unsafe practices and environment must be
immediately corrected and improved.
Safety starts from plan design, prevention starts from hazard
identification.
Safety drive with determination, attention and
care to achieve zero accident.
Education, communication and audit are important tasks of assuring safe operation.
Work performance will be meaningless without work
safety assurance.
76
7.1.3 Safety and Health Committee (SHC)
CHB has established an OSH management system that is consistent with the Malaysia Occupational Safety and Health Act (1994) (Act 514) and Regulations. The Managing Director of CHB has appointed his Special Assistant as the SHC Chairman. All the relevant department heads, as employer representatives, and all the relevant section heads, as employee representatives, are meeting quarterly to review the S&H system to ensure its continuing suitability, adequacy and effectiveness.
Chairman
Deputy Chairman
Already updated
Employer
Representative
Secretary
Vice Chairman
Employee
Representative
Head of TFC
Leader
Investigator & Enforcement
Leader
Health & Hygiene Control
Leader
Industrial Hazard Control
Leader
Emergency Response
Leader
Radiation Safety
Organization Chart for SHC
77
7.1.4 Safety and Health Task Force Committee (TFC)
Safety and Health Task Force Committee (TFC) was established to carry out specific duties of the respective scope of function. Safety and Health TFC supports SHC in inspections, audit, and monitoring and promotion programs in as according to respective scope of function.
The illustration below shows safety and health task force team:
Safety and Health
Task Force Team
Emergency Response
Team
Industrial Hazard ControlTeam
Health and Hygiene Control Team
Investigator and
EnforcementTeam
Radiation SafetyTeam
78
The main duties of each task force team as below:
7.1.5 Transporters Safety
Besides taking care of employee safety and health, CHB also concerns about the safety of our contracted transporters during their loading activities at CHB. Additional requirement on standard job procedure has been discussed in the year 2012, and expected to be implemented by 1st half of year 2013 in order to avoid unnecessary accidents.
7.1.6 Task Implementation
CHB entrusted the Environment Management System (EMS) Team, Energy Conservation Committee (ECC), Safety and Health Committee (SHC) and Task Force Committee (TFC) with the mandate to produce a detailed plan for tackling ESH relevant matter. The work program determines each task with a fixed deadline, resources and responsibilities for completion.
Task Force Team Duties
Emergency Response The main duty is to evacuation management, emergency response to fire, chemical spillage, gas & fuel leakage and first-aid management.
Industrial Hazard Control The safety control of overhead crane, forklift, reach truck, sky-lift, mobile crane, scaffold, scissor-lift and other dangerous equipment is under this team.
Health and Hygiene Control The control of food and beverage hygiene, health control for gas and chemical exposure and hearing conservation are in charge by this team.
Investigator and Enforcement The ESH inspection, and accident investigation is shoulders by ESH Inspector and Accident Investigation Panel.
Radiation Safety It is main duty on management of radioactive facilities, safety and health control.
79
7.1.7 Removal of Basic Cause of OSH Hazard
CHB is identifying potential operational risks; therefore the risk identification is for OSH prevention. The approach in risk assessments in the plant operation in charge by the self-trained personnel (Safety Inspector) and appointed third party’s competent person to conduct the site inspection weekly. Notice
of Corrective Action and Preventive Action will be issued on any finding of the unsafe act, environment or OSH negligence. The Safety Officer, OSH Panels and/or Head of Department will then review the control measures which are appropriate. Employees are also encouraged to submit Job Safety Proposal (JSP) for the above mentioned finding and report any near miss case. The accepted JSP will be rewarded.
The table below shows the potential hazard cases found and had been eliminated in year 2010, 2011 and 2012:
Activity No. of Cases
Year 2010 2011 2012
Monthly Inspection leads by SHC Chairman 81 140 75
Weekly Inspection by Safety Inspectors / SHO 50 265 126
Job Safety Proposal (JSP) by Employees 189 175 154
Near Miss Case 16 15 15
Total Case of Potential Risk being eliminated 336 595 370
80
7.1.8 Procurement and Contractors’ OSH Management
Procurement of services from the contractor will be managed according to the OSH terms and conditions of the contract. The contractor will be fined for any findings of contravention to OSH rules and regulations. The contractor shall obtain a Work Permit from the Area Responsible Person for working in that particular area. Safety briefing will be conducted.
Transporters entering plant shall follow the maximum speed limit of 30 km/hour, drivers and attendances wearing with the suitable PPE and included reflective (safety) vest. No smoking is allowed, except in the designated Smoking Area. Transporters will be fined and/or penalty point for any findings of contravention to OSH rules and regulations.
CHB conducts two-ways communication with contractors and transporters twice a year. During this meeting, the Safety Officer will take the opportunity to educate and train the contractors’ and
the transporters’ representatives or person-in-charge on relevant OSH topics.
CHB ensured the materials purchased comply with safety standards. All the chemicals used in the plant shall have the Chemical Safety Data Sheet. The chemicals used in the process plant are paint, lubricant, detergents, solvent, acid and alkali.
Monthly Safety Inspection: Production Vice President (middle) with SHC members are inspecting the production floor.
Safety Briefing before Start Work
Practice: Manager in charge is briefing to contractors regarding safety rules.
