Annual Environmental Report Year 2001 ~ 2002

Thal Engineering Plot no. 1,2 Sector 22, Korangi Industrial Area Karachi.

Contents

Company Profile Company Milestones Environment Management System Companywide Environmental Management System Objectives and Targets, Implementation and Operation Training, Communication Public awareness and promotion activities focusing on the environment. Environmental Cost EMS Organizational Chart Environmental Policy Total Environmental Aspects TE Business activities and their effect on the environment List of concerned Parties Environmental Achievements Results of Activities to fiscal year 2001~2002 Activities to reduces substances with environmental impacts Case Study 1: Recovery Recycling Unit at DENSO AIRCON CENTER Case Study 2 : TEC Recycling at Factory Feedback Form

Company Profile

Thal Engineering
Number of employees: 194 Products: Car Air Conditioner & Wiring Harness Sales: Rs. 627,351,000 p.a
Plant: Thal Engineering Plot 1,2, Sector 22, Korangi Industrial Area, Karachi.Pakistan Denso Aircon Service Centre: 14, Banglore Town Housing Society, Sharah-e-Faisal, Karachi.

Company Milestones
Thal Engineering, was setup by the House of Habib in 1995 as a division of Thal Jute Mills, to manufacture auto parts. The Company entered into a Technical Assistance Agreement with Denso Corporation Japan, in 1996 to progressively manufacture car air conditioners. A localization plan, envisaging achievement of 52 % in five years was prepared and approved by the Ministry of Industries and the company started operations in Aug,1996,supplying its air conditioners to Toyota and Suzuki car manufacturers. In late 1999 Thal engineering entered into a Technical Assistance Agreement with Furukawa Electric Japan to manufacture wiring harness and began supplies in March 2000. It now supplies for Toyota, Daihatsu, Hilux &Honda cars, Yamaha motorcycles and MF Tractors. The Company employs modern management practices and was awarded certificate of Excellence by Management Association of Pakistan in 2000.It has also been certified for ISO 9001-2000 and ISO 14001, the only auto parts manufacturer to be certified in Pakistan. The company is young and youthful and the average age of the employees is 28. The Company is service oriented. It has taken upon itself the market discipline of total solution provider and has established a 3S centre in the activity hub area, besides being in daily contact with the automakers.

Environmental Management System

Company-wide Environmental Management System (EMS)

We established the Thal Environment Committee in Sept. 2000 as a company-wide organization for promoting effectively our company action plans of environment protection. The committee made a three month action plan to achieve ISO 14001 certification.

Objective and Targets

In setting the objectives and targets significant environmental aspects are considered.We use and maintain a procedure for developing such objectives and targets which accomplish the goals of the Environmental Policy.At a minimum, our objectives and targets comply with regulatory requirements but we strive wherever possible to exceed this minimum requirements.

Implementation and Operation

A procedure is used and maintained for DOCUMENTING ROLES, RESPONSIBILITIES AND AUTHORITIES of various individuals, to ensure that the structure and system of accountability for implementation of EMS remains current and clear. Each individual knows what his or her responsibilities are, as well as the authority with which to fulfill them. Management has provided resources including Human capital, Specialized skills training, and funds essential for the implementation and control of the EMS.

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Environmental Management System

Training
Environmental training is conducted to ensure that all employees are aware of the environmental issues, environmental policy, significant aspects of activities, product and services and requirements of EMS and have adequate training to deal with responsibilities they are given. We are firmly committed to provide all necessary training to employees.

Communication
We maintain a documented system for INTERNAL AND EXTERNAL COMMUNICATION, which provides regular and timely communication among Thal Engineerings Employees and to other relevant persons as and when required. We arrange Management review meetings to review the process for communication ( Internal & External both) and record its decision. We believe that maintaining a high level of effective communication is essential for good performance of the company and the community as well.

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Environmental Management System

Public Awareness and Promotion Activities Focusing on the Environment
Our view is that action is needed to generate a greater awareness of environmental concerns amongst all employees. To achieve this wider recognition we are engaged in company-wide awareness and promotion activities. Year 2001~2002 has been designated The Recycling Year of Thal Engineering. During this year we carried out an intensive program of awareness building activities on a company-wide basis, including practical action programs for cleaning-up and greening our plant sites as well as awareness campaigns directed at the general public through our product booklet, CDs and website.Environmental awareness-building has also been an important subject of our initial training program for newly recruited employees since 2001.

