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HONG KONGHead Of f rn China)Address: Suite No. 912, 9/F., Skyline Tower, 39 Wang Kwong Road, Kowloon Bay, Hong KongTel: (852) 2173 6688Fax: (852) 2808 0183Email: [email protected]
SHANGHAIRegional Of rn China)Address: Room 602, 6/F., K. Wah Centre, 1010 Central Huaihai Road, ShanghaiPostal Code: 200031Tel: (8621) 6113 3333Fax: (8621) 6113 3500Email: [email protected]
YUNNANRegional OfAddress: Room 1A, Unit 2, Block 10, Sunny Lake & Splendid Life, Anning, Kunming, YunnanPostal Code: 650300Tel: (0871) 6869 7472Fax: (0871) 6869 7472Email: [email protected]
BEIJINGRegional Of rn China)Address: Room 2706, Building B of Tower 2,
Wangjing SOHO, Chaoyang District, Beijing
Postal Code: 100102Tel: (8610) 8471 5516Fax: (8610) 8471 5516-210Email: [email protected]
We appreciate your feedback. Kindly send us your commentsor suggestions at [email protected].
Scan the QR code to read ourfull version Sustainability Report.
Cementing
SustainableFuture
stakeholders’connection for a
SustainabilityHighlights
2019
Cementing
SustainableFuture
stakeholders’connection for a
SustainabilityHighlights
2019
Managing Director’s Message
Business Environment
Despite the competitive market landscape, K. Wah Construction Materials Limited (“KWCM” or “the Company”) delivered a strong financial performance across our markets. KWCM’s focus on domestic market minimises our exposure to the global economic uncertainty. The resulting economic ripple effect is further mitigated through our diversified business portfolio.
In Mainland China, we benefited from the strong domestic demand for construction materials. The Central Government’s Belt and Road Initiative also helped to underpin demand for construction materials like cement in a number of geographies including Yunnan Province, where KWCM has several strategically-located production facilities.
In Hong Kong (“HK”), we saw stable demand for construction materials. HKSAR Government is continuing its commitment to launch major infrastructure works and building projects. We have confidence that the future demand for construction materials in HK will be promising. The Guangdong-Hong Kong-Macao Greater Bay Area Initiative also helps to underpin future demand for construction materials in this area.
Going Forward
Since early 2020, the China-US polit ico-economic tension is heightened, the COVID-19 pandemic that is sweeping across the world has changed our way of life. With the world still recovering from the tragic blow of this pandemic, this will be a challenging year for many trade sectors, but also an opportunity for growth and expansion for those who have strong support from stakeholders.
KWCM has weathered storm after storm successfully. Amid the many challenges and uncertainties we encounter, I truly believe that a sustainable future cannot be accomplished by the business world alone. Such a sustainable future will undoubtedly require partnership across all sectors of society, and we have long cemented for a closer connection with governments, business partners and community to provide the innovative products and quality services needed to achieve sustainable goals locally and globally in order to make the world cleaner and greener.
Joseph Chee
Managing DirectorK. Wah Construction Materials
Connections with Stakeholders
Our Value Creation Model (“VCM”) embedded corporate social responsibility into KWCM’s gene. In our VCM, one important stakeholder is the regulatory body. In the last couple of years, Mainland China has been pushing forward the “Blue Sky Initiative” and “Extra-low Emission Scheme”. Manufacturers that are underperforming will be forced to shut down. This change opens up the market to those who put continuous effort into improving their environmental performance, and will further sustain our company growth and image.
Supporting the Paris Agreement which was adopted by 189 countries in 2015, China has established its Emission Trading System two years ago. Since its coming into effect, KWCM has been pushing forward “coal-to-gas switch” to slash our carbon emission and to gain a competitive edge in this cap-and-trade system.
In addition, we connect proactively with the local community to establish a mutual-understanding to gain their confidence in our production facilities. Open days and factory visits were periodically organised for the local community, and air emission dashboards were displayed outside the production plants. All these efforts serve to provide openness and transparency to the communities and foster a closer connection with them.
K. Wah Construction Materials Limited is delighted to present its performance in corporate social responsibility and environmental, social and governance. This year, we will issue our first Sustainability Highlights to cover the reporting boundaries of all our subsidiaries and thereafter annually to demonstrate our efforts to achieve excellence in sustainability. The full version of our Sustainability Report will continue to be published biennially, and in future to demonstrate our commitment to the environment, it will only be available on our website.
Your Choice - K. Wah Construction Materials
Legend of KWCM
KWCM is a wholly owned subsidiary of Galaxy Entertainment Group Limited. KWCM is a vertically integrated resource based company supplying aggregates, ground granulated blastfurnace slag (“GGBS”), cement and other downstream building materials. The Company is firmly focused on creating value for our stakeholders in a sustainable manner.
