Professional Documents
Culture Documents
DRBHICOM Sustainability Report
DRBHICOM Sustainability Report
Within the Services Sector, DRB-HICOM began a massive Automotive recorded a 6.7% increase in revenue from
transformation of its Postal & Logistics business by RM6.9 billion to RM7.4 billion mainly as a result of
acquiring new assets and consolidating them under Pos PROTON’s contribution, underscored by strong sales of
Malaysia Berhad (“Pos Malaysia”) as it builds the group the X70 SUV with more than 14,000 units delivered from
into a leading logistics player. Separately, in FY2018/19, the its launch till end of March 2019. Services recorded a 2%
Company entered into an agreement to divest Alam Flora increase in revenue from RM4.49 billion to RM4.58 billion
Sdn. Bhd. (“Alam Flora”), its waste management services due to better performance by Bank Muamalat Malaysia
provider, to Malakoff Corporation Berhad (“Malakoff”). Berhad (“Bank Muamalat”), Alam Flora and PUSPAKOM
The sale will enable DRB-HICOM to unlock value of the Sdn. Bhd. (“PUSPAKOM”), their vehicle inspection
concessionaire and use the proceeds to reduce gearing concessionaire.
and to part-finance PROTON’S 10-year business plan. The
deal should be finalised by end of 2019. Properties, however, saw a 37.3% dip in revenue from
RM862.6 million to RM540.9 million, primarily due to
Meanwhile, to streamline their Properties Sector, towards progressive completion of two construction projects being
the tail end of FY2017/18, DRB-HICOM entered into undertaken, namely Media City in Kuala Lumpur and the
transactions to divest of their retail and leisure assets in Immigration, Customs, Quarantine and Security (“ICQS”)
order to leverage on more than 30 years of experience in Complex at the Thai border. The nature of construction
developing and selling industrial land. These transactions, projects sees revenue varying throughout the various
too, are expected to be completed within 2019. stages of completion, with payment percentages tied to
the progress.
Key Highlights
Work in Progress
National motorcycle company Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”) is now on the cusp of a new era.
Similar to PROTON, a path is being outlined for Malaysia’s national motorcycle manufacturer in terms of partnering with
foreign Original Equipment Manufacturer (“OEM”) to enhance its product line-up. From its existing partnership with
India’s Bajaj, the fourth largest motorcycle manufacturer in the world, it launched the popular Dominar 500 street bike in
April 2018 which contributed to an increased share of this particular segment from 21% to 36%. In April 2019, Kawasaki
Heavy Industries, Ltd. (“KHI”) increased its stake in MODENAS from 11% to 30%, heralding a new beginning for the
company. KHI is a founding shareholder of MODENAS and the increased role of this world-renowned marque will augur
well for the company and for the market it serves.
PROTON has regained the market’s confidence with the X70, Iriz, Persona and Exora, and has promised to keep fans
enthralled with the launch of at least one new model a year. Already in the pipeline are the locally-assembled version of
X70 and an improved Saga. Meanwhile, PROTON’s ongoing retail outlet revamp will ensure greater customer satisfaction
and a better brand experience.
In order to meet their clients’ requirements, our manufacturing companies will continue to manage their costs under
proven programmes such as Lean Six Sigma and Kaizen. Cost reduction initiatives will also feature prominently among
our distribution companies as they maintain their focus on introducing new and/or updated exciting models. There will
also be a greater push towards local assembly to leverage the tax structure which is more favourable to CKD as opposed
to completely built-up (“CBU”) models.
Within the Services Sector, DRB-HICOM involved in postal Bank Muamalat made significant strides in terms of its
& logistics services provided by the Pos Malaysia group; customer delivery. In August 2018, it became the first
waste management and vehicle inspection offered by domestic full-fledged Islamic financial institution to
Alam Flora and PUSPAKOM respectively; Islamic banking provide premier banking facilities via Muamalat Beyond
by Bank Muamalat; and tertiary education focused on Premier Banking. To better understand its customers, it
the automotive industry at DRB-HICOM University of launched its Customer Relationship Management (“CRM”)
Automotive Malaysia (“DRB-HICOM U”). platform. It also enhanced its mobile banking platform
with biometric authentication enabling customers to view
Key Highlight their balance without having to log in.
A significant corporate decision was made to divest of DRB-HICOM U continued to focus on increasing its student
Alam Flora in order to realise its value and use the funds intake by introducing more programmes and catering
to support PROTON’s turnaround. Hence, on 1 August to distance learners by identifying seven programmes
2018, HICOM Holdings Berhad (“HHB”) entered into a to be conducted online. Further integrating itself with
conditional share sale agreement with Tunas Pancar Sdn. the industry, six programmes are to be offered under
Bhd. (“TPSB”), a wholly-owned subsidiary of Malakoff, for the Work-Based Learning and 2-Year University, 2-Year
the proposed disposal of HHB’s entire equity interest of Industry (“WBL” and “2U2I”) platforms combining practical
97.4% in Alam Flora. This transaction is now awaiting the experience with theoretical learning. Another feather in
necessary regulatory approvals for completion. its cap was gaining ISO 9001:2015 certification, reflecting
high levels of quality and safety.
Other Significant Achievements
Work in Progress
A 13% decline in mail volume together with high costs to deliver to a growing number of addresses (which has increased
17% to 8.9 million over the last five years) exerted a financial toll on Pos Malaysia. However, the management is working
closely with the regulators to review and revise the current tariff, and is hopeful of a resolution in the near future.
Meanwhile, various transformation initiatives are in place to capitalise on growing e-commerce; consolidate its transport
logistics; enhance cost efficiencies and build new revenue streams. In addition, Pos Malaysia is placing greater emphasis
on rebuilding its relationship with customers through trust in the quality of its service.
While the companies within this sector represent a range of activities, they have one underlying commonality: the fact
that they are service providers. In this respect, all the companies share a need to please the customer. They have all
embarked on digital and other initiatives towards this end as they continue to drive greater cost efficiencies and further
develop their people. Ultimately, their goal is to offer the best service at the most competitive and profitable price.
During the year, DRB-HICOM achieved significant On 8 March and 11 July 2018, DRB-HICOM entered into
milestones in the Media City development. It completed various agreements to dispose of certain property assets
the first parcel of the RM860 million project to redevelop and investments to Prisma Dimensi Sdn. Bhd. and Kelana
Angkasapuri’s broadcast studios and complex, while the Ventures Sdn. Bhd. The disposals will relieve the Group of
second parcel will be completed by end of 2019 and the landbank earmarked for residential development as well
entire development will be handed over by the middle as their leisure and hospitality assets which are capital
of 2020. Some of Radio Televisyen Malaysia (“RTM”) intensive as they require periodic refreshes to keep up
programmes are now produced and broadcast from their with market trends.
new facilities.
DRB-HICOM’s shareholders agreed to these disposals
Full completion and handover of the ICQS facility in Bukit at an Extraordinary General Meeting (“EGM”) held on 15
Kayu Hitam will see the 28-year leasing concession of the October 2018, and the Group expects to fulfil the conditions
facilities kick in. Northern Gateway Infrastructure Sdn. within 2019.
Bhd., a subsidiary of the Group was awarded the concession
for the rights to design, finance, develop, construct,
complete and lease the facilities and infrastructure and
to carry out the asset management services for the ICQS
Complex.
The Group is now managing the completed ICQS, which is operated 24 hours a day for commercial vehicles transporting
goods across the Malaysian/Thai border under a three-month pilot programme. If successful, the round-the-clock
operations will continue as it would enhance bilateral trade. At the same time, the Company aims to progressively handing
over the final phases of Media City and then managing the complex as specified under the concession.
In the longer term, DRB-HICOM are looking at developing integrated industrial parks – offering better shared facilities –
for the high-tech sector in support of Industry 4.0.
PROTON, established in 1983 as Malaysia’s national The brand’s stellar performance can be distilled to a
car company, is involved in key automotive value chain 10-year business plan established immediately upon
activities covering research and development (“R&D”), completion of the partnership deal in September 2017,
product and powertrain engineering, vendor development, outlining seven strategic thrusts, namely:
vehicle and key component manufacturing, as well
as marketing, sales and after-sale services. In 2017, 1) Develop attractive, technologically-advanced
DRB-HICOM entered into a strategic partnership with Geely products
to reinvigorate the PROTON brand, regain its domestic 2) Expand its plant capacity and upgrade its
leadership while achieving greater success abroad. manufacturing processes by adopting advanced
equipment and automation systems
Key accomplishments in FY2018/19 demonstrate PROTON 3) Implement progressive localisation of components,
is on the right track. Progress in the domestic front has especially systems and sub-systems of advanced
led to the brand regaining second spot in terms of market technologies
share, after a three-year hiatus. This serves as huge 4) Adopt group practices on quality management
motivation for PROTON’s employees to continue to work throughout the value chain
hard to deliver better results consistently.