81
7.1.9 Employee Safety and Culture Management
CHB is implementing OSH practices to create and cultivate a healthy living and safety culture. The safety culture was classified into three main aspects as below:
a. Policy Aspect: Establishment of OSH Policy, managing organization and resource allocation.
b. Management Aspect: Assigned responsible party, safe operational control, competency and training, reward and punishment, auditing, rewarding improvement, implementing safety care plan, constructing company mechanism structure.
c. Individual Aspect: Improving safety concept among employees, applying educational training, employee participation, safety care, health care and two way communication, etc. to improve individual safety awareness.
.
•Safety Briefing
•Special Task Before Operation (STBO)
•Work Permit (included Hot Work, Work at Height and Confine
Space)
•Vehicle Parking Permit
•ESH Information and Guideline (ING)
•Vehicle & Truck Speed Limit Check
•Wear Safety Helmet, Safety Shoes and use suitable PPE
•Smoking at designated Smoking Area only
•Overhead Crane or Forklift Operation Permit
Safety observation and auditing are the important tasks for safety compliance. Site inspections are regularly carried out by superior at all levels to achieve the earlier finding and correction on the employee’s and contractor’s unsafe act, unsafe method, and unsafe work site and facilities situation. Immediate correction, removal or communication will be done to eliminate any unsafe condition and unsafe procedure.
The practices conducted in the plant operation are as below:
Emergence Evocation-head count:
Employees are gathering at Emergence Assembling Point during the emergence evocation drill.
Workman negligence is the major cause of the accident. Provision of OSH education and training for employees and contractors are necessary to eliminate the common unsafe working habit. Multiple emergency response drills were conducted each year to improve the ability of rapid response to unexpected and emergency situation.
82
7.1.10 Occupational Health Risk Management
The Chemical Health Risk Assessment was done through by appointment of a competent third party. An Occupational Health Doctor was appointed to monitor annual health report of the employees, who were working at chemical hazards and control place. The report will be submitted to DOSH Melaka (www.dosh.gov.my), whereas employees who working at the radioactive area, their medical reports will be submitted to Agency Nuclear Malaysia (http://www.nuclearmalaysia.gov.my).
I am mandatory wearing Film Badge at Cold Rolling Mill and Film Badge will be sent for processing every month by Radiation Protection Supervisor.
Mr. Mustafha Kamal (930803) Rolling Mill Operator/ Radiation Worker Service in CSC Steel since 1993
83
7.1.11 Occupational Safety and Health Mentor-Mentee Program (OSH)
CSC Steel Sdn. Bhd. was chosen by DOSH Melaka to participate in (OSH) mentor mentee program. Micro-Nano Precision Sdn. Bhd. which involves in manufacturing of precision tools, dies, moulds, jigs and fixtures for plastic and metal stamping as the mentee. The mentoring relationship helps mentee succeed in the OSH aspect especially to improve the working environment and enhance safe working cultural. The communication and commitment are established between both managements, overall CSC Steel Sdn. Bhd. plays the following roles:
Give advice and guidance, share ideas, and provide feedback Participate with DOSH Melaka in OSH inspection and audit on Micro-Nano Precison Sdn. Bhd. Share information on aspect of OSH
Mentor-Mentee Program: Mr. Leou, Jiing-Kuen, Production Vice President(sitting left) on behalf CSC Steel Sdn. Bhd. Signing MoU for Occupational Safety And Health Mentor-Mentee Program with Managing Director of Micro Nano Precision Sdn. Bhd. (mentee) witnessed by Director of Occupational Safety and Health Department, Melaka.
84
7.1.12 Safety Performance
Occupational Safety and Health
CHB is implementing an “area responsibility system” whereby employees are appointed to take
charge and be responsible for the safety aspect of allocated areas. The frequency rate of occupational accidents such as rate of injury in the year 2009 stands the highest proportion, which is 14.69%. Meanwhile, the frequency rate in the year 2010 and 2011 were 6.27% and 9.06% respectively. CHB is adopting a safety concept of ‘one is too many’. The Safety Briefing Before Start Work practices which are assigned an area responsible person, safety promotion through the Safety Leaflet and provision of the safety and health information and guideline through ERP system for all the employees, therefore; the CHB is manage to lowering both the Accident Frequency rate and a Severity rate of 2.51 and 43.90 to 1.51 and 33.21 per million hours worked respectively in the year 2011 by comparing with the previous year 2010. The accident severity rate in year 2012 showed a significant increase due to an accident case which the victim walked in shortcut pathway, tripped and fell down and caused fractured bones. Total 177 MC days for recovery and resume working.
The table below shows the frequency rate of occupational accidents for last three years:
2010 2011 2012
Minor (first-aid level) injury 6 15 8
Lost days(employees) 4 3 0
Injury rate (total workforce) 6.27 9.06 7.34
Injury rate (independent contractors) N/A* N/A* N/A*
Occupational disease rate (total workforce) 0 0 0
Occupational disease rate (independent contractors) 0 0 0
Lost days rate (employees) 43.9 35.23 175.08
Lost days rate (independent contractors) N/A* N/A* N/A*
Absenteeism rate (total workforce) 11 21 77
Absenteeism rate (independence contractors) N/A* N/A* N/A*
Absolute number of fatalities (total workforce) 0 0 *1
85
The graph below shows accident severity and frequency rate for last three years:
0 50 100 150
2010
2011
2012
Rate
Yea
r
Accident Severity and Frequency
Rate
Severity Rate Frequency Rate
7.1.13 ESH Competency and Training
Engagement of a competent person to carry out important tasks for ESH is essential. CHB provides regular ESH Training to the employees based on the pre-assessed training plan. The employees need to attend the yearly refresher training for the ESH Awareness topics, which will be conducted by a CHB in-house trainer. The external trainer or professional will only be engaged to conduct skill or professional training course such as First Aid, practical use of SCBA in Smoke House (located at Fire Station), scaffolding erection and etc. The ESH training is also extended to CHB contractors and transporters. Half yearly training and dialogue session was conducted to communicate, educate and to improve the ESH awareness.
