Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• The Group’s Biogas/Long Fibre plant at Kuala Ketil Green Palm Oil Mill is an example of turning industrial waste to clean energy and useful products, hence reducing pollution and carbon emission.
• Our Future-NRG Sendayan facility, through the use of Ozonation Technology, has been able to reduce toxic medical waste to harmless waste which is another FITTERS’ corporate responsibility towards improving the environment.
• The usage of PVC-O pipes for the transport of water under pressure is arguably the most green and sustainable option currently in the market due to the use of organic and non-toxic material to construct the pipes, lower energy consumption in the manufacturing stage, fully recoverable and recyclable raw materials used during production, less usage of heavy machinery during installation, lower pumping energy consumption to transport water during operation, and the product has design durability up to 50 years of useful life, hence reducing frequent pipe replacement. As a result, the greenhouse gas emission is significantly reduced by 48% in comparison to the application using other traditional pipe materials.
• Molecor HYPRO ® obtained the prestigious SIRIM ECO 054:2016 certification under Eco-Label Licence for eco-friendly PVC-O pipes and joints on 30 March 2018 from SIRIM QAS International Sdn Bhd. HYPRO® PVC-O pipe is the first pipe product in Malaysia to receive such recognition, which serves as a testimony of our commitment towards a greener environment.

Social Achievements

• FITTERS Group continues to be listed as a responsible corporate citizen through our activities and businesses modelled to have a positive impact at the workplace, community and the environment.
• Management has strived to motivate staff at every level in achieving their given targets/budgets of their divisions, which in turn contributes to the Group’s common goal.
• FITTERS Sports Club in fostering teamwork through their various activities, has been instrumental in complimenting management efforts to encourage effective and open communication to enhance interpersonal relationships.
• At FITTERS, a balanced and healthy lifestyle is promoted for the staff and management alike.
• At the community level, the group continued with the “One-Home-One-Extinguisher” and One-Car-One Extinguisher” campaign towards creating an overall awareness on fire safety and prevention with emphasis that the first line of defence starts with the individual.

Governance Achievements

• The Board has always subscribed to the attainment of the highest standards of business ethics, transparency, professionalism and accountability across all the activities that the Group is engaged in. All this has been carried out in strict adherence to the requirements and the standards set by the authorities for good corporate governance.

Climate Goals & Targets

Environmental Challenges

• The performance of the various divisions under the Group managed to persevere in the face of a challenging business environment characterised by uncertainties, stricter legislations and low profit margins due to intense competition.
• The Fire Services Division remains profitable but experienced a decline in revenue and profit. This division was affected by stiff competition from new players in the market.
• On the M&E division, project launches are delayed due to the uncertainties in the construction industry. The situation was further marred by undercutting in tender prices by competitors especially new entrants in the industry.
• The Property & Construction division record of lower turnover and profit was mainly due to the challenging property sector and the division did not launch any new project in FY 2017.
• The performance of our eco-friendly HYPRO ® PVC-O Pipes Manufacturing & Distribution Division under Molecor continued to record losses.

Mitigation Strategies

• This division will continue its efforts to increase its revenue stream through greater participation in cross sectoral projects and not limiting its focus in the building and construction sector to remain profitable.
• The division will progress with the work of the RM97.8 million project management and construction contract which is expected to be a key contributor to the Group’s profitability for FY 2018.
• The division also expects to begin with Phase 2 of this contract valued at RM81.5 million in the second half of 2018.
• The management and marketing team had made break-through with higher acceptance of the HYPRO® PVC-O pipes in many states throughout Malaysia.
• The management has revised the marketing strategy to break into non-traditional market segments and to ensure repeat orders from existing clients.

Supply Chain Management

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• SDG 6 - Clean Water and Sanitation

HYPRO® PVC-O pipes contribute to sustainable water management.