MMM is the official distributor of Mitsubishi Motors Isuzu’s commercial vehicles continued to dominate the
vehicles in Malaysia. The company is represented by 54 local market in 2018, achieving the number 1 position
showrooms of which 48 are 3S Centres; and 55 service in the truck segment for the fifth consecutive year, and
outlets throughout Malaysia. It has 15 showrooms in East number 1 position in the light-duty truck segment for the
Malaysia – eight in Sabah, seven in Sarawak. seventh consecutive year. Overall, Isuzu is ranked ninth as
a brand.
During the financial year 2018, MMM launched an
enhanced Outlander SUV and a new Mitsubishi Triton. In 2018, a total of 6,036 units commercial vehicle trucks
The Outlander was introduced in May 2018, boasting an were sold, achieving 35% market share and 5,067 units
all-round monitor and premium leatherette seats. The of Isuzu D-Max were sold which made up 12% of the total
Triton followed in January 2019, carrying the concept of pick-up segment.
‘Engineered Beyond Tough’ and offering four pillars under
the 4Sure Handling USPs: 4Sure Power, 4Sure Control, Isuzu Malaysia was number 1 in J.D Power’s Initial Quality
4Sure Agility and 4Sure Safety. Study in the pick-up segment for year 2018. The Isuzu Pick-
up was also the Car Sifu Editor’s Choice in the Star Car
MMM enabled Malaysians to experience the thrill of high- Sifu awards, and won for the category of Proven Durability
speed rides and off-road driving, as well as the proven Vehicle in the carlist.my’s Editors’ Choice Award 2018.
capabilities of the new Triton, by hosting the Mitsubishi
4Sure Thrill Event in March 2019. The event, featuring In July 2018, the company launched a limited edition
two-time Dakar Rally Champion, Hiroshi Masuoka, and Isuzu D-Max X-Series boasting a sporty urban look and
Malaysia Motorsports Athlete, Leona Chin, was a hit. enhanced accessories.
MOTORCYCLES
Euromobil is the largest Audi dealer in Malaysia with HASB is an authorised dealer for Volkswagen (“VW”) with
centres in Damansara, Chan Sow Lin, Glenmarie and two sales and service outlets contributing 7% to VW volume.
Johor Bahru. It accounts for 75% of Audi’s total sales in
the country. HASB’s outlook is bright, with sales to corporate fleets
expected to contribute significantly to its performance in
After two years of not introducing any new models, in FY2019/20. The company is also confident of a 25% growth
March 2019 Audi launched the latest Q series range – in vehicle throughput given VW’s launch of Volkswagen
Audi Q2, Q5, Q7, and all-new Q8 – once again giving fans Care Plus (“VCP”), a customer care programme to keep
something to look forward to. This was followed by the customers returning even after their five-year warranty
arrival of the Audi A3, A4 Quattro and A5 in April 2019. The expires.
premium Audi A8L and all-new Audi Q3 will debut later in
2019. With the introduction of new models line-up will definitely
benefit HASB. In the interim, it will concentrate on
In FY2018/19, without any new models, a total of 294 enhancing its sales volume via more targeted marketing
Audi cars were sold in Malaysia of which 225 units were efforts complemented by extensive roadshows.
accounted for by Euromobil. Euromobil maintained its
lead as Audi’s dealer by purchasing all 78 units of unsold Automotive Corporation (Malaysia) Sdn. Bhd. (“ACM”)
Audi cars manufactured in 2015/2016 from Audi Malaysia
in March 2018, thus boosting its own sales. Meanwhile, as ACM is the largest dealer of Isuzu trucks, pick-ups and
part of ongoing efforts to reduce costs, it invested in digital SUVs in Malaysia. The company’s sales centre in Shah
marketing through which it has been able to target specific Alam, Selangor, is supported by a network of Sales, Service
audiences. and Spare Parts (“3S”) centres in Batu Caves, Selangor;
Kuantan, Pahang; Juru, Penang; Ipoh, Perak; and Johor
Re-strategising its after-sales operations, in July 2018 Bahru in Johor.
the Chan Sow Lin Service Centre was transformed into a
Running Gear Competence Centre – a first-in-Malaysia ACM specialises in supply of Isuzu truck with customised
dedicated facility equipped with the latest technology body application to suit specific business needs. This is
to ensure Audi cars continue to deliver the best ride made possible through experience of more than 30 years
possible. Further, to reduce the workshop overload at the in commercial vehicle industry and strong relationships
Damansara Service Centre, all major jobs such as engine with numerous prestigious body builders. With strong
overhaul have been diverted to Chan Sow Lin. This led to financial position, ACM is capable of fulfilling the needs
the Damansara outlet being recognised with the honorary of fleet customers which usually involve massive number
Customer Experience Management (“CEM”) Improvement of units.
Award from Audi.
ACM aims to further enhance its customer service through
2019 looks set to be an exciting year given the new product offering more comprehensive and competitively priced
launches. service maintenance packages with lower total cost of
ownership for the fleet and government agency business.
DRB-HICOM EZ-Drive Sdn. Bhd. The company’s prospects look good as demand for leased
vehicles is set to increase, driven by cash-strapped
DRB-HICOM EZ-Drive, which owns DRB-HICOM Leasing organisations, the establishment of more multinational
Sdn. Bhd., represents Avis Malaysia. It is the leasing arm of corporations (“MNCs”) and foreign operations in the
the DRB-HICOM Group, offering short-term vehicle rental country, and ongoing mega projects.
and long-term leasing of passenger and commercial
vehicles as well as agricultural equipments.
MANUFACTURING AND ENGINEERING
The year was positive overall as EZ-Drive continued
to grow its fleet by 26% to more than 4,000 units while ISUZU HICOM Malaysia Sdn. Bhd. (“IHM”)
expanding its network of stations to 14 from 12 at the end of
FY2018/19, and further building its agricultural equipment IHM manufactures ISUZU commercial vehicles such as the
business. Operationally, it was able to maintain a high N-Series light-duty trucks, F-Series medium and heavy-
vehicle utilisation rate, 10% higher than AVIS Asia Pacific duty trucks and D-Max pick-up trucks.
standard rate. It also established a Kaizen department to
drive a continuous improvement programme. For year 2018, ISUZU sales for light, medium and heavy-
duty trucks totalled 5,975 units, capturing 39% of the
Its business expansion and diversification enabled the market, further entrenching the brand as a firm leader
company to overcome competition from ride hailing set- in its segment. At the same time, sales of pick-up trucks
ups to achieve 23.1% growth in revenue year-on-year to stood at 5,067 units, making up 11.4% of the market. With
more than RM100 million, with 4.1% growth in PBT, mainly this performance, ISUZU retained its pole position for all
supported by the introduction of agricultural equipment trucks for the fifth consecutive year. It is also the number 1
leasing business. light-duty truck brand for the ninth consecutive year.
EZ-Drive’s operational and financial successes were In quality, the ISUZU D-Max was presented the IQS Award
duly recognised when Avis Malaysia won the Avis by J.D Power for the second consecutive year. In addition
Budget Group 2018 Licensee of the Year Award at the to that, IHM as a company received the High Productivity
International Licensee Conference 2018, held in Prague, Enterprise Using Local Talent Award from Malaysia
Czech Republic. The award recognise licensee partners Productivity Corporation. The company has also achieved
that have demonstrated growth in annual financial the highest score for Chemical and Ergonomic safety under
performance, measured against their respective country’s a voluntary Systematic Occupational Health Enhancement
economic conditions, excellence in customer service and Level Programme (“SoHELP”) run by the Department of
alignment with the brand’s initiatives. Avis Malaysia has Occupational Safety and Health. IHM was subsequently
been independently owned and operated since 1973, was invited to share its best practices at the National SoHELP
also recognized for its long, successful tenure with an Convention 2018.
additional “45-year award” at the event. During this time,
Avis Malaysia has been offering customers and businesses To further strengthen its market position, IHM plans
alike a wide selection of well-maintained vehicles, as well to upgrade ISUZU N-Series, ISUZU F-Series as well as
as ancillary services and coverages to enhance the overall ISUZU D-Max. Following approval from the Road Transport
driving experience. Department in April 2018, it has also embarked on a
frame extension project under which it performs frame
Going forward, the company will continue to tap into the modifications for trucks at a new workshop.
potential of commercial vehicle leasing and market its
services more aggressively with state governments. It also IHM is confident of maintaining its leadership in the
seeks to leverage potential synergies within Albukhary commercial vehicles segment as it continues to introduce
Group of companies; and capitalise on its International the latest ISUZU models while complying with all local and
Licensee of the Year win. To further meet increase in international regulatory requirements.
demand, it will further strengthen its fleet size and add
another two outlets to its network in FY2019/20.
HA assembles the Mercedes-Benz C, E and S Class, GLC, HYMM manufactures and assembles Yamaha motorcycle
GLC Coupe as well as Actros and Mitsubishi Fuso Light engines and parts, with current production catering for
and Medium-Duty trucks, in addition to the VW Passat, three moped and two scooter models.
