ShenmaIndustrial Co., Ltd.
Sustainability Report 2023
Contents
Opening of the Report
About This ReportChairman's Message
Company Overview
About ShenmaCorporationMain Products and BusinessesMajor Honors and Recognition in 2023
ESG GovernanceESG Governance StructureStakeholder CommunicationMateriality Assessment
Annual Topic 1Become a Global Leader in High-endFunctional Materials
AppendixPerformance Table of Quantified DataGRIContent IndexContent Index of the Guidelines No. 14 ofShanghai Stock Exchange for Self-Regulationof Listed Companies—Sustainability Report(Trial)Content Index of the Reference IndicatorsSystem for ESGReports of Listed CompaniesControlled by Central State-owned EnterprisesReader Feedback Form
Corporate GovernanceParty BuildingGovernance StructureCompliance and Risk ControlBusiness Ethics and Anti CorruptionCybersecurityand Data ProtectionProtection of Intellectual Property Rights
Product Liability
R&D InnovationQuality AssuranceCustomer ServiceResponsible Marketing
Annual Topic 2
Pioneering Green Manufacturing
Climate and Environment
Environmental ManagementPollution Emission ControlResource Conservation and Circular EconomyAgainst Climate Change
Safety and Employee ManagementEquality and EmploymentEmployee Welfare and CareEmployee Training and DevelopmentOccupational Health and Safety
Social Responsibility FulfillmentSupply Chain ManagementPublic Welfare and Charity
Report Information Explanation
ThisreportistheSustainabilityReport2023releasedbyShenmaIndustrialCo.,Ltd..ThereportelaboratesontheCompany'ssustainabledevelopmentphilosophyandpolicies,andtheeffortsmadebytheCompanyinenvironmentalprotection,socialresponsibility,corporategovernance,andotherareasin2023,inresponsetotheexpectationsandconcernsofstakeholders.
Time Frame
ThetimespanofthisreportcoverstheperiodfromJanuary1,2023toDecember31,2023.Inordertomaintainthecontinuityofinformationandenhancethecomparabilityandforward-lookingnatureofthereport,somecontentshavebeenmoderatelyextendedtopreviousorsubsequentyears.TheinformationinvolvedcomesfrominternaldataoftheCompanyandpubliclyavailablematerials.Organizational Scope
TheorganizationalscopeofthisreportcoversthemainbusinessconductsofShenmaIndustrialCo.,Ltd.anditssubsidiaryholdingcompanies,andisconsistentwiththescopedisclosedintheCompany'sannualreport.Data InterpretationThedataandcasesusedinthisreportareallfromtheCompany'sofficialdocumentsandstatisticalreports.Theoperatingdatadisclosedinthisreportareallfromthe2023AnnualReportofShenmaIndustrialCo.,Ltd.(the"AnnualReport").Incaseofanydiscrepanciesinthedatalisted,theAnnualReportshallprevail.Unlessotherwisespecified,allcurrencyamountsmentionedinthereportarepresentedinrenminbi.
Reference StandardsThisreportwaswrittenwithreferencetothefollowing7ESGdisclosurestandards:
l"Reference"standardsoftheGRIUniversalStandards2021releasedbytheGlobalSustainabilityStandardsBoard(GSSB)lReferenceIndicatorsSystemforESGReportsofListedCompaniesControlledbyCentralState-owned
EnterprisespreparedbyBureauofPropertyRightManagement,BureauofSocialResponsibilityandResearchCenteroftheState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncillGuidelinesNo.14ofShanghaiStockExchangeforSelf-RegulationofListedCompanies—Sustainability
Report(Trial)releasedbyShanghaiStockExchangelESGReportingGuideandGuidanceonClimateDisclosuresreleasedbytheStockExchangeofHong
KonglRecommendationsoftheTaskForceonClimate-RelatedFinancialDisclosuresreleasedbytheTask
ForceonClimate-RelatedFinancialDisclosures(TCFD)lTheTenPrinciplesoftheUNGlobalCompactlThe17SustainableDevelopmentGoals(SDGs)oftheUN
Notes on Appellations Used in the ReportFor the convenience of expression and reading, in this report, "ShenmaIndustrial Co., Ltd." is referred to as"ShenmaCorporation", "the Company" or "we".
Contact DetailsPositionSecurities Affairs RepresentativeContact PersonShi ZenghuiContact AddressNo. 63 JiansheRoad, Pingdingshan, Henan ProvinceContact Number0375-3921231Fax0375-3921500
About This Report
1212
Common Company Name Interpretations
ShenmaCord Fabric, ShenmaCord
Fabric Company
Refers toShenmaIndustrial Co., Ltd. (Production Department)ShenmaCord Fabric Development
Co., Ltd.
Refers toPingdingshanShenmaCord Fabric Development Co., Ltd.Nylon Chemical Co., Ltd.Refers toHenan ShenmaNylon Chemical Co., Ltd.ShenmaEngineering Plastic Co., Ltd.Refers toPingdingshanShenmaEngineering Plastic Co., Ltd.ShenmaEngineering PlasticsTechnology Development Co., Ltd.
Refers to
PingdingshanShenma
Ltd.ShenmaAramidRefers toHenan ShenmaAramid Fiber Technology Development Co., Ltd.ShenmaYingcaiPackaging Co. Ltd.Refers toPingdingshanShenmaYingcaiPackaging Co., Ltd.
AidianRefers toHenan ShenmaAidianChemical Co., Ltd.Shanghai ShenmaRefers toShanghai ShenmaEngineering Plastics Co., Ltd.ShenmaNylon Technology Co., Ltd.Refers toHenan ShenmaNylon Technology Co., Ltd.ShenmaHydrogen ChemicalRefers toHenan ShenmaHydrogen Chemical Co., Ltd.ShenmaHuawei Plastic Co., Ltd.Refers toHenan ShenmaHuawei Plastic Co., Ltd.International Trade
Refers toChina PingmeiShenmaGroup International Trade Co., Ltd.
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International Trade Co., Ltd. is a subsidiary of China PingmeiShenmaGroup and is not within the scope of ShenmaCorporation'sconsolidated financial statements
Access ChannelsThisreportisreleasedinhardcopy,andinvestorscanalsoobtainitfromtheofficialwebsiteofShenmaIndustrialCo.,Ltd.andthewebsiteofShanghaiStockExchange.Websites:http://www.shenma.com/andhttp://www.sse.com.cn/Feedback
Chairman's Message
Chairman of ShenmaIndustrial Co., Ltd.Li Benbin
ShenmaCorporation,formerlyknownasPingdingshanNylonCordFabricFactory,wasfoundedin1981.Aftermorethan40yearsofdeepcultivationinthefieldofnylon,itnowhasacompletenylonindustrychain,withanindustrialstructurespanningthechemicalindustryandthechemicalfiberindustries.IthasformedanindustrialpatternwithNylon66(hereinafter"N66")saltsandN66intermediates,N66chips,N66industrialyarns,cordfabrics,airbagyarns,Nylon6(hereinafter,"N6")chips,N6textileyarns,PC,BPAandotherleadingproductsasthepillars.ShenmaCorporation'sproductsarewidelyusedinfieldssuchastextile,automobile,high-speedrail,electronicsandelectricalappliances,aerospace,andnewenergytransportation;ourcustomersarelocatedallovertheworldandwehaveestablishedstrategicandtradepartnershipswithover40Fortune500companiesandmultinationalcorporations."Shenma"brandnylonseriesproductsenjoyahighreputationinbothdomesticandinternationalmarkets.Theyear2023wasanextremelyextraordinaryyearforShenmaCorporation.Duetomultiplepressuressuchasshrinkingdemand,supplyshocks,andweakenedexpectations,theCompany'snetprofitattributabletoshareholdersinthefirsthalfoftheyearsuffereditsfirstlossinnearly10years.Facedwithenormouschallenges,theCompanyfirmlygraspedthekeylinkofimprovingoperationalefficiencyandprofitability,andtookaseriesofdecisive,targetedandtransformativeguidingmeasures,andquicklyreversedthepassivesituationofoperation.Wesystematicallyimplementedthespecialactionof"deepeningreformandimprovingefficiency",comprehensivelyreducedthecostofproductionfactors,broughtvariousnon-productiveexpendituresunderstrictcontrol,vigorouslypromotedtheoptimizationofhumanresources,streamlinedinstitutions,optimizedredundantpersonnel,andsignificantlyreducedmanagementexpenses.Weflexiblyadjustedoursalesstrategyandmarketlayout,deeplycultivatedandtappedintotraditionalmarkets,activelydevelopedoverseasmarkets,furtherexpandedhigh-endcustomers,significantlyincreasedthesalesofhighvalue-addedproductssuchasfine-denierfilament,andsparednoefforttostabilizeprices,protectthemarket,andimprovequalityandefficiency.TheCompanyturnedlossesintoprofitsinthethirdquarterof2023,achievingatotaloperatingrevenueofRMB12.9billionandanetprofitattributabletoshareholdersofRMB123millionfortheyear.Wehavecultivatedtechnologicalinnovationasourcorecompetitiveness.Withmorethan40yearsofaccumulationintheindustryandcontinuousfocusoninnovationinvestment,wehavesuccessfullymadebreakthroughsinthecoretechnologyofADN,vigorouslydevelopeddifferentiatedandhigh-endproductssuchasdyedindustrialyarns,textilespinningchips,modifiedchips,specialnylon,andbio-basednylon,activelyexploredapplicationfieldssuchastextileyarnsandlargeaircraft,andacceleratedthetransitionofproductstructurefrommid-to-highendtohighend.Attheendof2023,ourproductioncapacityforleadingproductsreachedanewhighwiththecompletionandputtingintooperationofprojectssuchasthehydrogen-ammoniaprojectinsupportofthenylonchemicalindustry,the30,000-ton1,6-hexanediolproject,andphaseIIofthe40,000-toncontinuouspolymerizationprojectforN66chips.Focusingonleveragingthecapitalmarket,wesuccessfullyissuedRMB3billionofconvertiblebonds,effectivelyensuringthefundingneedsfortheCompany'shigh-qualitydevelopment.TheCompanysuccessfullyacquiredPingmeiShenmaFinancialLeasingCo.,Ltd.,andtookadvantageofthefinancialplatformtoreducetheoperatingcostsofitsaffiliatedenterprisesandincreasetheprofitsofthelistedcompany.WecompletedtheequityacquisitionofShenmaPuliMaterialsCo.,Ltd.,expandedthelayoutofN6products,andextendedthestrategyoflargenylon.Weimplementedeffectivemeasuresinsuccessionsuchasincreasingholdingsbydirectors,supervisorsandseniorexecutivesandstockrepurchases,andcontinuouslyreleasingpositivenews,soastoboostinvestmentconfidenceandsafeguardtheCompany'sinvestmentvalueandtherightsandinterestsofsmallandmedium-sizedshareholders.Wehaveinsistedonrewardingshareholderswithexcellentperformanceandcashdividends.Sinceitslistingin1994,ShenmaCorporationhasdistributeddividends21times,withanaveragecashdividendratioof45.72%.Inthepastthreeyears,ShenmaCorporationaccumulatedacashdividendofRMB1.39billion,withacashdividendratioashighas47.44%.In2023,theCompanydistributedacashdividendofRMB135million(includingtax),withacashdividendratioof31.81%.Thissustained,stable,scientificandreasonabledividendpolicystemsfromtheCompany'ssoundoperationandsufficientcashflow,demonstratingthelong-termstablegrowthandintrinsicinvestmentvalueofthelistedcompany.Inthefuture,theCompanywillcontinuetoscientificallyutilizethefunctionsoftheplatformforlistedcompanies,andfocusonkeylinksinthemainbusiness,theindustrialchainandthesupplychain,soastostrengthen,extendandsupplementthechains,comprehensivelyenhanceourcorecompetitiveness,acceleratetheconstructionofaworld-classenterprise,andcreategreatervalueforshareholdersandthesociety.
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Company Overview
ShenmaIndustrialCo.,Ltd.(hereinafterreferredtoas"ShenmaCorporation")wasformerlyknownasPingdingshanNylonCordFabricFactory,thebuildingofwhichbeganin1977.In1981,thefactorywascompletedandputintooperation.In1994,theCompanywaslistedontheShanghaiStockExchange,becomingthefirstShanghailistedcompanyinHenanProvince.Itsstockisabbreviatedas"ShenmaCorporation"anditsstockcodeis"600810".Asoftheendof2023,ShenmaCorporationhas10,164employeesandanassetsizeofRMB31.4billion.ShenmaCorporationismainlyengagedinchemicalandchemicalfiberindustries,withN66saltsandN66intermediates(adipicacid,HMDA),engineeringplastics,industrialyarns(cordfabrics),airbagyarns,PC(polycarbonate),BPAandotherleadingproductsasitspillars,andhydrogen-ammoniasupportingindustriesasitsfoundation.Ithasformedanewpatternofnylonchemicalindustrycharacterizedbyuniquefeatures,obviousadvantagesandcoordinateddevelopment.
About ShenmaCorporation
Business ScopeAccording to the Guidelines on Industry Classification of Listed Companies (revised in 2012) released by theChina Securities Regulatory Commission, the industry in which the Company is located is chemical fibermanufacturing under the manufacturing industry (classification code: C28). Nylon is an important high polymermaterial and one of the five major engineering plastics. Among the vast family of nylon materials, nylon 6 (N6)and nylon 66 (N66) are two main varieties. With excellent comprehensive properties such as shock resistance,heat resistance, wear resistance, and corrosion resistance, N66 is widely used in textile yarns, industrial yarns,engineering plastics, aerospace and other fields. It is an ideal material for high-end yoga clothes, quick dryingclothes, elastic nylon outerwear, outdoor jackets, and other civil clothing. It is also an important material forachieving automotive lightweightingand has a wide range of applications in automotive engines, electricalappliances, car bodies, high-speed rail train bodies, large ship turbines, propeller shafts, screw propellers,sliding bearings, and other components.ShenmaCorporation'sleadingproductsaresoldwellinmorethan40countriesandregionsinEurope,America,andAsia,andtheCompanyhasestablishedstrategicandtradepartnershipswithmorethan40Fortune500companiesandmultinationalgroupssuchasNVIDIA,BASF,Michelin,Goodyear,andBridgestone.Theworld-renowned"ShenmaBrand"seriesofproductsspansthetwomajorfieldsofN66andN6,withcustomersallovertheworld.
565656
The Company's Marketing Network
Build a million-ton Nylon Industry Base.Build an interrelated industrial system dominated by the nylon industry, supplemented by extendedindustries characterized by fully utilized resources, and integrated upstream and downstreamdevelopment.Westrivetomakenewbreakthroughsintechnologicalinnovation,structuralupgrading,scientificmanagement,andenergyconservationandemissionreduction,achievelarge-scaleandhigh-leveldevelopment,andformindustrialclusterswithsoundfacilities,completechains,andinterconnectedindustries.
The Company's Development Vision
565656
Subsidiary
Name
Percenta
ge ofShares(%)
Main Business
TotalAssets(RMB
million)
OperatingIncome(RMB10,000)
Net Profit(RMB10,000)PingdingshanShenmaCord FabricDevelopment Co., Ltd.
Manufacturing and Sales of CordFabrics and Industrial Yarns
26.60195,647.41657.01
Pingdingshan Shenma Engineering PlasticCo., Ltd.
Manufacturing and Processing of theRaw and Auxiliary Materials ofPlastics, Chemical Fibers and TheirProducts
7.82209,882.892,470.54
Henan Shenma Nylon Chemical Co., Ltd.69.41
Production and Marketing of N66Salts
126.86577,625.1829,168.07
Pingdingshan Shenma Engineering PlasticsTechnology Development Co., Ltd.
100Production and Sales of N66 Chips6.4863,814.161,569.47Shanghai Shenma Engineering Plastics Co.,Ltd.
100Production and Sales of N66 Chips3.2225,808.00-555.39Henan Pingmei Shenma Nylon InvestmentManagement Co., Ltd.
Project Investment, InvestmentManagement, Investment Consulting,Equity Investment, etc.
0.344.63Henan Pingmei Shenma PolycarbonateMaterial Co., Ltd.
71Production and Sales of BPA and PC43.82125,524.91-9,985.55Henan Shenma Aidian Chemical Co., Ltd.100
Manufacturing of Basic ChemicalRaw Materials
10.451.72Zhongping Shenma Jiangsu New MaterialTechnology Co., Ltd.
Production and Sales of N66 High-performance Materials and Sales ofPlastic Products and Fiber Yarns
3.0571,611.57323.54
Henan Shenma Aramid Fiber TechnologyDevelopment Co., Ltd.
