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Corporate Social Responsibility

INTRODUCTION

For the current financial year, FACB Industries Incorporated Berhad ("FACB Industries") has expanded its CSR framework to include marketplace responsibility, besides environmental and social responsibility, the two major themes which were accorded the same level of priority in the previous financial year.

AN ENVIRONMENT FRIENDLY AND RESPONSIBLE RECYCLING POLICY

As part of our effort to achieve a responsible recycling policy, our bedding manufacturing operations has constantly searched for innovative ways to optimise the usage of residual materials generated from the manufacturing process. Over the years, Dreamland Malaysia has combined repurchased usable scrap from external buyers with internally produced foam scrap to produce sellable re-bond mattresses. These initiatives have not only reduced consumption of new raw materials, but also enabled us to reduce solid waste disposal to the environment. Our initiatives are in line with worldwide environmental programmes in preserving a cleaner environment and practising sustainable manufacturing for our future generation.

EMPHASIS ON HEALTH & SAFETY STANDARDS

Where issues of Safety, Health and Environment are concerned, FACB Industries believes that there is neither room for complacency or compromise. Safety campaigns and continuous training programmes are part and parcel of our corporate culture. The Steel Division hosted the Annual Safety and Health Week in March 2009. Our commitment in providing employees with a healthy and safe working environment had resulted in a significant reduction of industrial accidents in the Steel Division, from 29 cases in 2006 to a combined 19 cases in 2007 and 2008 respectively. We always strive to reduce lost man-hours to a minimum level in every phase of our production process.

Industrial hygiene and safety measures remain our top priorities in our steel products production process. To avoid our employees from excessive exposure to toxic and hazardous chemicals, each hazardous chemical is frequently examined and assessed in terms of the quantity of chemical usage, its exposure method and control measures or practices, etc. We also ensure that our Shah Alam plant's exhaust ventilation systems are functioning properly to avoid our employees from over exposure to dust and hazardous emissions by monitoring the velocity of ducting and capacity of filters. We ensure our chemical health risk assessments are conducted in accordance with Use of Chemical Hazardous to Health Regulations under the Occupational, Health and Safety Act.

Besides implementing noise exposure monitoring system to determine noise pollution composition at various plants, we also engaged a hygiene technician to conduct Audiometric Hearing Test to all employees in November of every year. All these were conducted in compliance to Noise Exposure Regulations as stipulated under the Factories & Machinery Act.

In respect of the bedding division, rigorous chemical risk assessment tests are the norm. Being an annual event, various types of assessment tests were conducted in the different manufacturing plants in Johor. Besides jointly conducting these annual tests with our joint venture partner i.e. Pacific Brand Australia, we collaborate closely with the Department of Environment to identify, control and maintain chemical risks to comply with environmental regulations.

Throughout the year, our bedding division has conducted safety courses for its employees. These courses, conducted by credible institutions, included training on proper usage of industrial apparatus, machinery, safety equipment and proper handling of hazardous chemicals. The types of training courses comprise Safety & Health by SMIDEC Malacca and Austive Training Centre, Basic Fire Prevention and Safety by Bomba Malaysia, Muar District and Forklift Safety by M Harvest Consultancy. In addition, standard courses on the application of personal protective equipment also form an inevitable part of our holistic safety modules.

CONTRIBUTION IN TRAINING AND EDUCATIONAL INITIATIVES

As one of the key players in water resources, we forge close working relationships with water authorities from the various states by regularly participating in their training programmes. For instance, in August 2008, our stainless steel division participated in the Technician and Plumber Training Programme organised by SYABAS . The event took place at IKRAM Training & Infrastructure Development Institute located at IKRAM Park, Kajang-Serdang. These external programmes form part of our overall initiative in providing continuous educational and training programmes to the water industry.

The provision of Industrial Attachment Training to future engineers and technicians is deeply embedded into our corporate culture. Over the years, our steel division had provided numerous opportunities to undergraduates from various local colleges and universities to undergo their practical training at our manufacturing plants. One of the most practical experiences that have benefited them is the experience in managing challenges in an actual working environment to enhance their employability upon their graduation.



In August 2008, a small group of undergraduates from the Faculty of Mechanical Engineering, Universiti Teknologi Mara, Shah Alam visited our steel manufacturing plants. Similarly, two separate groups of students from the Mechanical Engineering Society of Tunku Abdul Rahman College Kuala Lumpur visited our plants in November and December 2008 respectively. These plant visits have enriched the knowledge of our future engineers on the manufacturing process, besides demonstrating to them the essentials of quality control, sheet metal working process, extrusion, technical drawing, etc. where all these are crucial to fulfill their engineering course requirements.

In addition, our steel division also encouraged cross cultural and regional exchange programmes to promote Malaysia to global varsities. In collaboration with ArcelorMittal Stainless International, we arranged a plant visit cum educational tour, in April 2009, to 39 students from the Master of International Business, University of Paris Dauphine. These initiatives have facilitated global scholars to understand and experience first hand, the manufacturing environment and business practices in different countries including Malaysia.

To reflect our continuous emphasis on staff training and development affairs as a caring employer of choice, we congratulate Kanzen Tetsu, our stainless steel manufacturing unit as a proud recipient of a Certificate of Appreciation under the Human Resource Development Awards in October 2008. This award was in recognition of our active involvement in providing numerous training sessions to upgrade employees' skills under the Human Resource Development Fund scheme. We were honoured to receive this award under Large Employers - Manufacturing Sector category, held in conjunction with National PSMB Conference & Exhibition 2008 by Pembangunan Sumber Manusia Berhad (PSMB), Ministry of Human Resources.

UPHOLD IN PRODUCT QUALITY ASURANCE AND WARANTY

Our strong commitment towards quality has resulted in Dreamland being voted as the most Trusted Brand in Malaysia 2009 under the Mattress Category by Reader's Digest Asia. Reader's Digest had engaged prominent market survey firm, AC Nielsen, to conduct an independent survey recently amongst targeted Malaysian consumers. The independent survey clearly demonstrated that Dreamland has been voted by Malaysian consumers as a credible brand.

Our stainless steel products division is one of the best quality product exporters in Malaysia over the past two decades. We have received numerous quality assurance and audit commendations by prominent local agencies and globally renowned bodies endorsing our product quality attributes. We first obtained our quality certification in compliance to ISO 9001:1994 Quality Management Systems requirements in 1996. It was further upgraded to ISO 9001:2000 in 2002. We treat this recognition as an indirect endorsement and a vote of confidence in delivering our quality products beyond our customers' expectations.

CONCLUSION

As a responsible corporate entity, we continue to adopt best business practices which are beneficial to the society, environment and marketplace. Our CSR framework has been progressively reviewed to reflect our corporate values which are synchronous with the ever changing market environment.