Tiguan, Vento and Polo Hatchback at its plants in Peramu
Industrial Estate, Pekan. During the financial year, three of the models – namely
the B17, 55D and 2WB – were upgraded, contributing to a
During FY2017/18, HA achieved a significant milestone surge in demand which exceeded HYMM’s manufacturing
with the commercial launch of a new high-tech paint capacity. This led to production line balancing and cycle
shop which doubles HA’s capacity to 50,000 units a year. time improvement to cater for higher volumes. Excitingly,
HA leveraged its additional capacity by signing a five-year the ramp-up in production also saw HYMM achieving a
contract with Mercedes Benz Malaysia and a three-year milestone when the 3,000,000th engine rolled out from its
contract with Hap Seng Truck Distribution for commercial plant on 25 February 2019.
vehicle assembly.
In its effort to boost productivity, HYMM continued to
Assembly of the Mercedes-Benz GLC Coupe and S Class focus on its Total Productive Maintenance programme,
560e plug-in hybrid commenced in February and March which contributed to an Assembly Overall Equipment
2019 respectively. Another feather in their cap was when Effectiveness (“OEE”) of more than 97% and a Machining
HA scored 10/10 points in the Daimler Surveillance Audit OEE of more than 91%. HYMM has also achieved its fourth
during the financial year. consecutive gold in the annual Yamaha Motor Company
Limited (Japan) audit in 2018 for the implementation of
Capitalising on its high-end painting capabilities and Shikkari Kihon manufacturing principles. It also won three
infrastructure as well as skilled employees, HA is looking Global Benchmarking Awards at the Yamaha Japan Annual
at further volume expansion in the years to come. The Monozukuri 2018 – for Best Performance Assembly, Best
focus for FY2019/20 will be new Mercedes-Benz and VW Improvement Machining Crankcase and Best Improvement
models, as well as a project it has embarked on with a new Crankshaft lines.
customer.
Yamaha’s market share has inched up from 44% in 2017
to 47% in 2018, reinforcing the brand’s leadership. This is
also reflected in the overall HYMM financial performance
which sees HYMM revenue and PBT exceeding the Annual
Management Plan by 22.1% and 40.5% respectively.
For FY2019/20, there are plans for B17, 55D and 2WB
models facelift, as well as B92 in order to excite the
market. This excitement is expected to further increase
Yamaha’s market share. In order to cater for the increase
in demand, HYMM is upgrading its production capabilities
with the installation of three new machining lines which
is for crankcase and head cylinder in FY2019/20, followed
by crankshafts machining lines in FY2020/21. It is also
improving its assembly cycle time from 0.60 minutes to
0.55 minutes in its effort to increase productivity as to
meet the increase in demand.
HICOM-Teck See Manufacturing Malaysia Sdn. Bhd. HICOM HBPO Sdn. Bhd. (“HHBPO”)
(“HTS”)
HHBPO designs, develops and supplies front end modules
HTS provides precision plastic injection moulding, blow (“FEMs”) for PROTON, VW and BMW at its plants in Tanjung
moulding, laser cutting, vacuum foaming, assembly, Malim, Perak; Pekan, Pahang; and Kulim, Kedah respectively.
painting and electroplating services. From manufacturing
of cockpits, bumpers, door modules and chrome parts This financial year saw HHBPO recording a steady growth
for the automotive industry, it has diversified into the with increase in sales, contributed primarily by BMW
non-automotive sector with the supply of road furnitures, and PROTON. Demand from the former increased with
mobile garbage bins and sound barriers. It is also gearing the launch of the second project namely, MINI (F60), X3
up to supply for the aerospace industry. (G01) and X4 (G02); while that from PROTON was driven
by higher than expected sales of Prevé. Together with VW
Moving up the value chain, HTS is now currently upgrading sales, HHBPO’s revenue for the year exceeded its target
its technology while focusing on people development to by 30%.
deliver excellence in manufacturing and service while
maintaining a competitive cost structure. Taking its Its quality and efficiency were recognised in December
technological transformation a step higher, it has formed 2018, when PROTON bestowed HHBPO the Excellent
a joint venture company with Jiangsu Xinquan Automotive Contribution Award for outstanding performance in
Trim Co. Ltd. (“XINQUAN”) in January 2019 to design, Quality, Delivery & Cost Reduction.
develop and manufacture instrument panels using a new
slush moulding technology, which is currently not available Moving forward, HHBPO has been nominated to supply
or used in Malaysia. the FEM for the Proton X70 and X50 once local production
commences. Concurrently, HHBPO is engaging with the
XINQUAN was incorporated in Jiangsu, China in 1982 and local OEMs and collaborating with the Malaysian External
was listed in the Shanghai stock exchange on 17 March Trade Development Corporation to explore opportunities
2017. It currently has 10 production plants in various for export within ASEAN.
parts of China supplying instrument panels, floor console
and door trims to Geely, SAIC Motor, Chery, Volkswagen, Launches from BMW, PROTON and VW, as well as other
Nissan, FOTON and Fiat Chrysler Automobiles (“FCA”). brands should boost HHBPO further.
In FY2018/19, PHN entered into technical partnerships PHN continues to service and quality recognition. It received
with TOPRE and ATSUMITEC Japan, to enhance the Perodua’s “Excellent Delivery Award” and “Excellent
development of components for three new Honda vehicles. Quality Vendor Award”, PROTON’s “Best Cooperation and
In addition to that, it acquired the rights to supply 24 parts Technology Award” and HONDA’s “Delivery Appreciation
for the Perodua Aruz; and 22 parts for PROTON’s upgraded Award” as well as “Environment Appreciation Award”.
Persona and Iriz.
HICOM Diecastings Sdn. Bhd. (“HDSB”)
Pos Malaysia, the nation’s postal service provider for over 200 years, has evolved
beyond traditional mail and parcel delivery. Leveraging its extensive network of
more than 3,700 touch points across the country, it offers end-to-end logistics
capability with an asset fleet that includes three freighter aircraft, two bulk
carrier vessels, 374 prime movers, 2,369 trailers and 377 lorries in addition to
3,020 delivery vehicles and 6,599 motorcycles.
Riding on Malaysia’s e-commerce wave, revenue from the Profit before tax (“PBT”) plunged from RM117.3 million to
CEP business increased by RM50 million. Supporting this a loss before tax of RM158.4 million, mainly as a result
growth, the aggregated total capacity of Pos Malaysia’s of widening losses from mail and impairment charges of
automated processing has been increased to 530,000 RM39.6 million from the impairment loss of goodwill in Pos
items a day from 300,000 items a day with the completion Logistics. Postal Services’ losses stem from continuing
of the second integrated processing centre (“IPC”) in KLIA. double-digit contraction in mail volume and bill payments
The first IPC is in Shah Alam. as these are replaced by electronic communication. The
impairment of goodwill in Pos Logistics was due to lower-
The Aviation business, which provides a range of ground than-expected performance resulting from competition.
handling services at airports including cargo handling,
saw a 4.8% increase in revenue year-on-year. This was Moving forward, Pos Malaysia is embarking on a Digital
due to higher cargo tonnage at the Sabah and Sarawak Transformation journey and expanding its capabilities
stations as well as enhanced cargo volume. Revenue to serve growing e-commerce demand. Overarching its
from the Logistics business dropped by 29%, mainly digital strategy are comprehensive efforts to become
as a result of completion of the RAPID project in Johor. more customer centric. Pos Malaysia seeks to elevate
The International Business, comprising the cross-border the customer experience and build trust through greater
delivery of e-commerce items (either via transshipment or transparency and visibility of service.
direct entry), recorded RM147.2 million in revenue.
Along with e-commerce growth, the long-term outlook
Overall, Pos Malaysia saw a 4.8% year-on-year drop in for Pos Malaysia is bright as more and more people
revenue to RM2.36 billion compared to RM2.47 billion in shop online. In the shorter term, it is hopeful of the
the previous financial year. tariff negotiations coming to fruition. This, together with
strategies for revenue growth and cost containment, places
Pos Malaysia on a surer footing to expand its business with
the best infrastructure and solutions to serve the market.
PUSPAKOM Sdn. Bhd. (“PUSPAKOM”) Yet another digital innovation has been to install live feed
display units at all inspection centres allowing customers
PUSPAKOM celebrates its silver jubilee this year. In that to monitor their vehicle inspection status while waiting.
time, it has played a significant role in motorists’ safety
as the only authorised vehicle inspection body in Malaysia. On the ground, PUSPAKOM has continued to grow its
In addition to this mandatory function, it offers a suite of mobile inspection network, extending the number of
services for private vehicles that includes inspection for operation days and hours of operation at major branches
hire-purchase financing, ownership transfer, registration while relocating and upgrading branches for greater
of imported vehicles and voluntary vehicle inspection. customer convenience and experience. It has also been
engaging more diligently with the public to enhance
awareness of the importance of inspection.