Manufacturing and Sales of High-performance Fibers and CompositeMaterials, Scientific Research andTechnology Services
2.271,044.95-620.37
Pingdingshan Shenma Yingcai PackagingCo., Ltd.
Production and Sales of PackagingProducts, Production and Sales ofSafety and Industrial Costumes
0.242,393.01-19.95
Pingdingshan Shenma Nylon Material PilotBase Co., Ltd.
Manufacturing of Chemical RawMaterials and Chemical Products
0.38
Henan Shenma Puli Materials Co., Ltd.54.87
Manufacturing of Synthetic Materials;Sales of Synthetic Materials; Sales ofIndustrial Textile Products, etc.
7.07105,553.052,996.85
Pingmei Shenma Financial Leasing Co., Ltd.100Leasing24.5910,002.596,435.36Henan Shenma Long'an Chemical Co., Ltd.100
Manufacturing of Basic ChemicalRaw Materials
2.22
Shenma Boliemai (Pingdingshan) Air BagWire Co., Ltd.
Manufacturing and Sales of Air BagYarn Products and Other SpecialtyYarns
4.4845,744.584,301.93
Since1977,theCompanyhascontinuouslyaccumulatedmomentumfordevelopment,becomingthefirstShanghai-listedcompanyinHenanProvince,andinnovativelylaunchingN66saltandchipprojects,successfullyachievingbusinessextensionanddiversification.Inrecentyears,theCompanyhassuccessivelyputN66chips,N6chip,N6fiber,PC,hydrogen-ammoniaandotherprojectsintooperation,furtherexpandingitsbusinessscope.
Development History
N66 industrial yarn and cord fabric production lines were put
into operation
The Company became the first Shanghai-listed company in
HenanAH salt & N66 chip production lines were put into operation
The Company entered into air bag yarn industry incollaboration with PHP, a German company
New N66 industrial yarn and cord fabric production bases
were put into operation
TheN66chipproductionincreaseprojectwasputintooperation
TheN6chipprojectwasputintooperation
TheN6fiberprojectwasputinto
operation
ThePCprojectwasputintooperation
Thehydrogen-ammoniaprojectwasputintooperation
TheADNprojectisexpectedtobeputintooperation
202420232022
202020192018
2015
The adipicacid project was put into operation
201220061998
19941981
787878
TheCompanyisaproductionandsalesorientedindustrialenterprise.Intermsofindustrialstructure,theCompanyspansacrossthechemicalindustryandthechemicalfiberindustry.Throughtheimplementationofanintegrationstrategy,anewindustrialpatternhasbeenformed,withN66salts,N66saltintermediates,N66chips,industrialyarns,cordfabrics,N6chipsandotherleadingproductsasthepillars,andrawandsubsidiarymaterialsandrelatedproductsasthebasis.TheCompany'smainproductsincludeindustrialyarns,cordfabrics,N66chips,adipicacid,BPAandPC,andotherproductsincludecyclohexane,aramidfiber,flameretardantfiber,dope-dyedyarns,N6chips,N6textileyarns,etc.
Main Products and Businesses
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N66 Chips
AdipicAcid
N6 Chips
BPA, PC
N66 Cord Fabrics
N66 Industrial Yarns
TheCompanymainlyproducesdifferentiatedhigh-endN66cordfabricsforhalf-steelradialtires,engineeringtires,aircrafttires,andotherapplications.TheCompany'sN66cordfabricshaveexcellentpropertiessuchassmallunitweight,highstrength,fatigueresistance,andimpactresistance.Theyarehigh-qualityskeletonmaterialsforproducingaircrafttires,largeengineeringtires,andcartires.Michelin,Bridgestoneandotherworld-renownedtiregroupsareallimportantcustomersoftheCompany.
N66industrialyarnisahigh-strengthN66fiberobtainedbyspinningandstretchingN66saltafterthesaltiscontinuouslypolymerizedorafterthesaltisslicedandthenundergosolidstatepolymerization.TheCompany'sN66industrialyarnshaveadvantagessuchashighstrength,fatigueresistance,impactresistance,andfrictionresistance.Theyaremainlyusedincordfabricsandairbags,canvas(inthefieldofconveyorbelts),peelply,ropes,andwebbing.
N66chipisacommonlyusedorganichighpolymermaterialwithhigh-qualitycharacteristicssuchashightemperatureresistanceandcorrosionresistance.Asahigh-qualityrawmaterialforproducinghigh-strengthindustrialyarns,high-endtextilefibers,andengineeringplastics,itiswidelyusedinimportantfieldsofthenationaleconomysuchasautomobiles,electronicsandelectricalappliances,engineeringmachinery,instrumentsandapparatus,clothingandtextiles,aerospace,etc.
Adipicacidisanimportantorganicdibasicacidthatcanundergoesterificationandamidationreactionswithdibasicalcoholsanddiamines,polycondensingintohigh-molecularpolymers.ItismainlyusedintheproductionofPUandN66seriesproducts.Inaddition,adipicacidcanalsobeusedtoproduceplasticizers,adhesives,advancedlubricants,andfoodadditives,playinganimportantroleintheproductionofdailychemicalproducts.
N6isatranslucentoropaquemilkywhitecrystallinepolymerproducedfromcaprolactamthroughpolymerizationreaction.N6chipsareusuallywhitecolumnarsheet-likeparticles,whichareintermediatesinthenylonindustryconnectingchemicalrawmaterialsanddownstreamapplications.Downstreaminjectionmoldingapplicationsarecommonlyusedinautomotiveenginecomponents,electricalcomponents,etc.Itiswidelyusedintermsofspinning,suchasfiltermeshyarns,sewingthreads,high-endfishinglines,andtextilenylonfabrics.
BisphenolA(alsoknownasBPA)andpolycarbonate(PC)areimportantorganicchemicalrawmaterials,andimportantderivativesofphenolandacetone.Theyaremainlyusedintheproductionofvarioushighpolymermaterialssuchasepoxyresin,polysulfoneresin,andPPO.Theycanalsobeusedinfinechemicalproductssuchasplasticizers,flameretardants,antioxidants,heatstabilizers,rubberantioxidants,pesticides,coatings,etc.
910910910
Major Honors andRecognition in 2023
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Case ｜The Company Received Climate Leadership Award from CDPIn2023,ShenmaCorporationwasawardedthe"ClimateChangeLeadershipAward"fromtheCarbonDisclosureProject(CDP),whichreflectedtheCompany'soutstandingperformanceinaddressingclimatechangeandpromotingsustainabledevelopment.ThisnotonlydemonstratedtheCompany'sleadershippositioninenvironmentalprotectionandsocialresponsibility,butalsoshowcasedtheCompany'scontinuouseffortsinreducingcarbonemissions,energyconservationandemissionreduction,andgreentechnologyinnovation.WinningthisawardisofgreatsignificancetotheCompany.IthasnotonlyenhancedtheCompany'sinternationalreputationandindustryinfluence,butalsolaidthefoundationforattractingmoregreeninvestmentsandpartners.Atthesametime,italsoinspirestheCompanytocontinuetoadheretogreendevelopmentandtakethepathofsustainabledevelopment.
ShenmaIndustrial Co., Ltd.
?IntellectualPropertyDemonstrationEnterpriseofChina'sPetroleumandChemicalIndustries
?SingleChampionEnterpriseofManufacturingIndustryofHenanProvince
?Leading Wild Goose ManufacturingEnterprise of Henan Province
?One of China's Top 100 ListedCompanies
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Topic 1Become a Global Leaderin High-end FunctionalMaterials
ShenmaCorporationhasbeendeeplyinvolvedinthefieldofnylonnewmaterialsformorethan40years.Byhorizontallyexpandingtheindustrialscaleandverticallyextendingtheindustrialchain,continuouslyoptimizingthestructureandimprovingtheproductportfolio,theCompanyhascreatedanylonchemicalindustrychainwithacompletechain,hightechnologicalcontent,andobviouscirculareconomycharacteristics,reflectingtheCompany'sleadingpositioninglobalhigh-endfunctionalmaterials.TheCompanyiscurrentlyactivelymakingoverallarrangementinN66textileyarns,enteringintothefieldofpara-aramid,andbuildinga4,000-tonaramidfiberproductioncapacityprojecttofurtherconsolidateitsmarketadvantage.ShenmaCorporationhasfournationallevelR&Dplatforms,includinganationalleveltechnologycenter,anationallevelpostdoctoralworkstation,andaCNASaccreditedlaboratory,demonstratingitsstrongR&Dcapabilities.Meanwhile,theCompanyisactivelymakingoverallarrangementfordigitalandintelligentproductionandcapacityexpansion,soastolayasolidfoundationforfutureinternationaldevelopment.
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Leading the Nylon IndustryAs a pioneer and leader in China's nylon industry, ShenmaCorporation has been deeply involved in the fieldof nylon new materials for more than 40 years. By horizontally expanding the industrial scale and verticallyextending the industrial chain, continuously optimizing the structure and improving the product portfolio, theCompany has created a nylon chemical industry chain with a complete chain, high technological content, andobvious circular economy characteristics, embarking on a path of "Big Nylon" featuring equal developmentand complementary advantages of N66 and N6.Lookingbackatitsmorethan40yeardevelopmenthistory,ShenmaCorporationhasgonethroughtheprocessofstartingfromscratch,growingfromsmalltolarge,andfromweaktostrong.Itsproductsmixhasgrownfromsimpletodiverse,anditsfocushasshiftedfromchemicalfiberalonetoequalemphasisonboththechemicalindustryandthechemicalfiberindustry.Thecomprehensivestrengthoftheenterprisehasgreatlyimproved,anditisdevelopingatarapidpace.Atpresent,the"Shenma"brandseriesproductscoverhundredsofvarietiesinmorethantencategoriessuchasindustrialyarn/cordfabric,nylonresinandengineeringplastics,adipicacid,airbagyarn,para-aramidandcanvas,andarewidelyusedinfieldssuchastires,automobiles,aerospace,high-speedrail,electronicsandelectricappliancesandfabrics.Amongthem,ShenmaCordFabricDevelopmentCo.Ltd.,asubsidiaryofShenmaCorporation,mainlyproducesdifferentiatedhigh-endcordfabricssuchasmodifiedN66cordfabricsforhalf-steelradialtires,dedicatedcordfabricsforengineeringtires,aircrafttires,andspecialtires.TheCompany'sproductsarewidelyusedinhigh-endcartires,superlargeengineeringvehicletires,specialvehicletires,aircrafttires,conveyorbelts,industrialfiltercloth,shipcables,autoairbags,high-speedsewingthreads,specialprotectiveclothingandotherfields.
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Entering into the Realm of Para-aramid andImproving Overall Arrangement in High-endMaterials
Duetoitsexcellentpropertiessuchashighstrength,highmodulus,andlowdensity,para-aramidiswidelyusedindefenseindustriesandvariousaspectsofthenationaleconomy,includingmilitary,aerospace,electromechanicaldevices,construction,automobile,andsportsequipment.Itisknownasthe"kingoffibers".OfficiallyfoundedinDecember2021,HenanShenmaAramidFiberTechnologyDevelopmentCo.,Ltd.isawholly-ownedsubsidiaryinvestedinandestablishedbyShenmaCorporation.ItisspecializedintheR&D,production,sales,andapplicationdevelopmentofpara-aramidtechnology.Thepara-aramidprojectwasinitiatedbyChinaPingmeiShenmaGroupin2005.Itwasexploredfromscratchbyagroupoftechnologicalelitesandproductionbackbones.Afternearly20yearsofunremittingefforts,keytechnologieswerefinallybrokenthrough,allprocessflowswereinterconnected,andstableoperationwasachieved.TheproductperformancereachedtheadvancedlevelintheindustryinChina.In2023,phase1ofthe4,000-tonpara-aramidprojectofficiallystartedconstructionandisexpectedtobeputintooperationbytheendof2024.
Case ｜ShenmaCorporation Focuses on Developing the Market of High-end N66 Textile Yarns
Inthefieldofnylonfibers,withthecontinuousimprovementofresidents'livingstandards,thedemandforhigh-endproductswithdelicatetouchandUVresistancehasrapidlyincreasedinrecentyears.ComparedwithN6,N66issuperiorintermsofstrength,wearresistance,heatresistance,airpermeability,andUVresistance.Itisahigh-endrawmaterialforsportswear,yogaclothes,andbrandedclothing,withgreatmarketgrowthpotential.Duetothelackofadvancedproductionequipment,barrierstoproductiontechnology,differencesinrawmaterialsandotherreasons,therearefewdomesticenterprisesthatcanmassproducehigh-endN66fibers.Therefore,inordertoenterintotherealmofhigh-endN66textileyarnsandfurtherexpandtheCompany'snylonindustrychain,ShenmaCorporationplanstoengageinapackageofcommercialcooperationwithNilitanditssubsidiaryNilitChinaInvestmentB.V.throughitsAnnouncementonEstablishingJointVenturesandPurchasingEquitythroughOutwardInvestmentreleasedonApril19,2024.Thisacquisitioninvolvestwotargetcompanies:NilitNylonTechnologies(Suzhou)Co.,Ltd.andNilit(Suzhou)EngineeringPlasticTechnologiesCo.,Ltd..NilitNylonmainlyproducesN66textiledrawntexturedyarn(DTY)forhigh-endclothing;NilitPlasticmainlyproducesN66textilepre-orientedyarn(POY),includingfull-dullPOYandsemi-dullPOY,withover90%oftheproductssuppliedtoNilitNylon.Throughthisinvestment,ShenmaCorporationwillfurtherdeepenitsinvolvementintheproductionofN66textileyarns,seizetheopportunitiesintheN66textileyarnmarket,andcreatenewprofitgrowthpointsfortheCompany.
ShenmaIndustrial Co., Ltd.
BasedonyearsofR&Dexperienceintheproductionlineforpilotproduction,ShenmaAramidhasdeterminedtheanalysisandcontrolindicatorsforvariousrawandauxiliarymaterials,developedscientificandreasonableanalysisandinspectionmethodsaccordingtonationalstandards,andscreenedoutqualifiedsuppliersbasedonactualuseeffectsoftheproductionline.StrictlyfollowingtheanalysisandinspectionplansapprovedbytheCompany,ShenmaAramidFiberTechnologyDevelopmentCo.,Ltd.ensuresthatthequalityofincomingrawandauxiliarymaterialsmeettheneedsoftestrunsandproduction.
Basedonyearsoftrialproductionexperienceonthe500-tonpilotproductionline,aprocesscontrolsystemforpara-aramidproductionhasbeenestablished.Basedonthenewprocessesandequipmentoperationrequirementsofthe4,000-tonproject,ShenmaAramidhasrevisedtheoriginalproductionprocesssystem,scientificallyandreasonablyclarifiedthesamplinglocations,theanalysisitems,theanalysisfrequency,andthecontrolrange,andformedanewproductionprocesscontrolsystem.Accordingtostandardtestingmethods,ithasstrengthenedon-siteprocessoperationregulationsmanagementandprocessdocumentconsistencymanagement,andbroughtproductqualityundercontrolfromeverylink,providingasolidguaranteeforthedevelopmentofnewproductsonthepilotlineandthestableproductionoperationofthe4,000-tonproject.ShenmaAramidscientificallyandreasonablydeterminesthesamplingandanalysisfrequenciesandlocationsoffinishedyarns,soastoensurethatthesamplingcanaccuratelyreflectthequalityoftheproducts.Accordingtoapprovedanalysisandtestingplans,itcollectsandsummarizesproductqualitysituationsonadailybasistoprepareforthenextstepofqualityanalysis.Itorganizesweeklyproductqualityanalysismeetingstosummarizetheweeklyoutputandquality,establishesalinkageanalysisbetweenproductanalysisindexcontrol,processequipmentoperationstatus,andprocessoperationcontrol,clarifiesthefactorsthataffectproductqualityandtheirweights,andprovidescorrespondingcontrolandfollow-uptoensurethestabilityofproductquality.
Basedonthesalesmarketandthemainsalestargetsofthecompany'sproducts,ShenmaAramiddeterminesthecertificationrequirementsfordownstreammarketapplicationsoftheproducts,activelycontactsandsendssamplesfortesting,analysis,andtrialuse,andcarriesoutspecialcertificationforproductsalesmarkets.Meanwhile,inaccordancewiththerequirementsonbuildingahighstandardhigh-techenterprise,thecompanyactivelypromotesISO9001certificationandiscurrentlyundergoingon-siteevidenceobtainingandverification.