Employees With Environmental related Qualification (as of July 2002)

Qualification Lead Auditor Internal Environment Auditors Number 1 6

Curriculum ( classes in FY 2001~2002)

Course General Training on Environment Training of new employees Number of attendees 228 68

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Environmental Management System

Environmental Costs
For the ongoing deployment of our environmental protection activities, it is essential to make an accurate assessment of the costs involved and of the effects achieved and to communicate the cost information to all concerned both inside and outside the company.

Environmental Protection Costs In FY 2001~2002

Category and Primary Expenses Direct Costs Pollution prevention, industrial waste disposal and recycling costs Indirect Costs Management, environmental education, certification and other costs R & D Costs Costs for product development, research and capital investment for environmental protection Total Amount ( Rs.) 500,000

550,000

650,000

1,700,000

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EMS Organizational Chart

EMS Organizational Chart

Chief Executive

MR Committee

EMR

M(Finance)
- Ist floor office

M(PE)
- Plant & Machiner of A/C Plant

DMC
- Main Store - Incoming Store - Raw Material store

MAP
- Canteen - Security - Sanitation - Scrap yard - Plantation - Transport - others

GMP
- WH Plant - TFW

SM
- Air Con Centre

Task Team

Approved By Issue Date: Issue No. 27-06-2001 01

ENVIRONMENTAL POLICY

"Fulfill Environmental Obligation to Community, Country and Mother Earth ." We shall commit to prevent pollution and continually improve our environmental performance by regularly setting objectives against significant environmental impacts, conducting audits, management review and complying with legislative and regulatory requirements.

Environmental Aspects
TE
S. No. 1 2 3

Graphical Representation of Total Environmental Aspects / Impacts

Aspects No. 98 39 34 171
PARETO ANALYSIS

Issue date: 20-9-01, No: 02

Aspects Register

% 57.3 22.8 19.9

Cum % 57.3 80.1 100.0

Remarks

Medium Significance (MS) High Significance (HS) Low Significance (LS) Total

Objectives & targets are made to minimize HS

Pie Chart for Aspects

1
20%

3
98 80.1

100

57.3 39

50

57% 23% ASPECTS

0

TE

Graphical Representation of Significant Ervironmental Aspects / Impacts

Description No. 22 7 7 4 3 4 47 % 46.8 14.9 14.9 8.5 6.4 8.5 Cum % 46.8 61.7 76.6 85.1 91.5 100.0

Aspects Register
Issue date: 20-9-01, No: 02

No. 1 2 3 4 5 6

Remarks

Land Pollution Hazardous Waste Wastewater Discharge Non-Hazardous Waste Energy use/ Consumption Air Emissions Total
Pie Chart for Aspects
28% 5% 10%

PARETO ANALYSIS
1 2 22 3
14% 76.6 85.1 91.5

34

100

46.8

50

4 5 7 7

24%

19%

6
1 2 3 4 5 6

ASPECTS

CUM %

No

61.7

CUM %

No

Business Activities

Thal Engineering Business Activities and Their Effect on the Environment

Thal Engineering Environmental Protection Activities Environmental protection in production Social contribution activities

Product development

Recycling and scrapping

Discharge of industrial waste Use of substances with an environmental impact

Procurement
Resource and energy consumption Industrial waste generation Use of substances with an environmental impact

Air pollution Destruction of ozone layer Water contamination Noise pollution Depletion of resource

Global warming

Product use
Gas Emissions Noise pollution

Production
Industrial waste generation Use of substances with an environmental impact

Distribution
Gas emissions Fuel consumption Noise pollution Product packaging waste

LIST OF CONCERNED PARTIES

1.
a) b) c) d)

CUSTOMER
Indus Motor Company Pak Suzuki Motor Company Authorized dealers Direct customer (A/C purchase directly from Service Center)

2.
A)

VENDORS AND SUPPLIERS

List of vendors available with our Development Department.

3.
a) b)

NEIGHBOURING COMPANIES
Atomic Energy Commission (New-2) Plot no. 3 & 4, sector 20, Korangi Industrial Area Karachi. K.E.S.C Work Shop. Plot no. 23 & 24, sector 22, Korangi Industrial Area Karachi.