Its Hire-Purchase Inspection service was extended for Higher demand for inspection services along with an
another three years in December 2018 when PUSPAKOM overall increase in TIV during the year led to a 3.8%
won a tender issued by the Ministry of Domestic Trade and growth in net revenue year-on-year to RM145.5 million,
Consumer Affairs. while PBZT rose to RM9.9 million from RM8.1 million.
PUSPAKOM conducted a total of 3.35 million inspections
Since being awarded its concession in 1994, PUSPAKOM in FY2018/19, compared to 3.31 million in FY2017/18.
has been conscientious about fulfilling its service mandate
by continuously enhancing the customer experience. A key Meanwhile, its commitment to excellence was reflected
focus area currently is to harness digital technology for in more accolades and accreditation. PUSPAKOM was
more holistic, hassle-free solutions. This saw the launch of awarded the Malaysia Best Employer Brand Award 2018 by
online reservation and payment system, MyPUSPAKOM, in World HRD Congress, and received the MS ISO 37001:2016:
FY2017/18. In FY2018/19, PUSPAKOM rolled out the digital Anti-Bribery Management System (“ABMS”) accreditation,
service to all inspection centres in Peninsular Malaysia, becoming among the first organisations in Malaysia to
Kuching and Kota Kinabalu while also extending it for its do so.
mobile truck services. In addition, PUSPAKOM introduced
its own e-wallet as a new payment option besides credit Going forward, to meet increasing demand for mobile
and debit cards as well as financial process exchange. inspections PUSPAKOM seeks to grow its mobile service
fleet. With strengthened resources, it will also take its
services to as yet untapped markets.
DRB-HICOM University of Automotive Malaysia face the challenges of the 21st century. Currently, 2-Year
(“DRB-HICOM U”) University, 2-Year Industry (“2U2I”) programmes have
obtained provisional accreditation from the Ministry of
DRB-HICOM U is a full-fledged university offering Education: the Diploma of Engineering Technology in
foundation, diploma, degree and post-graduate Aerospace Composites Manufacturing; and Bachelor
programmes in engineering, technology, business and of Engineering Technology in Aerospace Composites
management to Malaysian and international students. Manufacturing.
Located within DRB-HICOM’s Automotive Complex in
Pekan, Pahang, it is the only university in Malaysia that Meanwhile, the Faculty of Business and Management’s
focuses on producing graduates who are automotive newly approved Bachelor Business Administration
industry-ready. (“BBA”) in Entrepreneurship and Innovation saw its first
intake in February 2019; and plans to offer programmes
Enrolment in FY2018/19 stood at 377, a number that is in flipped classroom mode under the School of Advanced
targeted to increase to 700 in FY2019/20 as a result of and Distance Learning (“SADLe”) are progressing. Out of
more aggressive marketing as well as new scholarship seven undergraduate programmes to be offered through
packages. In the next five years, DRB-HICOM U aims to the virtual campus, the SADLe is starting with two
have a total student population of 3,000. programmes for the June 2019 intake.
As part of efforts to increase its student intake, the The quality of DRB-HICOM U programmes is assured
Engineering Faculty is streamlining its resources to focus through relevant accreditation. To date, a total of 14 out of
on the most sought-after programmes. It has also identified 55 programmes have been accredited. Another seven were
six work-based learning (“WBL”) programmes that would audited in the first half of 2019 and have been provisionally
combine on-the-job experience with theoretical lessons. accredited. The remaining programmes will be audited for
This is in line with the Malaysian Education Development full accreditation in the coming years. To ensure relevancy
Plan 2015-2025 (Higher Education) to produce graduates and continuous enhancement of the programmes,
who are talented, skilled, knowledgeable and ready to industrial advisors and subject matter experts have been
appointed to appraise the curriculum contents.
This picture of our headquarters, Wisma DRB-HICOM, was hand-drawn by Kennard Lee Kean Aun (“Ken”), one of six differently-abled individuals
employed by the Company under our People with Disabilities (“PWD”) Programme. Ken is a staff of the Creative Services Department at Group
Strategic Communications Division.
Our wide geographic reach also means that our carbon footprint is larger than
most. Our postal services, for example, cover the far reaches of our nation, and
thus we endeavour to be responsible in the way we impact the environment
within which we operate.
Our size means we consume more energy when compared to the smaller
organisations. But we are cognisant to take proactive steps to ensure wherever
we can, we manage energy consumption while not impacting the output of work.
The satisfaction is in the results we have achieved. This year, we are proud
that the efforts across the Group have borne fruit. These are detailed in this
report and I hope you will celebrate with us the small successes that will lead
to greater ones.
Thank you.
This report focuses on the sustainability strategy and The scope of the report is confined to subsidiaries in which
practices of DRB-HICOM and its subsidiaries, namely the DRB-HICOM has more than 50% equity, unless indicated
material Economic, Environmental and Social aspects of otherwise.
our business operations.
Memberships and Associations
This report has been prepared in reference to the reporting
framework stipulated by the Global Reporting Initiative DRB-HICOM is actively involved in nationally recognised
(“GRI”) Standards and meets the statutory requirement memberships and associations in Malaysia. Examples of
prescribed by Bursa Malaysia Securities Berhad (“Bursa include, but are not limited to, the list below:
Malaysia”). The reporting principles covered in this report • MIGHT – Malaysian Industry-Government Group for
includes: High Technology
• FMM – Federation of Malaysian Manufacturers
• Stakeholder : capturing our stakeholders’
• MIER – Malaysian Institute of Economic Research
Inclusiveness expectations and concerns
• MIM – Malaysian Institute of Management
• MEF – Malaysian Employers Federation
• Sustainability : p
resenting our performance in the • MICG – Malaysian Institute of Corporate Governance
Context wider context of sustainability • MAA – Malaysian Automotive Association
• IIAM – The Institute of Internal Auditors Malaysia
• Materiality : identifying and prioritising the • FPLC – Federation of Public Listed Companies
key sustainability issues that our
Group encounters References
• Completeness : reporting all sustainability topics References to “DRB-HICOM”, “the Company”, “the
that are relevant to our Group, Organisation”, “the Group” and “we” refer to DRB-HICOM
and those that influences our and its subsidiaries.
stakeholders.
Feedback
The Materials established as the reporting perimeters in For further details, you may contact:
this report are as stated below: Name : Mahmood Abdul Razak
• GRI 203 Indirect Economic Impacts 2016 Designation :
Head, Group Strategic Communications
• GRI 302 Energy 2016 Division
• GRI 306 Effluents and Waste 2016 Email : info@drb-hicom.com
• GRI 403 Occupational Health and Safety 2016
• GRI 404 Training and Education 2016
• GRI 407 Freedom of Association and Collective
Bargaining 2016
• GRI 413 Local Communities 2016
Reporting Period
A B
C D
C. Excellent Technology Development Award H. Human Resources Asia Recruitment Awards 2018
Geely Auto 2019 Annual Supplier Conference awarded In-House Recruitment Professional of The Year
to PHN Industry Sdn. Bhd. (Silver) awarded to Vilashini Ananda Rajah, Head of
Group Talent Acquisition
D. Best Performer 2018 Award
Airbus Supply Chain & Quality Improvement I. Rentalcars.com Customer Favourite Award 2018
Programme (“SQIP”) awarded to Composites Avis Malaysia’s Kuching and Kota Kinabalu branch
Technology Research Malaysia Sdn. Bhd. (“CTRM”)
Today, with over 100 years of experience and growth, DRB-HICOM strives to lead by example in driving our Group’s
sustainability agenda. The group is among the region’s leading conglomerates with over 70 subsidiaries covering three
main sectors (across Automotive, Services and Properties) nationwide, employing more than 55,000 strong employees
base. Working with different sectors, people and needs, we have always aspired to reform the sustainability-sphere to
achieve noteworthy and continuing improvement in economic, environmental and social outcomes. This is a commitment
for all our business sectors, and Group as a whole, as we work together to incorporate sustainability into all our daily
operations.
Building on a strong foundation of corporate governance, sustainability principles permeate decisions and actions we
undertake to ensure responsible business practices, manage the environmental impact of our operational activities,
provide an inclusive workplace for our employees and meet the needs of wider society. We recognise the responsibility
we owe to our various stakeholders in delivering not only quality but ethical and responsible services and products. We
continue to strive towards inculcating sound corporate governance practices that is in line with the Malaysian Code on
Corporate Governance (“MCCG”) and adhere to related industrial best practices (see page 63 to 74 for details).
Human
Services Capital
Corporate
Responsibility
Properties
Given the diverse nature of our business operations, sustainable practices and responsible business strategy form the
basis of our ability to create long-term value for our stakeholders. We allocate and channel our capital in the form
of financial, manufactured, intellectual, human, social and relationship as well as natural capital into all our business
operations with the objective to minimise our negative impact and generate sustainable value to our diverse stakeholders.
As we believe that our global presence needs us to be forward looking and be supportive on both global and national
agendas, we therefore incorporate Sustainable Development Goals (“SDGs” or “Goals”) introduced by the United Nations
into the Group’s sustainable strategy. These set of 17 Goals include calls of action to end poverty, protect the environment
and help people lead a peaceful and prosperous life. Malaysia is committed to support and implement the 2030 Agenda for
Sustainable Development and its 17 Goals. We at DRB-HICOM reaffirm our support, aligning to the national aspirations
towards achieving the Goals.