Quality Control of Raw and Auxiliary MaterialsQuality Control in the Production Process
Finished Product Quality Analysis and ControlProduct Quality Management System
Full Life Cycle QualityManagement of ShenmaAramid
151615161516
Strong Technical Strength, Participation in theFormulation of Multiple National StandardsShenmaCorporationhasfournationallevelR&Dplatforms,includinganationalleveltechnologycenter,anationallevelpostdoctoralworkstation,andalaboratoryaccreditedbytheChinaNationalAccreditationServiceforConformityAssessment(CNAS);theHenanNylonNewMaterialsIndustryResearchInstituteestablishedbytheCompanyisoneofthefirst10industrialresearchinstitutesinHenanProvince;theCompanyhasjointlyestablishedaresearchandproductionbaseforpolyamidenewmaterialswiththeChinaChemicalFibersAssociation,anditspolyamideindustrialyarntechnologyinnovationcenterhasbeenrecognizedbytheChinaNationalTextileandApparelCouncil;theCompanyhasalsoestablished17provincial-levelR&Dplatforms,includingHenanFiberSkeletonMaterialEngineeringTechnologyResearchCenter,HenanPolyurethaneIndustryTechnologyInnovationStrategicAlliance,andHenanModifiedPlasticEngineeringTechnologyResearchCenter.TheCompanyparticipatedinthedraftingofNationalstandardonpara-aramidfilament,Industrialstandardonnylon66salt,IndustrialstandardoncyclohexanolforindustrialuseandIndustrialstandardoncyclohexeneforindustrialuse,andthesestandardshaveallbeenpublishedandimplemented.Inaddition,ShenmaCorporationhasestablishedkeylaboratoriesfortheentireprocessesofnylonintermediates,nylonengineeringplastics,andnylonfibersbasedinHenanNylonNewMaterialsIndustryResearchInstitute.ThishasachievedanintegratedR&Dplatformfortheentireprocessesfromnylonrawmaterialintermediatestonylonengineeringplasticchipsandthentonylonfibers,providingintegratedsupportforthedevelopmentofnylonproductsintheentireindustrychainandrealizingbasicresearchforsmall-scaletrialsintheentireindustry"withinthesamebuilding".OnSeptember16,2023,HenanAcademyofSciencessignedastrategiccooperationagreementwithShenmaCorporationandtheNylonNewMaterialsIndustryResearchInstitute,forminganinnovativepatternofco-constructionandsharing,complementarity,andmutualbenefit.In2023,ShenmaCorporationraisedfundsthroughmultiplechannelsandcontinuedtoincreaseitsinvestmentinR&D.Throughselffinancing,applicationfornational,provincialandmunicipalmajorspecialfunds,raisingprovincialR&Dfunds,andintroducingsocialfunds,theCompanyprovidedsufficientfinancialsupportforscientificandtechnologicalinnovation.
17181718
Digital-intelligent Development, InternationalDevelopment Guaranteed by ProductionCapacity
Inrecentyears,withtheacceleratedupgradingofChina'snylonindustry,theCompanyhasfocusedonbuildingadvancedintelligentworkshopsbasedonintelligentequipment.Byfar,theCompanyhasachievedtheintegrationandoptimizationofintelligentequipment,informationinfrastructures,andintelligentinformationapplicationsystems,thefullcoverageofproductionmanufacturing,productiontraceability,andproductioncollaborationprocesses,andtheinterconnectionbetweenelementssuchasintelligentequipment,controlsystems,andmanagementsystems.Thegoalofdigitaltransformationistoachieveintelligentautomationoftheproductionofthethreemainprocessesofprotofilament,twistedweaving,andimpregnation,aswellasproducttransportationandlogisticswarehousingbetweenprocesses,andtoachievetraceabilityofproductioninformationfortheproductsofeachprocess.Throughtheimplementationoftheprojects,allheavyphysicallaborhasbeenintelligentlyautomated,andtheentireproductionprocesshavebeenseamlesslyconnectedwithinformationatallstages.Theproductionprocessisnowunderintelligentcontrolandoperation.AccordingtothedigitaltransformationplanforthedevelopmentofShenmaCordFabricDevelopmentCo.,Ltd.,asoftheendof2023,theCompanybuilttwosetsofautomaticdoffingequipmentforprotofilament,onesetofstereoscopicstorehouseforthefilatureofprotofilament,oneintelligentstatisticalanalysissystemforprotofilamentproduction,onetransformationofinformationsystemfortwistedweavingworkshop,andoneintelligentinspectionsystemforprotofilamentprocesses.ThetotalinvestmentinsoftwareandhardwarewasaboutRMB11.62million.TheautomaticdoffingequipmentandthestereoscopicstorehouseforfilaturebuilthelpedtheCompanytoachieveautomaticcontrolandmanagementofprotofilamentproductionprocesses.Eachcontrolledequipmentcompletessequentialoperationscompletelyinanautomaticmanner,reducingtheoccurrenceofabnormalsituations,loweringtheproductdefectrate,andcuttingthenumberofemployeesinvolvedintheprotofilamentproductionprocessbymorethan25%.Sincetheintelligentinspectionsystemwasputintooperation,thedetectionrateofequipmentabnormalitieshasbeen100%,andtheCompanyhasbeenabletotimelyreporttheinformationandquicklyhavetheabnormalitiessolved.Byimplementingtheconstructionofintelligentworkshopsandpromotingthedigitaltransformationoffactories,theCompany'sproductionefficiencyhasbeenraisedbymorethan14%,theproductdefectratehasdroppedby45%,andtheenergyconsumptionperunitoutputhasbeencutdownby30%.TheCompany'scostcontrolcapabilitieshavebeenremarkablyenhanced,anditsmarketcompetitivenessandprofitabilityhavebeenimprovedinanallroundway.
Key Performance
In2023,newprogresswasmadeinanumberofR&DprojectsofShenmaCorporation'ssubsidiaries:
（I）Breakthroughsin3originaltechnologies:theultra-highstrengthnylonskeletonmaterialproject,thepara-aramidproject,andtheamino-capronitrileproject（II）6achievementsweretransformed:high-endnyloninjectionmolding,high-endspinning,anddifferentiatednylonseriesproductsseizedthemarket.In2023,theCompanywasawardedthetitlesof2022"IntellectualPropertyDemonstrationEnterpriseofChina'sPetroleumandChemicalIndustries"and"MeritoriousEnterpriseofTextileIndustryinHenanProvince".
R&D Expenditure as a Percentage of
Operating Revenue (%)
End of the 14th Five-
year Plan Period
1993200320132023
Plan for the Future Production Capacity
the Company (10,000 tons)
17181718
The data includes both production capacity under construction and production capacity already put into operation
1718
23242324
Topic 2Pioneering GreenManufacturing
Withtheincreasinglysevereglobalenvironmentalproblems,greenfactorieshaveeffectivelyreducedpollutionanddamagetothenaturalenvironmentandpromotedsustainabledevelopmentbyadoptingcleanenergies,optimizingproductionprocesses,improvingtheefficiencyofresourceutilization,andimplementingstrictenvironmentalmanagementmeasures.Thesefactoriesnotonlyhelpalleviateclimatechangeandprotectbiodiversity,butalsoenhancecorporateimage,strengthenmarketcompetitiveness,andleadtheindustrytowardsagreenerandmorelow-carbondirection.In2023,theCompanyattachedgreatimportancetotheconstructionanddevelopmentofgreenfactories,andfocusedonthefollowingaspects.Firstly,theCompanyincreasedinvestmentinenvironmentalprotectiontechnologyR&D,introducedandappliedadvancedenergy-savingandemissionreductiontechnologiesandequipment,andfurtherimprovedproductionefficiencyandtherateofresourceutilization.Secondly,theCompanydeepenedgreensupplychainmanagement,promotedupstreamanddownstreamenterprisestojointlyimplementgreenproduction,andbuiltagreenindustrialecosystem.Finally,theCompanyestablishedandimplementedstrictenvironmentalstandardsandmanagementsystemstoensuretheeffectiveimplementationofvariousenvironmentalmeasuresandcontinuouslyimprovetheenvironmentalperformanceandsocialresponsibilityoftheCompany.Throughtheseefforts,weaimtobuildtheCompanyintoanindustry-leadinggreenfactorywhichcontributestothesustainabledevelopmentofthesocietyandtheeconomy.
19201920
Sustainable Development Goals (SDGs) of theUN Addressed in This Chapter
1920
Leading Green Chemical Industry, ManufacturingFull Life Cycle Environment-friendly Products
Committedtotheinnovationanddevelopmentofgreenproducts,ShenmaCorporationmanufacturesgreenproductsfromthesourcetotheendbyadoptingcutting-edgeR&Dtechnologies,andselectingenvironment-friendlymaterials.OntheR&Dfront,theCompanyfirmlyinsistsonthedirectionofgreenR&Dandcontinuestotacklerelatedissuesinareassuchasenvironment-friendlychemicalmaterials,productionprocessemissionsreduction,andenvironmentalimpactreduction.Onthesupplychainfront,westrictlyscreenenvironmentalpartnerstoensurethateverylinkmeetsgreenstandards.Atthesametime,theCompanyoptimizestransportationprocesses,adoptslow-carbontransportationmodes,andreducesenvironmentalburdens.ShenmaCorporationinterpretstheconceptofgreenproductionthroughpracticalactionsandaimstocontributemoreenvironmentallyfriendlyandmoresustainableproductstothesociety.
2121
Promoting Green R&D
Case ｜Nylon Chemical Co., Ltd.'s R&D Project of "Cyclohexane Dehydrogenation to Benzene"
AsakeyR&DprojectofNylonChemicalCo.,Ltd.,"CyclohexaneDehydrogenationtoBenzene"dehydrogenatescyclohexane,aby-productofthecyclohexanolunit,toproducebenzene,andthenrecyclethebenzeneandhydrogengeneratedbacktothecyclohexanolunitprocesssystem,thusachievingaproductionloopof"rawmaterial→product→rawmaterial",reducingthelarge-scaleexternalpurchaseoftherawmaterialsofbenzeneandhydrogenforcyclohexanolproduction,andrecyclingtheby-productcyclohexane.Thisprocessmaygreatlyreducevarioussafetyrisksandtransportationcostsinthetransportationprocessoforganicmaterials,improvetheutilizationrateofcarbonatomsintheoperationofthecyclohexanolunit,furtherenhancetheutilizationrateofrawmaterialbenzene,achievebreakthroughprogressinexistingtechnological,safetyandenvironmentalprotectionlevel,solveaglobaltechnicalproblemintheindustry,ensurethegreen,efficientandstableoperationoftheCompany,andfurtherenhancetheCompany'scorecompetitiveness.
ShenmaIndustrial Co., Ltd.
Building Green Supply
Chain
ShenmaCorporationiscommittedtotheR&Dandapplicationofenvironmentallyfriendlychemicalmaterials.Byintroducinggreenrawmaterialsandcombiningtechnologicalinnovationmethods,productenergyefficiencycanbeimprovedandenvironmentalimpactcanbereduced.Eachsubsidiarycontinuestopromotegreeninnovationdevelopment,optimizeresourceallocation,improveresourceutilizationefficiency,andactivelypromoteresearchanddevelopmentprojectsincluding“indirecthydrationofcyclohexene”,"noveladipicacidreaction","researchonnewtechnologyofHMDA","researchoncyclohexanedehydrogenationtechnology",etc.Whileexpandingandstrengtheningthenylonindustrychain,theCompanyfurtherdevelopsandexpandsthedownstreamoftheexistingindustrychain,developsnewproductsandprocesses,enhancescorecompetitivenessandincreasestechnologicalreserves,soaslayasolidfoundationforthenextstepofdevelopment.
Case ｜ShenmaCord Fabric Development Co., Ltd.‘s “Research on New EnvironmentallyFriendly Impregnation Technique for Cord Fabric and Its Industrial Application”
ShenmaCordFabricDevelopmentCo.,Ltd.isactivelycollaboratingwithscientificresearchinstitutionstoacceleratetheresearchanddevelopmentof"ResearchonNewEnvironmentallyFriendlyImpregnationTechniqueforCordFabricandItsIndustrialApplication".Thisinitiativeaimstoreduceharmfulsubstancessuchasresorcinolandformaldehydethatmaybereleasedduringtraditionalimpregnationprocesses,andprotecttheenvironmentandhumanhealth.Meanwhile,wearealsofocusedontherecyclingandreuseofwastetirematerials,soastoachieveeffectiveresourcerecyclingthroughinnovativetechnologiesandreduceenvironmentalpressures.Inaddition,thenewenvironmentallyfriendlyimpregnationtechniquewillalsosignificantlyimprovethedurabilityandservicelifeoftires,furtherreducingthewastegeneratedbyprematuretirescrappingandcontributingpositivelytoenvironmentalprotection.
ShenmaIndustrial Co., Ltd.
ShenmaCorporationintegratestheconceptofgreenandlow-carbonthroughouttheentireprocessofsupplychainmanagement,andiscommittedtobuildingagreensupplychainsystem.TheCompanyiswellawarethatsuppliersareanimportantpartofthesupplychain,andtheirlow-carbonperformancedirectlyaffectsthecarbonemissionsleveloftheentiresupplychain.Somesubsidiaries,suchasNylonChemicalCo.,Ltd.,havesentletterstomajorrawmaterialsuppliers,requestingthemtopreparegreenhousegasinventoryreportsandproductcarbonfootprintreportsinaccordancewiththerequirementsoftheCompany,andtonaildowntasksrelevanttoemissionreductiontargets.Insisting on GreenTransportation
TheCompanyfirmlybelievesthatenvironmentallyfriendlyandlow-carbontransportationmodescaneffectivelyreducetheimpactontheenvironment,promoteecologicalbalance,andcontributetothesustainabledevelopmentoftheearth.Therefore,theCompanyactivelyadvocatesgreentransportationmodesusingnewenergies,andeachsubsidiaryspreadsenvironmentalawarenesstorawmaterialsuppliers,urgingthemtograduallyusenewenergytransportationvehiclesformaterialtransportation.TakingNylonChemicalCo.,Ltd.asanexample,thissubsidiaryhasofficiallysetupplanstoreplaceallcoaltransportationvehicleswithnewenergyvehiclestoreducegreenhousegasemissions.
Green Operation and
Carbon AuditTheCompanyadherestotheconceptofgreenoperationandiscommittedtointegratingtheprinciplesofresourceconservation,ecologicalandenvironmentalprotectionintotheentireprocessofoperationandmanagement,soastoachievesustainablegrowth.TobetterplantheCompany'sresourcesasawholeandtracktheimpactoftheCompany'soperationsontheenvironment,somesubsidiariesoftheCompanyhaveconductedenvironmentalimpactassessmentsandbuiltenvironmentalgovernancesystemstohelpreducetheCompany'scarbonfootprintandnegativeenvironmentalimpacts.Meanwhile,inordertoaccuratelyassesscarbonemissions,somesubsidiarieshaveimplementedcarbonauditaimedatconfirmingemissions,evaluatingtheeffectivenessofemissionreductionmeasures,enhancingenvironmentalimage,supportingpolicyformulation,andpreparingforparticipationinthecarbonmarket,therebycomprehensivelypromotingthegreentransformationandsustainabledevelopmentoftheCompany.Case ｜Nylon Chemical Co., Ltd.'s Carbon Emission Control Structure
Toensurethatcarbonemissionmanagementisputintopractice,NylonChemicalCo.,Ltd.hasestablishedaleadershipgroupforcarbonemissionmanagement,withthePartySecretaryandtheGeneralManagerastheheadsandtheDeputyGeneralManagerinchargeastheexecutivedeputyheadofthegroup.Thereisanofficerundertheleadershipgroup.EachbranchofNylonChemicalCo.,Ltd.hasestablishedacarbonemissionmanagementteamwiththefirstpersoninchargeofthebranchastheleader,andtechnicalpersonnelandproductionbackbonesofthebranchasmembers.Inaddition,full-time(part-time)administratorshavealsobeenassigned.Overall,acarbonemissionmanagementnetworkfromthecompany'sleadershipteamtotheproductiontechnologydepartment,eachproductionplant,andgrassrootsemployeeshasbeenestablishedtocomprehensivelystrengthentheorganizationandleadershipofcarbonemission.
ShenmaIndustrial Co., Ltd.Party Secretary andGeneral ManagerDeputy General Managerin ChargeFirst Persons in Charge ofthe BranchesTechnical and ProductionBackbones of the Branches
Leadership Group forCarbon EmissionManagementOfficeCarbon EmissionManagement Teams
21222122
SHENMA INDUSTRIAL CO., LTD.