Training Program: Safety and Health Training (Indoor Fire Fighting Course) conducting by Mr.
Sulaiman Bin Abdul Hadi@ Dehadi
86
CHB has established monitoring programs to assess the environmental protection performance. This includes the monitoring of the objectives and targets, resources consumed and wastes generated as well as ensuring all operational controls comply with the legal requirements (acts and regulations, standards or codes of practice, and any other applicable rules and regulations).
A third party competent body has been appointed by CHB to prepare an Environmental Monitoring Reports on quarterly and the reports will be submitted to the Department of Environment (DOE) Melaka.
7.2 ENVIRONMENTAL MANAGEMENT
7.2.1 Environmental Monitoring Program
CHB’s environmental monitoring program as below:
Sound Level Meters: Taman Muzaffar Shah, Ayer Keroh is a residential area and one of noise monitoring is located at there by CSC Malaysia.
Water Quality Sampling: A water sample is collected from the Sungai Putat river which is to monitoring discharge water quality from Ayer Keroh Industrial Park and this proves that CSC Malaysia is committed to a sustainable environmental.
87
7.2.2 Environmental Management Team
CHB has established Environmental Management System (EMS) that is consistent with ISO 14001:2004 international standard. The Managing Director of CHB has appointed his Special Assistant as the Management Representative (MR) of EMS. A competent internal audit team carries its audit once a year to ensure the EMS conforms to the ISO 14001:2004 requirements. All the relevant department heads meet twice a year, chair by MR, to review EMS.
7.2.3 Environmental Performance Indices
City Water
The graph below shows the city water consumption rate for last three years:
The graph below shows water effluent discharge quality rate for last three years:
0.12 0.14 0.16 0.18 0.2
2010
2011
2012
Consumption rate
Yea
r
City Water
Intensity Effluent M3 /Output t
- 0.020 0.040 0.060 0.080
2010
2011
2012
Discharge rate
Yea
r
Effluent Discharge Quality
Intensity Effluent M3 /Output t
City water consumption is used to measure the water intensity of plant operation. The consumption per metric ton of output decreased 11% since year 2009. This is resulted from the effort of plant management in better managing housekeeping, reducing unnecessary wastes, piping leakage and water overflow, and as well as practicing recycling water at selected operation. Hence, it is able to reduce water consumption. In year 2012, the consumption increased compared to previous year, due to additional water rinsing system were installed to improve the steel coil quality.
City water consump
CHB’s water treatment plant operation is maintaining the hydrology and water quality. CHB ensured the water effluent discharge quality to drainage by installing various online monitoring devices such as pH sensor, COD online analyzer, flow meter and etc. The system is linked to the HMI to ensure water quality is under close surveillance.
88
The graph below shows effluent quality COD for last three years as below:
0 50 100 150 200
2010
2011
2012
CODY
ear
Effluent Quality COD
COD (ppm)
Monthly sampling by 3rd parties-accredited laboratory is carried out to ensure all control parameters especially heavy metals are lower than requirements, which shall comply with Standard B of Environment Quality Act, 1974, The Malaysia Environment Quality Environmental Quality (Industrial Effluent) Regulation 2009.
Waste water treatment plant: Ensure the water effluent discharge is compiled with Effluent Discharge Quality.
In order to maintain the hydrology and water quality, waste water is first treated in CHB water treatment plant to ensure that it complies with Standard B [ENVIRONMENT QUALITY ACT, 1974, The Malaysia Environment Quality (Sewage & Industrial Effluents) Regulations] before discharged to drainage of Ayer Keroh Industrial Estate and to Sungai Putat river and finally to Malacca river (PDF(river)monitoring system/Programme and-WEPA). Rain water is directly discharged through proper drainage system to Kampung Bukit Katil stream.
89
Emission
0 100
2010
2011
2012
Concentration ug/m3
Yea
r
Ambient Air Quality
Monitoring for Particulate
Matter 10
A3 A2
The graph below shows ambient air quality monitoring for Particulate Matter 10:
CHB process line operation is responsible for maintaining the emitted ambient air quality. CHB ensured the emitted ambient air quality will not affect the surrounding residential areas. Hence, all the process line operations are responsible to make sure the emitted air quality is clean and complied to the standard.
Quarterly Stack Monitoring by 3rd party accredited laboratory is carried out to ensure all control parameters are within the limits specified under the Environment Quality (Clean Air) Regulations, 1978. The ambient concentrations for all parameters monitored at the three surrounding residential areas were also observed to be below the limits of the Malaysian Recommended Air Quality Standards. The areas under close monitoring are situated at (Taman Pelangi Point A1), Kg. Tun Razak (Point A2) and Taman Muzaffar Shah (Point A3).
