INVESTOR RELATIONS

Sustainability Statement

Daibochi is committed to building a sustainable business and conducting our operations with integrity. As a leading flexible packaging converter for globally-renowned clients in the food and beverage and fast moving consumer goods sectors, we are mindful that good sustainability practices are integral to our long term business growth. To this end, the Board strives to embed a strong governance culture, socially responsible values and sound environmental practices throughout the Group.

The Board is pleased to present the inaugural Sustainability Statement of Daibochi Plastic And Packaging Industry Bhd (Daibochi/the Company) in line with Bursa Malaysia’s Listing Requirements. This statement encompasses the strategic management of the Company’s Economic, Environment and Social matters for the financial year. The data/information reported is in relation to our Malaysian operations as the Group’s subsidiary; Daibochi Packaging (Myanmar) Company Limited (Daibochi Myanmar) only
commenced operations in July 2017.

Governance Structure
The Board sets the “tone at the top” for a strong sustainability culture whilst Management ensures that ethical/social values and good environmental practices are cascaded throughout the entire organisation. Our governance structure is as follows:
Engagement With Stakeholders
We recognise that our stakeholders are important to the Group’s long-term growth/success. Hence, sustainability issues that are of interest to them are important to our business. Our key stakeholders and their areas of interest based on our various engagements with them are set out below:
Sustainability Framework
Our sustainability framework focuses on the following 4 themes, which we consider important and relevant
from the perspective of the Company as well as our key stakeholders:

  • People/Employees – Social, Economic
  • Environmental Conservation – Environment
  • Sustainable Business Growth – Economic
  • Communities – Social and Economic
People / Employees
People are our principal asset and we believe that it is their commitment, enthusiasm and innovative ideas that propel Daibochi forward to achieve our long term business goals. We nurture our employees in an environment where they are treated with dignity and respect, whilst enhancing their economic well-being and professional development.
The brief information of the Company’s workforce is set out below:
230 of our employees (27%) have been a part of the Daibochi team for more than 10 years.
Fair & Equitable Workplace
The Company provides an inclusive working environment by fostering a culture of personal ownership and facilitating the pursuit of excellence for all employees. We promote a workplace that is free of any form of harassment that can violate a person’s dignity and interfere with the performance of employees’ duties. Employees can voice concerns and submit reports of harassment without fear of retaliation pursuant to the Workplace Harassment Policy. Allegations of harassment will be dealt with seriously, expeditiously, sensitively and confidentially.

We believe in the inherent strength of a diversified workforce as reflected in our Workplace Diversity Policy. Women employees do not face prejudice, are given equal opportunities to perform and excel at work and are well represented across all levels of the organisation. Employees who are pregnant may be offered suitable alternative work or adjustments to their working hours depending on the respective circumstances, thus creating a workspace that is welcoming to women employees. There is currently one female Independent Non-Executive Director on the Board and 2 women in our 7-member senior Management team (excluding the Executive Directors). Any promotion or increase in pay is based on merit i.e. the blend of competencies, qualifications and job-related skills, with due regard to diversity in terms of gender, age and cultural background.

Daibochi adheres to a No Child Labour policy. In accordance with our recruitment guidelines, we only engage and enter into employment contracts with persons who have completed 18 years of age. We expect our
suppliers, contractors, agents and business partners to uphold the same standards and/or comply with the specific provisions relating to the employment of children and young persons.

The Company offers fair and competitive remuneration packages based on our employees’ performance, roles and responsibilities. This is to ensure that we remain competitive in attracting, motivating and retaining talent which is important to our sustained growth. Employees and their immediate family members are also provided with access to quality healthcare as well as medical and healthcare insurance.

The Company helped to ease the burden of deserving employees with school going children by providing them with financial aid for the 2017 school session. Educational awards were also given to employees’ children to reward them for their outstanding academic performance. Social and recreational activities i.e. team building, annual dinner and festive celebrations were organised during the year to facilitate networking and camaraderie amongst employees.

