Lemtech Holdings Co., Limited

Climate Impact & Sustainability Data (2020, 2021, 2022)

Reporting Period: 2020

Environmental Metrics

Environmental Achievements

Passed the Environmental Management System Certification (ISO 14001:2015) on Apr. 29, 2014, with a validity period from Jul. 1, 2020 to Apr. 28, 2023.
Added an air compressor heat energy recovery system to supply heating for some workshops in winter, so as to effectively reduce energy consumption.
Formulated the "Energy Control Procedures" to effectively control the rational use of water, electricity and gas, and to avoid waste reduction.

Social Achievements

Provides diversified employee benefits including labor insurance, health insurance, labor pension and group insurance, employee meal subsidies, employee health checks, departmental social dining, three-holiday cash gifts and wedding and funeral subsidies.
Regularly hold labor-management meetings and conduct employee opinion surveys for the references for executives, internal operations, enhancing employee engagement and improving work input.
Regularly organize various activities, such as employee sports meets, family days, various sporting events and artistic and cultural activities

Governance Achievements

Established the Audit Committee and the Remuneration Committee.
Formulated the "Performance Evaluation Measures for the Board of Directors and Functional Committees"
Formulated the "Regulations for the Evaluation of Independence and Competency of Certified Public Accountants"

Climate Goals & Targets

Long-term Goals:

Continuously improve the service quality of overseas customers to gain more share of overseas market. Continue to strengthen the layout of overseas business markets in Europe, America and Japan to improve the Company's future business performance.
Try to introduce strategic partners and integrate upstream and downstream resources to enhance the Company's competitive advantage.
Engage in the vertical integration of the thermal industry chain to strive for diversified development of products and strengthen the risk response capacity of the Company.

Medium-term Goals:

Assembly and finish product production based on component manufacturing to provide customers with a one-stop service and expand the business scale.
For the Company’s current product line, such as thermal module, hinge, slide and other products, launch new generation products through the continuous investment of research and development, in order to gain a larger market share.

Short-term Goals:

Expand the plastic packaging business of stamping parts, and provide customers with more convenient and complete services.
Strengthen the R&D capabilities of Taiwan R&D Center, and increase investment in R&D expenses.
Win orders for stamping components from the electric vehicle platform and give priority to the production of electric vehicle parts and components in response to the rapid development of electric vehicles in China.

Environmental Challenges

Increasingly fierce competition among newcomers in the industry, increasing pressure on product prices.
Gradually rising wage costs every year, increasing operating costs.
Uncertainty of the future budget.

Mitigation Strategies

Providing products with competitive advantages in prices while maintaining product quality.
Developing automated equipment and actively intervening in clients' product development processes.
Strengthening the provision of correct financial information for decision-making units.

Supply Chain Management

Responsible Procurement

assess suppliers' cost, quality and delivery time at regular intervals to ensure product quality and yield
maintains more than two suppliers providing major materials such as copper, iron and aluminum to ensure the supply of raw materials and reduce the risk of shortage of materials

Climate-Related Risks & Opportunities

Awards & Recognition

Excellent Supplier Award of AUTOLIV
2017 Best Cooperation Award and 2016 Quality Excellence Award of BorgWarner
2017 General Manager Award of Wuhan Tianhe

Reporting Period: 2021

Environmental Metrics

ESG Focus Areas

Employee safety and health
Fair treatment in the workplace
Information security
Product quality
Environmental protection
Carbon emissions reduction
Global cooperation
Sustainability

Environmental Achievements

Reduced office electricity consumption by approximately 20% by changing office lighting to LED energy-saving lamps
Reduced packaging material loss costs by approximately RMB 500,000 by improving packaging materials
Implemented an air compressor heat energy recovery system for heating workshops in winter, effectively reducing energy consumption
Achieved annual electricity output value proportion ≤ 0.90% and annual water fee output value proportion ≤ 0.06%

Social Achievements

Zero employee safety incidents in 2021
Approved as a Safety Member Unit by Kunshan City
Implemented a complete training system for new recruits, technical personnel, job rotation personnel, and cadre promotion
Provided various employee welfare measures including holiday gifts, year-end bonuses, and subsidies

Governance Achievements

Established an Audit Committee and a Remuneration Committee
Formulated the "Performance Evaluation Measures for the Board of Directors and Functional Committees"
Formulated the "Regulations for the Evaluation of Independence and Competency of Certified Public Accountants"
Established a clear and effective reward and punishment and complaint system for whistle-blowing

Climate Goals & Targets

Long-term Goals:

Achieve sustainability by working with stakeholders

Medium-term Goals:

Provide globally standardized services
Become a Tier 1 solution provider

Short-term Goals:

