‘Sustainability’ has long been one of the key pillars of the Company’s business foundation and in fact, become a part of its culture. Supermax’s employees, be they C-level management staff or factory workers, are reminded to act ethically across the spectrum of the Group’s activities, from procurement to sales and marketing activities to financial management. Supermax adopts the Stakeholder Approach where stakeholders’ welfare maximisation is emphasised rather than just the pursuit of profit maximisation. We want to be responsible to not only our shareholders but all identifiable stakeholders relating to Supermax.
Globalisation enables parties involved in transactions to be able to benefit (win-win situation) greatly to the extent that surpasses the ability of any individual firm or country could possibly do on its own. Having said that, industrialisation has caused negative by-products that are already harming our green lungs as well as creating great economic inequality such as income and information gaps that will be difficult to bridge. At Supermax, we want to play a more positive role and have identified 4 areas – Economic Sustainability, Environmental Sustainability, Social Sustainability and Good Governance, to focus on and be responsible for.
The Supermax Group believes that capital deployment is one of the more crucial investment decisions to be made that will affect the long term sustainability and value creation. Back in 2014, the Group made an important decision – diversifying into contact lens manufacturing. The intuition behind this decision is simple and clear – creating a portfolio of medical devices (rubber gloves & contact lens) which has both the characteristics of recession-proof demand and high return to asset and equity.
Rubber Gloves Division
While the Group is investing some of its resources into the new contact lens division, it remains committed to its rubber glove division. During the year, the Group has commissioned the new production lines in one of its plants in Perak as part of its Rebuilding & Replacement Program and is also in the midst of building a brand new plant, i.e. Plant #12. The first batch of production lines in Block A of Plant #12 is due to be commissioned in the coming weeks and the remaining lines in Block A to commence operations in stages going into the first quarter of CY2020. Block B will follow and be fully commissioned in the second half of CY2020. Plant #12 will add a total of 4.4 billion pieces of gloves to the Group’s installed capacity.
To elaborate on the Rebuilding & Replacement Program as mentioned above, the Group had carried out an exercise to assess the efficiency and performance of each manufacturing plant with the objective of replacing the old, inefficient lines/plants with new hi-tech, highly automated production lines. The first block in its Perak plant has been completed and the remaining blocks as well as a plant in Sungai Buloh are next in line under this program. The rebuilding and replacement when completed at these locations will add a further 4.6 billion pieces of gloves to the Group’s installed capacity.
The Group has also entered into a sale & purchase agreement to acquire another neighbouring piece of freehold land with industrial building in Meru, Klang, measuring 16.2 acres. This piece of land is located next to its existing cluster of plants in Meru and this will facilitate integrated and shared facilities and management to achieve optimum synergies. The plan is to build its 13th, 14th & 15th plant on this plot of land over the next 5 years. These plants will add a further 13.2 billion pieces to the Group’s annual production capacity when completed by CY2024.
For all of the above glove capacity expansion plans, the Group expects to invest RM1.1 billion in capital expenditure, which will be funded through a combination of internally generated funds and bank borrowings.
Contact Lens Division
To date, we have successfully installed and commissioned our contact lens manufacturing facility. We are already marketing our contact lenses in Malaysia as well as overseas markets and are making inroads as we draw on our knowledge & experience on global distribution and leverage on the distribution network established thus far. Todate, our contact lenses are sold in over 60 countries worldwide. The Group continues to invest on advertising and promotion to build brand awareness for our contact lens and to penetrate the global markets.
The process of obtaining the necessary approvals and certifications for our contact lenses continues for other countries in the world in order to further widen the Company’s global footprint. In 2018, the Group successfully obtained from the Pharmaceutical and Medical Device Authority (PMDA) of Japan the product license to export contact lenses under its house brand to the Japanese market. This is a proud achievement as the PMDA’s vetting process is one of the most stringent in the world. The Group has built on that success to also meet the requirements of the US FDA for its toric lenses. This is another notable achievement as only a handful of manufacturers are able to produce lenses that meet the standards required.
Going forward, the Group will continue efforts to secure the necessary approvals and licenses for the other targeted countries and regions to extend its marketing reach and at the same time also focus on market penetration through active advertising and promotional campaigns.
Supermax practices environmental ethics as far as possible in an effort to reduce its environmental footprint.
Biomass as an alternative environmentally friendly fuel source
The Supermax Group has a “Protect your Health, Protect the Environment” philosophy, the daily practice of which is encouraged and instilled among all levels of its organisation. Among its major ongoing initiatives which emphasises environmental preservation is the use of an alternative fuel source which is renewable and sustainable to fire its heating systems and for power generation. With this in mind, the Group has implemented biomass systems at several of its factories. The fuel used is basically the waste from the oil palm industry (e.g. palm kernel shells and empty fruit bunches) and the wood-based industry (e.g. wood chips and odd bits and pieces from the furniture industry and even the tree trimmings from pruning work done by the local councils). The need for depleting and non-renewable energy sources is therefore reduced.
Waste Water Management
Another ongoing ‘green’ project undertaken by the Supermax Group is the treatment of wastewater. Wastewater from the Supermax Group’s manufacturing facilities is treated on site in effluent treatment plants utilising a chemical flocculation, anaerobic digestion and activated sludge process. The Group collaborates closely with the Department of Environment to conduct regular checks to ensure that the final discharge is clean and safe. The Supermax Group spares no expense or effort to ensure that all of its manufacturing facilities do not pollute the environment nor endanger the health of its employees or the communities residing within the vicinity.