2122
21222122
Building Green
FactoriesTheCompanyiscommittedtoreducingenergyconsumptionandpollutantemissionsintheproductionprocess.Wereducewasteintheproductionprocessbyadoptingadvancedproductiontechnologyandequipment,andimprovingtheutilizationefficiencyofrawmaterials,energy,andwaterresources.Meanwhile,wepromotecleanproductiontechnologies,andreduceoravoidthegenerationandemissionofharmfulsubstancesbyoptimizingproductionprocessesandprocedures.Wealsohavethepollutantsgeneratedtreatedandrecycledtoreducetheirnegativeimpactontheenvironment.Thesemeasuresnotonlyhelpreduceproductioncosts,butalsoalleviatetheimpactoftheCompany'sproductionontheenvironment.
Use of Renewable
Energies
TheCompanyactivelyrespondstothenational"dualcarbon"strategy,regardsrenewableenergiesasanimportantdirectionforfuturegreendevelopment,andincreasesinvestmentandlayoutinthefieldofrenewableenergy.Somesubsidiariesandfactorieshavebuilttheirownphotovoltaicpowerstations,whichhavebeenputintooperation.Forexample,ShenmaCordFabricDevelopmentCo.,Ltd.hasbuiltatotalinstalledcapacityof12.3MWdistributedrooftopphotovoltaicpowerstations,withanannualpowergenerationof13GWh,accountingfor6%oftheCompany'stotalelectricityconsumption.Pleaserefertothe"CampaignagainstClimateChange"sectionofthisreportforspecificdetails.
Digital-intelligent
Operation
TheCompanyactivelypromotestheconstructionofanintelligentpowerplatform,andbringstheoperationandcontrolofpowerandequipmentoftheentireplantunderunifiedmonitoringandmanagement.Bycarryingouttheintelligenttransformationprojectontheautomaticdoffingofprotofilament,realizingautomaticyarnfeedingfortwistedweaving,andstartingtoimplementtheconstructionofmonitoringandcontrolsystemsforwastewater,wastegas,steam,naturalgas,andotherenergies,westrivetobuildenergy-saving,efficientandintelligentfactories.
EnergyConservation,ConsumptionReduction andPollution Control
Throughmanagementimprovementandequipmentupgrading,thecomprehensiveenergyconsumptionandpollutantemissionlevelspertonofproductofShenmaCordFabricDevelopmentCo.,Ltd.arefarbelowtherelevantnationalstandards,andareinleadingpositionsintheindustry.Throughtheimplementationofenvironmentalprotectionandenergyconservationprojectssuchasreductionofsolidwaste,smartwatercooling,highandlowpressureoverflow,andlownitrogencombustiontransformationofheatconductionoilfurnaces,costsweresavedbyaboutRMB12.5million,and5.5tonsofnitrogenoxidesandotherpollutantswerereducedinemissions,bringingenvironmentalbenefits.Throughfullparticipationandprocessmanagement,theCompanyhasfurtherimprovedtheenvironmentalprotectionandenergyconservationawarenessandmanagementlevelofallemployees,layingagoodfoundationforthenextstepofgreenandsustainabledevelopment.
Material Recyclingand Energy Reuse
TheCompanyhastakenmultipleinnovativemeasurestoachievematerialrecyclingandefficientreuseofenergy.Let'stakeShenmaCordFabricDevelopmentCo.,Ltd.asanexample.ByfullyrecoveringwasteN66industrialyarnsandrealizing100%reuseofwasteyarnsthroughadvancedmeltinggranulationtechnique,thecompanyhaseffectivelyreducedresourcewasteandenvironmentalpollution.Atthesametime,wehaveintroduceddrying-freepapertubestoreplacetraditionalpapertubes.Drying-freepapertubescanbereusedupto20times.Thisnotonlyreducesmaterialconsumptionintheproductionprocess,butalsosignificantlyreducesenergyconsumptioncausedbythedryingprocess,contributingtoenergyconservationandemissionreduction.Inaddition,wehavealsocontinuouslypromotedtheimplementationofenvironmentalprotectionandenergyconservationprojects,includingthe1205wasteheatreuseprojectinprotofilaproduction,whicheffectivelyrecoversandutilizesthewasteheatgeneratedduringtheproductionprocess.Wehavebuiltasmartwatercoolingsystemtoachievetherecyclingofwaterresourcesandrefinedmanagementofenergyconsumption.
Green Factory Area of ShenmaCord Fabric Development Co., Ltd.
23242324
In2023,Scope1andScope2carbonemissionsofShenmaCordFabricCompany(theparentcompany)were221.98/145,708.94tonsofCO
e,totalling145,930.92tonsofCO
e.ThetotalcarbonemissionsofScope1andScope2decreasedby35.6%comparedwith2022.Basedontheoperatingincomeoftheparentcompany,in2023,Scope1andScope2carbonemissionintensityofShenmaCordFabricCompanywas0.111ton/10,000yuan,adecreaseof13.2%comparedtoScope1andScope2carbonemissionintensityin2022,whichwas0.128tonsper10,000yuan.
Key Performance
2324
23242324
ESGGovernance
ShenmaCorporationhasalwaysadheredtotheconceptofsustainabledevelopment,continuouslyenhancedtheCompany'ssustainabledevelopmentcapabilities.Inourlong-termdevelopmentstrategy,theCompanystrivestocontinuouslyimproveourESGmanagementandenhanceourcorecompetitiveness.Byintegratingsustainableconceptsintoourbusinessoperationsandlong-termplan,wearecommittedtoreducingenvironmentalimpactthroughmanagementoptimizationandgreeninnovation.WeidentifysubstantiveissuesthatarealignedwiththeCompany'scorecompetencies,formulatedevelopmentstrategiesthatareconsistentwithourglobalgoals,andstrivetoachievebalancedeconomic,social,andenvironmentaldevelopment.Table of Contents for This Chapter:
nESGGovernance SystemnStakeholder CommunicationnSubstantive Issue IdentificationnResponse to SustainableDevelopment Goals (SDGs)
25262526
Sustainable Development Goals (SDGs) of theUN Addressed in This Chapter
2526
ESG Governance StructureShenmaCorporationpracticesthesustainabledevelopmentconceptsthroughpracticalactions,integratesenvironmental,social,andcorporategovernance(ESG)intotheentireoperationprocessoftheCompany,andensurestheeffectiveimplementationoftheCompany'ssustainabledevelopmentconceptsthroughinstitutionalizedandsystematicmanagementstructure.In2023,theCompanycontinuedtoimproveitstop-downESGmanagementstructure.Coveringthegroupandholdingcompanies,theCompany'sESGgovernancesystemhasestablisheda"governance-management-execution"three-tierESGmanagementstructurecharacterizedbycompletestructure,clearhierarchy,well-definedpowersandresponsibilities,andefficientoperation,effectivelyensuringtheefficientpromotionofworkonESG.TheBoardofDirectorsisresponsibleformakingdecisionsandsupervisingtheCompany'sESGmatters.TheESGmanagementteamisresponsibleforcoordinatingthespecificimplementationofvariousworkonESGundertheguidanceoftheBoardofDirectors(includingspecificESG-relatedworktobeimplementedbyvariousdepartmentsandsubsidiaries),isresponsiblefortheCompany'ssustainabledevelopmentstrategyandESGgovernance,andformulatesrelevantpoliciesandspecificmeasures.
25262526
Board of Directors
Core ConceptEnterprise Development, Employees' AffluenceEnterprise StyleManagement ConceptSafety ConceptBe Truthful, Do Practical Work,and Seek Tangible Results
Everyone Fulfills TheirResponsibilities, Every TaskReaches All Standards
Life Comes First, Safety is
ParamountMarketing ConceptStudying ConceptTalent ConceptGrow with CustomersStudying Makes the Future
Talent is a Man Who Does His
Job Well
Quality ConceptCost ConceptIntegrity ConceptQuality is the Lifeblood of the
Company
Every Penny Saved is a Penny
Gained
Take Pride in Honesty and
Integrity in One's Job
Sustainable DevelopmentConcepts of ShenmaCorporation
Board of Directors
ESGManagement Team
Business Departmentsand Subsidiaries
Insist
onBusiness Ethics
ProtectWorkers' HumanRights
ImproveProductQuality
StrengthenClimateResilience
FocusonSafetyProduction
Case ｜ShenmaCorporation Held a Training Workshop on Knowledge on SustainableDevelopmentOnSeptember26,2023,thetrainingworkshoponKnowledgeonSustainableDevelopmentofShenmaCorporationwasheldintheconferenceroomofSouthNo.1Building.Nearlyahundredpeople,includingheadsofthetechnologycenterandrelevantdepartmentsShenmaCorporation,aswellascompetentleadersofvariousunitsinthenylonchemicalsectorandresponsiblepersonsofrelevantbusinessesparticipatedintheworkshop.Thecontentsofthetrainingworkshopcoveredtopicssuchassustainabledevelopment,qualitytraining,anddualcarbonmanagementpolicies.
ShenmaIndustrial Co., Ltd.
272827282728
Be responsible for making decisions on major issuesrelated to the sustainable development of theCompany, and also for reviewing the Company'sannual sustainability report.ESG Management TeamTheOfficeoftheBoardofDirectorsisresponsibleforresearchingandformulatingtheCompany'ssustainabledevelopmentstrategyandpolicies,andsupervising,inspecting,evaluating,andprovidingrecommendationsontheCompany'simplementationofsustainabledevelopmentmanagement.TheStrategyandSustainableDevelopmentCommitteereportsitsworktotheBoardofDirectorsandisaccountabletotheBoardofDirectors.Business Departments andSubsidiariesBeresponsibleforcollaborativelyformulatingandimplementingstrategicplansandgoalsofsustainabledevelopment,whileestablishinggovernancestructures,planningasawholeandpromotingprojectimplementation.Collaboratingwithdedicatedpersonneltoimplementandexecuterelevantbusinesses,andtrackworkperformanceinthefollowingfiverespects:insistingonbusinessethics,protectingworkers'humanrights,improvingproductquality,strengtheningclimateresilience,andfocusingonsafetyproduction.
In2023,theCompanycarriedouttheidentificationofsustainabledevelopmentissues,aswellastheevaluationandscreeningoftheimportanceoftheseissues.Thereportdisclosedandrespondedtothemanagementandpracticalperformanceofthe26issuesidentified.Fromtheperspectiveoftheprocess,intheidentificationstage,theCompanyidentifiedtheimportantissuesthathaveanimpactonitselfandstakeholders,andformedalibraryofsubstantiveissuesmainlybytakingintoaccountinternationalstandards(GRI,SDGs,etc.),majornationaleconomicandsocialdevelopmentissues,cutting-edgetrendsinsustainabledevelopmentintheindustry,andtheCompany'sdevelopmentstrategy.Intheevaluationstage,theCompanyinvitedexpertsinsustainabledevelopmentandotherstakeholderstofilloutaquestionnaireontheimportanceoftheissues,andtookinternalemployees'evaluationoftheimportanceoftheissuesintoconsideration,thusformingatwo-dimensionalevaluationoftheimportanceoftheissues.Inthescreeningstage,theCompanyconstructedasubstantiveanalysismatrixbasedontheevaluationresultsoftheissues,andobtainedtherankingresultsoftheimportanceoftheissues.Forissueswithhighsubstantivecontents,thereportfocusedonthedisclosure,discussionandanalysisoftheseissues.
Materiality Assessment
2728
StakeholderCommunicationIn2023,ShenmaCorporationcontinuedtopayattentiontotheopinionsofstakeholdersfromallwalksoflife,includingshareholders,investors,customers,regulatoryauthorities,employees,andsuppliers.UndertheguidanceofESGphilosophy,theCompanyhasestablishedanormalizedcommunicationmechanismwithvariousstakeholdersthroughvariousforms,andeffectivelyrespondedtotheirdemandsbasedontheCompany'sexperienceaccumulatedintheindustryanddeepunderstandingofESGphilosophy.
StakeholdersIssues of ConcernCommunication Channels
Shareholdersand Investors
Corporate Governance
Strengthen InvestorRelations Management
Management ofIntellectual PropertyRightsAnti CommercialBribery and AntiCorruption
General Meeting of
ShareholdersInformation Disclosure
Performance
BriefingDomestic andInternational
Strategy
Meetings
Customers
Innovation-drivenDevelopmentData Security andCustomer Privacy
Customer ServiceResponsible Marketing
Innovation in ScientificResearchCustomer PrivacyProtection Measures
CustomerService System
Government andRegulatoryAuthorities
Corporate Governance
Compliance and Risk
ControlAnti Unfair Competition
Public Welfare and
CharityRural RevitalizationCommon Progress inthe Industry
Supervision andInspectionReceiving Visitors
PolicyImplementation
Employees
Employees' Rights and
InterestsTalent Development
Occupational Healthand Safety
Employee ActivitiesEmployee Assessmentand Promotion
EmployeeTraining
Suppliers
Supply Chain SafetyAnti Commercial Briberyand Anti Corruption
Equal Treatment forSmall and Medium
EnterprisesCommon Progress inthe Industry
Cooperation andTransactionsDaily Communication
ContractExecution
Community andEcologicalEnvironment
Energy UtilizationWater ResourceUtilizationWaste DisposalCampaign againstClimate Change
Pollutant DischargeEnvironmental
ComplianceManagementCircular Economy
Waste ManagementSystemConservationManagement System
Low CarbonAwarenessCultivation
AcademicInstitutions
Innovation-drivenDevelopmentTalent Development
Public Welfare andCharityCommon Progress in
the Industry
Academic ExchangesIndustry-university-research Cooperation
TalentCooperationProjectsVocationalEducation
Stakeholder Communication
2930
Substantive IssuesComprehensive RankingProduct Safety and Quality1R&D Innovation2Occupational Health and Safety3Against Climate Change4Corporate Governance5Anti Commercial Bribery and Anti
Corruption
Pollutant Discharge7Environmental ComplianceManagement
Talent Development9Investor Relations Management10Management of Intellectual Property
Rights
Compliance and Risk Control12
Supply Chain Safety13Employees' Rights and Interests14Energy Utilization15Customer Service16Water Resource Utilization17Anti Unfair Competition18Common Progress in the Industry19Equal Treatment for Small and
Medium Enterprises
Privacy and Data Security21Responsible Marketing22Circular Economy23Waste Disposal24Public Welfare and Charity25
Rural Revitalization26
Analysis of ShenmaCorporation's ESGIssues
313231322930
ShenmaIndustrial Co., Ltd.
Importance to Stakeholders
Importance to the Company's StrategyEnvironmental
SocialGovernance
23242324
CorporateGovernanceShenmaCorporationhasalwaysadheredtotheprinciplesofintegrity,transparency,andcompliance,andhasbeencommittedtobuildinganefficientandstandardizedcorporategovernancesystem.TheCompanystrictlyimplementstheworkingprocessesoftheGeneralMeetingofShareholders,theBoardofDirectors,andtheBoardofSupervisors,ensuresthatalldecision-makingprocessesareopenandtransparent,andrespectsandprotectstherightsandinterestsofshareholdersandstakeholders.TheCompanyadherestotheprincipleofintegritymanagement,regularlyprovidesprofessionaltrainingtoemployeestoenhancetheirunderstandingofandtheimportanceattachedtobusinessethics,andensuresthattheCompany'sbusinessactivitiesareconductedwithinalegalandethicalframework.Foranyformofcorruptbehavior,theCompanyadoptsafirmzerotolerancepolicyandhasestablishedacomprehensiveanti-corruptionmechanismwhichincludeinternalsupervision,auditsupervision,andanonymousreportingsystems,soastoensurethatanyimproperbehaviorcanbequicklydetectedandcorrected.
Key ESGPerformanceüIn2023,theCompanyheld18meetingsoftheBoardofDirectors,
andoptimizedtheperformanceofdutiesbythemembersofthe
BoardofDirectorsüIn2023,theCompanyreleased9regularannouncementsand159
provisionalannouncementsüIn2023,theCompanyimplementedover200roundsofbidding
supervision,effectivelymaintainingafaircompetitiveenvironment
forinvitationandsubmissionofbidsandensuringthemaximization
oftheCompany'sinterestsüIn2023,allsubsidiariesoftheCompanyinvolvedininformation
securityissuesactivelycarriedouttrainingoninformationsecurity
system,withatrainingcoveragerateof100%
33343334
Sustainable Development Goals (SDGs) of theUN Addressed in This Chapter
3132
TheBoardofDirectorsofShenmaCorporationhasbeencontinuouslycommittedtosafeguardingthelegitimaterightsandinterestsoftheCompanyandallshareholders,activelyfulfilledmanagementresponsibilities,continuouslyimprovedcorporategovernancecapabilities,constantlystrengthenedtheindependenceanddiversificationoftheBoardofDirectors,activelyengagedindialogueswithinvestorsandparticipatedininvestorrelationsmanagement,andstandardizedinformationdisclosure.