• Stakeholder • Stakeholders’
Social and engagement survey concerns are
Relationship • Community addressed
engagement
We have strengthened the relationships we have with our DRB-HICOM Green Procurement Policy
vendors and suppliers through years of mutual trust and
respect via transparent business transactions. Given the The Group established the DRB-HICOM Green
multi-faceted nature of our services, we believe this is Procurement Policy to require all employees to
essential for the success of our business. conduct purchasing and contracting activities in
a resource efficient manner. It recommends each
At DRB-HICOM, we are committed to providing equal and necessary purchase to consider the below:
fair business opportunities through our tendering and
Request for Quotation (“RFQ”) processes. Our process 1. Fit for purpose, provide value for money
ensures all the participants are evaluated in a transparent 2. Energy and resource efficient
manner by the appointed committee members. We screen 3. Minimum use of virgin materials
all potential suppliers through our pre-qualification 4. Non-polluting
(“pre-Q”) evaluation before the tender or RFQ invitation 5. Durable, easily upgraded and repairable
is issued. Suppliers who pass the pre-Q are qualified 6. Minimum packaging
to move forward their participation of the tender/RFQ. 7. Reusable and recyclable
To encourage local supplier participation, we award
additional points to them in our tender/RFQ evaluations
where applicable.
1. Clause 2.7 : Confidentiality To learn more on how PROTON engages its supply
2. Clause 2.8 : Bidder’s Undertaking chain on energy management, please refer to
3. Clause 2.16 : Bribery and Solicitation page 162 to 163.
4. Clause 2.17 :
Compliance to Safety, Health and
Environment Regulations and Guidelines
5. Clause 2.18 : Immigration Regulations
Automotive Properties
Group Corporate
Services Support Services
DRB-HICOM
Sustainability Governance Structure
At DRB-HICOM, risks related to climate change, market and industries, reputation, and organisation are perceived as
the overarching foundation for sustainability risk management. These risks are managed by the Group’s three lines of
defense, namely Sector and Business Units, Group Risk Management Department and Group Internal Audit Division,
alongside initiatives conducted to measure and mitigate risks across all sectors, units and divisions on a consistent basis.
Climate-Related According to the Task Force on Climate-related At DRB-HICOM, we undertake a similar approach to
Risk Financial Disclosures (“TCFD”), climate-related risks understand our climate-related risks. We align our
can be divided into two categories, 1) risks related to commitment to Malaysia’s aspiration on carbon reduction
the transition to a lower-carbon economy and 2) risks in order to safeguard our business as well as the
related to physical impacts of climate change. community we serve from climate-related risks. This
means we constantly explore innovative ways and cutting
edge technology to reduce our energy consumption as well
as carbon footprint not only within the Group but also in our
supply chain.
Legal & Compliance The newly restructured Ministry of Energy, Science, With this in mind, the Group frequently engage with the
Risk Technology, Environment and Climate Change government as well as industry experts to ensure we are
(“MESTECC”) has emphasised on the participation of well prepared for regulatory transitions.
private sector in addressing climate change and other
environmental issues in Malaysia. The government is
currently looking into establishing policies on climate
change and energy efficiency. This may result in
increased compliance costs for businesses especially
those which are involved in high energy intensity
industries.
Health & Safety The health and safety of our employees as well as all Guided by the Group Safety, Health and Environment
Risk our stakeholders is an integral part of DRB-HICOM’s (“SHE”) Policy, we conduct stringent checks and employee
operational excellence that we will not compromise. trainings as well as implement control systems and
standard operational procedures to ensure disruptions
from health and safety related incidents at our workplace
are effectively mitigated.
Circular Economy Over 70 subsidiaries spanning across three diverse The Group is currently exploring methods to adopt the
within DRB-HICOM sectors - Automotive, Services and Properties, circular economy approach and gradually move away from
Ecosystem DRB-HICOM has built an economic ecosystem that the traditional linear “take, make, dispose” industrial
possesses sizable potential in minimising waste processes. We believe this will enable the Group to
and making the most out of resources within our minimise risks associated with raw material and natural
subsidiaries. For example, waste generated by one of resources in the long term.
our subsidiaries can be a source of raw material for
other subsidiaries.
Decarbonise Our In supporting Malaysia’s commitment towards We align our energy management strategy with Malaysia’s
Environmental achieving a 45% nationwide carbon reduction by year committment to carbon reduction. Since FY2016/17, the
Footprint 2030 compared to base year 2005, the Group has been Group has recorded a reduction of over 42 million kWh in
actively reducing its carbon footprint through energy energy consumption, which is equivalent to a reduction
reduction initiatives as well as adoption of renewable of more than 28,000 tonnes of carbon emissions. While
energy sources. the Group continues to yield energy savings from energy
reduction initiatives, our main subsidiaries PROTON and
CTRM have plans to adopt and instal solar panels at their
premises in the upcoming years.
These Economic, Environmental and Social (“EES”) risks and opportunities also complement the Group’s Enterprise Risk
Management (“ERM”) framework. More information can be found in the Risk Management Statement on the pages 75 to
80 and 95 to 102 of the Annual Report.
Our stakeholders are an integral part of our business, thus understanding and addressing their expectations and
concerns is key towards ensuring continuity in the DRB-HICOM sustainability journey. We are grateful and humbled by
the involvement of our stakeholders in this journey, particularly in identifying areas for improvements and defining the
expectations on our sustainability areas.
Over the years, we have nurtured our relationship with our stakeholders by placing an emphasis in prioritising our people,
the quality of our products, the personalised services we provide, the social impact we create, the economic performance
we achieve and our diligence in complying with relevant laws and regulations.
This year, DRB-HICOM has taken a digital approach by reaching out to our stakeholders via an online survey to understand
their expectations and concerns about our businesses.
The table showcased below has been revised as per data we have collated from our engagement with stakeholders
throughout FY2018/19.
Frequency of
Stakeholders Mode of Engagement Scope of Interest
Engagement
Customers Website / Social media platforms Continuous • Direct economic value generated and distributed
Media conferences As needed • Materials (recycled materials and reclaimed
products)
• Employment (turnover rate and benefits)
Local Community Participation in and sponsorship of community As needed • Materials (recycled materials and reclaimed
service events / NGO events products)
Social and environmental contribution As needed • Human rights assessment
programme • Indirect economic impacts
Safety, health and environment campaigns Quarterly
Investors In-house, one-to-one and small group meetings Continuous • Direct economic value generated and distributed
Community with stakeholders • Environmental compliance
Annual General Meeting (“AGM”) Annually • Employment (turnover rate and benefits)
Extraordinary General Meeting (“EGM”) of As needed
shareholders
Financial results announcements Quarterly
Dialogue / Teleconference between the Group and Continuous
investors
Non-deal roadshows As needed
Planned visits / Business showcase Annually
Regulators Attend workshops and seminars organised Continuous • Anti-corruption
by regulatory agencies to stay abreast of any • Energy
regulatory requirement • Training and education
Pro-active engagement / consultation with Continuous
the relevant regulatory bodies on corporate
compliance matters
MATERIALITY ASSESSMENT
Our closed loop materiality assessment is a key component of our sustainability reporting journey, primarily in defining
the reporting expectations and boundaries. Following the Materiality Matrix that was established in FY2017/18,
DRB-HICOM has reviewed and revised the existing matrix by incorporating local and global sustainability trends as well
as perspectives from our internal and external stakeholders via various engagements. The survey undertaken to engage
our stakeholders was managed and verified by an independent third party consultant. The results were compiled and
mapped according to the influence of sustainability issues emphasised by stakeholders and the significance of economic,
environmental and social impacts to the business. Further to the establishment of the Materiality Matrix, it was discussed
and approved by the BRSC. The Group strives to review the Materiality Matrix on an annual basis.
1 2
Current State Identify Local and
Assessment Global Trends
• Analyse previous year • Utilise media search and
reports to identify subject matter experts’
improvements to be inputs to identify local and
incorporated into this year’s global sustainability trends
report. that are relevant to
DRB-HICOM and its subsidiaries.
6 3
Validation
• Align the Materiality Matrix DRB-HICOM Climate Check
with DRB-HICOM Sustainability Materiality • Align report to Bursa Malaysia
Themes. requirement, GRI Standards
• BRSC discusses and approves Assessment and United Nations Sustainable
the finalised Materiality Matrix. Approach Development Goals (“UNSDGs”).
• Conduct comparative analysis
on peers and best-in-class.
Stakeholder
5 4
Management
Discussion Engagement
• Conduct a series of management • Bottom-up approach to identify
meetings and focus group internal and external stakeholders'
discussions to incorporate concerns on sustainability issues
stakeholders' concern into the via periodical engagements and
Group’s Materiality Matrix. online surveys.