Sustainable Products & Innovation

• HYPRO® PVC-O pipes
• Green Mill Solution

Environmental Metrics

ESG Focus Areas

• Corporate Governance and Business Ethics
• Supply Chain Management
• Regulatory Compliance
• 3R: Reduce, Reuse, Recycle
• Waste & Resource Management
• Energy Management
• Water Management
• Quality Assurance
• Brand Reputation and Customer Satisfaction
• Human Resource Development
• Occupational Health & Safety
• Corporate Social Responsibility

Environmental Achievements

• Molecor (SEA) Sdn Bhd produces eco-friendly HYPRO® PVC-O water pipes with 100% recyclable rejects.
• Green Mill Solution: reduced carbon footprint through self-sustaining electricity consumption and waste management of Empty Fruit Bunches (EFB) and Palm Oil Mill Effluent (POME).
• Biogas Plant converts POME to electricity, reducing greenhouse gas emissions.
• Ozone Medical Waste Treatment Plant uses ozonation technology with minimal environmental impact.
• HYPRO® PVC-O pipes certified under SIRIM Eco-Label 054:2016 and MyHIJAU Mark.

Social Achievements

• Commitment to employee safety and a conducive workplace.
• Observance of Minimum Wages Order 2012 and its amendments.
• Anti-harassment policy in place.
• Adherence to Children and Young Persons (Employment) (Amendment) Act 2010.
• Employee benefits including travel allowance, communications expenses, uniform, and staff leave.
• FITTERS Sports Club promotes teamwork and work-life balance.
• Employee training and development programs.
• Promotion of workforce diversity and equal opportunities.

Governance Achievements

• Compliance with Malaysian Code on Corporate Governance.
• Adoption of Board Charter, Code of Conduct & Ethics, Whistle Blower Policy, Directors’ and Senior Management’s Remuneration Policy, External Auditor’s Assessment Policy, Directors’ Assessment Policy, Risk Management Policy, and Diversity Policy.
• Establishment of Board Committees (Nominating, Remuneration, Audit, Long-Term Incentive Plan).
• Whistleblowing Policy and Procedures in place.
• Regular audits and reporting to meet compliance demands.

Climate Goals & Targets

Environmental Challenges

• Slowdown in project progress and intense competition leading to lower margins in the Engineering division.
• Decline in crude palm oil and palm kernel prices and lower crop yield affecting the Renewable & Waste-to-Energy division.
• Sluggish supply of FFB to the palm oil mill due to unpredictable weather patterns.
• Inconsistent supply of POME to the Biogas Plant affecting electricity generation.
• Anticipation of more challenging prompt collection of debts in FY2020.
• Exposure to foreign currency fluctuation risk.
• Challenging year in 2020 due to global market conditions and the impact of Covid-19.

Mitigation Strategies

• Prudent credit management SOP rigorously monitored.
• Credit evaluations on customers and appropriate credit limits allocated.
• Close monitoring and collection of accounts.
• Continuous monitoring of foreign currency fluctuations and use of foreign exchange spot contracts to hedge against risk.
• Implementation of prudent strategies to cut costs and manage operating expenses.
• Exploration of opportunities to mitigate negative impacts on performance.
• Improvement in Oil Extraction Rate (OER), stringent quality inspection on FFB, and continuous improvement on the production floor at the palm oil mill.
• Greater marketing efforts to increase the use of HYPRO® PVC-O pipes.
• Intensified product penetration into new domestic markets.
• Exploration of opportunities to offer PVC-O pipes in projects that require private finance initiatives (PFI).
• Identification of partners in the ASEAN region to market and export HYPRO® PVC-O products.

Supply Chain Management

Responsible Procurement

• Continual effort to find suitable, sustainable, and cost-competitive materials.
• Sourcing materials and services from local suppliers where applicable.
• Background checks on suppliers, their directors, and key personnel.
• Ensuring principals adhere to strict international standards.