Quarterly Stack Monitoring:
Gaseous Emission Monitoring at boiler chimney stack.
90
7.2.4 Schedule Wastes Management
CHB ensured the schedule wastes are properly placed, stored, arranged, transit or sent with prior written approval of the Director General of Environmental Department, Malaysia.
The Waste Water Treatment system generated metal hydroxide sludge (SW204) has recovered and it is utilized as raw material for cement making. Zinc dross (SW104) was sent for recovery purpose, waste oil (SW305) is collected for recycling and blending into fuel oil, waste solvents (SW322) and empty containers (SW409) are disposed for further recycling and recovery. Contaminated waste filter cloth (SW410), waste chromic acid (SW206) and miscellaneous (SW421) are sent to Kualiti Alam Sdn. Bhd. (http://www.kualitialam.com), licensed Waste Management Centre, Bukit Nanas, Negeri Sembilan. In additional, the total domestic solid waste in year 2012 is 180.36 tan.
Disposal of Schedule Waste: Schedule wastes generated is transporting to Kualiti Alam Sekitar Sdn. Bhd., Bukit Nanas licensed scheduled waste management center.
91
7.2.5 Biodiversity
Planting trees is a simple solution to mitigating climate change while enriching biodiversity. We are aware of the interdependence of humankind and the planet’s ecosystems, as well as the links between
tree planting activity and climate change mitigation. This is our contribution to maintain biodiversity, air and soil quality and environment in general. CHB is preserving the boundary green belt and buffer zone as secondary forest with an area of 2.173 hectares (11.4% of total land size) and planted 28 units "Eugenia" species trees in the year 2012 and 99 units "Kayah" trees in the previous year. Therefore, total of trees planted in the year 2012 was 127 in our premise. It is a valuable action of company combat against climate change and to reduce carbon footprint and enhance environmental sustainability.
Buffer Zone: Maintaining secondary forest as a buffer zone between Kampung Tun Razak and our production plant.
Green Preservation: “Eugenia” species trees were planted to enlarge our green ground.
Appreciation: CSC Steel Sdn. Bhd. was awarded one of prominent company in Melaka by the local municipal council.
92
7.3 Energy Management
7.3.1 Energy Policy Statement
CSC Steel Sdn. Bhd. is a midstream flat steel producer and marketer of Pickled and Oiled Steels, Cold Rolled Steels, Galvanized Steels and Pre-painted Galvanized Steel Products. The energy sources consumed in the company are natural gas, electricity, diesel and petrol. The operation is energy intensive and our company is committed to using energy in the most efficient and environmentally responsible manner possible. Towards this end, CSC Steel Sdn. Bhd. shall:
Improve energy efficiency continuously by implementing effective energy management programs.
Ensure availability of information and resources to meet energy objectives and targets. Educate, train and motivate employees on how to save energy. Comply with applicable laws and regulations.
The main energy sources of CHB are electricity and natural gas. It is a common understanding that natural gas is a finite natural resource, which will be depleted within a century. As for electricity, the current major sources of generation are coal and natural gas. All these carbon base fossil fuels generate the energy needed, but they have a side effect, i.e. emission contained the element of greenhouse gas (GHG), in this case is carbon dioxide (CO2). It is believed that the emission of GHG will cause climate change. If the amount of GHG in the atmosphere reaches a critical point, it may cause catastrophic climate change. At that point, disaster may happen all over the globe.
The processes of CSC Steel Sdn. Bhd. are energy intensive. We take initiative to preventing catastrophic climate change event from happening, therefore; CHB has embarked on serious energy management since 2008. In 2012, we took a step further to affirm our commitment in energy conservation. We implemented ISO 50001:2011 system, and went through the certification process. We are confident that we can obtain the certification by the end of 2012. With the implementation of ISO 50001:2011, we will continue to pursue energy efficiency in all aspects of the company operations.
7.3.2 ISO 50001:2011 Energy Management System (EnMS)
The EnMS has been released by ISO in June 2011. It is based on the management system model of ISO 9001:2008 and ISO 14001:2004 and provides a framework that focus on ensuring the efficient use of energy. As part of the CHB’s effort in preserving the environment, the CHB is keen to leveraging the guidelines of ISO 50001:2011 in helping to reduce energy consumption that would result in reducing energy cost and minimizing the greenhouse gas emissions. In year 2012, CSC Steel Sdn. Bhd. had passed the external audit by SGS (Malaysia) Sdn. Bhd. in December 2012 and had been certified with ISO 50001:2011.
93
Overall, the benefit arising from ISO 50001:2011 certification as below:
1. Identifying opportunities for improvement in energy performance continually, including energy efficiency, energy use, energy consumption and intensity.
2. Reduction in energy cost, GHG emissions and other environmental impacts.
3. Be a responsible corporate citizen and it provides a platform to work with stakeholders to achieve the goals.
4. Enhance company image, committed to continuously improving energy intensity.
With the latest addition of ISO 50001:2011 integrated into our ISO management systems, we almost cover all the key areas which include quality and environment. Nonetheless, we are committed to continuously improving our company energy efficiency by adopting the ways could use the available energy sources more efficiently, hence reducing our energy consumption and minimizing our product impact to the environment.