Daibochi Annual Dinner
Festive Celebrations 2017
Festive Celebrations 2017
Our Human Resource Department (HRD) has relevant programmes in place for the recruitment and retention of talent. These include skilled workers and junior management programmes to identify, nurture and train employees with high potential in the Company. A talent search programme that provides a platform to tap into the graduate pool for recruitment was introduced in 2017.

In line with our commitment to sustain a productive working environment, we have implemented the workplace organisation method of 5S comprising “Seiri” (Sort), “Seiton” (Set in Order), “Seiso” (Shine), “Seiketsu” (Standardise) and “Shitsuke” (Sustain). Audits were also undertaken to ensure that employees adhere to these principles.

Talent Management
Our employees’ personal development continues to be our priority. Employees are offered a wide variety of learning/development opportunities that enhance their skills, overcome individual challenges and meet career aspirations. In line with this, Daibochi’s Training department has a dedicated yearly budget and works with various divisions to ascertain competency gaps and identity training programmes suitable for employees.

During the reporting period, various training sessions were conducted to motivate and enhance the morale of our production team. Personal development/leadership programmes were also provided to enhance production supervisors’ leadership potential. Employees also attended external trainings to stay abreast of evolving matters relevant to their job scope. These programmes promote the development of our workforce and equip them with the relevant skills for career growth.

Occupational Safety & Health
We recognise that the very nature of our business itself involves occupational health and safety risks. Hence, the safety and health of our employees as well as the safety of our contractors, service providers and visitors to our manufacturing facilities remain a priority. Our commitment is manifested in Daibochi’s Safety and Health Policy which is premised on the following principles:

  • Compliance with laws, rules and regulations;
  • Ensure a healthy and safe working environment for all employees and contract staff;
  • Develop and enforce the use of safe working practices and provide training to employees in this regard;
  • Hold each manager accountable for their achievement of these objectives; and
  • Take every measure to prevent job related injuries and illnesses.

The Safety and Health Committee (SH Committee) is entrusted with cultivating safe workplace practices, including developing and administering safety policies, conducting annual safety audits of our manufacturing sites and ensuring compliance with Occupational Safety and Health Administration laws and regulations. The SH Committee regularly reviews safety performance results, occupational illness and injury incidents, workplace hazards, incident mitigation and prevention measures and conducts regular inspections to check that SH standards are met. Personal protective equipment is provided to all concerned workers to reduce potential occupational hazard exposure, whilst preventive actions such as fire drills are carried out annually to prepare our employees for speedy evacuation in the event of fire emergencies. Contractors are also expected to comply with our health, safety and environment standards in Daibochi’s Safety, Health and Environment Policy.

During the reporting period, the SH Committee continued to adhere to all standard operating procedures in relation to major accident cases. Meetings were held on an immediate basis, whilst complete investigations of the accidents, including corrective and preventive actions were undertaken. Particulars of the accidents were then reported to all employees at the Company’s monthly assemblies to create awareness and instil a safety culture amongst employees. Reviews were also carried out on a quarterly basis by the SH Committee and reported to Management. The SH Committee continued to provide regular training in relation to fire safety, chemical spills, machine safety and accident-prevention to ensure a high degree of preparedness to respond to workplace safety incidents in addition to greater safety compliance.

As a result of our SH initiatives and proactive engagements with employees and contractors, we maintained zero fatalities and occupational illness in our manufacturing plants. The data is as follows:

Note: Data calculated based on Department of Safety and Health requirements and the Occupational Safety and Health Act and regulations 1994.
At the Company’s “World Earth Day, Safety & Health Week 2017” held from April 17, 2017 to April 21, 2017 (SH Week), the SH Committee organised various seminars/talks on safety and health. Employees attended talks given by the officers from Government departments in relation to handling of chemicals, safety at the workplace and road safety.

The SH Committee arranged for health screenings, talks to educate employees on best practices and habits to encourage a healthy and balanced lifestyle during the SH Week. A “No Smoking Day” campaign was organised to create awareness of the hazards of smoking. The focus of these campaigns was to enhance health awareness and encourage employees to make positive lifestyle changes.