High
Occupational
Anti-corruption Health and Safety
INFLUENCE OF STAKEHOLDER ASSESSMENT & DECISION
Training and
Education
Energy
Indirect Economic
Impacts
Local Communities
Respective
indicators can
Effluents and
Waste be found in
Freedom of Association
and Collective Bargaining GRI Standards
Water
Content Index on
the pages 193
Supplier Environmental and 194
Assessment Emissions
Diversity and Equal
Opportunity
Human Rights
Assessment
13% 5 Subsidiaries
reduction in total number of incidents
as compared to FY2017/18 were awarded SoHELP Level 5
Achievement of Excellence
81%
reduction in total Lost Time Injuries as
compared to FY2017/18 Open Dialogue
with the Group SHE practitioner to
191 share successful SHE initiatives
1 2 3 4
NO ZERO GOOD HEALTH QUALITY
POVERTY HUNGER AND WELL-BEING EDUCATION
6 7 8 9 1
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY RED
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND INEQU
ENERGY GROWTH INFRASTRUCTURE
11 12 13 14
SUSTAINABLE RESPONSIBLE CLIMATE LIFE BELOW
CITIES AND CONSUMPTION AND ACTION WATER
COMMUNITIES PRODUCTION
6 7 8 9 10
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY REDUCED
SUSTAINABILITY REPORT
Our people matters. It is our primary aim to provide a safe Safety, health and environment (“SHE”) matters at
and healthy working environment for our employees. It DRB-HICOM are guided by the Group’s SHE policy. The
is important to the Group that we ensure the safety of all policy focuses on four major objectives that include
our stakeholders that do businesses at our premises are Compliance, Prevention of Pollution, Communication and
prioritised. With a business influence sphere that spans Continual Improvement. These broad scopes underpin
throughout Malaysia, it is our duty to be compliant with all our overarching commitment towards protecting the
relevant safety and health requirements. environment where we operate while emphasising our
employees’ safety and health. The policy is applicable to
We have put in place stringent checks, systems and all our business activities and premises.
processes to ensure that safety and health is never
compromised, as we see these as not just a priority, but The Group formed a SHE Council, headed by the Group
a necessity. We have also invested heavily in training and Managing Director with the Group SHE Department acting
re-training courses, as well as run safety awareness as secretariat to monitor and advise on all SHE matters
and training programmes to instil a safety and health at Group level. The Council, with active participation
conscious culture in employees at all levels. This focus from Senior Management of the Group, has a role in
continues to be strongly reflected in the Group’s policies, determining the overall safety and health strategies and
procedures and plans. initiatives, as well as to drive effective implementation.
They meet quarterly to review the Group’s SHE strategies,
examine the progress on the Group’s SHE performances,
and evaluate audit results.
Key Objectives of
DRB-HICOM’s
Group SHE Policy
Compliance
To comply with all legislative and
regulatory requirements related
to SHE, as well as code of
conduct, best practices and
behaviour.
Prevention of
Pollution Communication
To identify and implement Best To engage and educate SHE
Green Practices for the Policy to all employees, partners,
workplace and to minimise and contractors and stakeholders
prevent at source where working within our premises.
possible. Continuous
Improvement
To identify and reduce the
potential hazards, risks and
impact to safety, health and
environment in order to
achieve continuous
improvements in all
activities and working
condition.
14,333
management system that enables us to monitor our SHE 12,000
performance not only at Group level but also at subsidiary
level. It is compulsory for all subsidiaries to report their 9,000
SHE performance (e.g. energy, waste and safety & health)
via IROSHE on a monthly basis.
8,212
6,000
1,598
from the data collected. All results will be subsequently 3,000
reported to the SHE Council on a periodic basis. Financial
0 Year
FY FY FY
Our Performance 2016/17 2017/18 2018/19
We continue to monitor our Group’s safety and health Total Lost Time Injuries in DRB-HICOM
performance by tracking both total Lost Time Injuries1 (Man Days)
(“LTI”) and total number of incident cases2. Based on the
results3, we are progressing positively based on a year-to-
year comparison. Incident
Cases
For FY2018/19, we managed to reduce the total number 800
of incident cases by approximately 13% compared to the 700 760
previous year. The number of cases decreased from 760
to 676 and 591 for FY2016/17, FY2017/18 and FY2018/19 600
676
respectively. This is a significant progress as the Group
591
500
aspires to have a consistent year-to-year reduction of 2%
400
in the total number of cases.
300
Based on the year-to-year comparison, the Group
200
has recorded a significant drop in the total LTI for
FY2018/19. We have recorded zero fatality cases, thus 100
Financial
the aforementioned results. It is our utmost priority to 0 Year
ensure our people are safe and healthy while conducting FY FY FY
their responsibilities to the company. We will continue to 2016/17 2017/18 2018/19
evaluate our current processes, monitor and find better
ways to improvise our safety and health matters. Total Number of Incident Cases in DRB-HICOM
Near-Miss Reporting
1
Total Lost Time Injuries is the total lost workdays - the number
We encourage our employees to report near-miss of workdays on which the employee would have worked but could
incidents across all operations as part of the measures not because of occupational injury or occupational poisoning or
occupational disease.
to prevent any such recurrence. Our near-miss reporting
system is designed to ensure that all near-miss incidents 2
Total number of incident cases - the total number of employees who
(including minor incidents) are reported, recorded and change in status from one state of health to another (such as non-
disease to disease) over a specific period of time.
investigated in a consistent and effective manner.
3
This includes data from ISUZU HICOM Malaysia Sdn. Bhd. and
HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd.
The SoHELP programme is a systematic intervention programme aimed to help companies enhance hygiene standards
in the workplace while meeting relevant regulatory requirements. The programme focuses on three main aspects:
1 2 3 4 5
chemical management, ergonomic issues and hearing conservation. The Group has NO
identified
ZERO
champions among the
GOOD HEALTH QUALITY ZER
SHE practitioners as SoHELP Enablers to assist the companies to self-regulate and monitor. Department of Occupational
POVERTY HUNGER AND WELL-BEING EDUCATION HUNG
Safety and Health (“DOSH”) acts as the SoHELP Verifier to evaluate and certify the level of achievement from Level 1
to 5. For FY2018/19, five companies have achieved Level 5 – Excellent, i.e. Perusahaan Otomobil Nasional Sdn. Bhd.
(“PROTON”), ISUZU HICOM Malaysia Sdn. Bhd., Bank Muamalat Malaysia Berhad, CTRM Aero Composites Sdn. Bhd. and
Motosikal Dan Enjin Nasional Sdn. Bhd. (“MODENAS”). 6 7 8 9 10
CLEAN WATER AFFORDABLE DECENT WORK INDUSTRY REDUCED
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND INEQUALITIES
LEVEL ENERGY GROWTH INFRASTRUCTURE
EXCELLENT
ADVANCED Element 1 Element 2 Element 3
INTERMEDIATE Chemical Noise Ergonomic
Management Management Management
BASIC 11
SUSTAINABLE
12
RESPONSIBLE
13
CLIMATE
14
LIFE BELOW
ENTRY
CITIES AND CONSUMPTION AND ACTION WATER
COMMUNITIES PRODUCTION
courses under the guidance of Balai Bomba Seksyen 15, CITIES AND
COMMUNITIES
CONSUMPTION AND
PRODUCTION
ACTION WATER
Key Initiative 2: Safety, Health & Environment Dialogue and Awareness Training
POVERTY HUNGER AND WELL-BEING EDUCATION HUNGER
From 26 to 28 September 2018, Group SHE organised a dialogue session with more than 190 SHE practitioners
8
across DRB-HICOM’s Group of Companies. Through the dialogue, weCLEAN conducted
6
WATER
open 7
AFFORDABLE
discussions to get feedback
DECENT WORK
9
INDUSTRY
andREDUCED
10
opinions on SHE matters, including inviting our subsidiary, PHN Industry Sdn. Bhd.
AND SANITATION
to demonstrate
AND CLEAN
ENERGY
AND ECONOMIC
GROWTH their ‘Safety Dojo’
INNOVATION AND
INFRASTRUCTURE
INEQUALITIES
amongst SHE practitioners, ensuring continued improvements to make DRB-HICOM a safe place to work. The dialogue
included presentation on corrective / preventive SHE-related action plans, SHE awareness training as well as providing
cardiopulmonary resuscitation (“CPR”) training to other employees in Wisma DRB-HICOM.
11 12 13 14
SUSTAINABLE RESPONSIBLE CLIMATE LIFE BELOW
CITIES AND CONSUMPTION AND ACTION WATER
COMMUNITIES PRODUCTION
15 16 17
LIFE ON PEACE JUSTICE PARTNERSHIPS
LAND AND STRONG FOR THE GOALS
INSTITUTION
1 2 3 4
NO ZERO GOOD HEALTH QUALITY
POVERTY HUNGER AND WELL-BEING EDUCATIO
The SHE team organised a safety, health and environment campaign on 24 and 25 October 2018 in Wisma DRB-HICOM.