Mr. Lee Learn Ping (A10902) Manager of Electrical Section, has Service in company since 2010
7.3.3 Energy Conservation Committee
Along with implementation of ISO 50001:2011, the EnMS Committee has been setup and known as Energy Conservation Committee (ECC). The main responsibility is to organize and implement energy conservation programs, monitor and audit the energy consumption, report the findings on energy conservation, and promote the awareness among the employees.
The Energy Conservation Committee (ECC) provides the information and advice on the activities of energy efficiency program. The purposes of this committee are to ensure all the employees are aware of the energy management and continuously improve the energy efficiency with the implementation of the program and regularly review the status of the program to ensure its continuing suitability, adequacy and effectiveness.
Electrical Section is using the process management information system to monitor power consumption which has helped CSC Steel to conserve energy and reduce CO2 emission.
94
All department heads are involving in energy conservation activities and our energy management organization chart is as below:
Energy Management Organization Chart
ENERGY CONSERVATION
COMMITTEE (ECC)
Chairman
P6 General Manager
Assistant Chairman
P670 Manager
Secretary P670 Engineer
ISO 50001 Advisor
PS10 Manager
Administration,
Finance,
Marketing and
Management
Team
A110 Manager
Production
Technical Team
P130 Manager P170 Manager P210 Engineer P220 Engineer P151 Manager P520 Manager
Technical
Service Team
P520 Manager P540 Manager P610 Engineer P640 Engineer
95
7.3.4 Energy Saving Activities
The purpose of energy saving activities is to reduce impact on climate change – reducing GHG emission by electricity consumption reduction (improve energy efficiency).
In 2012, we started phasing out the broken *Metal Halide High Bay Lights and replaced with
energy efficient LED or Induction High Bay Light. The T5 fluorescent light in the company has new reflector that will increase the lighting
efficiency. In the production processes, we had implemented Variable Speed Drive (VSD) for the auto
slowdown in the process line ECL blower system that will automatically reduce to minimum speed during idle time.
Changed CCL Pre-treatment Exhaust Fan from Direct On-Line (DOL) to Variable Speed Drive (VSD) and adjust the damper at full open position.
Replaced some metal halide high bay light at CCL Pre-treatment section with LED high bay lighting.
Replaced old normal electric motor with high efficiency rating motor. Replaced cooling water pump impeller with stainless steel blade which will increase the
pump’s efficiency and save electricity. Replaced old and inefficient air compressor with high efficiency VSD type air compressor.
7.3.5 Conserving Resources – Reduce electricity wastage
When plant's equipment and facility is not in use on the specific time, it will be shut down to reduce electricity wastage.
7.3.6 Energy Efficiency Action Plan
In year 2012, CSCM has completed 2 action plans. One of them involved changing CCL Pre-treatment Exhaust Fan from DOL to VSD. The other one was replacing some of the metal halide high bay light at CCL Pre-treatment section with LED. The replacement of old or damage low efficiency high bay light with LED or Induction type is a progressive step CHB took to enhance our commitment to increase lighting efficiency.
*Note: The replacement of old or damaged low efficiency lighting equipment with high efficiency (>90 lumen/watt) such as T8 to T5, Metal Halide to LED or Induction type, is
an on-going step CHB took to enhance our commitment to increase lighting efficiency and conserve electricity.
96
7.3.7 Future plan for Energy Conservation
Maximum Demand Control
We are planning to implement electricity demand control. This will reduce our monthly electricity demand directly and save energy cost. The monitoring tools shown in Figure 1.
Figure 1 Monitoring tool that will be used in Demand Control.
Heat recovery for CCL recuperator
From the Figure 2, the idea is to connect a ducting after recuperator to the existing air dryer duct as shown in the blue circle. The new flow system includes flow transmitter, flow control valve, additional panel for electrical control and etc. These accessories are used to control the temperature, flow rate and operation of the inlet hot air to the air dryer oven.
97
Figure 2 Heat recovery for CCL recuperator.
7.3.8 Energy Baseline and Target
CHB developed electricity energy baseline based on year 2009 to 2011 electricity consumption per unit production and consider reducing 1% of the consumption in the year 2012 as a target.
Energy Performance
Index Base Line Target Actual
Year 2009~2011 2012 2012
Unit Production
(kWh/t) 47.88 47.40 47.97
Table 1 Energy Baseline and Target
Referring to Table 1; a few processes had gone through revamping which resulted in slight increases of total electricity consumption to 47.97kWh/t in the year 2012. The electricity consumption will be closely monitored to ensure the efficient use of energy.
98
7.3.9 Electricity Consumption Monitoring Tool
Power Monitoring System (as shown in figure 3 & 4) has been developed to manage and monitor the electricity consumption of the company. It is a robust system that records all online power readings, and stored in a system database.
Figure 3 Layout of main electrical distribution.
Figure 4 Main page showing energy meters online.
99
The data is then processed and displayed to the user. We are closely monitoring whole company’s
electricity consumption using this system (as shown in figure 5) on a daily basis. Any abnormalities in electricity consumption will be reviewed; the problem will be identified and rectified.
Figure 5 Main VCB (Incoming from utility provider) consumption data.
It also provides the daily data, monthly summary (as shown in Figure 6) for each process. Each process personnel can monitor their electricity usage anytime.
Figure 6 Electricity Consumption of all processes.
100
It also provides basic analytical data (as shown in Figure 7) to assist electricity end user to identify problems in electricity usage, and looking for opportunities to save electricity.