The Management System
TheCompanyisengagedinstandardizedoperationaccordingtolawinstrictaccordancewiththeprovisionsandrequirementsofrelevantnationallaws,regulationsandnormativedocuments,suchastheCompanyLawofthePeople'sRepublicofChina,theSecuritiesLawofthePeople'sRepublicofChinaandtheCodeofCorporateGovernanceforListedCompanies.Atpresent,theCompanyhasformedacorporategovernancestructurewithclearly-definedpowersandresponsibilities,effectivechecksandbalances,scientificdecision-making,andcoordinatedoperation.Theactualsituationofcorporategovernancemeetstherequirementsofrelevantlawsandregulations,andthereisnoproblemrequiringrectificationwithinaspecifiedperiodoftimebyregulatoryauthorities.TheGeneralMeetingsofShareholders,theBoardofDirectorsandtheBoardofSupervisorsoftheCompanyareoperatedinalegalandcompliantmannerwithtimely,accurate,andfairinformationdisclosureandstandardizedandeffectiveinternalcontrols.TheyhaveeffectivelysafeguardedtheinterestsoftheCompanyanditsinvestors.TherearefourspecializedcommitteesundertheCompany'sBoardofDirectors,namelytheStrategyCommittee,theAuditCommittee,theNominationCommittee,andtheCompensationandEvaluationCommittee,whichprovideconsultationandsuggestionsformajordecisionsoftheBoardofDirectorstoensuretheprofessionalismandefficiencyofthediscussionsanddecisionsoftheBoardofDirectors.TheCompanyhasestablishedanoperationalmechanismfeaturingtheGeneralMeetingofShareholders,theBoardofDirectors,theBoardofSupervisors,andtheManagement.In2023,theAuditCommitteeheld6meetings.
IndicatorUnit202120222023
General Meeting ofShareholders
Time4128Board MeetingTime111718
Key Performance of Corporate Governance
Diversification of the Board of DirectorsTheCompanyhasbeencommittedtodiversifyingitsboardofdirectorsforalongtime.Asoftheendof2023,theBoardofDirectorsconsistsof9directors.Amongthem,thereare3independentdirectors,accountingfor
33.3%oftheboardmembers;thereisonefemaledirector,accountingfor11.1%oftheboardmembers.The
boardmembershaverichknowledgeandexperienceinindustryexperience,financialmanagement,andotherareas,whichhelpstheBoardofDirectorsmakethebestdecisionsandpromotethesustainableandhealthydevelopmentoftheCompany.Thebackgroundsoftheboardmemberscanbefoundinthe"CorporateGovernance"sectionofthe2023AnnualReport,specificallyunder"IV.InformationonDirectors,Supervisors,andSeniorManagement".TheindependentdirectorsoftheCompanyareallseniorprofessionalswithprofessionalknowledgeinaccounting,finance,andtechnology,andmeettheindependencerequirementsoftheMeasuresfortheAdministrationofIndependentDirectorsofListedCompanies,theGuidelinesNo.1ofShanghaiStockExchangeforSelf-RegulationofListedCompanies—StandardizedOperation,includingbutnotlimitedtonotholdinganypositionsintheCompanyotherthanindependentdirector,havingnorelationshipwiththeCompanyoritscontrollingshareholdersthatmayhinderindependentandobjectivejudgment,andnotobtaininganyadditionalundisclosedbenefitsfromtheCompany,itscontrollingshareholders,ortheiraffiliates.ToensuretheindependenceoftheBoardofDirectors,thenumberofindependentdirectorsaccountsfor
66.7%ofthemembersoftheAuditCommitteeandtheNominationCommittee,100%ofthemembersofthe
CompensationandEvaluationCommittee,and33.3%ofthemembersoftheStrategyCommittee.
Governance Structure
General Meetingof Shareholders
Board ofSupervisorsBoard of Directors
Strategy Committee
NominationCommittee
Compensation andEvaluation Committee
Audit Committee
Management
Board of Supervisors
Board of Directors
General Meeting ofShareholders
?Composed of all shareholders of the Company, is the governing body of the Company.?Exercise and decide on the Company's business policies and investment plans in accordance with
the law.?Elect and replace directors and supervisors who are not employee representatives, and decide onmatters related to their remunerations.
?Deliberate and approve the reports of the Board of Directors.?Deliberate and approve the reports of the Board of Supervisors.?Deliberate and approve the Company's annual financial budget plans and final accounting plans.?Deliberate and approve the Company's profit distribution plans and loss recovery plans and other
authorities.?Composedof9directors,including3independentdirectorsand1Chairman.?TheChairmaniselectedbytheBoardofDirectorswithamajorityvoteofalldirectors.?ConveneGeneralMeetingsofShareholdersinaccordancewiththelawandreportitsworktothe
GeneralMeetingsofShareholders.
?ImplementtheresolutionsoftheGeneralMeetingsofShareholders.?DeterminetheCompany'sbusinessandinvestmentplans.?DeveloptheCompany'sannualfinancialbudgetplansandfinalaccountingplans.?FormulateprofitdistributionplansandlossrecoveryplansfortheCompanyandotherauthorities.?Composedof5supervisors,andtheBoardofSupervisorshas1Chairman.?TheChairmanoftheBoardofSupervisorsiselectedbyamajorityofallsupervisors.?ExercisetherighttoreviewtheCompany'sregularreportspreparedbytheBoardofDirectorsin
accordancewiththelawandprovidewrittenreviewopinions.Thewrittenreviewopinionsshall
explainwhetherthepreparationandreviewproceduresofthereportcomplywithrelevant
regulations,andwhetherthecontentistrue,accurate,andcomplete.?InspecttheCompany'sfinancesinaccordancewiththelaw,andsupervisetheperformanceof
Companydutiesbydirectorsandseniormanagementpersonnel.31323334373837383536
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In 2023, Shenma Corporation released 9regular announcements and159temporaryannouncements.
Key Performance
Dividend Distribution and Investor Returns
AccordingtotherelevantprovisionsoftheRegulatoryGuidelinesforListedCompaniesNo.3-DistributionofCashDividendsofListedCompaniesissuedbytheChinaSecuritiesRegulatoryCommission,aswellastheArticlesofAssociationofShenmaIndustrialCo.,Ltd.,ShenmaCorporation'sprofitdistributioncanbemadeintheformofcash,shares,acombinationofcashandshares,orothermethodspermittedbylawsandregulations.Whenselectingthemethodofprofitdistribution,ShenmaCorporationpreferstousecashdividendsastheprimarymethodcomparedtoothermethodssuchasstockdividends.Theobjectiveofthecashdividendpolicyistomaintainafixeddividendpayoutratio.Whenconditionsforcashdividendsaremet,priorityshouldbegiventocashdividendsforprofitdistribution,andShenmaCorporationshoulddistributeatleast30%ofitsrealizeddistributableprofitsincasheachyear.Theproportionofcashdividendsinthecurrentprofitdistributioniscalculatedasthecashdividendsdividedbythesumofcashdividendsandstockdividends.Inordertorewardinvestorsandfosteralong-terminvestmentphilosophyamongshareholders,inaccordancewiththerelevantprovisionsoftheArticlesofAssociationofShenmaIndustrialCo.,Ltd.andbasedonitsactualsituation,ShenmaCorporationplanstouse1,031,398,528shares,whichisthetotalsharecapitalattheendof2023(1,044,178,658shares)minusthecurrentsharebalanceof12,780,130sharesinitsrepurchasespecialaccount,asthebasefordistributablesharecapitalfortheyear2023.AcashdividendofRMB1.37per10shares(includingtax)willbedistributed,totalingRMB141,301,598.34.
Sustainability-linked CompensationThe Remuneration and Evaluation Committee of the Board of Directors of ShenmaCorporation complies withlaws and regulations such as the Labor Law of the People's Republic of China, and reviews the remunerationpolicies and plans for directors and senior executives, taking into account factors such as its Articles ofAssociation, corporate policies and objectives, remuneration levels in peer companies, as well as the specificresponsibilities and time commitment of its directors and senior executives. The committee also providesrecommendations on evaluation matters.TheremunerationofShenmaCorporation'sdirectors,supervisorsandseniorexecutivesisdistributedinaccordancewithitsestablishedremunerationpolicies,whichconsistofbasicsalary,performance-basedsalary,specialcontributionrewards,andincentivesbasedonachievingspecificmilestones.ShenmaCorporationevaluatesitsdirectors,supervisorsandseniorexecutivesonthebasisofestablishedperformanceevaluationstandardsandprocedures.Theremunerationlevelsoftheseindividualsareadjustedaccordingtotheevaluationresults,ShenmaCorporation'soperatingconditions,andthepositionsheldbythem.TheallowanceforindependentdirectorsisdeterminedbytheGeneralMeetingofShareholders.Theremunerationinformationofdirectors,supervisorsandseniorexecutivesisdisclosedannuallyinShenmaCorporation'sannualreport.Inaddition,ShenmaCorporationincorporatesESGindicatorsintotheperformanceevaluationofdirectorsandseniorexecutivesasmonitoringindicators,whichmainlyincludesafetyproduction(includingbutnotlimitedtosafetypenalties,safetyaccidents,occupationalaccidents,etc.),environmentalprotection(includingbutnotlimitedtoenvironmentalpollutionaccidents,environmentalpenalties,etc.),lawfulandcompliantoperations,andbusinessethics.Incasesignificantnegligenceisfoundinanyaspectoftheevaluation,ShenmaCorporationwillincorporatethisintotheperformanceevaluationcalculationprocessaccordingtotherelevantregulationsoftheHumanResourcesDepartment,andtheperformanceevaluationresultswillbedirectlylinkedtoremuneration.Credit Enhancement
FareastCreditRatingCo.,Ltd.hasissuedaCreditRatingReportonthePublicOfferingofConvertibleCorporateBondsbyShenmaIndustrialCo.,Ltd.,inwhichShenmaCorporation'smaincreditratingisAA+withastableoutlook,andthecreditratingoftheissuedconvertiblecorporatebondsisAAA.
Building of the Board of SupervisorsTheBoardofSupervisorsoftheCompanyisresponsibletotheGeneralMeetingofShareholders.TheBoardofSupervisorsshallinspectandsupervisethelegalityoftheperformanceofdutiesbythedirectorsandseniormanagementpersonneloftheCompany,andsafeguardthelegitimaterightsandinterestsoftheCompanyandshareholders.ThetermofofficeforthesupervisorsoftheCompanyis3years,andtheycanbere-electedforconsecutiveterms.SupervisorswhoarenotemployeerepresentativesshallbeelectedanddismissedbytheGeneralMeetingofShareholders;supervisorswhoareemployeerepresentativesshallbeelectedanddismisseddemocraticallybyemployeesoftheCompanythroughtheEmployeeRepresentatives'Assembly,theEmployee'sAssembly,orotherforms.Asoftheendof2023,theBoardofSupervisorsoftheCompanyconsistsof5supervisors,with1chairman.
Minority Investor
ShenmaCorporation attaches great importance to investor relations management and has formulatedinstitutional documents such as the Investor Relations Management Measures in accordance with relevantlaws, regulations, and securities regulatory rules.Adheringtotheconceptof"respectinginvestorsandrewardinginvestors",ShenmaCorporationhassetupafull-timepositionforinvestorrelationsmanagementundertheofficeoftheBoardofDirectors,equippedwithdedicatedstaffforcontinuousmanagementandmaintenanceofinvestors.ShenmaCorporationstrivestobuildapositiverelationshipbetweenitanditsinvestors,advocatestheconceptofrationalinvestment,valueinvestment,andlong-terminvestment,fostersarationalandmatureinvestmentculture,deepensinvestors'understandingandrecognitionofShenmaCorporation,improvescorporategovernance,andmaximizescorporatevalue.ToensurethatresolutionsaremadebytheGeneralMeetingofShareholdersinafairandopenmanner,allproposalsattheGeneralMeetingofShareholdersofShenmaCorporationarevotedontosafeguardtheinterestsofallshareholders.ShenmaCorporationsendsanoticetoshareholders15or20daysbeforetheGeneralMeetingofShareholders.Somedirectors,supervisors,andseniormanagementpersonnelofShenmaCorporationattendtheGeneralMeetingofShareholderstohavein-depthexchangeswithinvestors.ToincreasetheproportionofshareholdersparticipatingintheGeneralMeetingofShareholders,inadditiontotheon-sitevoting,ShenmaCorporationalsoprovidesshareholderswithonlinevotingmethods(tradingsystemvotingplatformorInternetvotingplatform).Furthermore,ShenmaCorporationproactivelycontactsthetop100shareholderstwodaysbeforethemeetingtoinvitethemtoparticipateinonlinevoting.ShenmaCorporationcommunicatesandinteractswithinvestorsonadailybasisthroughvariouschannelssuchastelephone,email,WeChatofficialaccount,andtheSSEE-interactiveplatform.Inaddition,ShenmaCorporationregularlyholdsperformancebriefings,receivesofflineresearchvisitsfrominstitutionalandindividualinvestors,activelyparticipatesincollectiveinvestorreceptiondayactivitiesintherespectivejurisdiction,andengagesinmulti-channelandcomprehensivecommunicationandinteractionwithawiderangeofinvestors.Througheffectiveandsufficientcommunicationanddialogue,ShenmaCorporationaimstoestablishagoodimageandenhancetheunderstandingofShenmaCorporationinthecapitalmarket.ShenmaCorporationattachesgreatimportancetothecomplianceandtransparencyofinformationdisclosureoperations.ItstrictlyadherestotheregulationsoninformationdisclosuresupervisionandhasformulatedinternalinformationdisclosuremanagementsystemssuchastheInformationDisclosureManagementMeasures,theInsiderInformationRegistrationandManagementSystem,andtheAccountabilitySystemforMajorErrorsinAnnualReportInformationDisclosure.ShenmaCorporationstrictlyfollowstherequirementsoftheGuidelinesforAnnouncementFormatsoftheShanghaiStockExchangetostandardizethestandardsandsubmissionprocessofinformationdisclosure,activelyfulfillsitsinformationdisclosureobligations,andensuresthatthecontentofinformationdisclosureistrue,accurate,andcomplete.
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Compliance ManagementEnsuring integrity and compliance management is an important cornerstone for ShenmaCorporation's steadyand long-term development. ShenmaCorporation consistently adheres to the principle of law-basedmanagement, and continuously improves its compliance management policies and systems. In accordancewith its compliance management requirements and work needs, and in order to strengthen contractmanagement, ShenmaCorporation has formulated and issued the Measures of ShenmaIndustrial Co., Ltd.for the Administration of Contract Signing Authorization, standardizing the behavior of contract signing andimproving the level of integrity and compliance management as well as risk prevention and control.
Compliance and Risk Control
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Compliance ManagementFrameworkWithregardtothecompliancemanagementsystem,ShenmaCorporationhasestablishedathree-tiercompliancegovernancestructure,withthehandlingpersonnelofthecontractsponsoringdepartmentservingasthefirstlineofdefense,theheadofthecontractsponsoringdepartmentservingasthesecondlineofdefense,andcontractreviewservingasthethirdlineofdefense.
Contract ReviewDepartment HeadHandling Personnel
1. Improvement of the Compliance Management System
Tostrengthencontractmanagement,ShenmaCorporationformulatedandissuedtheMeasuresofShenmaIndustrialCo.,Ltd.fortheAdministrationofContractSigningAuthorization,standardizingthebehaviorofcontractsigningandenhancingthelevelofintegrityandcompliancemanagementaswellasriskpreventionandcontrol.
2. Promoted Construction of the Compliance Management System
ShenmaCorporationclarifiesitscomplianceobjectives,establishescompliancepoliciesandprocedures,andensuresthatemployeesunderstandandcomplywithrelevantregulations.ShenmaCorporationestablishesadedicatedcomplianceteamorcommitteeresponsibleforsupervisingandpromotingcomplianceaffairs,aswellasprovidingcompliancetrainingandconsultation.