Become a comprehensive manufacturing solution provider
Expand sales and business development in 3C, Automotive, Connected Fitness, and Semiconductor industries
Increase robot application in production
Establish manufacturing footprint in North America and Southeast Asia through M&A
Implement SAP system for efficient operation

Environmental Challenges

Labor shortage and increasing labor costs due to the pandemic
Fierce market pricing competition
Semiconductor chip shortage and shipment delays
Volatile market conditions and customer insolvency risks
Increasing logistic costs, supply chain disruptions, and political risks

Mitigation Strategies

Continuous process improvement and automation implementation to reduce labor dependency
Identifying key differentiators and focusing on suitable project nominations
Close monitoring and control of inventory aging
Prudent management of customer aging payments
M&A collaboration with strategic partners to expand global manufacturing footprint
Implementation of SAP system for efficient operation and decision-making

Supply Chain Management

Supplier Audits: Annual supplier audits are performed, covering quality, environment, and safety.

Responsible Procurement

Requires suppliers to provide raw materials free of harmful substances
Signed an EICC commitment letter with suppliers

Climate-Related Risks & Opportunities

Awards & Recognition

Excellent Supplier Award of AUTOLIV (multiple times)
2017 Best Cooperation Award of BorgWarner
2016 Quality Excellence Award of BorgWarner
2017 General Manager Award of Wuhan Tianhe

Reporting Period: 2022

Environmental Metrics

ESG Focus Areas

Environmental
Social
Governance

Environmental Achievements

Reduced energy consumption by transforming the cooling system of welding equipment, saving about 120,000 kw of electricity per year.
Improved packaging materials in production to reduce material waste, reducing loss costs by about 450,000 RMB in 2022.
Achieved annual electricity output value ≤0.90% and annual water fee output value ≤ 0.06% in 2021.

Social Achievements

Implemented various employee welfare programs including labor insurance, health insurance, labor pension, group insurance, meal subsidies, health checks, and holiday gifts in Taiwan, China.
Provided various benefits such as vacation, insurance, health checks, holiday gifts, marriage, childbirth, and birthday benefits in Mainland China.
Offered employee benefits such as social and health insurance, holidays, meal subsidies, liability insurance, and company events in the Czech Republic.
Implemented an annual training plan to enhance employee skills and knowledge.

Governance Achievements

Established an Audit Committee and a Remuneration Committee.
Formulated and disclosed the "Code of Practice on Corporate Governance of the Company."
Established a concrete whistleblowing and rewarding system.
Implemented a regular assessment of the independence of certified accountants.

Climate Goals & Targets

Long-term Goals:

Achieve sustainability by working with stakeholders.
Implement sustainable development programs.

Medium-term Goals:

Provide globally standardized services to customers.
Become a Tier 1 solution provider.

Short-term Goals:

Become a comprehensive manufacturing solution provider.
Increase sales in 3C, Automotive, Connected Fitness, and Semiconductor industries.
Increase automation in production.
Establish manufacturing footprint in North America and Southeast Asia.

Environmental Challenges

Weaker-than-anticipated recovery of the 3C industry due to slow inventory digestion by customers.
Global economic slowdown due to geopolitical tensions, inflationary pressures, rising interest rates, and the Russia-Ukraine war.
China government’s pandemic-related measures.
Increasing competition from established players and new entrants.
Evolving regulatory environment.
Short product life cycle of 3C consumer products.
Fierce price competition in the industry.
Frequent fluctuations in raw material prices.

Mitigation Strategies

Securing new project orders from existing and new customers in areas like Electric Vehicle (EV) and Autonomous Driving.
Expanding core stamping business capacities with factory expansion in Kunshan, China and a new manufacturing location in Querétaro, Mexico.
Investing in technology research and development and automation to reduce labor dependency and improve efficiency.
Optimizing sourcing, procurement, and logistics processes.
Leveraging digital marketing channels.
Implementing regular risk assessments and mitigation plans.
Maintaining an insurance program.
Diversifying revenue streams and exploring new markets.
Implementing price management of quoted raw materials and adjusting inventory to reduce the risk of raw material price fluctuations.

Supply Chain Management

Supplier Audits: Annual supplier audits

Responsible Procurement

Requires suppliers to provide raw materials free of harmful substances.
Signed an EICC commitment letter with suppliers.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, IAS

Certifications: ISO 14001:2015, ISO/TS16949:2009, ISO27001, TISAX

Third-party Assurance: Deloitte & Touche

Awards & Recognition

Excellent Supplier Award of AUTOLIV
2017 Best Cooperation Award and 2016 Quality Excellence Award of BorgWarner
2017 General Manager Award of Wuhan Tianhe