Figure 7 Analytical data for SEU and ECL.
101
Our company had changed three grades of fuels. For your information, the boiler of this company is using light fuel oil. Due to the carbon discharge and black smoke are too thick, hence company change it to Diesel fuel. Since 2005, the boilers are using natural gas which is more clean and environmentally friendly.
7.3.10 Energy Utilization Performance
Natural Gas
The graph below shows the consumption rate of natural gas for last three years:
0 2 4 6 8 10
2010
2011
2012
Natural Gas
Yea
r
Intensity Natural Gas Sm3/t
Mr. Arumugam A/L Suppiah (941136) Utility Engineering Section (P520) Service in company since 1994
Natural gas consumption rose with increasing production output of thinner and thicker gauge of the strip. The ECC is putting effort to reduce the consumption through the feasibility study of heat recovery from flue gas and re-use of steam condensate of the selected process lines.
102
7.3.11 Electricity Consumption
Electricity is one of CHB main resources of energy use. The table below illustrated 2012 monthly electricity consumption per output:
As in year 2012, a couple of process equipments revamping project and related engineering works has resulted in a slight increase of total electricity consumption per output from 46.52 kWh/t to 47.97 kWh/t.
The table below is total electricity consumption and CO2 per output from year 2010 to 2012:
2012 Monthly Total Production vs. kWh
Month Production (t) Electricity (kWh) Average(kWh/t)
Jan 111,738 5,735,355 51.33 Feb 110,150 5,898,502 53.55 Mar 101,606 5,158,465 50.77 Apr 150,666 6,941,292 46.07 May 166,017 7,373,637 44.41 Jun 151,111 7,217,304 47.76 Jul 156,578 7,409,865 47.32 Aug 157,516 7,280,391 46.22 Sep 162,192 7,519,090 46.36 Oct 127,299 7,021,960 55.16 Nov 149,792 6,855,275 45.77 Dec 152,689 7,005,134 45.88
Total 1,697,354 81,416,270 47.97
Year Production (t) Electricity (kWh) kWh/t CO 2 kg emission/t
2010 1,526,977 71,923,452 47.1 29.27 2011 1,708,198 79,470,982 46.52 28.91 2012 1,697,354 81,416,270 47.97 29.79
103
Referring to Figure 8, we were gradually reducing our electricity consumption per output since year 2010 to 2012. Continuous electricity saving is our goal, thus the effort to reduce electricity consumption per output will be emphasized in all departments in the company.
Figure 8 Electricity Consumption (kWh) per output (t).
0
10
20
30
40
50
60
2010 2011 2012
kW
h/t
Electricity Consumption
kWh/t
Year
104
GRI INDEX TABLE
Disclosure Circumstances:
Fully Reported Partial Reported Not Reported Irrelevant
Profile Description Reporting
Status
Page No. Remark
1.1 Statement from the most senior decision-maker of the organization.
4
1.2 Description of key impacts, risks, and opportunities.
19, 20, 35, 36, 37
2.1 Name of the organization. 5, 6
2.2 Primary brands, products, and/or services. 6, 7, 8, 9, 10, 11, 12, 41, 47
2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.
1, 28, 29
2.4 Location of organization's headquarters.
1
2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.
1
2.6 Nature of ownership and legal form. 5, 28
2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).
11
2.8 Scale of the reporting organization. 5, 38, 48, 50
2.9 Significant changes during the reporting period regarding size, structure, or ownership.
- No significant change.
2.10 Awards received in the reporting period.
90
3.1 Reporting period (e.g., fiscal/calendar year) for information provided.
1, 4
3.2 Date of most recent previous report (if any).
2
3.3 Reporting cycle (annual, biennial, etc.)
1, 4
3.4 Contact point for questions. 3
3.5 Process for defining report content. 18
3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers).
1, 2, 3
3.7 State any specific limitations on the scope or boundary of the report.
1
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.
5, 16, 26, 27
3.9 Data measurement techniques and the bases of calculations.
1
3.10 Explanation of the effect of any re-statements of information provided in earlier reports.
7-10, 12, 13, 14, 28, 33, 34, 35, 36, 37, 75
3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.
4, 16, 18, 19, 20, 21, 22, 42, 92-103
3.12 Table identifying the location of the Standard Disclosures in the report.
104-108
3.13 Policy and current practice with regard to seeking external assurance for the report.
2
4.1 Governance structure of the organization.
29
105
4.2 Indicate whether the Chair of the highest governance body is also an executive officer.
31
4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.
31
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.
20, 21, 53, 54, 57
4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives.
21, 29, 32
4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.
14, 28, 33, 34
4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization's strategy on economic, environmental, and social topics.
29, 32
4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.
4 (MD), 14, 33,
73 ,92
4.9 Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles.
4 (MD), 15, 16, 32,
76, 87, 94
4.10 Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance.
15, 16, 32
4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization.
35, 36, 37
4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses.
21, 53, 83
4.13 Memberships in associations (such as industry associations). 21, 53, 83 Mentor-Mentee Program, MSIF, MEF
4.14 List of stakeholder groups engaged by the organization.
19, 20, 21, 22
4.15 Basis for identification and selection of stakeholders with whom to engage.
19, 20, 21, 22
4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.
19, 20, 21, 22
4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.
19, 20, 21, 22
EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.