3. Compilation of a Risk Inventory and Compliance Manual to Integrate Compliance into Comprehensive Risk
ManagementShenmaCorporationdevelopsrelevantcontentsbasedonriskidentificationandclassification,riskassessment,andriskpriorityrankingresults.
4. Strengthened Management and Control of Overseas Compliance Risks
ShenmaCorporationconductsdynamicmonitoringofchangesinoverseaslawsandregulationstoensureriskminimization.
Case｜Compliance Training for ShenmaCorporation's ERP Contract Management SystemShenmaCorporationisfullyawarethatinarapidlychangingbusinessenvironment,thecloseintegrationofcompliancemanagementandtechnologicalinnovationiscrucialforitssteadydevelopment.Therefore,ShenmaCorporationsparesnoeffortinpromotingwidespreadparticipationofemployeesintheonlinecompliancetrainingprogramforERPcontractmanagementsystem,aimingtobuildanefficientandcompliantcontractmanagementsystem.Throughthiswell-designedtrainingprogram,ShenmaCorporationhasnotonlyenabledthehandlingpersonnelandheadsofthecontractsponsoringdepartmentstodeeplyunderstandtheircoreroleinthecontractreviewprocess,butalsoequippedthemwiththeskillstocomplywiththeregulationsinkeyaspectssuchascontractuploadingandapproval.Thiscomprehensiveandin-depthtraininghasnotonlyenhancedtheprofessionalcapabilitiesofemployees,butalsoraisedtheirawarenessofcompliance,ensuringthateveryemployeebecomesapromoterandpractitionerofShenmaCorporation'scomplianceculture.Withthein-depthimplementationofthetraining,theonlineoperationalefficiencyofShenmaCorporation'sERPcontractmanagementsystemhasbeensignificantlyimproved,resultinginasubstantialreductioninthecontractprocessingcycleandasimultaneousincreaseinworkefficiencyandquality.Moreover,thestandardizedcontractmanagementprocesshaseffectivelyreducedthelegalandoperationalrisksfacedbyShenmaCorporation,buildingasoliddefenseforitssustainabledevelopment.Thesepositivechangesnotonlydemonstratetheforward-thinkingandexecutioncapabilitiesofShenmaCorporationincompliancemanagement,butalsoearnmoretrustandopportunitiesinthefiercemarketcompetition.
ShenmaIndustrial Co., Ltd.
Risk ControlShenmaCorporationattachesgreatimportancetovariousrisksfacedduringbusinessdevelopment,continuouslyimprovesitscomprehensiveriskmanagementsystem,enhancesriskidentificationandresponsemechanisms,organizesandconductscomprehensiveriskassessments,conductstargetedmanagementofannualmajorandimportantrisks,andpreparescomprehensiveriskmanagementreports.Atthesametime,ShenmaCorporationcontinuouslyimprovesitsinternalcontrolsystem,strengthensinternalcontrolsupervisionandmanagement,andprovidesasolidfoundationforsustainabledevelopment.In2023,ShenmaCorporationdidnotexperienceanysignificantriskevents.
Through continuousmarket research,internal audits andexternal informationgathering, themanagement ofShenmaCorporationcomprehensivelyidentifies potential riskpoints in businessoperations.
A scientific approach isadopted to conductquantitative analysison the identified risks,assessing theirlikelihood ofoccurrence and thedegree of impact onShenmaCorporation.Based on theassessment results,risks are prioritized toclarify which onesrequire priorityattention and handlingin order to allocateresources effectively.
For the high-risk areasidentified, detailedpreventive measuresare formulated,including improvinginternal controlsystems, strengtheningemployee training,optimizing businessprocesses, etc.These measures areimplemented toprevent the occurrenceof risks or mitigate theirnegative impact onShenma Corporationwhen they do occur,ensuring the continuityand stability ofbusiness operations.
When a risk eventoccurs, ShenmaCorporationimmediately activatesits emergencyresponse plan,responds quickly, andcontrols the situation toprevent further spreadof the risk.In-depth analysis ofrisk events isconducted tosummarize lessonslearned, optimize therisk managementsystem, and enhanceShenma Corporation'sability to respond tofuture risks.
RiskIdentification
RiskAssessment
RiskPrevention
RiskResponse
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Anti-corruptionSystem
ShenmaCorporationstrictlyabidesbyChina'santi-corruptionlawsandregulations,theUnitedNationsConventionagainstCorruption,aswellasanti-corruptionandanti-briberylawsandregulationsapplicableinothercountries(regions)whereitoperates.Inaccordancewithitsownanditsbusinesspartners'regulationsandcommitmentsonhonestemploymentandanti-corruption,ShenmaCorporationcontinuouslystrengthensthecultivationofanhonestculture.ShenmaCorporationanditsemployeesshallnotengageinoracceptcorruption,bribery,fraud,moneylaundering,oranyotherunethicalbehavior,regardlessofthereasonorform,inanygeographicallocation.Additionally,ShenmaCorporation'ssuppliers,contractorsandserviceprovidersarerequiredtocomplywiththeaforementionedregulations.Whenconductingdomesticandoverseasbusinessandinvestments,ShenmaCorporationstrictlyadherestotheprinciplesandregulationsofanti-corruption,anti-commercialbribery,anti-fraudandanti-moneylaunderingmentionedabove.ShenmaCorporationhasestablishedandcontinuouslyimproveditsanti-corruptionpolicyandinstitutionalsystem,ensuringcomprehensivecoverageofallitsagencies,businessesandpersonnel.ThisprovidesasolidfoundationforShenmaCorporation'slong-termsteadydevelopment.ShenmaCorporationhasformulatedrelevantsystemssuchastheListofResponsibilitiesoftheShenmaCorporationPartyCommitteeinFulfillingthePrincipalResponsibilityforComprehensivelyGoverningthePartywithStrictDisciplineandtheListofResponsibilitiesoftheShenmaCorporationDisciplineInspectionCommitteeinFulfillingtheSupervisoryResponsibilityforComprehensivelyGoverningthePartywithStrictDiscipline.Additionally,ShenmaCorporation'sPartycommitteehassignedtheTargetResponsibilityLettersforFulfillingthePrincipalResponsibilityforComprehensivelyGoverningthePartywithStrictDisciplinewithbranches,andwithsenior,middle-levelandprimary-levelleaders.ManagersandemployeeswhoarePartymembersmustalsoabidebytheCodeofConductforCleanandSelf-DisciplinedOfficialsoftheCommunistPartyofChinaaswellasotherregulationsonhonestemployment,andbesubjecttosupervision.Toimplementtheanti-corruptionpolicies,ShenmaCorporationhasissuedtheNoticeofShenmaCorporationPartyCommitteeonConductingInspectionsandEvaluationsofLeadingCadres,incorporatinganti-corruptionassessmentintotheperformanceappraisalsystem,andlinkingtheassessmentresultswithsalary,positionandrankadjustments.
CorruptionRiskControl
ShenmaCorporationhastakenrobustmeasuresinareaswithhighcorruptionrisks,suchastheselectionandpromotionofcadres,supervisionofthemisuseofresources,andsupervisionofbusinesstendersandbids.ThesemeasureshavepromotedtheimprovementofShenmaCorporation'smanagementlevelandthecultivationofanhonestculture.
CadreRecruitmentandSelection:ShenmaCorporationhasimplementedthe"FourSystems"reformformiddle-levelmanagers,includingthesystemsofrecruitmentthroughcompetition,termlimits,position-basedsalaryandelimination.Therecruitmentandselectionofcadresareconductedinanopen,fairandimpartialmannerthroughvariousformssuchas"threerecommendationsandoneexamination"or"threerecommendationsandthreeexaminations".ShenmaCorporation'sDisciplineInspectionCommitteeoverseestheentireprocesstoensurethatthereisnocorruptionriskinthepersonnelselectionmechanism.
MisappropriationofResources:Ontheonehand,byorganizinginspectionsofofficespaceusedinviolationofregulations,ShenmaCorporationhaspromptlyidentifiedandcorrectedexistingproblems,effectivelycurbingtheabuseofresources.Ontheotherhand,inresponsetotheissueofleadingcadrespotentiallyusingspecialresourcessuchasrareandvaluableproductsforpersonalgain,ShenmaCorporationhaslaunchedaspecialrectificationcampaignandrequiredmanagersatorabovetheprimaryleveltosignthePersonalCommitmentLetter,therebystrengtheningtheirawarenessofhonestyandself-discipline.
BusinessTendersandBids:ShenmaCorporationhasstrengthenedsupervisiontoensurethestandardization
andtransparencyofbiddingandtenderingactivities.ThesupervisiondepartmentsofShenmaCorporation'sheadquartersandsubsidiariesactivelyparticipatedinthebiddingprocess,conductingover200biddingsupervisionactivitiesthroughout2023.ThiseffectivelymaintainedafairandcompetitivebiddingenvironmentandensuredthemaximizationofShenmaCorporation'sinterests.
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Business Ethics andAnti Corruption
(I)EmphasisonPoliticalConstruction.ShenmaCorporation'sleadingcadresshallimplementthespiritofGeneralSecretaryXiJinping'sspeech,superviseandurgetheimplementationoftheresponsibilityofcomprehensivelygoverningthePartyinthenewera,andensuretheeffectiveimplementationofthedecisionanddeploymentofthe20thCPCNationalCongressthroughstrongpoliticalsupervision.ShenmaCorporation'sleadingcadresshallstrengthenthesupervisionandinspectionof"thetopleaders",graspthelawsgoverningtheconstructionofPartyconductandthefightagainstcorruption,givefullplaytotheroleofthe"six-in-one"comprehensivesupervisionsystem,andconsciouslyregulatebehaviorswiththe"TenRedLines".(II)FocusonImplementationofDecisions.ShenmaCorporation'sleadingcadresshallimplementthedeploymentrequirementsoftheGroupPartyCommitteeandtheCompanyPartyCommitteeregardingtheconstructionofPartyconductandthefightagainstcorruption,formulateworkplans,targetrequirementsandspecificmeasures,clarifytheresponsibilitiesandtaskassignmentsoftheleadershipteam,leadingcadres,internalfunctionaldepartmentsandbusinessunits,andpromotetheimplementationofresponsibilities.(III)StrengtheningofTheoreticalStudy.ShenmaCorporation'sleadingcadresshallcontinuouslypromotethestudyandimplementationofXiJinpingThoughtonSocialismwithChineseCharacteristicsforaNewEra,consistentlyadvocatePartymembersandcadrestoenhancetheir"fourconsciousnesses",strengthentheir"fourself-confidences"andachieve"twoupholdings",consistentlyimplementthestrategicapproachofcomprehensivelygoverningthePartywithstrictdiscipline,safeguardthecentralizedandunifiedleadershipoftheParty,urgetheimplementationoftheParty'stheories,lines,principlesandpolicies,andmaintaintheadvancednatureandpurityofPartymembersatalltimes.(IV)ContinuousImprovementofConductandDiscipline.ShenmaCorporation'sleadingcadresshallimplementthespiritoftheeight-pointdecisionoftheCPCCentralCommitteeonimprovingconduct;continuouslyrectifyformalismandbureaucratismthataffecttheimplementationofdecision-makinganddeployment,ignoreandinfringeupontheinterestsofthemassesandincreasetheburdenonthegrassrootslevel;deeplyrectifyhedonismandextravagancethatharmtheimageofthePartyandarestronglyopposedbythemasses;seriouslyrectifyissuessuchastheirregulardistributionofallowancesandsubsidies;andcreateagoodatmosphereofintegrity,honestyanddedicationtowork.(V)StrengthenedConstraintsofPower.ShenmaCorporation'sleadingcadresshallstrictlyimplementtheresponsibilityofcomprehensivelygoverningthePartywithstrictdiscipline,enforcedemocraticcentralism,performdutiesandexercisespowerinaccordancewithrules,regulationsandlawsaswellasthe"threemajorandoneimportant"systemandthefactory(enterprise)affairsdisclosuresystem,andensurethattheexerciseofpowerisopenandtransparent.ShenmaCorporation'sleadingcadresshallstrictlyfollowtheregulationsinselectingandappointingcadres,andpreventandcorrectirregularitiesintheselectionandappointmentprocess.(VI)ThoroughInvestigationsandResearch.Duringtheyear,ShenmaCorporation'sleadingcadresshallconductresearchontheconstructionofPartyconductandthefightagainstcorruption,andpromptlyresolveprominentissues.ShenmaCorporation'sleadingcadresshallbefamiliarwiththesituationofPartyconductconstructionandanti-corruptionworkwithintheirowndepartmentsorunits,superviseandinspecttheintegrityofpersonnelwithintheirscopeofresponsibility,andpromptlyengageinconversationsandremindersforanypotentialissues.(VII)FulfilmentofSupervisoryResponsibilities.ShenmaCorporation'sleadingcadresshallsupportandensurethatdisciplineinspectionandsupervisionpersonnelconductdisciplinaryreviewsinaccordancewithrulesandregulations,maintainahigh-pressurestanceonimprovingconductanddisciplineandpunishingcorruption,promptlycoordinateandresolvemajorsituationsandprominentissues,andensurethatthosewhoviolaterulesanddisciplinesareheldaccountableseriously.(VIII)DeepeningofCase-basedReform.ShenmaCorporation'sleadingcadresshalltakecase-basedreformasapowerfultooltopromotethegovernanceofthePartyandaneffectivemeasuretooptimizethepoliticalecology,adheretotheintegratedpromotionofthe"threeno's"principle(nocorruption,nocollusion,andnotoleranceforcorruption),makegooduseofdisciplineinspectionandsupervisionsuggestions,enhancetheeffectivenessofcase-basedreformandgovernance,andupholdthemainthemeof"strictness"throughouttheentireprocessofsupervisionanddisciplineenforcement.
Case｜Eight Key Responsibilities of ShenmaCorporation's Leading Cadres in Clean Governance
ShenmaIndustrial Co., Ltd.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
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EmployeeIntegrityTraining
Tostrengthenitscorporatecultureofanti-corruptionandintegrity,ShenmaCorporationhasintensifieditsanti-corruptionpublicityandeducationefforts.Basedonthesituationandtasksofdifferentperiods,ShenmaCorporationhascarriedoutvariousactivitiessuchaspromotingreformthroughcasestudies,organizinganti-corruptionpublicityandeducationmonths,promotingfamilyvaluesandeducation,collectingquotesonintegrity,organizingtheviewingofaseriesofwarningeducationalfilms,andvisitingintegrityeducationbases.Theseeffortshavecontinuouslyfosteredastrongatmosphereofdaringtotakeresponsibility,actingwithintegrity,andworkingwithhonesty.Overall,ShenmaCorporationhasincorporatedintegrityeducationintoitsemployeetrainingprogramsandimplementedatieredresponsibilitysystem.ShenmaCorporationheadquartersanditssubsidiariesmakefulluseofelectronicscreens,displayboardsandfactorybulletinboardstodisseminateknowledgeaboutlawsandregulations.Focusonthekeydates:ShenmaCorporationgivesearlyremindersandearlypreventionduringimportantholidays,promotesPartymembersandcadrestoconscientiouslyimplementthespiritofthecentralPartyleadership'seight-pointdecision,thecodeofconductforcleanandself-discipline,andthe"TwelveProhibitions",soastoavoidtheoccurrenceofholidaysyndrome.Focusonkeypersons:Allleadersatorabovethemiddlelevelparticipatedinthesigningandnotificationofthe"TenRedLines"forPartybuildingandoperation;managersatorabovetheprimarylevelparticipatedinthelectureonintegrityandthevideoconferenceonpromotingcase-basedreform;allPartymembersparticipatedintheknowledgetestontheParty'sregulationsondisciplinarysanctions.Case｜Collective Discussion Meeting of ShenmaCorporation Party Committee on Integrity
ShenmaIndustrial Co., Ltd.OnJuly12,2023,ShenmaCorporationPartyCommitteeheldanannualcollectivediscussionmeetingonintegrity.Themeetingemphasizedtheimportanceofimprovingconductandbuildingintegrityforthehealthydevelopmentofenterprises,pointingoutthatinthecontextofthenewera,strengtheningintegrityandself-disciplineandcreatingacleananduprightcorporateenvironmentaretheunshirkableresponsibilitiesofeveryPartymemberandcadre.Bycitingtheprofoundlessonslearnedfromcorruptionsindomesticandforeignenterprisesinrecentyears,themeetingwarnedeveryonetoremainsober-mindedatalltimes,stayvigilantinmaintainingintegrityandself-discipline,andresolutelyrefrainfromcrossingtheredlineofdiscipline.