1950s ~ 1960s• Dr Lui Che-woo, Group Chairman, founded the first company of K.
Wah Group in 1955
• K. Wah Group was the first private enterprise to obtain a quarrying rights contract in Hong Kong at Anderson Road Quarry 1 in 1964
• Introducing mechanisation in quarrying to enhance productivity to meet the surging demand for construction materials in public housing and infrastructure projects
1970s• Supplying quality aggregate with the latest technologies and
modernised facilities
• Implementing overseas technology in the production of precast concrete products
1980s• KWCM entered into Mainland China in 1981 and built its first quarry
in China in Shenzhen Wushigu, it also owned the first of its kind cross-border aggregate conveyor belt
• K. Wah Concrete Co. Ltd. was established in 1983
• K. Wah Stones (Holdings) Limited (currently known as K. Wah International Holdings Limited, stock code: 0173) was listed on the Stock Exchange of Hong Kong ("SEHK") in 1987
Value Chain and One-stop Service
IntegratedConstruction Materials Management
CentralServices
Material Collection and Processing for Reuse and Recycle
Partnership & Procurement
Quarrying Raw Materials
Rehabilitation
Production
Product in Use
Services and Logistic Centre
1990s• K. Wah Construction Material Limited (currently known as Galaxy
Entertainment Group Limited, stock code: 0027) was listed on SEHK in 1991
• KWCM built Guangzhou Huangpi Quarry in 1993, the largest of its kind at the time in Guangzhou
• The Anderson Road Quarry Rehabilitation contract commenced in 1997, and built the first glory hole in Asia to reduce air pollutant emissions from vehicles
2000s• KWCM established strategic partnerships with renowned iron and
steel enterprises in Mainland China to leverage their slag by-product to produce GGBS, an environmental-friendly cementitious product
2010s• Established Guangdong Huidong Quarry, one of the largest quarries
in the Greater Bay Area, and a leading model for green quarrying in Guangdong Province
2017• Over 53 years of quarrying and 20 years of rehabilitation, Anderson
Road Quarry was officially handover to the HKSAR Government
Qianan
Nanjing
Hong KongMacao
Shaoguan
Zhaotong
Anning Qujing
Baoshan
Puer
Liupanshui
ShenzhenHuidong
Ezhou
Maanshan
Tongling
HEBEI
YUNNAN
HUBEI
GUIZHOU
GUANGDONG
JIANGSU
ANHUI
14,000,000tonnes
12,000,000tonnes
16,000,000tonnes
4,000,000cubic metres
400,000tonnes
120,000tonnes
50,000,000pieces
1,000,000metres
Major Projects
Business Partners
Corporate Strength
Annual Production Capacity
Financial Highlights
Hong KongCross-Harbour TunnelHK International Airport Midfield Apron DevelopmentHK-Zhuhai-Macao BridgeIsland Eastern Corridor & Eastern Harbour CrossingKai Tak Airport (Extension)Liantang/Heung Yuen Wai Boundary Control PointRoute 3 ExpresswayMTR: Shatin to Central LinkSouth and North Runway Resurfacing of the HK International AirportThe third runway construction project of the HK International AirportTsing Ma BridgeTuen Mun - Chek Lap Kok LinkWestern Harbour CrossingHK - Shenzhen Western Corridor
Joint Venture PartnersAlliance Construction Materials Limited Guizhou Shougang Shuicheng Iron & Steel GroupAnhui Maanshan Iron & Steel Group Baowu Group Echeng Iron & Steel Co., Ltd.Beijing Shougang Group Kunming Iron & Steel GroupChina Resources Cement Holdings Limited Nanjing Iron and Steel GroupGuangdong Shaoguan Iron & Steel Group Taiwan Cement Corporation
Mainland ChinaAn Pu HighwayAnshun to Liupanshui Intercity Railway Beijing New Airport Project ConstructionChengdu to Guiyang RailwayConstruction of Beijing Tongzhou Sub-center Dakaimen-Kasa ExpresswayDongdi to Dapingzi Class I HighwayJinghong-Menghai ExpresswayLianyungang-Huaian-Yangzhou-Zhenjiang High-speed RailwayMojiang-Lincang ExpresswayQian'an City Sponge Project Renovation of Liupanshui Municipal Network Management Shanghai Pudong International AirportShangqiu-Hefei-Hangzhou High-speed RailwayShuicheng to Weining ExpresswayTangshan Fengrun Outer Ring Road Bridge and Leading Project Yuxi-Mohan RailwayZhenfeng Thermal Power Plant
MacaoGalaxy Hotel TM
One OasisSai Van Lake (Embankment)Sino-Portuguese Trade Center
GGBS Cement
Aggregates Ready Mixed Concrete
Asphalt Precast Concrete Pipes
Eco-Blocks and Pavers Precast Concrete Piles
For more than half a century, construction materials business has been the cornerstone on which the K. Wah Group has built its success. KWCM has transformed from a vertically integrated construction materials provider into an enterprise that integrates green measures with its value-added production processes. From our business base in HK, KWCM has branched out into Macao and Mainland China. Today, we have operations in over a dozen major cities and industrial strongholds.