38, 39, 40, 44, 68
EC2 Financial implications and other risks and opportunities for the organization's activities due to climate change.
44, 45, 46, 47, 48, 88, 89, 91, 92
EC3 Coverage of the organization's defined benefit plan obligations.
61, 62, 63, 64
EC4 Significant financial assistance received from government. - 2012 without any financial support from Malaysia government
EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.
19, 55
EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.
47
EC7 Procedures for local hiring and proportion of senior management and workforce hired from the local community at significant locations of operation.
51
EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.
66, 68, 69, 70, 71, 86,
EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.
19, 20
EN1 Materials used by weight or volume.
49
*EN2 Percentage of materials used that are recycled input materials.
90
EN3 Direct energy consumption by primary energy source.
92, 97, 101, 102, 103
EN4 Indirect energy consumption by primary source.
92, 97, 101, 102, 103
EN5 Energy saved due to conservation and efficiency improvements.
92, 97, 101, 102, 103
106
EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.
4 (MD), 47
EN7 Initiatives to reduce indirect energy consumption and reductions achieved. 44, 45, 46, 47
EN8 Total water withdrawal by source.
87
EN9 Water sources significantly affected by withdrawal of water.
45, 46, 87
EN10 Percentage and total volume of water recycled and reused. - Non-significant in our recycle and reuse of city water
EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.
91
EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.
91
EN13 Habitats protected or restored.
91
EN14 Strategies, current actions, and future plans for managing impacts on biodiversity.
91
EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.
- CHB is located in industrial park.
EN16 Total direct and indirect greenhouse gas emissions by weight.
89, 92, 93, 95
EN17 Other relevant indirect greenhouse gas emissions by weight. 89, 92, 93, 95 Not all greenhouse emission was stated.
EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved.
89, 92, 93, 95
EN19 Emissions of ozone-depleting substances by weight.
- Non applicable in our operation.
EN20 NOx, SOx, and other significant air emissions by type and weight. 89
EN21 Total water discharge by quality and destination.
88
EN22 Total weight of waste by type and disposal method. 90
EN23 Total number and volume of significant spills.
- No case reported.
EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.
90 Schedule wastes are sending to Waste Management Centre.
EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization's discharges of water and runoff.
88 We are located at industrial zone. Compliance with EIA requirements.
EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.
47, 48, 86
EN27 Percentage of products sold and their packaging materials that are reclaimed by category.
59 Data collection imprecise.
EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.
- No case reported.
EN29 Significant environmental impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the workforce.
21, 78
EN30 Total environmental protection expenditures and investments by type. 43 In the future, will practice green accounting.
LA1 Total workforce by employment type, employment contract, and region.
51, 52
LA2 Total number and rate of employee turnover by age group, gender, and region.
51,52
LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.
61, 62, 63, 64 We are engaged full time employees
LA4 Percentage of employees covered by collective bargaining agreements.
- We are non-unionized
LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.
53
LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.
76
LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region.
79, 84
107
LA8 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.
35, 63, 85
LA9 Health and safety topics covered in formal agreements with trade unions.
- We are non-unionized.
LA10 Average hours of training per year per employee by employee category.
58
LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.
58
LA12 Percentage of employees receiving regular performance and career development reviews.
58
LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.
51, 52
*LA14 Ratio of basic salary of men to women by employee category.
55
LA15 Return to work and retention rates after parental leave by gender.
53 Compliance
HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.
- No investment agreement that include human right clauses.
HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.
53 Fair employment practice.
HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.
58 We will establish human right policy by 2015.
HR4 Total number of incidents of discrimination and actions taken. 53 No incident of discrimination was recorded.
HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.
53, 57
HR6 Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor.
- No case recorded.
HR7 Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute for elimination of forced or compulsory labor.
- No case recorded.
HR8 Percentage of security personnel trained in the organization's policies or procedures concerning aspects of human rights that are relevant to operations.
33, 58
HR9 Total number of incidents of violations involving rights of indigenous people and actions taken.
- No case reported.
HR10 Percentage and total number of operations that have been subject to human rights reviews and/ or impact assessments.
- No case subjected to human rights reviews
HR11 Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.
53 No case reported.
SO1 Nature, scope, and effectiveness of any programs and practices that access and manage the impacts of operations on communities.
22, 86 We are located at Industrial Estate Zone.
SO2 Percentage and total number of business units analyzed for risks related to corruption.
34, 35 No case recorded.
SO3 Percentage of employees trained in organization's anti-corruption policies and procedures.
58
SO4 Actions taken in response to incidents of corruption.
- No incident recorded.
SO5 Public policy positions and participation in public policy development and lobbying.
19, 20
SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.
- Do not have any financial and in-kid contribution to the political party
SO7 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.
19,41
SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.
No incident recorded.
SO9 Operations with significant potential or actual negative impacts on local communities.
36, 48, 86
SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities.
36, 48, 86
PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.
11, 12, 42
PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle,
- No incident recorded
108
by type of outcomes. PR3 Type of product and service information required by procedures and percentage of
significant products and services subject to such information requirements.
11, 12, 48
PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.
- No incident reported.
PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.
50
PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.
5, 18, 19, 20, 21, 22, 33, 34, 58
Industry best practice.
PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes.
- No incident recorded.
PR8 Total number of substantiated complaints regarding breaches customer privacy and losses of customer data.