4. 1)
a) b) c) d)

ENVIRONMENTAL PROTECTION AGENCY ASSOCIATIONS

The Federation of Pakistan Chambers and Commerce. The Karachi Chambers and commerce Korangi Industrial Estate Association Pakistan Association of Automotive Parts & Accessories Manufacturers

2)
a) b) c) d) e) f) g)

CONTRACTORS
Industrial Power (Tech) Fahad Enterprises Star Contractors Al-Hina Architect Engineers & Constructors MHM Builders Noor Khan Scrap Contractors EMC

5.

EMPLOYEES OF THAL ENGINEERING We also publicize our Quality and Environmental Policies and Objectives to Public through Web site.

Achievements

S. No
1

ACTIVITIES FY 2001~2002
OBJECTIVE To prevent the escape of Ozone depleting substances completely at Denso Aircon service centre. We will not fit any new aircon with R-12 after sep, 2001. Gases R-12 & R134a will be recycled in order to save the Ozone depletion by Sep-2001. Used Trichloroethylene ( Hazardous chemical) will be recycled. TCE will be collected, Stored and recycled offsite by Dec-2001. Training on Environmental awareness & EMS elements to all TE employees. All THAL ENGINEERING staff be given basic training on EMS elements and environmental awareness by Dec-2001. To conserve energy by replacing Petrol with CNG in company vehicle.

Results

Completed

TARGET

OBJECTIVE TARGET

Completed

OBJECTIVE TARGET

Completed

OBJECTIVE

75% completed TARGET 5 OBJECTIVE TARGET 6 OBJECTIVE 04 Vehicles will be converted to CNG from petrol by Dec-2001. To design and install the water treatment facility. The Water treatment facility be operated by June-2003. Improve and designate proper area for scrap from its existing condition. The proper areas will be designated according the types of scraps by Dec2001. Improve existing oil, chemical and hazardous material storage and designate proper area for used chemicals / hazardous material. The proper areas will be identified and designated by Dec-2001.

60% completed

TARGET

completed

OBJECTIVE

completed

TARGET

Activities to Reduce Substances With Environmental Impact

Specified CFCs (Substances Destroying the Ozone layer)

We discouraged specified CFCs (R12), used as a refrigerant for automotive air-conditioners, with R134a from the first day of production. The management also decided not to fit any air-conditioner with R-12 gas, even if it means loss of business. We are also striving to reduce the consumption of R-134 by taking more effective steps for preventing leakage when filling the refrigerant in the system.

Environmental Achievement (Case Study 1)

BUSINESS DECISION
CAPITAL INVESTMENT To prevent the escape of Ozone depleting substances completely at Denso aircon service centre. In the early days R-12 gas was not being recovered from vehicle when the A/C was repaired. R-12 gas is very harmful for environment so the management decided to buy a recovery recycling unit to avoid releasing the harmful gas into the atmosphere. The management also decided not to fit any air conditioner with R-12 gas, even if it means loss of business. For an investment of Rs. 399,000/= Thal would see annual operating saving ranging about Rs. 137,700/= per year.

BUSINESS ENVIRONMENT BENEFITS WHY WAS PROJECT PERFORMED?

Global warming is one of the most dreadful threat to all of us these days. Reason being that ice glaciers and the ice bergs will be melted in no time flooding the entire mother earth if preventive measures are not taken. Most of know that the sun radiates energy in the form of ultraviolet radiations. These radiations are spread out through the entire universe and are extremely harmful to human body (can cause severe burns, skin cancer, skin irritation etc) therefore nature has created a protective shield (Ozone Layer) around the global which does not allow these radiations to penetrate through. But unfortunately there are some gases (CFCs) which they escaped into the atmosphere, can damage Ozone Layer letting the UV radiations to pass through and thus raising the temperature of the earths environment as well as causing harm to the human beings. It is a common practice that whenever the car is brought at the Denso aircon service centre for servicing of the A/C system, the gas (refrigerant) has to be discharged into the atmosphere because it becomes difficult to restore it in another container. When it is discharged, it poses threat to the operator working on the vehicle and finally to the ozone layer. After thoughtful evaluation of the means available for preserving the refrigerants escaping out into the atmosphere , it was decided to procure a machine which can recover as well as recycle the refrigerants and then safely recharge them into the A/C system. This would not only prevent loss of gases into the atmosphere but also save cost. In the light of above facts recovery recycling unit had been purchased as per plan.