Chlorine Gas Treatment
Chlorine gas, a by-product resulting from the Group’s manufacturing process is known to be hazardous to living beings on earth. As with waste water, the Group is very stringent on its processes when it comes to discharging any by-products into the environment. All our plants are installed with effective scrubber systems that filter and remove all toxic chlorine particles from the gas before discharging it harmlessly into the atmosphere.
Go Green Building!
In 2013, we completed the setting up of our distribution headquarters in Chicago, Illinois. This warehouse and office facility in Aurora was designed and built with environment conservation in mind and had received the LEED (Leadership in Energy & Environmental Design) Gold Certification recognized by the U.S. Green Building Council. The facility has many environmentally-friendly features such as photovoltaic solar panels and other energy saving fixtures such as full LED lighting to improve energy-usage efficiency.
Recycling of Single-use Materials
One of our main components in the Group’s contact lens production process is the homo polymer polypropylene resin which is used to manufacture the medical grade polypropylene mould, the design of which determines the specifications such as the shape, size and power of the contact lens. The mould is a single use item which is discarded after the lens has been extracted from it. However, conscious of the potential harm to the environment should the non-bio-degradeable moulds be improperly disposed where it could end up in landfills and oceans, the Company has made it a policy to collect the dispensed moulds and to send them to recycling plants where they are broken down into non-medical grade polypropylene resin and used to manufacture products such as plastic chairs, baskets and tables.
The Supermax Group recognises the efforts and contributions of its employees to its progress over the years and realises that they remain an integral part of the Group’s growth engine going forward. Thus, it is imperative that the employees’ welfare is well taken care of including providing them a safe and conducive working environment to grow and further progress in their respective career paths. The Group also recognises and acknowledges the need to contribute back to society and has made this a part of its philosophy over the years.
Human capital – core assets of Supermax Group
Supermax places great emphasis on employee health and safety and making the Supermax workplace a conducive working environment for its entire workforce. It currently holds the ISO 9001:2015 and ISO 13485:2016 certification on product quality as well as other quality management system certifications which showcases its commitment to providing stakeholders an assurance of quality in fulfilling requirements whilst optimising environmental performance. Training and re-training of staff are conducted on a regular basis. Its policies are also non-bias in nature, be they in terms of gender, ethnicity, etc.
On-going initiatives include:
(a) Strict “No child labour” policy
(b) Encouraging a healthy lifestyle and building camaraderie among staff by providing support for social activities
(c) Equal employment opportunity in terms of gender and ethnicity across all levels of employment from the boardroom to the factory floor.
Besides the executive and other white collar workers, Supermax has also taken good care of its line workers, including the foreign workers, be they in-house or contractual workers. We ensure that accommodation provided to these workers is all in compliance with regulations and standards. All other necessary requirements and conveniences are also provided to them, including in-house canteens that provide nutritious and affordable food for their needs.
In line with our efforts to encourage a healthy work environment and camaraderie among employees, we have organised various in- house events, usually around festive periods like Hari Raya, Chinese New Year and Deepavali, aimed at allowing employees from diverse backgrounds and races to get to know each other better and to understand each other’s cultures better.
Contributing towards Social Welfare
The use of contact lenses for eyesight correction as well as for aesthetics purposes is becoming more and more widespread. However, as its usage becomes more popular and prevalent, so does the incidence or eyesight-issues caused by their improper use, such as eye infections and in extreme cases even blindness. As a responsible manufacturer of contact lenses, we take seriously the need to provide good education and create greater awareness on due care and proper use of contact lenses among the users. Our aim is to reduce and prevent as far as possible the potentially devastating effects resulting from improper lens use and poor eye care practices. Towards this end, Supermax has helped organise and sponsored several eye care campaigns at some local hospitals and education centres, involving thousands of participants (e.g. hospital staff, teaching staff and students), with the aim of educating consumers on matters such as:
(a) proper lens use and eye care procedures
(b) importance of procuring lenses from legal and trustworthy manufacturers and sellers
(c) consumer rights
Supermax views human capital equally important as physical capital in long-term sustainable global growth. Particularly, the Management sees human capital as of one of the more crucial assets needed to drive the Company and the industry forward and also propel our country towards becoming a developed nation. In line with this belief, Supermax lends its helping hand to youths from under-privileged backgrounds who are keen on achieving their academic dreams and have, in collaboration with the Malaysian Rubber Export Promotion Council (MREPC), provided scholarships to needy students each year.
Supermax also recognises the importance of practicing the highest standards of corporate governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance stakeholders’ value and has taken all reasonable steps to ensure that the best practices are adopted and implemented wherever possible.
Supermax has ensured that all of Bursa Malaysia’s listing requirements are duly complied with such as timely reporting of quarterly results, share buy-backs, incorporation of new subsidiaries and major acquisitions. Supermax also regularly engages with stakeholders including analysts, fund managers, investors and other shareholders wherever possible via various means and platforms from investor conferences and road shows to teleconferences to provide updates on the Company as well as the industry.
Terms of Reference of Audit Committee