World Earth Day And Safety Health Week 2017
Team Building 2017
The Company encourages its employees to adopt a work life balance and financially supports sports and recreational activities organised by our inhouse Sports and Recreational Club to build a healthy workforce. Team building activities and various sports and games were held in 2017 to encourage physical wellbeing. The Company maintained our practice to distribute complimentary fresh fruits to employees twice weekly at the staff canteen to promote a healthy lifestyle.
Team Building 2017
There were no breaches of compliance with the relevant laws/regulations or observations reported in audits conducted in relation to employment and SH in 2017. There were also no instances of discrimination/harassment reported by any of our employees during the reporting period. We will continue to encourage employees’ professional development and wellbeing and further enhance our SH structures and processes to build a sustainable and motivated workforce.
Environmental Conservation
We understand that our operations and activities have an environmental footprint and it is our responsibility to minimise these through continuous improvement/management of our manufacturing facilities. To this end, our sustainability agenda focuses on eco-friendly environmental management practices to reduce the impact of our carbon footprint.
Environmental Policy
Daibochi’s commitment to operate in an environmentally sound manner is reflected in our Environmental Cares Policy which is based on the following principles:
Employee Awareness
We encourage green activities in the workplace and support environmental conservation efforts in the community.

Employees continue to participate in recycling activities through our “Green Day” campaign every Tuesday and Thursday. They are encouraged to bring segregated waste of plastic, paper, tin, discs, used batteries or clothing to be sent to the Tzu Chi recycling centre. The use of polystyrene food packaging is prohibited in the Company premises and employees are provided recyclable food containers. Employees are encouraged to practise the 5R’s – ‘Refuse, Reuse, Reduce, Repair and Recycle’ in their daily activities. We also lead by example to encourage prudent electricity usage by switching off the lights in the office during scheduled breaks. Employees participated in the “Earth Hour” on March 25, 2017 from 8.30pm to 9.30pm by switching off lights and electrical equipment during that hour.

Our internal teams ensure that our business operations comply with existing regulatory requirements through continuous monitoring and audits. During the year, the Group was not penalised for any instance of noncompliance with environmental laws and regulations. Our ISO 14001 environmental management certification signifies our commitment to minimise the impact on the environment and conserve natural resources. Moving forward, we will step up trainings and awareness amongst our employees and identify opportunities in relation to environmental best practices and prudent management of resources.

Sustainable Business Growth
We remain focused to deliver superior and innovative products to our customers and enhance shareholders’ wealth by embracing responsible business practices.
Product Quality & Customer Satisfaction
At Daibochi, our mission is to be the “Preferred Supplier of Our Customers” and exceed customers’ expectations in terms of product quality, service and delivery. In achieving this, we have high standards of quality controls in place for our operational processes to ensure the quality and safety of our products. Our manufacturing facilities are equipped with state of the art machinery and in house laboratory facilities to produce high-quality packaging solutions. Strategic partnerships with customers allow us to continuously develop innovative and competitive solutions to meet their evolving needs.

The Company ensures that there is a robust and effective quality management system in place to meet the requirements of regulators, customers and consumers. Our commitment to excellence and continuous improvement in quality is further reflected in the Quality & Food Safety Policy and accreditations attained by the Company. The ISO 9001 certification underscores our commitment to deliver high quality products and services to our customers. The FSSC 22000 accreditation (Food Safety System Certification) recognised by the Global Food Safety Initiative and supported by the Confederation of the Food and Drink Industries of the European Union emphasises our dedication to continuous improvement of quality and food safety. In 2017, we continued to adhere to good manufacturing practices, hygiene practices and food safety management systems in our supply chain, manufacturing and delivery of products to our customers. Regular reviews and audits were undertaken based on established standards and criteria to ensure quality control in our manufacturing facilities.

High Standards Of Business Conduct
We recognise that responsible business conduct ensures the long term viability of our business and is imperative to maintaining successful relationships with all stakeholders. In this regard, we conduct our business according to the highest ethical standards by upholding professionalism in our relationship with customers, suppliers, shareholders and other stakeholders. These core principles are enshrined in our “Code of Conduct and Ethics” (Code) and observed by the Board, Management team and employees. The Code requires that we comply with all laws, rules and regulations, conduct our business with honesty and integrity and treat our employees with respect. It also prohibits the giving or receiving of gifts, benefits etc. during the course of employment. This is in accordance with Daibochi’s zero tolerance policy towards fraud, bribery and corruption.