19, 41 Do not receive complaint.
PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.
- Refer to Bursa Malaysia announcement.
Mining and Metals Supplementary Sector (MMSS)
MM1 Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated.
5,91
MM2 The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place.
5,91 We are located at Industrial Estate Zone.
MM3 Total amounts of overburden, rock, tailings, and sludge and their associated risks.
- We do not carry
out mining activity
MM4 Number of strikes and lock-outs exceeding one week's duration, by country. - No industrial dispute is recorded.
MM5 Total number of operations taking place in or adjacent to Indigenous Peoples' territories, and number and percentage of operations or sites where there are formal agreements with Indigenous Peoples' communities.
5 We are located at Industrial Estate Zone.
MM6 Number and description of significant disputes relating to land use, customary rights of local communities and Indigenous Peoples.
- We are located at Industrial Estate Zone.
MM7 The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary rights of local communities and Indigenous Peoples, and the outcomes.
- We are located at Industrial Estate Zone.
MM8 Number (and percentage) of company operating sites where artisanal and small-scale mining (ASM) takes place on, or adjacent to, the site; the associated risks and the actions taken to manage and mitigate these risks.
- Not involved in mining activity
MM9 Sites where resettlements took place, the number of households resettled in each, and how their livelihoods were affected in the process.
- We are located at Industrial Estate Zone.
MM10 Number and percentage of operations with closure plans. - In year 2012, we do not have any closure plan
MM11 Programs and progress relating to materials stewardship.
49, 92
109
Abbreviations Meaning
5W1H What, Who, When, Why, Which and How ASCR As Cold Rolled BOD Board of Directors BS476 British Standard 476 (Part 7) CAPEX Capital Expenditure Budget CCL Color Coating Line CEC China Ecotek Corporation CHB CSC Steel Holdings Berhad CHSC Chung Hung Steel Corporation CO2 Carbon Dioxide COD Chemical Oxygen Demand CR Cold Rolled CRC Cold Rolled Coil CRP Cold Rolling Plant CSC China Steel Corporation CSC Taiwan China Steel Corporation Taiwan CSCM CSC Steel Sdn. Bhd. (Malaysia) CSGT China Steel Global Trading Corporation CSGTS CSGT (Singapore) Pte. Ltd. CSMC China Steel Machinery Corporation DFT Dry Film Thickness DHCP Dynamic Host Configuration Protocol
DOE Department of Environment DOL Direct On-Line DOSH Department of Occupational Safety and Health DSC Dragon Steel Corporation EAC Employees Activities Committee ECC Energy Conservation Committee ECL Electrolytic Cleaning Line EMS Environmental Management System EnMS Energy Management System ERP Emergency Response Plan ESH Environment Safety and Health etc et cetera EU Europe Union GHG Greenhouse Gas
110
GI Galvanized Steel Coils GRI Global Reporting Initiative HCRs Hot Rolled Steel Coils HMC Himag Magnetic Corporation HMI Human Machine Interface HRC Hot-Rolled Coils i.e For Example
ING Information and Guideline ISC InfoChamp Systems Corporation ISO International Organization for Standardization JSP Job Safety Proposal kWh/t kilowatt-hour/ton LCA Life Cycle Assessment LED Light Emitting Diode M.A.Y.C Melaka State Malaysian Association of Youth Clubs MISIF Malaysia Iron and Steel Industry Federation MMSS Mining & Metals Supplementary Sector MOU Memorandum of Understanding MRU Malaysian Rugby Union MSDC Melaka State Development Corporation MyIPO Malaysia Intellectual Property Organization OSH Occupational Safety and Health PAVP Production Assistant Vice President PDCA Plan-Do-Check-Action Cycle PIP Performance Improvement Program PO Pickled & Oiled PPE Personal Protection Equipment PPGI Pre- painted Galvanized Steel Coils PVdF Polyvinylidene fluoride R&D Research and Development REACH Registration, Evaluation, Authorization and Restriction of Chemicals RoHS Restriction of Hazardous Substances S&H Safety and Health SAPH Steel Automotive Press Hot SCBA Self Contained Breathing Apparatus SEAISI South East Asian Iron and Steel Institute SEU Significant Energy Use
111
SGS Societe Generale de Surveillance SHC Safety and Health Committee SME Small Medium Enterprise SOCSO Social Security Organization SPHT Steel Plate Hot Tube SS Steel Structural STBO Special Task Before Operation SVHC Substances of Very High Concern SWOT Strengths, Weaknesses, Opportunities and Threats t ton T5 Type of Fluorescent Light Bulbs TFC Task Force Committee TOC Thin Organic Coating US United States VCB Vacuum Circuit Breaker VSD Variable Speed Drive
112
Cold Rolled Steel Coils (CR) Pickled & Oiled Coils (PO) Galvanized Steel Coils (GI) Pre-painted Galvanized
Steel Coils (PPGI)
This image for photo
impression by artistic material
from our Quality Assurance
Department colour coated steel
stamping test piece sample
match with real branch to
reflect our sustainable
products.
CSC Steel Holdings Berhad
Company Registration No (640357-X) 180, Kawasan Industri Ayer Keroh, 75450 Melaka, Malaysia. Tel: (6) 06- 231 0169 Fax: (6) 06- 231 0167 Website: www.cscmalaysia.com
All other trademarks or logo are the property of their respective owners