In2023,ShenmaCorporationheadquartersanditssubsidiariesorganized34integrityeducationandtrainingsessions,withatotalof10,164participants,achievinga100%coveragerateforintegrityeducation.
Key Performance
SupplyChainAnti-corruptionShenmaCorporationexplicitlyprohibitssuppliersfromengaginginanyformofcorruption,bribery,andotherunethicalbehaviors.ShenmaCorporationconductsduediligencebeforeselectingsupplierstoconfirmwhethertheyhavebeeninvolvedincorruptpracticesandwhethertheyhavetheabilitytooperateincompliance.Thesupplycontractshouldclearlystatetheanti-corruptioncommitmentsofbothparties,requiringsupplierstocomplywithanti-corruptionlawsandethicalstandards.ShenmaCorporationsignsaCleanBusinessResponsibilityStatementwithsuppliersandcontractors,clearlycommunicatingitsrequirementsforcleanbusinesspracticesandanti-corruption,andattachestheCleanBusinessResponsibilityStatementasanannextotheprocurementcontract(agreement),makingitequallylegallybinding.Atthesametime,ShenmaCorporationentruststhird-partybusinesscreditevaluationagenciestoconductlegalpersoncreditcertificationforsuppliers,regularlytrackschangesinthecreditworthinessofsuppliersandcontractors,andusesbigdatatechnologytomonitortheirbusinessanomalies,administrativepenalties,punishmentsfordishonestyandotheraspectsinreal-time,soastopromptlyidentifyrisksfromsuppliersandcontractorsandavoidbusinessrisks.Forviolationsofanti-corruptionregulations,ShenmaCorporationimplementsclearhandlingmeasures,whicharedividedintonotification,suspensionoftradingqualifications,cancellationoftradingqualifications,inclusioninits"blacklist"andreportingtojudicialauthoritiesforcriminalliabilityaccordingtotheseriousnessofthecircumstances.IfsuppliersregisteredontheEPECplatformviolatetherelevantregulationsonhonestconduct,ShenmaCorporationwillalsopubliclyannouncethehandlingresultsontheplatform.
RegularAuditSupervisionIn2023,LixinCertifiedPublicAccountants,anexternalauditfirm,conductedaninternalcontrolauditonShenmaCorporationandits18second-tiersubsidiaries,coveringvariousaspectssuchasorganizationalstructure,developmentstrategy,humanresources,corporateculture,capitalactivities,procurementoperations,salesoperations,productquality,safetyproduction,energyconservationandenvironmentalprotection,taxmanagement,productionmanagement,assetmanagement,researchanddevelopment,engineeringprojects,subsidiarymanagement,investmentmanagement,contractmanagement,guaranteeoperations,related-partytransactions,financialreportingandinformationdisclosure,internalaudit,internalinformationtransfer,andinformationsystemmanagement.Thehigh-riskareasoffocusmainlyincludedcapitalactivities,procurementoperations,salesoperations,assetmanagement,guaranteeoperations,investmentmanagement,andrelated-partytransactions.Basedontheidentificationofsignificantdeficienciesintheinternalcontroloverfinancialreporting,asofthebasedateoftheinternalcontrolevaluationreport,therewerenosignificantdeficienciesintheinternalcontroloverfinancialreporting.TheBoardofDirectorsbelievesthatShenmaCorporationhasmaintainedeffectiveinternalcontroloverfinancialreportinginallmaterialaspectsinaccordancewiththerequirementsoftheenterpriseinternalcontrolstandardsystemandrelevantregulations.Basedontheidentificationofsignificantdeficienciesintheinternalcontrolovernon-financialreporting,asofthebasedateoftheinternalcontrolevaluationreport,therewerenosignificantdeficienciesintheinternalcontrolovernon-financialreporting.
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Case｜Trainings of Nylon Chemical Co., Ltd.
ShenmaIndustrial Co., Ltd.
1.MembersoftheleadershipteamofNylonChemicalCo.,Ltd.utilizedthelearningsessionoftheCentralGrouptoseriouslystudythePublicNotificationoftheCentralCommissionforDisciplineInspectionandtheNationalSupervisoryCommissiononSevenTypicalCasesofViolatingtheSpiritoftheCentralPartyLeadership'sEight-pointDecisionandthePublicNotificationoftheHenanProvincialCommissionforDisciplineInspectionandSupervisoryCommissiononFiveTypicalCasesofMealGatheringinViolationofRegulations.
2.TheDisciplineInspectionCommitteeofNylonChemicalCo.,Ltd.organizedmembersoftheleadership
team,secretariesofvariousPartybranches,andrelevantpersonnelforpoliticalandideologicalworktostudyaseriesofthreevideosanalyzingcorruptioncasestitledTheTransformedOriginalIntention,ZhuXi,andTheHarmofGreedthreetimes,soundingthealarmforPartymembersandcadresthroughstudyingthesecases.4344
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Business Ethicsand AntiCorruption
Antitrust PolicyShenmaCorporation strictly abides by relevant national laws and regulations such as the Anti-Monopoly Lawof the People's Republic of China, the Provisions on Prohibition of Monopoly Agreements, the Provisions onProhibition of Abuse of Market Dominant Position, and the Provisions of the State Council on Thresholds forPrior Notification of Concentrations of Undertakings. ShenmaCorporation commits to avoiding monopolisticbehaviors in future business operations and ensuring fair competition within the industry. ShenmaCorporationwill actively take various measures to ensure that all participants in the market have equal opportunities, andthat no single party can manipulate the market or suppress competitors. ShenmaCorporation will comply withall relevant laws and regulations, respect the rules stipulated in competition laws, and also encourage othermarket participants to join us in contributing to the prosperity and innovation of the industry.ThechemicalindustryinwhichShenmaCorporationoperatestypicallydoesnotinvolvemonopolyissuesduetotheintenseanddiversifiedcompetitioninthemarket.Thechemicalindustryencompassesawiderangeofproductsandapplications,withmultiplesupplierscompetingineachsub-sector.Furthermore,whilethechemicalindustryoftenrequiressignificanttechnicalandcapitalinvestments,beingupstreamintheindustrialchain,therelativelyhomogenizedproductsandservicesmakeitdifficulttoestablishasustainablemonopolisticlandscape,resultinginarelativelylowoverallriskofmonopolyforShenmaCorporation.Duringthereportingperiod,ShenmaCorporationdidnotexperienceanyincidentsthatresultedinpenaltiesforviolationsoftheAnti-MonopolyLawofthePeople'sRepublicofChinaortheLawofthePeople'sRepublicofChinaAgainstUnfairCompetition.
Tax PolicyShenmaCorporation strictly abides by laws and regulations such as the Law of the People's Republic ofChina on Enterprise Income Tax and the Law of the People's Republic of China on the Administration of TaxCollection as well as applicable laws in the locations of its overseas operations. ShenmaCorporationconscientiously fulfills its prescribed tax obligations and has established a comprehensive system for financialand tax management. In daily tax-related matters, tax and financial managers at all levels conduct reviews,and external tax and financial intermediaries issue relevant tax-related assurance reports, effectively reducingtax-related risks.ShenmaCorporationcontinuouslyengagesincooperativeexchangeswithstakeholdersandpaystaxeswithintegrity.Forinformationontaxpaymentsin2023,pleaserefertoShenmaCorporation's2023AnnualReport.In2023,toenhancetheefficiencyandcomplianceoftaxmanagement,ShenmaCorporationwasfullycommittedtobuildinganintegratedinformationsystemthatdeeplyintegrates"business,finance,taxation,andlaw".Thissystemseamlesslyintegrateswithallkeybusinessprocesseswithintheenterprise,includingprocurement,production,sales,finance,taxationandlegalaffairs,breakingdowninformationbarriersbetweendepartmentsandenablingreal-timedatasharingandintelligentanalysis.Thisnotonlysignificantlyimprovesworkefficiencybutalsosubstantiallyreducestaxrisksandoperatingcosts,providingsoliddatasupportforcorporatedecision-making.
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WhistleblowerProtectionThewhistleblowerprotectionmechanismplaysavitalroleinShenmaCorporation'santi-corruptionefforts.Thismechanismencouragesemployeestoactivelyexposeimproperconduct,corruptionandviolationswithinShenmaCorporationbyprovidingthemwithconfidentiality,securityandlegalprotection.Itnotonlyenhancesemployees'senseoftrustandbelonging,makingthembelievethatShenmaCorporationhasafirmcommitmenttomaintainingintegrityandfairness,butalsoprovidesanimportantavenueforShenmaCorporation'smanagementtopromptlyidentifyandrectifyissues.Therefore,thewhistleblowerprotectionmechanismisanessentialcomponentofShenmaCorporation'santi-corruptionsystem,anditisofgreatsignificanceformaintainingShenmaCorporation'sreputation,safeguardingshareholders'interests,andpromotingahealthycorporateculture.In2023,thesubsidiariesofShenmaCorporationgraduallyimprovedtheirreportacceptanceandwhistleblowerprotectionpoliciesandmechanisms,aimingtoensurethatthepersonalinformation,reportcontent,andreportingprocessofwhistleblowersarestrictlyconfidentialandprotected,therebyavoidinganyformofretaliationorinfringement.Thissystemnotonlyprovideswhistleblowerswiththeoptionofanonymousreportingbutalsoestablishesdedicatedreportingchannelsandhandlingagenciestoensurethatthereportedinformationisprocessedinatimely,fairandprofessionalmanner.Furthermore,ShenmaCorporationhasformulatedstrictdisciplinarymeasurestoresolutelyinvestigateandpunishanyactsofretaliationagainstwhistleblowers,creatingasafeandfearlessenvironmentforwhistleblowing.TheestablishmentofthissystemdemonstratesShenmaCorporation'scommitmenttointegritycultureanditszero-toleranceattitudetowardscorruption,layingasolidfoundationforitshealthyandsustainabledevelopment.
1. Reception of Reports
nReportingchannels:ShenmaCorporationhasestablishedmultiplechannelsforreportingcorruption,includingbutnotlimitedtotelephonehotlines,email,onlinereportingplatforms,physicalmailboxesandface-to-facereporting,soastofacilitateemployees,customers,suppliersandmembersofthepublictoeasilysubmitreports.nInformationreception:Adedicatedreportingreceptionagencyordepartmentisresponsibleforreceivingreports,
ensuringthatthereportingchannelsareunobstructed.Thereportedinformationreceivedwillberecordedandsavedindetailforsubsequentverification.
2. Review and Assessment
nInformationorganization:Thereportingreceptionagencysortsoutthereportedinformationreceivedbyit,includingverifyingthewhistleblower'sidentity(exceptincasesofanonymousreporting),thesubjectbeingreported,thecontentofreport,etc.nPreliminaryassessment:Thereportingreceptionagencyconductsapreliminaryassessmentbasedonthenature,
severityandurgencyofthereportedcontenttodeterminewhetheranimmediateinvestigationprocedureneedstobeinitiated.Reportsinvolvingmajorviolationsoflawsandregulationswillbeprioritizedforprocessing.
3. Investigation and Verification
nIn-depthinvestigation:TheinvestigationteamwillconductathoroughinvestigationandverificationofthecontentofreportinaccordancewithrelevantlawsandregulationsaswellasrulesandregulationsofShenmaCorporation.Duringtheinvestigationprocess,variousmeanswillbeusedtocollectevidencematerials,includingbutnotlimitedtoreviewingdocuments,interviewingrelevantpersonnelandconductingon-siteinspections.
nPrincipleofconfidentiality:Throughouttheinvestigationprocess,theprincipleofconfidentialityisstrictlyadheredtosoastoensurethatthepersonalinformationofthewhistleblowerandthecontentofreportarenotdisclosed.
4. Disposal and Feedback
nDisposaldecision:Basedonresultsoftheinvestigationandverification,ShenmaCorporationwilldisposeofthe
corruptioninvolvedinaccordancewithrelevantlawsandregulationsaswellasitsrulesandregulations.Thedisposaldecisionmayincludedisciplinaryactions,legalproceedings,andothermeasures.
nFeedbacktothewhistleblower:Underthepremiseofcomplyingwithlawsandregulationsaswellasitsrulesand
regulations,ShenmaCorporationwillprovidefeedbackonthedisposaltothewhistleblower.47484748
Tax Information Management and Control System
Invoice Management
ComprehensiveDeclaration of TaxesRisk Managementand ControlStatistical Analysis
ArchivesManagementTaxation Policy
A"one-windowinvoicemanagement"systemisimplementedtocovertheentirelifecyclemanagementofinputandoutputinvoices,thesystemincludesissuance,confirmation,cancellation,accountingandotherprocessesandensuresthestandardizationandefficiencyofinvoiceprocessing.
Varioustaxdeclarationfunctionsareintegratedtoautomaticallyextractfinancialdatatogeneratetaxreturns,reducemanualintervention,andimprovetheaccuracyandtimelinessoftaxdeclarations.Ataxmonitoringindicatorlibraryandariskcontrolassessmentmodelareestablishedtoregularlyalertpotentialtaxrisksandpushthemtotaxspecialistsfordisposal.Thesystemsummarizesandgeneratesriskcontrolreports,comprehensivelyassessingthetaxriskstatusoftheenterprise,andassistingShenmaCorporationinpreventingandrespondingtorisksinadvance.
Electronicstorageandmanagementoftaxarchivesisachievedforeasyandquickretrievalaswellasauditresponses.
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ShenmaCorporationstrictlyabidesbyrelevantlawsandregulationsrelatedtointellectualpropertyprotection,includingtheCivilCodeofthePeople'sRepublicofChina,theCriminalLaw,theTortLiabilityLaw,thePatentLaw,theTrademarkLaw,theCopyrightLaw,theAnti-UnfairCompetitionLaw,aswellasthenationalstandardEnterpriseIntellectualPropertyManagement,andfullyimplementsintellectualpropertyprotectionmeasures.ShenmaCorporation'ssubsidiarieshaveformulatedandcontinuouslyupdatedpoliciesandsystemsforintellectualpropertyprotection,suchasthePatentManagementSystem,thePatentManagementMeasures,theOpinionsonStrengtheningLegalProtectionofIntellectualPropertyRightsandtheDetailedRulesfortheAssessmentandRewardofR&DPersonnel,soastoprovideclearimplementationnormsforpromotingpatentmanagementandlegalprotectionofintellectualpropertyrights.InordertofurtherprotectShenmaCorporation'scoreinterests,safeguardthelegitimaterightsandinterestsofintellectualpropertyrightsholders,encourageinventionsandcreations,improveinnovationcapabilities,enhancemarketcompetitiveness,reduceinvestmentrisksinscientificresearchandeffectivelyleveragethesupportingroleofintellectualpropertyrightsinthefieldofscienceandtechnologyforShenmaCorporation'sproduction,operationandtransformationdevelopment,allsubsidiariesofShenmaCorporationhaveestablishedspecializedintellectualpropertymanagementsystems.
Protection of IntellectualProperty Rights
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ShenmaCorporationstrictlycomplieswithlegalprovisionssuchastheCybersecurityLawofthePeople'sRepublicofChina,theDataSecurityLawofthePeople'sRepublicofChina,thePersonalInformationProtectionLawofthePeople'sRepublicofChina,theRegulationsonClassifiedProtectionofCybersecurity,andtheRegulationsonSecurityProtectionofCriticalInformationInfrastructure.ToensurethesecureandstableoperationofShenmaCorporation'sinformationsystemsandpromotethein-depthdevelopmentofinformatizationwork,theInformationSecurityManagementMeasuresofShenmaIndustrialCo.,Ltd.hasbeenformulated,establishingastandardnetworksecuritymanagementsystemwiththisMeasuresasitscore.Furthermore,ShenmaCorporationhasestablishedaCybersecurityandInformatizationLeadingGrouptocoordinate,superviseandoverseeitscybersecuritywork.ThisgroupreviewsShenmaCorporation'smedium-andlong-termcybersecurityplansandannualplans,promotestheimplementationofvariouscybersecuritytasksandrelatedresponsibilities,andeffectivelypreventstheabuseofcustomers'personalinformation,ensuringthatthecollectedpersonalinformationisonlyusedforlegitimateandrelevantpurposes.In2023,ShenmaCorporationdidnotexperienceanymajorcybersecurityincidents.