PROJECT DESCRIPTION

Environmental Achievement (Case Study 1)

ANALYSIS
The investment in a recovery recycling unit was evaluated to enhance capital budgeting decisions in connection with environmental safety. the initial investment cost which include not only equipment and material but also training of operators. The saving would result from not discharging R-12 gas into the atmosphere. This recovery recycling unit showed a positive impact on cost. Now gas is being fully recovered and recycled. Project saving has been calculated on yearly basis, about Rs. 137,700/= for which the payback will be achieved in three years time approx. A number of critical assumptions underlying the analysis were individually tested to determine their effect on profitability. These included the expected cost of the gases, the cost of rework, and the depreciation method. Ejaz Rizvi, DM QA, Thal Engineering, Korangi industrial Area, Karachi. Ph. No. 5897608 Fax no. 5888539 E mail ejaz@thalengg.com.pk

FINANCIAL RESULTS

CONTACT

Cost Considerations
Cost Considerations
Rs.
Annual cost saving of gas Cost of recovery unit Total cost saving over ten years Total saving over ten years 137,700 399,000 1,377,000 978,000

Environmental Achievement (Case Study 2)

BUSINESS DECISION

Product/ Process Costing Trichloroethylene TCE (Hazardous Chemical) will be recycled by Dec-2001.

BUSINESS ENVIRONMENT BENEFITS WHY WAS PROJECT PERFORMED?

Company will save about Rs.60,000 per year to recycle this chemical.

This chemical is being used to degreasing the aluminum tubes, which use in air-conditioner production. There are two bath of TCE. in first bath aluminum tubes are dipped for degreasing heavy oil and chips. And in second bath tubes are dipped for final degreasing. Normally after one month, TCE of first bath is disposed off and TEC of second bath is transferred into first bath. Disposed TCE was stored that could not be disposed on land because it is very harmful chemical. Final management decided to search the sources to recycle that chemical.

PROJECT DESCRIPTION

WE contacted to PCSIR to recycle the TCE. Finally they agreed to recycle TCE. After several attempts they succeeded to get good results of recycled TCE.

Environmental Achievement (Case Study 2)

ANALYSIS

The investment in a recycling of TCE was evaluated to enhance budgeting decisions in connection with environmental safety. the initial investment cost which include not only material but also transportation of material. The saving would result from not disposing the hazardous chemical on land.

FINANCIAL RESULTS

To recycle the TCE, we saved about Rs.60,000 per year.

Cost Considerations
Rs.
Monthly Saving Yearly Saving 4,995 59,940

Feed Back

Your Comments or opinions on this report would be much appreciated.

FAX 021- 5888539
Environment Protection Dept.Thal Engg.Pvt.Ltd. Please complete this questionnaire and return it to us by fax. Your comments will help us make further improvements and prepare our next Environment Reports.

Q1. How would you evaluate this report? (Please circle only one.) 1.Excellent 2.Good 4.Unsatisfactory 3.Average 5.Poor

Q5. What do you expect Thal Engg.to do concerning the environment? Please give specific reasons.

Why did you choose the answer above? Pleas give specific reasons (e.g,topics covered or simplicity) Q6. Why did you receive this report and how did you become aware of it?(Circle as many as relevant) Why did you receive the report. 1.Have transactions with Thal Engg. 2.Member of Government or administrative office. 3.Member of the press. 4.Thal Engg. Employee or family member. 5.None of the above (Be specific)

Q2. What impressed you the most about this report? What information did you find most interesting?

Q3. Is there any part of this report that should be supplemented with more information or improved in any other way? How did you become aware of the report? 1.Thal Engg Web Site 2.Thal Engg.dealer 3.Heard from a friend or acquaintance 4.None of the above (Be specific)

Q4. After reading this report,how do you feel about Thal Engg's environment-related activities? 1.Excellent 3.Unsatisfactory 2.Good 4.Poor

Why did you choose the answer above? Please give specific reasons.

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Sex 1. Male

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