Cementitious Products: Cement and GGBS
Conventional Products: Aggregates, ready mixed concrete, asphalt, blocks & pavers, precast concrete pipes and piles
Note: The above figures also cover all joint venture companies.
0
500
1,500
2,500
1,000
2,000
3,000
3,500
2015 2016 2017 2018 2019
Revenue (in HK$ Million)
Adjusted EBITDA (in HK$ Million)
Sanhe
We Care about Our Peopleand the EnvironmentKWCM considers health, safety and the environment to be a core value of our business. We are fully committed to safeguarding the health and safety of everyone affected by our business activities, and encourage our key stakeholders to participate to achieve mutual benefit.
Safety Statistics
Support Clean Energy
Instant Communication through Safety App
23% (2019: 315) vs (2018: 410)
Lost Days due toWork Injury
< 1GJ/t
(2019: 0.99) vs(2018: 0.97)
Energy Consumption
Intensity
KWCM has developed a Safety App to facilitate instant safety reporting and communication and a Safety On-line, a web platform, to provide analytics of safety data and statistics for continuous improvement.
Thanks to our team cohesion to advance our safety performance, KWCM’s injury rate and accident frequency rate are significantly lower than industrial averages by a large margin.
KWCM echoed government’s initiative, China's 2018-2020 Three-year Action Plan for Winning the Blue Sky War, by proactively pushing forward “coal-to-gas switching” to fight against air pollution. Coal has long been a major energy source in Mainland China, and natural gas has been acclaimed as a viable green alternative to coal. Our “coal-to-gas switching” retrofit projects demonstrated reduction of over 30% in various air pollutants including nitrogen oxides and sulphur dioxide. We do not limit our effort to slash conventional air pollutants, but are also committed to controlling our carbon footprint. On account of our tight collaboration with government’s green initiatives, in the reporting period, KWCM has been successful in curbing our energy consumption intensity and greenhouse gas emission intensity within 1 GJ per tonne of product and 0.25 tonne CO2e per tonne of product respectively.
Note: The industrial safety statistics of Mainland China is not listed here as it is based on a different system which is incomparable to other statistics.
Injury Rate per 1,000 Employees
Greenhouse Gas Intensity (tonne CO2e per tonne of product)
Energy Consumption Intensity (GJ per tonne of product)
Natural Gas Usage (GJ)
0.22
2018 2018
2018
2019 2019
2019
0.240.97
0
0.99
42,860
31.7
14.7 13.8
2018 2019
5.13
30.6
23.2
Hong Kong Construction Industry
Hong Kong Manufacturing Industry
Macao Construction Industry
Macao Manufacturing Industry
KWCM
29.0
4.27
27.5
21.2
< 0.25tCO2e/t
(2019: 0.24) vs(2018: 0.22)
GreenhouseGas Intensity
Natural GasUsage
42,860 GJ
(2019: 42,860) vs(2018: 0)
Note: Compared to the published figure in Pg. 45 “Galaxy Entertainment Group Limited Annual Report 2019”, energy consumption intensity figure is adjusted after independent verification by certified body.
In KWCM, listening to and addressing community concerns is always synonymous with good business practice.
We invest in activities and programs that focus primarily on economic development, education, and environment, reaching thousands of people in locations where we operate. We carry out most of these projects in partnership with local charities, and we are especially proud of the long-term relationship that has been built with them.
KWCM's Three Training Pillars
Major Community Programmes
957
Total Number ofDirect Employees
24%
2019: 6.02018: 10.5
Employee Turnover Rate
Average Training Hours
Note: Compared to the published figure in Pg. 55 and 58 “Galaxy Entertainment Group Limited Annual Report 2019”, the methodology of measuring KWCM average training hours has been updated, thus the figures relating thereto have been remeasured accordingly.