In line with this commitment, the Company also has a Whistleblowing Policy in place to provide an avenue for employees and stakeholders to report, in good faith, genuine concerns about unethical behaviour and improper conduct within the Company without fear of reprisal. There were no unethical behaviour/improper conduct/concerns reported to the Independent Non-Executive Directors during the year. The Company has a Competition Law Compliance Policy which provides guidance to employees in their dealings with competitors in relation to anti-competitive practices to ensure that we compete fairly and ethically in the marketplace.

Investor Relations / Shareholders
We remain committed to delivering shareholder value and our key highlights in 2017 are as follows:
The Company continuously explores new business opportunities to deliver sustainable business growth. The Group’s 60% owned subsidiary, Daibochi Myanmar was incorporated in February 2017, commenced operations in July 2017 and is poised to perform strongly in 2018.
The Board values its dialogue with shareholders, the investment community and other stakeholders. General meetings are the principal forum for dialogue with shareholders and provide them the opportunity to raise questions and seek clarifications on the Group’s operations, performance and strategies. All the Directors were present in person to engage directly with the shareholders of the Company during the general meetings held in 2017. The Company won the Merit Award for Best AGM (Market capitalisation less than RM1 billion) by the Minority Shareholder Watchdog Group in 2017, reaffirming our commitment towards good governance in our engagement with our shareholders.

We also monitor and evaluate risk on an ongoing basis as part of our sustainability commitment. There is a sound risk management and internal control framework/system in place to safeguard shareholders’ investments, the Group’s assets and the interest of other stakeholders. The Group’s Corporate Governance Overview Statement and Risk Management and Internal Control Statement in this Annual Report and the Corporate Governance Report at www.daibochi.com provide further details on good governance and risk management.

Details on the Group’s growth strategies are furnished in the Management Discussion and Analysis available in the Annual Report.

Daibochi Managing Director Lim Soo Koon addressing shareholders’ queries at the Company’s Annual General Meeting on May 24, 2017
Sustainable Procurement
Our supply chain plays an important role in ensuring the efficiency and effectiveness of our operations. Daibochi’s procurement policy guides our assessment of suppliers/service providers to ensure that they are chosen for their ability to deliver over the long term and operate in a responsible and ethical manner. The Company also has a diversified supplier base for our raw materials to ensure that there is minimum disruption to our operations process.
Communities
As a caring corporate citizen, the Company strives to make a positive impact on the community by encouraging and supporting employees’ participation in various community activities. The Company provides the poor and marginalised community in Melaka with supplementary work and income by collaborating with a non-profit organisation (NPO) in respect of an assembly project. In 2017, we continued to engage the NPO to supply a portion of our fresh fruits requirements in the staff canteen.

We understand our role in economic development and our manufacturing plants located in Ayer Keroh and Jasin, Melaka support the employment of local communities. Furthermore, each year, we recruit students from colleges, technical schools and universities for our internship programme. There were 30 trainees attached to the Company for their industrial training in 2017. These trainees were provided with comprehensive hands-on training to equip them with the knowledge and skills needed in future career pursuits. We also seek to employ some of these trainees if there are vacancies available in the Company.

Our HRD organised a blood donation campaign at our premises in 2017. This noble cause received good response from the workforce and encouraged the culture of voluntary blood donation.

Compliance With Standards
Sourcing responsibly (sustainable supply chains) is imperative to our customers and various audits were organised to ensure our conformity to Labour, Environmental Management, Health and Safety and Business Integrity standards. The Board is pleased to report that the Company complied with all the applicable laws, regulations and standards during the financial year.
Moving Forward
The Board will work progressively towards improving the Group’s sustainability reporting in relation to the management of our Economic, Environment and Social risks and opportunities. This Sustainability Statement is prepared in accordance with the resolution of the Board of Directors dated April 4, 2018.

Daibochi Berhad (12994-W). All Rights Reserved.

Sustainability Statement