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• HYPRO® PVC-O pipes
• Green Mill Solution

Awards & Recognition

• GOLD Award @ 3rd ASEAN Plastic Awards 2018 (HYPRO® PVC-O pipes)

Environmental Metrics

ESG Focus Areas

• Corporate Governance and Business Ethics
• Supply Chain Management
• Regulatory Compliance
• 3R: Reduce, Reuse, Recycle
• Waste & Resource Management
• Energy Management
• Water Management
• Quality Assurance
• Brand Reputation and Customer Satisfaction
• Human Resource Development
• Occupational Health & Safety
• Corporate Social Responsibility

Environmental Achievements

• Green Mill Solution: Self-sustaining electricity consumption, Dry Long Fibre Plant converts EFB waste into Dry Long Fibre, Biogas Plant generates electricity from POME, reducing greenhouse gas emissions.
• Ozone Medical Waste Treatment Plant uses ozonation technology, reducing environmental impact.
• HYPRO® PVC-O pipes are SIRIM ECO-LABEL certified and contribute to the Government's effort in achieving 20% use of green products.

Social Achievements

• Commitment to employee safety and wellbeing, including FITTERS Sports Club.
• Equal opportunity employer, promoting workforce diversity.
• Adherence to minimum wage policy and other employee benefits.
• Ongoing campaigns on fire safety and prevention.
• Commitment to customer satisfaction and protection of customer privacy.

Governance Achievements

• Compliance with Malaysian Code on Corporate Governance.
• Adoption of various policies (Board Charter, Code of Conduct & Ethics, Whistle Blower Policy, etc.).
• Establishment of Board Committees (Nominating, Remuneration, Audit, Long-Term Incentive Plan).

Climate Goals & Targets

Environmental Challenges

• Slowdown in project progress and intense competition in Fire Services.
• Delay in Phase 2 work commencement in Property Development due to Covid-19.
• Lower FFB intake and low OER performance in Renewable & Waste-to-Energy due to low FFB production and dry weather.
• COVID-19 positive cases in the mill resulting in closure.
• Impact from COVID-19 pandemic and political landscape changes on HYPRO® PVC-O Pipes Manufacturing & Distribution, leading to delays in water projects.

Mitigation Strategies

• Implemented prudent strategies to cut costs and manage operating expenses.
• Prudent approach of sourcing FFB supply.
• Operational efficiency improvement and cost optimisation in Green Palm Oil Mill.
• Intensified marketing efforts for HYPRO® PVC-O pipes.
• Leveraging on recent success of Johor and Kelantan in promoting HYPRO® PVC-O pipes.

Supply Chain Management

Responsible Procurement

• Continual effort to find suitable, sustainable and cost competitive materials.
• Sourcing materials and services from local suppliers where applicable.
• Ensuring principals adhere to strict international standards of reliability and legality (Fire Services).

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• HYPRO® PVC-O pipes
• FIRE-X fire extinguisher

Awards & Recognition

• GOLD Award @ 3rd ASEAN Plastic Awards 2018 (HYPRO®)

Environmental Metrics

ESG Focus Areas

• Governance
• Economic
• Environmental
• Social

Environmental Achievements

• Achieved MSPO part 4 accreditation and MSPO Supply Chain Certification Standard
• Introduced environmental awareness program to reduce wasteful consumption of electricity
• Used energy saving LED lightings and invested in better waste handling equipment
• Monitored water source consumption at palm oil mill to ensure no wastage
• Processed wastewater from palm oil mill to meet Department of Environment standards
• Encouraged employees to adhere to Reduce, Reuse, Recycle motto

Social Achievements

• Employs upwards of 100 workers at palm oil mill, creating job opportunities
• Invests in human capital and supports employee development through various learning opportunities
• Strives to ensure remuneration packages are in accordance with labour laws and comparable to market rates
• Set up a team to manage the potential impact of the Covid-19 pandemic and adhere to government measures

Governance Achievements

• Developed a sustainability framework led by the Board of Directors and driven across its operations
• Internal audit function performs regular audits and reporting on compliance
• Adopted Anti-Corruption and Bribery Policy
• Implemented Whistle Blower Policy
• Engages with different stakeholder groups to identify and address material sustainability matters
• Adopted Directors’ Fit and Proper Policy
• Adopted Gender Diversity Policy

