Fraser & Neave Holdings Bhd Sustainability Report 2021

Similarly, we have also established a regional distribution centre (RDC) in Rojana, Ayutthaya Province, Thailand, equipped with THB287 million ASRS. Strategically located 1.7 km from our dairies manufacturing plant in Rojana, Ayutthaya Province, the 20,000 square metres RDC is expected to be operational in end 2021. This RDC will serve as our regional distribution hub for F&N Dairies Thailand (FNDT)’s products. Operations Exposure to Climate Change Risks F&NHB’s operations and supply chain face risks due to climate change impacts. This includes impacts from rising sea levels, extreme temperatures, farming shortages and water availability. Physical climate change risks are monitored and managed as part of our Enterprise Risk Management process, which is under the responsibility of the Sustainability and Risk Management Board Committee. Identified climate change related risks include flooding and mineral water sourcing and contamination. To manage these risks, we work closely with state authorities and local councils. We also have robust incident escalation procedures and response plans in place as part of our Business Continuity Management. Route Planning and Reducing Carbon in Our Value Chain Optimal route planning can help us to reduce costs and be more environmental-friendly. Over the past few years, we have continued to streamline our distribution networks. We have made more than RM800 million of capital investments since 2014 on new lines and warehouses across our production facilities in various locations. Our decentralisation strategy also means that our manufacturing and warehouse operations are closer together, resulting in shorter routes to market and lower carbon emissions from logistics. To further optimise route planning, we have invested RM180 million in a new integrated warehouse at our Shah Alam plant, equipped with an Automated Storage Retrieval System (ASRS). This new warehouse is expected to commence operations by mid-2022 and will deliver carbon avoidance of about 600 tonnes per year, equivalent to approximately 3,600 trees or 130 cars driven annually. The ASRS will manage the automated process of getting finished goods ready for delivery to market or distributors’ warehouse. The system will drive improvement through: More accurate stock management Elimination of product damage caused by mishandling In-sourcing of break bulk activities Reduction of time spent by workers at the warehouse Improvement in warehouse safety Low Carbon Footprint Product The Extra Non-dairy Half Creamer for Cooking and Baking (net weight of 385g) is F&N’s first low-carbon product certified by Thailand Greenhouse Gas Management Organisation (Public Organisation: TGO) for successfully meeting the requirements of the Carbon Footprint Label Scheme. The product’s carbon footprint is 295 kg CO 2 . F&N is working towards having more products certified by TGO that meets the requirements of the Carbon Footprint Label Scheme. Operational Eco-Efficiency 099 Fraser & Neave Holdings Bhd ! Sustainability Report 2021