6 7 8 9
About 10 external exhibitors participated in this two-day event providing healthcare advice, free
CLEAN WATER optometry
AFFORDABLE DECENT check-ups
WORK INDUSTRY
and fire safety awareness. One of the key events for the campaign was a blood donation drive ENERGY in collaboration
GROWTH with the
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND
INFRASTRUCTURE
National Blood Bank or Pusat Darah Negara where more than 80 DRB-HICOM employees donated their blood.
11 12 13 14
SUSTAINABLE RESPONSIBLE CLIMATE LIFE BEL
CITIES AND CONSUMPTION AND ACTION WATER
COMMUNITIES PRODUCTION
15 16 17
LIFE ON PEACE JUSTICE PARTNERSHIPS
LAND AND STRONG FOR THE GOALS
INSTITUTION
Energy Management
Key Highlights in
FY2018/19
11 22 33 44
NO
NO ZERO
ZERO GOOD
GOODHEALTH
HEALTH QUALITY
QUALITY
POVERTY
POVERTY HUNGER
HUNGER AND
ANDWELL-BEING
WELL-BEING EDUCATION
EDUCATION
66 77 88 99
1 2 3 4
AFFORDABLE
AFFORDABLE DECENT
5
DECENTWORK
WORK INDUSTRY
INDUSTRY
CLEAN
CLEANWATER
WATER
NO ZERO GOOD
AND
AND HEALTH
SANITATION
SANITATION QUALITY
AND
ANDCLEAN
CLEAN AND ZERO
ANDECONOMIC
ECONOMIC INNOVATION
INNOVATIONAND
AND
POVERTY HUNGER AND WELL-BEING EDUCATION
ENERGY
ENERGY HUNGER
GROWTH
GROWTH INFRASTRUCTURE
INFRASTRUCTURE
11 12 13 15
1514 16
16 17
17
Why It Matters
ISO 14001:2015 Certification
According to the World Resources Institute, more than
70% of global Greenhouse Gas (“GHG”) emissions are 12 DRB-HICOM subsidiaries received ISO 14001: 2015
contributed by energy sectors. It suggests that many global certification:
challenges associated with climate change we currently
face are mainly due to a rapid increase in human activities • HICOM Automotive Manufactures (Malaysia) Sdn. Bhd.
and energy consumption in our economy since the mid- • HICOM-YAMAHA Manufacturing Malaysia Sdn. Bhd.
20th century. While we acknowledge that climate change is • HICOM-Teck See Manufacturing Malaysia Sdn. Bhd.
expected to impact not only the communities we serve but • HICOM Diecastings Sdn. Bhd.
also our businesses in the long run, especially industries • PHN Industry Sdn. Bhd.
that are inherently energy-intensive, we strongly believe it • Oriental Summit Industries Sdn. Bhd.
is our responsibility to take an active role towards finding • DRB-HICOM Environmental Services Sdn. Bhd.
a sound solution towards embracing a low carbon society • Glenmarie Properties Sdn. Bhd.
for our future generation. • Composites Technology Research Malaysia Sdn. Bhd.
• HICOM HBPO Sdn. Bhd.
How We Approach It • PROTON Tanjung Malim Sdn. Bhd.
• Alam Flora Sdn. Bhd.
At DRB-HICOM, we are pleased to be entrusted with
an imperative role in contributing to the betterment
of the nation due to the Group’s strong presence with To date, PROTON has successfully implemented PROTON
more than 70 subsidiaries across various sectors in Green Initiatives Phase 1 (Energy Management System),
Malaysia. We align our energy management strategy Phase 2 (Energy Efficiency) and Phase 3 (Waste and Water
with Malaysia’s commitment to carbon reduction as Management). Notably, PROTON has commissioned
well as United Nations Sustainable Development Goals Energy Performance Contracting (“EPC”) in PROTON
(“UNSDGs”) to demonstrate our commitment towards Tanjong Malim Plant and PROTON Centre of Excellence in
energy management. This means the Group constantly January 2019.
engages with our subsidiaries to not only reduce energy
consumption through adopting industry best practices and Based on the United Nations Industrial Development
international standards but also to drive them to explore Organisation (“UNIDO”) Energy Management System Tool
new and innovative ways such as opting for renewable adopted by PROTON to monitor and evaluate its energy
energy to transform the way we manage our energy performance on monthly basis, initiatives implemented
consumption. under Phase 1 and Phase 2 have yielded up to 34% total
energy consumption reduction against the base year,
Energy Management at PROTON which is equivalent to more than RM18 million cost
savings across PROTON. Phase 3 is currently underway
PROTON has further escalated energy-related matters in PROTON Tanjung Malim Plant via the Recycled Water
as one of the material sustainability topics via its Green Initiative. Kindly refer to page 168 for more details on
Initiatives in September 2015. This has subsequently PROTON’s Phase 3 – Waste & Water Management.
fostered the launch of PROTON Green Initiatives that
drives PROTON towards reducing 40% of total energy In FY2019/20, PROTON is ready to step into the PROTON
consumption by 2020 in comparison with the base year Green Initiatives Phase 4 (Renewable Energy) with new
2015. and exciting initiatives in the pipeline. While PROTON
continuously adopts best practices in optimising energy
In January 2019, PROTON streamlined their energy performance in its manufacturing process, it plans to
reduction efforts by introducing the New Energy install a 9.75 Mega-Watt peak (“MWp”) Solar Photovoltaic
Management (“NEM”) department to spearhead and (“PV”) system as well as implement the conversion of
oversee energy reduction initiatives across all PROTON energy source from Liquefied Petroleum Gas (“LPG”) to
operations. Their Registered Electrical Energy Managers Compressed Natural Gas (“CNG”) in the PROTON Tanjong
(“REEMs”) are certified under the Energy Commission Malim Plant. It is estimated that both measures will
to achieve PROTON’s energy reduction target, in tandem generate more than RM 5.5 million energy savings once it
with PROTON’s aspiration towards becoming the leading is completed in FY2019/20.
ASEAN automotive company.
Phase 1: (2014-2015) Phase 2: (2016-2018) Phase 3: (2019-2020) Phase 4: (2018-2020) Phase 5: (2021)
Energy Management Energy Efficiency Waste & Water Management Renewable Energy Energy Digitalisation
System (AI)
Reducing Energy in PROTON’s Supply Chain As a prominent player in the Aerospace and Composites
industry in Malaysia, CTRM actively supports government
After its success in reducing energy consumption initiatives in climate change as the industry is considered
within PROTON’s operations in the past three years, inherently energy-intensive among other industries.
PROTON believes it is time to expand its aspiration to
reduce energy consumption through its upstream and CTRM’s commitment to energy management not only
downstream supply chain by assisting them towards reflects CTRM’s corporate responsibility towards the
adopting energy efficiency initiatives. environment but also subsequently reduces its overall
product costing that is highly associated with energy cost.
This year, PROTON has embarked on an energy audit
programme across its branches in Malaysia with To advocate the efficient usage of energy, CTRM established
11
the objective
NO
NO
22
to achieve
ZERO
ZERO
energy
GOOD
33
GOODHEALTH
reduction
HEALTH
44
by 5% perZERO
QUALITY
QUALITY
55
ZERO
the Energy Management Policy back in 2014. It lays the
branch. To date, we have completed energy audits in
POVERTY
POVERTY HUNGER
HUNGER AND
ANDWELL-BEING
WELL-BEING EDUCATION
EDUCATION HUNGER
HUNGER
foundation for all CTRM employees to continuously
seven branches located in Northern and Southern improve the use of energy efficiency with minimum waste
region of Peninsular Malaysia. We plan to complete and without compromising on regulatory compliance
energy audit in all branches, including branches as well as product quality for customer satisfaction. To
in East Malaysia,
66 77
by end 88 of FY2019/20. 99
Apart 1010from further demonstrate its determination in optimising its
CLEANour
CLEAN
AND
WATER PROTON
WATER
ANDSANITATION
SANITATION AND
branches,
AFFORDABLE
AFFORDABLE
ANDCLEAN
CLEAN
DECENTwe
DECENT
AND
WORK are also
WORK
ANDECONOMIC
ECONOMIC INNOVATION
in
INDUSTRY
INDUSTRY
INNOVATIONAND
AND
the midst
REDUCED of
REDUCED
INEQUALITIES
INEQUALITIES
energy management practices, CTRM has set an annual
engaging with ENERGY
ENERGY
our vendors GROWTH
GROWTH
as well as our subsidiaries
INFRASTRUCTURE
INFRASTRUCTURE
2% electricity consumption reduction target across its
to implement effective energy reduction initiatives. operations.