Management Skills and Soft Skills
Occupational Health and Safety
Compliance and Regulation
We ConnectOur Community
Charitable Activities• Charitable fundraising events of The Community Chest (2019, 2018)• Donation to Liu's Ancestral Hall in Renshan Town (2019)• Village road facilities reconstruction at Renshan Town (2019)• KWCM-ELCHK Charity Walk (2018)• KWCM 2-year Volunteer Programme (2019, 2018)• Lifewire Run (2019, 2018)• Pok Oi Cycle for Millions (2019, 2018)• KWCM 5-year education fund in Zhaotong (2018–2022)
Education and Culture• HK Mine Challenge (2019, 2018)• Sowers Action Challenging 12 Hours (2018)• Final Year Project for Civil and Environmental Engineering students of
The HK Polytechnic University (2019, 2018)• Environmental Management and Technology Capstone Project for The
HK University of Science and Technology (2019, 2018)
Environmental Protection• Sewage diversion renovation project at Renshan Town (2019)• Tai Po Beach Cleaning Day (2019)
2019: 206,0002018: 1,227,000
2019: 6562018: 3,468
2019: 262018: 34
Investment in Community(in HK$) Community Hours
Community Programmes
(2019: 6.9%) vs(2018: 9.1%)
Note: The high number of community hours in 2018 is due to the large-scale signature event "KWCM-ELCHK Charity Walk".
Attracting and retaining staff, providing equal opportunities, and increasing diversity in our workforce are fundamental to KWCM. As such, we strive to treat everyone fairly and without discrimination, creating value for our employees by supporting them in reaching their potential. Also, we pride ourselves on training and career development opportunities, competitive remuneration and benefits, as well as a healthy work-life balance.
KWCM's talent management programmes are created and delivered at the local level, while our successful Human Resources strategy remains embedded across the Company, encompassing leadership development, occupational health and safety, and employee capability building.
Our Team - KWCM Professionals
Note: Hong Kong Quality Assurance Agency has undertaken an independent verification for the data presented in the Sustainability Highlights.
13+
Social
Others
Envi
ronm
enta
lG
overnance
31+
11+
4+
Proud to be KWCM People
Occupational Health Award 2018-19 - Joyful@Healthy Workplace Best Practices Award (Enterprise / Organisation Category)- Excellence Award
The 18th Hong Kong Occupational Safety & Health Award - Safety Management System Award - Other Industries - Bronze Award
2017/18 Airport Safety Recognition Scheme - Corporate Safety Performance Award
Good MPF Employer Award 2018-19- Logo
Hong Kong ESG Reporting Awards 2018- Excellence in Sustainability Report for Non-listed Company
(Grand Award)
- Excellence in Environmental Disclosure (Grand Award)
- Innovative Frontrunner (Grand Award)
Social Capital Builder (SCB) Awards 2018- Logo
Caring Company Scheme- 15 Years Plus Caring Company Logo
Green Office Award Labelling Scheme (GOALS)- Certificate of Recognition
Green Office and Eco-Healthy Workplace Awards Labelling Scheme- Eco - Healthy Workplace Award (Autumn 2019)
Green Factory
Name of Charter / Pledge Issuing BodiesCharter on External Lighting Environment Bureau
Good Employer Charter Labour Department
Green Event Pledge Environmental Protection Department
Joyful@Healthy Workplace Charter Department of Health, Labour Department, Occupational Safety & Health Council
Occupational Safety Charter Labour Department, Occupational Safety & Health Council
Workplace Hygiene Charter Labour Department, Occupational Safety & Health Council
Charters
Major Awards & Recognition in 2018 and 2019
Name of Association Nature of MembershipHong Kong Construction Materials Association Founding Board Member
Hong Kong Concrete Institute Member
Hong Kong Asphalt Pavement Association Member
Hong Kong Green Building Council Limited Institutional Member
Hong Kong Occupational Safety & Health Council Green Cross Group Member
Business Environment Council Corporate Member
China Concrete and Cement-based Products Association Slag Cement Concrete Branch Member
Membership
HONG KONGHead Of f rn China)Address: Suite No. 912, 9/F., Skyline Tower, 39 Wang Kwong Road, Kowloon Bay, Hong KongTel: (852) 2173 6688Fax: (852) 2808 0183Email: [email protected]
SHANGHAIRegional Of rn China)Address: Room 602, 6/F., K. Wah Centre, 1010 Central Huaihai Road, ShanghaiPostal Code: 200031Tel: (8621) 6113 3333Fax: (8621) 6113 3500Email: [email protected]
YUNNANRegional OfAddress: Room 1A, Unit 2, Block 10, Sunny Lake & Splendid Life, Anning, Kunming, YunnanPostal Code: 650300Tel: (0871) 6869 7472Fax: (0871) 6869 7472Email: [email protected]
BEIJINGRegional Of rn China)Address: Room 2706, Building B of Tower 2,
Wangjing SOHO, Chaoyang District, Beijing
Postal Code: 100102Tel: (8610) 8471 5516Fax: (8610) 8471 5516-210Email: [email protected]
We appreciate your feedback. Kindly send us your commentsor suggestions at [email protected].
Scan the QR code to read ourfull version Sustainability Report.
