Energy-saving plans top agenda


  • Business
  • Wednesday, 07 Dec 2005

ENERGY conservation has been a focus area for British American Tobacco (BAT) Malaysia for the last eight years, said managing director Andrew Gray.  

The year 2004 saw significant decreases of about 20% in water and energy usage; greenhouse gas emission was also reduced.  

“To further conserve energy, we will continue to work towards the reduction of reliance on depleting energy sources and seek out more environmentally friendly options,'' Gray said. 

In the steel industry, where electricity is one of the major costs, the Lion group plans to set up a dedicated power plant using waste gas from the blast furnace and natural gas to generate the power required by its steel-making projects. 

Chairman Tan Sri William Cheng said the pulp and paper mill at Sabah Forest Industries made use of fuel-wood, which was processed from bark and logs, to generate electricity power (being part of the fuel for the power boiler) to be used in the mill.  

Datuk Frank Steinleitner, president and CEO at DaimlerChrysler Malaysia, speaks of long-term plans for the company in Malaysia.  

The company is finalising its new investment plan for the assembly of its top model, the new Mercedes-Benz S-Class.  

DaimlerChrysler will confirm its investment plans upon the finalisation of the National Automotive Policy, which will outline the development and growth of the automotive industry. 

ANDREW GRAY 

Managing Director 

British American Tobacco Malaysia 

 

IS 2006 going to be a better year for your company, the economy and you personally? 

2005 has been an extremely challenging year for the tobacco industry, with BAT Malaysia working to ensure compliance with the recently revised Control of Tobacco Product Regulations and managing the impact of the large excise increase in Budget 2005. 

At the same time, we have to work hard to ensure that we maintain our leadership in the Malaysian tobacco industry. 

We hope 2006 will be relatively stable compared with 2005. The Budget 2006 announcement heralded a more balanced approach to tobacco taxation, taking into account the need to grow Government revenue and reduce the health impact of tobacco consumption while being mindful of the burgeoning threat of illegal cigarettes.  

Looking forward, we expect more regulations to be introduced for the tobacco sector as Malaysia works to align its domestic tobacco regulations with the Framework Convention on Tobacco Control – an international treaty in which Malaysia is a party. 

Given there are real risks of serious diseases associated with tobacco use, we believe tobacco should be regulated in various ways.  

At BAT Malaysia, we support sound and fair tobacco regulations that can reduce the public health impact of tobacco consumption and tackle under-age smoking while ensuring that adult consumers are allowed to continue making informed choices about a legal product.  

On a personal note, I am looking forward to see more of Malaysia in the coming year. I would like to get to know more of her people and understand more about her rich heritage and culture. My family and I have been living here for nearly two years and we are still learning about the country. It is a great place with so much to offer.  

 

What would be top on your list of priorities for the coming year? 

We are committed to further solidifying our market leadership in the tobacco industry. We will continue to protect the market share of our leading premium brand, Dunhill, by strengthening its brand presence in the marketplace and enhancing its brand equity.  

We will also continue to focus our resources upon reinforcing our position in the value-for-money segment. Over the last year, Pall Mall has become the fastest growing value-for-money brand in the country and we are confident we can take it further.  

Another area that will continue to be on top of our agenda is combating illicit trade. The latest study conducted by the Confederation of Malaysian Tobacco Manufacturers reveals that illegal cigarettes still represent 17% of the market. This means that nearly one in five packets of cigarettes sold in the country are contraband, and a large part of the market goes unregulated. 

On an encouraging note, the introduction of security ink marking for domestically produced products appears to have reduced the incidence of counterfeit brands available in the market. 

The main components of illicit trade these days are contraband cheap white and kretek cigarette brands, which frequently feature counterfeit tax stamps – this is a major concern to us. 

 

Are you going to invest more in 2006? 

Our investment in 2006 will be channelled towards supporting our business strategy.  

We will focus our resources to ensure we continue to generate growth in market share, enhance productivity and continue to run our business responsibly.  

Internally, in our pursuit to remain a winning organisation, we will continue to invest in training and developing our people and ensure BAT Malaysia is a great place to work. 

Please share some of your plans in relation to energy conservation, which has emerged as a major theme. 

Energy conservation has been a focus area for BAT Malaysia for the last 8 years.  

This initiative is driven by our dedicated Energy Conservation Committee, which continuously reviews our energy usage, tracks and monitors our energy conservation initiatives and consumption patterns, as well as actively seeks new ideas to lower energy usage.  

As of 2001, two of our managers who lead the committee have been authorised as Certified Energy Managers by the Energy Commission of Malaysia. 

We now have programmes to convert our machinery usage of diesel and LPG to natural gas; ensure the usage of energy efficient air-conditioning, lighting, motors, as well as conduct factory operations scheduling to optimise the off-peak load stipulated by Tenaga Nasional Bhd (TNB), just to name a few.  

2004 saw significant decreases of about 20% in water and energy usage.  

We have also reduced the amount of greenhouse gas emissions, from both our direct and indirect activities as measured by metric tonnes of carbon dioxide equivalent, by close to 20% compared with the year before.  

To further conserve energy, we will continue to work towards the reduction of reliance on depleting energy sources and seek out more environmentally friendly options.  

Collaboration with relevant bodies such as the Energy Commission of Malaysia, TNB, Pusat Tenaga Malaysia and energy consultants will remain one of the means to understand best practices to improve our energy usage.  

For full details of our energy consumption and conservation, view our Social Report 04/05 at www.batmalaysia.com  

DATUK FRANK STEINLEITNER 

President and CEO  

DaimlerChrysler Malaysia Bhd 

 

ARE you happy with your investments in Malaysia? What challenges do you foresee? 