Climate Goals & Targets

Environmental Challenges

• Low oil extraction rate at palm oil mill due to dry weather
• Slowdown in progress of engineering projects and competition in fire services market
• Deferral in progress of engineering projects due to containment measures
• Slowdown in utilisation of inventories in HYPRO® PVC-O pipes manufacturing and distribution
• Impairment loss on receivables due to write-off of receivable and liquidated ascertained damages
• Credit risk from trade receivables
• Foreign exchange risk from purchases in foreign currencies
• FFB supply risk for palm oil mill operations affected by weather conditions
• COVID-19 pandemic and MCO

Mitigation Strategies

• Prudent credit management and credit evaluations on customers
• Closely monitors collection from debtors
• Assess the need to utilise financial instruments to hedge currency exposure
• Prudent approach of sourcing FFB supply
• Adjusted business operations to comply with measures imposed by the Government of Malaysia
• Implemented cost cutting measures such as reducing manpower and non-essential expenses

Supply Chain Management

Responsible Procurement

• Continual effort to find suitable, sustainable and cost competitive materials
• Strive to source materials and services from local suppliers
• Ensure principals adhere to strict international standards

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: MSPO

Certifications: MSPO part 4 accreditation, MSPO Supply Chain Certification Standard, SGS ISO 9001-2000, UKAS Quality Management System, SIRIM QAS MS 1073 Part 2 & 3, SIRIM tested, BOMBA approved, HYPRO product certification ISO 16422:2014, ISO 9001:2015, SIRIM ECO-LABEL 054:2016, MyHijau Marking scheme

Sustainable Products & Innovation

• HYPRO® PVC-O pipes (SIRIM Eco-Label certified, MyHIJAU Mark)

Awards & Recognition

• GOLD Award @ 3rd ASEAN Plastic Awards 2018

Environmental Metrics

ESG Focus Areas

• Supply Chain Management
• Community Investment
• Anti-Corruption
• Data Privacy & Security
• Employee Management
• Diversity
• Health & Safety
• Energy Management
• Water Management & Effluents
• Waste Management
• Emissions Management

Environmental Achievements

• Implemented energy-efficient LED lighting and advanced waste handling equipment
• Meticulous monitoring of water consumption at palm oil mill to prevent wastage; wastewater undergoes thorough treatment before discharge

Social Achievements

• 95% of suppliers are local, supporting the local economy and reducing environmental footprint
• RM1,000 invested in community; 1 beneficiary
• Increased manpower by 6 at the end of FYE compared to the beginning

Governance Achievements

• Established policies, procedures, and guidelines to comply with good governance best practices
• Adopted a Code of Ethics and Conduct, Whistleblowing Policy, and Anti-Bribery and Corruption Policy
• ISO 9001 certified, promoting accountability and process control

Climate Goals & Targets

Environmental Challenges

• Fluctuation in price or availability of raw materials (FFB)
• Sustainability of order book (fire services and property development)
• Availability and cost of labour
• Competition risk (palm oil and fire services)
• Unpredictable weather and El Nino effect impacting FFB processing volume

Mitigation Strategies

• Enhancing operational efficiency and optimizing costs
• Striving to catch up on order book and work progress (fire services)
• Proactively working on redevelopment projects to maximize asset value
• Implementing e-Consignment Notes (eCN) to enhance traceability and efficiency in logistics and medical waste collection
• Ensuring compliance with standard operating procedures for safe handling and disposal of medical waste

Supply Chain Management

Supplier Audits: 95% local suppliers

Responsible Procurement

• Prioritizing local suppliers
• Building long-term partnerships based on trust, quality, and mutual benefit
• Ensuring materials and services can be traced to their sources

Climate-Related Risks & Opportunities

Physical Risks

• Unusual crop season leading to lower intake of fresh fruit bunches (FFB)

Reporting Standards

Frameworks Used: Bursa Malaysia’s Main Market Listing Requirements, Bursa Malaysia’s Sustainability Reporting Guidelines (3rd edition)

Certifications: ISO 9001:2015, ISO 45001:2018, ISO 14001:2015, MS2530-4:2013, MS1073 Part 3:1996, MSPO Supply Chain Certification Standard (MSPO SCCS)