400
350
Kilowatt-hour (million)
356.9
6 7 8 9 10 300
324.3
AFFORDABLE DECENT WORK INDUSTRY REDUCED
314.6
CLEAN WATER
AND SANITATION AND CLEAN AND ECONOMIC INNOVATION AND INEQUALITIES
ENERGY GROWTH INFRASTRUCTURE
250
200
150
11 12 13 14
SUSTAINABLE RESPONSIBLE CLIMATE LIFE BELOW
100
CITIES AND CONSUMPTION AND ACTION WATER
COMMUNITIES PRODUCTION
50
0
FY FY FY
2016/17 2017/18 2018/19
Moving forward,
15
CTRM 16
will consistently
17
uphold its
LIFE ON
commitment to reduce
LAND
PEACE JUSTICE
its
AND STRONG
PARTNERSHIPS
environmental
FOR THE GOALS
impact by Total Electricity Consumption in DRB-HICOM
Group of Companies4
INSTITUTION
5
This is calculated via World Resources Institute GHG Protocol tool for purchased
electricity, Version 4.8.
150 50
141.2
Kilowatt-hour (million)
Kilowatt-hour (million)
45.9
45.9
120 40
44.8
119.2
115.2
90 30
60 20
11 22 33 44
NO
NO ZERO
ZERO GOOD
GOODHEALTH
HEALTH QUALITY
QUALITY
POVERTY
POVERTY HUNGER
HUNGER AND
ANDWELL-BEING
WELL-BEING EDUCATION
EDUCATION
30 10
0 0
FY FY FY FY FY FY 88
66 77 99 10
1
2016/17 2017/18 2018/19 2016/17 2017/18
CLEAN
CLEANWATER
WATER
2018/19
AFFORDABLE
AFFORDABLE DECENT
DECENTWORK
WORK INDUSTRY
INDUSTRY REDU
RED
AND
ANDSANITATION
SANITATION AND
ANDCLEAN
CLEAN AND
ANDECONOMIC
ECONOMIC INNOVATION
INNOVATIONAND
AND INEQUA
INEQU
ENERGY
ENERGY GROWTH
GROWTH INFRASTRUCTURE
INFRASTRUCTURE
11
11 12
12 13
13 14
14
SUSTAINABLE
SUSTAINABLE RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE LIFE
LIFEBELOW
BELOW
PROTON Green Initiatives has been an integral part of the journey towards transforming PROTON into a leading Malaysia
automotive company in energy efficient production. Since 2015, PROTON has continuously invested1515its efforts and 16 resources 17
16 17
into optimising energy performance across its operations. This year, PROTON has conducted several
LIFE
LIFEON
LAND
LAND
ON
initiatives
PEACE
AND
ANDSTRONGunder the
PEACEJUSTICE
JUSTICE
STRONG
PARTNERSHIPS
PARTNERSHIPS
FOR
FORTHE
THEGOALS
GOALS
INSTITUTION
INSTITUTION
PROTON Green Initiatives which have resulted in more than 2.22 million kWh of energy reduction. Approximately 40% of
the energy reduction is contributed by PROTON Casting Plant through maximum demand management of its induction
furnace.
PROTON Shah Alam Plant PROTON Tanjung Malim Plant PROTON Casting Plant PROTON Centre of Excellence
Alam Flora is one of the leading environmental management companies in Malaysia. They are dedicated to help the
environment by providing innovative solutions for waste minimisation and management in the community.
Through Alam Flora together with its fully-owned subsidiary, DHES, DRB-HICOM is contributing towards shaping
consumer behaviour to adopt and move towards advanced waste management practices in their day-to-day habits. The
following five key initiatives demonstrate our efforts and progress in the area for the current financial year.
1 11 2 22 3 33 4 44
NONO
NO ZERO
ZERO
ZERO GOOD
GOOD
GOOD
HEALTH
HEALTH
HEALTH QUALITY
QUALITY
QUALITY
POVERTY
POVERTY
POVERTY HUNGER
HUNGER
HUNGER AND
AND
AND
WELL-BEING
WELL-BEING
WELL-BEING EDUCATION
EDUCATION
EDUCATION
6 66 7 77 8 88 9 99 10
CLEAN
CLEAN
CLEAN
WATER
WATER
WATER AFFORDABLE
AFFORDABLE
AFFORDABLE DECENT
DECENT
DECENT
WORK
WORK
WORK INDUSTRY
INDUSTRY
INDUSTRY REDU
RED
RE
AND
AND
AND
SANITATION
SANITATION
SANITATION AND
AND
AND
CLEAN
CLEAN
CLEAN AND
AND
AND
ECONOMIC
ECONOMIC
ECONOMIC INNOVATION
INNOVATION
INNOVATION
AND
AND
AND INEQUA
INEQU
INEQ
ENERGY
ENERGY
ENERGY GROWTH
GROWTH
GROWTH INFRASTRUCTURE
INFRASTRUCTURE
INFRASTRUCTURE
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
SUSTAINABLE RESPONSIBLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELOW
BELOW
BELOW
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
SUSTAINABLE RESPONSIBLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELO
BEL
B
Since 2004, Alam Flora has built eight Buy Back Centres
(“BBCs”) located around Kuala Lumpur, Putrajaya and 1515
15 1616
16 1717
17
LIFE
LIFE
LIFE
ONON
ON PEACE
PEACE
PEACE
JUSTICE
JUSTICE
JUSTICE PARTNERSHIPS
PARTNERSHIPS
PARTNERSHIPS
Cyberjaya, which functions as a one-stop platform for LAND
LAND
LAND AND
AND
AND
STRONG
STRONG
STRONG
INSTITUTION
INSTITUTION
INSTITUTION
FOR
FOR
FOR
THE
THE
THE
GOALS
GOALS
GOALS
to ensure proper collection and disposal of the waste Recycled Water Initiative in ENERGY
At DRB-HICOM, we have established a Green Procurement Apart from significant water savings generated by
Policy and encourage all our subsidiaries to conduct the adoption of dry scrubber tools in its paint shop,11
procurement in a resource-efficient manner. The Policy the PROTON Tanjong Malim Plant has implemented SUSTAINABLE
CITIES AND CO
provides guidance to conduct purchasing and contracting recycled water initiative since 2017 to channel COMMUNITIES
activities by preferably selecting and purchasing goods, wastewater discharge from the plant back to its
services and processes, which utilise reusable, recyclable manufacturing process.
materials with minimal packaging.
Over the past two years, PROTON Tanjong Malim plant 15
has reused over 153,000 m3 recycled water, averaging LIFE ON
LAND
7
This is dated from January 2017 to December 2018.
Alam Flora is one of the leading environmental management companies in Malaysia. They are dedicated to help the
environment by providing innovative solutions for waste minimisation and management in the community.
Through Alam Flora together with its fully-owned subsidiary, DHES, DRB-HICOM is contributing towards shaping
consumer behaviour to adopt and move towards advanced waste management practices in their day-to-day habits. The
following five key initiatives demonstrate our efforts and progress in the area for the current financial year.
1 11 2 22 3 33 4 44
NONO
NO ZERO
ZERO
ZERO GOOD
GOOD
GOOD
HEALTH
HEALTH
HEALTH QUALITY
QUALITY
QUALITY
POVERTY
POVERTY
POVERTY HUNGER
HUNGER
HUNGER AND
AND
AND
WELL-BEING
WELL-BEING
WELL-BEING EDUCATION
EDUCATION
EDUCATION
6 66 7 77 8 88 9 99 10
CLEAN
CLEAN
CLEAN
WATER
WATER
WATER AFFORDABLE
AFFORDABLE
AFFORDABLE DECENT
DECENT
DECENT
WORK
WORK
WORK INDUSTRY
INDUSTRY
INDUSTRY REDU
RED
RE
AND
AND
AND
SANITATION
SANITATION
SANITATION AND
AND
AND
CLEAN
CLEAN
CLEAN AND
AND
AND
ECONOMIC
ECONOMIC
ECONOMIC INNOVATION
INNOVATION
INNOVATION
AND
AND
AND INEQUA
INEQU
INEQ
ENERGY
ENERGY
ENERGY GROWTH
GROWTH
GROWTH INFRASTRUCTURE
INFRASTRUCTURE
INFRASTRUCTURE
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
SUSTAINABLE RESPONSIBLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELOW
BELOW
BELOW
1111
11 1212
12 1313
13 1414
14
SUSTAINABLE
SUSTAINABLE
SUSTAINABLE RESPONSIBLE
RESPONSIBLE
RESPONSIBLE CLIMATE
CLIMATE
CLIMATE LIFE
LIFE
LIFE
BELO
BEL
B
Since 2004, Alam Flora has built eight Buy Back Centres
(“BBCs”) located around Kuala Lumpur, Putrajaya and 1515
15 1616
16 1717
17
LIFE
LIFE
LIFE
ONON
ON PEACE
PEACE
PEACE
JUSTICE
JUSTICE
JUSTICE PARTNERSHIPS
PARTNERSHIPS
PARTNERSHIPS
Cyberjaya, which functions as a one-stop platform for LAND
LAND
LAND AND
AND
AND
STRONG
STRONG
STRONG
INSTITUTION
INSTITUTION
INSTITUTION
FOR
FOR
FOR
THE
THE
THE
GOALS
GOALS
GOALS