Yes, I am pleased with our investments in Malaysia.  

We began operations in 2003 and in less than three years, DaimlerChrysler Malaysia (DCM) has expanded into a multi-brand company, distributing Mercedes-Benz passenger cars and commercial vehicles, Smart, Maybach and Mitsubishi FUSO commercial vehicles.  

As the biggest European assembler in Malaysia, we have invested more than RM100mil in assembly activities.  

Today, the assembly of completely-knocked-down (CKD) vehicles has become DCM's core business, with more than 80% of Mercedes-Benz passenger cars sold in Malaysia assembled locally.  

In fact, we rolled out the 50,000th locally assembled Mercedes-Benz car in August.  

Our assembly facility in Malaysia produces vehicles that comply with DaimlerChrysler's international quality standards.  

Our joint assembly operations with MTB (Malaysia Truck and Bus Sdn Bhd) of DRB-Hicom group has set a new benchmark, offering the largest product range of locally assembled Mercedes-Benz passenger cars and commercial vehicles, as well as Mitsubishi FUSO commercial vehicles in Asean.  

Retail network and quality are as equally important as product quality and training.  

Our Mercedes-Benz dealers invested about RM120mil for 17 Autohaus in Malaysia, demonstrating their commitment and trust in the three-point star and strengthened the brand presence of Mercedes-Benz in Malaysia. 

Three Autohaus will open soon in the Klang Valley – CCB PJ Autohaus along the Federal Highway, Si Khiong Star Autohaus at Jalan P. Ramlee (opposite Shangri-la Hotel) and CCB Autohaus in Mutiara Damansara (near IKEA). 

We foresee challenges in the commercial vehicle segment due to rising fuel prices, car price stability pending the finalisation of National Automotive Policy (NAP), etc.  

However, our investments and strategy help us to differentiate ourselves from our competitors. I believe we are on the right track to uphold our position as the most reputable and successful premium automotive brand. 

What should Malaysia do to sharpen its competitive edge vis-à-vis its neighbours in the Asian region? 

We are confident the NAP will consider a balance of interests between national carmakers and foreign players. That said, Malaysia is still the biggest market for passenger cars in Asean, making it a very attractive for us. 

We feel that the announcement of the new duty structure and framework of the NAP are vital Government efforts to ensure sustainable development of the Malaysian automotive sector. 

It will facilitate the continuous growth of car sales and provide the necessary support for existing assemblers.  

 

Is your company investing further in Malaysia? 

DCM has long-term plans for Malaysia – we are currently finalising our new investment plan for the assembly of our top model, the new Mercedes-Benz S-Class.  

We are also looking into market introduction of other brands under the umbrella of DaimlerChrysler.  

We will expand our training centre by collaborating with the National Vocational Training Council on the automotive apprentice training - “Mechatronic Program”. 

We are looking forward to confirm our investment plans upon the finalisation of the NAP, which will complement the development of the Malaysian automotive industry. 

 

What is the outlook for your company and the economy in Malaysia? 

DCM charted very good performance and growth in the first three years.  

We are on the right track to achieve another 20% growth this year, representing a turnover of about RM1bil. We have expanded the company portfolio to multi-brands. 

On the Mercedes-Benz side, we remain very competitive with a great product line this year that includes the newly launched A-Class and new CKD models such as C230 and E240 Avantgarde, the first four-door coupe Mercedes-Benz CLS-Class

The luxurious CLS-Class, which was awarded overall “Car of The Year 2005” recently, also upped the glamour quotient to the line-up of new models.  

In the pipeline are the M-Class, B-Class and the all-new S-Class. Therefore, we foresee next year to be a good and exciting year. 

TAN SRI WILLIAM CHENG 

Chairman 

Lion Group 

 

IS 2006 going to be a better year for your company, the economy and you personally? 

I believe 2006 will be a better year for the nation’s economy and my companies.  

With the implementation of Budget 2006, the Government will spend RM35.5bil for development, which is 13% higher than the allocation in 2005.  

And as the 9th Malaysia Plan begins next year, more money will be released for the construction and agriculture sectors, water and sewerage infrastructure, human capital training as well as research and development. Hopefully, this will activate the market. 

 

What would be top on your list of priorities for the coming year? 

Our priorities for the coming year are to reduce production costs, increase productivity and enhance efficiency. These are the basics. 

 

Are you going to invest more in 2006? 

Definitely. We will continue to invest in the areas in which we have done well, especially in the retail, steel and tyre industries. We will expand our retail business in China.  

Currently, Parkson Retail Group Ltd (PRG) operates 44 stores in 26 cities in China. We expect to establish more outlets and acquire 10 to 14 department stores in the next three years.  

PRG is listed on Hong Kong Stock Exchange and we raised RM786mil from the listing.  

We are also evaluating the feasibility of investing RM5bil in the steel industry, which will increase our total capacity to 7.8 million tonnes. 

 

Please share some of your plans in relation to energy conservation, which has emerged as a major theme. 

In the steel industry, where electricity is one of the major costs, we plan to set up a dedicated power plant using waste gas from the blast furnace and natural gas to generate the power required by our steel-making projects.  

The power plant, with a proposed investment of RM1.6bil, will reduce electricity costs, and hence production cost, by RM48 per ton or RM245mil per annum. 

Also, the pulp and paper mill of our unit Sabah Forest Industries makes use of the fuelwood, which is processed from bark and logs, to generate electricity power (being part of the fuel for power boiler) to be used in the mill.  

Fuelwood generates around 36% of the mill's electricity requirement.  

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