TheManagementSystemToenhancethelevelofinformationsecuritymanagement,ensurethenormalconductofbusinessactivities,andpreventlossestoitselfanditscustomerscausedbydisruptionstoinformationsystems,datalossandthedisclosureofsensitiveinformation,ShenmaCorporationhasundertakenworkincompliancewithISO27001:
InformationTechnology-SecurityTechniques-InformationSecurityManagementSystems-Requirements.Thisincludesestablishing,implementingandcontinuouslyimprovingadocumentedinformationsecuritymanagementsystem,aswellasformulatinganInformationSecurityManagementManual.AllemployeesstrictlyadheretotherequirementsoftheInformationSecurityManagementManual,conscientiouslyfollowtheinformationsecuritymanagementpolicy,implementthevariousrequirementsofthemanual,andstrivetoachieveShenmaCorporation'sobjectivesforinformationsecuritymanagement.
Cybersecurityand DataProtection
InformationSecurityTrainings
ShenmaCorporationactivelyengagesininformationsecuritytraining,recognizingitasacrucialcornerstoneforsafeguardingthesecurityofitscoreassetsandensuringbusinesscontinuity.ShenmaCorporationregularlyconductsavarietyofinformationsecuritytrainingcourses,coveringtopicssuchasthelatestsecuritythreatlandscape,compliancerequirements,bestpracticessharing,andspecificprotectionskillenhancements.Byinvitinginternalsecurityexpertsandemployeestoserveasinstructors,andadoptingvariousformssuchasonlinelivebroadcasts,offlineseminarsandsimulationexercises,ShenmaCorporationensuresthateveryemployeecanacquiretargetedandhighlypracticalinformationsecurityknowledge.
In2023,allsubsidiariesofShenmaCorporationinvolvedininformationsecurityissuesactivelyconductedtrainingsoninformationsecuritysystem,withatrainingcoveragerateof100%.
Key Performance
Physical SecurityControl Measures
Access ControlMeasures
Password PolicyNetwork Security
Control
Data Backup andRecovery
Physical Documentand Media Security
ManagementSecurity accesscontrol, videosurveillance systems,secure transmissionmedia, computerroom securityprotection, etc.
User authentication,access permissionmanagement, multi-factor authentication,etc.
Strong passwordrequirements, regularpassword changes,non-reuse ofpasswords,encrypted passwordstorage, etc.
Network firewalls,intrusion detectionand preventionsystems, antivirussoftware, securityconfiguration andpatch management,etc.
Regular backups ofimportant data areperformed, andcorrespondingrecoverymechanisms areestablished toaddress data loss.
Safe custody ofstorage devices,confidentialitylabeling, and regulardestruction ofunused files andmedia.
Case｜Intellectual Property Protection System of Nylon Chemical Co., Ltd.Intellectualpropertyprotectionisanimportantsafeguardfortechnologicalinnovation.Currently,NylonChemicalCo.,Ltd.hasestablishedastandardizedintellectualpropertymanagementsystemundertheguidanceofShenmaCorporation'stechnologicalinnovationmanagementdepartmenttoensurethatitstechnologicalinnovationachievementsareeffectivelyprotected.Atthesametime,itstrengthensthepromotionandtrainingofintellectualpropertyrightstoraiseemployees'awarenessofintellectualpropertyprotection.
ShenmaIndustrial Co., Ltd.
General ManagerChief Engineer
Technology
Center
ProductionDepartment
General Office
EnterpriseManagementDepartment
Legal AffairsDepartment
Research &Development Office
Case｜Performance of Trainings on Intellectual Property Protection of ShenmaAramidFiber Technology Development Co., Ltd.ShenmaAramidFiberTechnologyDevelopmentCo.,Ltd.hasorganizedandcompletedtherevisionandcompilationofdocumentsforitsintellectualpropertymanagementsystem,withthedocumentsbeingrevisedthreetimesin2023,andthereviseddocumentshavebeenpromulgatedanddistributed.Itorganizeda4-hourintellectualpropertymanagementtrainingfor80persons,andheld4internalcommunicationmeetingsonintellectualproperty.Itrevisedandimproveditsreceptionmanagementsystem,standardizingandstrengtheningthemanagementofvisitsbyexternalpersonnel,andimplemented65approvalsforvisitstoconfidentialareas.
ShenmaIndustrial Co., Ltd.
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Product Liability
Asaleadingenterpriseinthechemicalindustry,ShenmaCorporationisfullyawareoftheimportanceofproductresponsibilityandcustomerservicetosustainabledevelopment.In2023,weactivelypromotedtheimprovementofproductqualityandtheoptimizationofcustomerservice,dedicatedtoprovidingcustomerswithhigh-quality,safeandenvironmentallyfriendlychemicalproducts.Wenotonlystrictlycomplywithindustrystandards,butalsohaveestablishedacomprehensiveproducttraceabilitysystemtoensurethattheentirelifecycleofourproductsmeetsenvironmentalprotectionrequirements.Furthermore,wehavestrengthenedourcustomerfeedbackmechanism,continuouslyimprovingcustomersatisfactionbypromptlyrespondingtoandresolvingcustomerissues.Wefirmlybelievethatonlybyachievingexcellenceinproductresponsibilityandcustomerservicecanweachievelong-termsustainabledevelopment,andwinthetrustofcustomersandtherecognitionofthemarket.KeyESGPerformancenIn2023,ShenmaCorporationobtained18inventionpatentsand58utilitymodelpatents,ofwhichtwopatentsweregrantedbyothercountries.Thenationalandindustrystandardsitparticipatedindrafting,includingthenationalstandardPara-aramidFilamentYarns,theindustrystandardNylon66Salt,theindustrystandardCyclohexanolforIndustrialUseandtheindustrystandardCyclohexeneforIndustrialUse,werereleasedandimplemented.nIn2023,allkeysubsidiariesofShenmaCorporationhavepassedqualitymanagementcertification.Amongthem,subsidiariessuchasShenmaCordFabricCompany,NylonChemicalCo.,Ltd.,ShenmaHuaweiPlasticCo.,Ltd.,ShenmaEngineeringPlasticCo.,Ltd.andShenmaCordFabricDevelopmentCo.,Ltd.haveallpassedISO9001andIATF16949certifications;ShenmaHuaweialsoholdsCQCproductcertification,ULproductcertificationandGRSinternationalrecyclablestandardcertification.
nIn2023,ShenmaCorporationcontinuedtoimproveitscustomer
servicesystemandstrengthenedthe"1231"rapidresponsemechanism.
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Sustainable Development Goals (SDGs) of theUN Addressed in This Chapter
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ManagementofScientificandTechnologicalInnovation
ShenmaCorporationhasimplementedaninnovation-drivendevelopmentstrategy,deeplypromotedreformsinthescientificandtechnologicalsystemandmechanism,andfullyleveragedthesynergisticadvantagesofproduction,salesandR&Dfor"mutualpromotionandsupport".RelyingonscientificresearchplatformssuchastheNationalEnterpriseTechnologyCenterandthePostdoctoralWorkstation,ithasinvestedintheconstructionoftheKeyFull-ProcessLaboratoryforNylonIntermediates,theKeyFull-ProcessLaboratoryforNylonEngineeringPlastics,andtheKeyFull-ProcessLaboratoryforNylonFibers.ThishasenabledtherealizationofacomprehensiveR&Dplatformintegratingtheentireprocessfromnylonrawmaterialintermediatestonylonchipengineeringplasticstonylonfibers,providingintegratedsupportforthedevelopmentofproductsacrosstheentirenylonindustrychain.
R&D Innovation
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ShenmaCorporationhas made enhancing itsR&D capability astrategic priority,ensuring that a certainproportion of annualoperating revenue isinvested in R&D toguarantee sufficientresources for thedevelopment of newproducts and thetackling of keytechnologies. Thiscontinuous investmentof funds has not onlystrengthened ShenmaCorporation'stechnological R&Dcapability but alsoaccelerated the rapiddevelopment andapplication of newtechnologies andproducts.
Shenma Corporationactively promotestechnological innovation,encouragesindependent innovationstrategies, and providescomprehensive testingplatforms and R&Dfacilities. On the onehand, ShenmaCorporation improvesproduct utilization andproduction efficiencythrough technologicalinnovation. On the otherhand, it achieves energyconservation andconsumption reductionby optimizingformulations andprocesses. In addition,Shenma Corporationregularly organizestechnical exchangesand trainings to enhancethe professional skillsand innovation capabilityof its R&D personnel.
Shenma Corporationattaches greatimportance tointellectual propertyprotection and hasinitiated the constructionof an intellectualproperty compliancemanagement system tocomprehensively protectthe achievements oftechnological innovation.By establishing keylaboratories coveringthe entire process,intensifying therecruitment ofprofessional R&Dtalents, and conductingdeep cooperation withexternal researchinstitutes, ShenmaCorporation isaccelerating theindustrialization of R&Dprojects to ensure thatscientific andtechnologicalachievements can betransformed into realproductive forces.
During the R&D process,Shenma Corporationfully utilizes externalresources and activelyseeks opportunities forcooperation andexchange with otherenterprises, researchinstitutions andgovernmentdepartments. Bycollaborating withresearch institutions,universities andenterprises ontechnology development,Shenma Corporationachieves resourcesharing andcomplementaryadvantages, drivingresearch andbreakthroughs in thedirections of green andlow-carbon practices,energy conservationand consumptionreduction, large-scaleequipment, personalizedproducts, anddevelopment of new rawmaterials.
Sustained R&D Input
Improvement ofInnovation Platform
Improvement of IPProtection
External Cooperationand Resource Integration
NylonChemicalCo.,Ltd.hassettheresearchonkeyorganicintermediatesandcatalysttechnologiesfornylon66synthesisasitslong-termresearchgoal,continuouslypromotinginnovativedevelopment,optimizingresourceallocation,andimprovingresourceutilizationefficiency.IntheR&Dprocess,NylonChemicalCo.,Ltd.fullyutilizesexternalresourcesandactivelyseeksopportunitiesforcooperationandexchangewithotherenterprises,researchinstitutions,governmentdepartments,etc.Itengagesintechnologicaldevelopmentcooperationwithresearchinstitutions,universitiesandenterprisestoachieveresourcesharingandcomplementaryadvantages.NylonChemicalCo.,Ltd.adherestothegoalof"cultivatinghigh-level,highlyskilled,innovativeandcompoundtalents",andhasestablishedaresearchteamconsistingofscientificresearchersandtechniciansincludingtheChairman(professor-levelSeniorEngineer),GeneralManager(professor-levelSeniorEngineer),ChiefEngineer(professor-levelSeniorEngineer)andkeypersonnelfromtheTechnologyR&DCenterandvariousbranches.Italsoconcurrentlyemploysexpertsandprofessorsfromwell-knownuniversitiesandinstitutionstopromotetechnologicalinnovation.NylonChemicalCo.,Ltd.hasissuedtheInterimMeasuresofNylonChemicalCo.,Ltd.fortheManagementofScientificandTechnologicalResearch,establishedaR&DteamwithintheTechnologyR&DCenter,andclarifiedtheresponsibilitiesforthemanagementofscientificandtechnologicalresearchprojects.Thisteamisprimarilyresponsiblefortheapplication,organizationandimplementationofR&Dprojects,projectevaluation,managementofR&Dfunding,performanceevaluationandincentives,andintellectualpropertymanagement.NylonChemicalCo.,Ltd.currentlypossessestheHenanKeyLaboratoryforPolyamideIntermediates,whichisledbyoneDirector,twoDeputyDirectors,andcomprisesrenowneddomesticexpertsinthefield.TheinitialAcademicCommitteeconsistsof18members,andthereareover10full-timeresearchers.ThelaboratoryundertakesmajorR&Dprojects,sector-focusedR&Dprojectsandindependentlyinitiatedresearchprojects,focusingonthreeresearchdirections:technologyresearchonkeyorganicintermediatesandcatalystsfornylon66synthesis,developmentandutilizationofnewcarbon-6materialsrelatedtonylon6and66intermediates,aswellasdevelopmentandutilizationofchemicalsandmaterialsrelatedtopolyamideintermediates.In2023,NylonChemicalCo.,Ltd.activelypromotedtheR&Dofkeytechnologiesandbreakthroughsinthe"newgenerationofcyclohexanolprocess",focusingongreenandlow-carbonpractices,energyconservationandconsumptionreduction,large-scaleequipment,personalizedproducts,andthedevelopmentofnewrawmaterials.Itinvestigatedthe"cyclohexanedehydrogenation"and"cyclohexeneindirecthydration"processes,andconductedscale-upexperimentsontheresultsofsmall-scaleR&D,soastomaketechnologicalbreakthroughsandbuildreservesfordevelopingnewcyclohexanolproductionprocesses.Additionally,itactivelyengagedintheR&Dof"newhexamethylenediamineprocesses"and"newadipicacidreactionsystems",aimingtodevelopandcompleteentireprocesspackages,formcoreintellectualpropertyrights,andpreparelong-termstrategicplanningfortheenterprise.
In2023,ShenmaCorporation'sR&DexpenditurewasRMB444million,accountingfor3.43%ofitsoperatingrevenue,representinga9.09%increaseoverthepreviousyear.Asoftheendof2023,ShenmaCorporationhadatotalof930R&Dpersonnel,including3docter'sdegreeholdersand93master'sdegreeholders.
Key Performance
Project Development Process of Nylon Chemical Co., Ltd.
Nylon Raw MaterialIntermediates
Innovation Layout across the EntireIndustrial Chain
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Market research by relevantdepartments such as Marketing
and TechnologyInstructions from superiors
Exchanges between technical personnelwith domestic and internationalcounterparts in the same industrySummary and sorting by the
Technology CenterInvitingindustryexperts forevaluation
Feasibility analysis and evaluationfrom aspects such as market risks,technical conditions and productionmethods
Conformity with thedevelopment strategy andhaving market potentialSubmission to the General Manager's
Office Meeting for approval
Compilation of the technologydevelopment andtransformation planIssuance to various departments for
implementation
Shenma Industrial Co., Ltd.Sustainability Report 2023
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ShenmaEngineeringPlasticCo.,Ltd.hasestablishedasystematicinnovationmanagementsystem,responsibleforimplementingthescientificandtechnologicalstrategicplanningandstandardizingscientificandtechnologicalmanagementwork.ToacceleratetheR&Dprocess,ShenmaEngineeringPlasticCo.,Ltd.hasestablishedaresearchanddevelopmentsystemcenteredontheKeyFull-ProcessLaboratoryforEngineeringPlastics,withaprimaryfocusonstructuralintegrityandtheneedsofresearchanddevelopmentprojects.Thissystemcombinesthecharacteristicsofexistingproductionlinesandadoptsataskgroupresponsibilitysystemasitsmainform.Eachtaskgroupconsistsofaleader,coremembersandparticipatingmembers,withtheleadertakingoverallresponsibility.Thissystemprovidesgreaterroomforcreativityandstimulatesthepotentialfortechnologicalinnovation.In2023,ShenmaEngineeringPlasticCo.,Ltd.firmlyfocusedondevelopinghigh-endanddifferentiatedproducts,acceleratedthedevelopmentoffunctionalandhighvalue-addedproducts,andmadeconcertedeffortstoadjusttheindustrialstructure.Thedevelopmentofprojectsrelatedtonylon66high-endserialproductsforinjectionmoldingandspinningwasfullycompleted,andtherelevantproductswerelaunchedintothemarket.ThemainR&DprojectsthatShenmaEngineeringPlasticCo.,Ltd.participatedinincludetheDevelopmentandApplicationofHigh-StrengthYarnChips,andtheachievementtransformationprojectsincludetheResearchandDevelopmentofNylon66High-EndSerialProductsforSpinningandtheResearchandDevelopmentofNylon66High-EndSerialProductsforInjectionMolding.ShenmaHuaweiPlasticCo.,Ltd.encouragesanindependentinnovationstrategyintechnologicaladvancements,providingacomprehensivetestingplatform.Ononehand,itenhancesproductutilizationthroughtechnologicalinnovations;ontheotherhand,itachievesenergyconservationandconsumptionreductionbyoptimizingformulationsandprocesses.Intermsoftechnicalexchangeandtraining,ShenmaHuaweiPlasticCo.,Ltd.regularlyorganizesinternaltrainingsessionsandarrangesforR&Dpersonneltoparticipateinexternalprofessionalskilltrainings,suchastheChinaplas,ULflameretardanttraining,syntheticresinexhibitions,andtrainingonscientificresearchqualitymanagementsystems.Employeesareencouragedtoparticipateintheimplementationofkeyprojectsandcontributetotheoutputofpatentsandintellectualpropertyrights.In2023,ShenmaHuaweiPlasticCo.,Ltd.mainlyundertookthedevelopmentofmodifiednylon66engineeringplasticsandtheR&Dofnylonengineeringplasticsforuseintheelectricvehicleindustry.ShenmaHuaweiPlasticCo.,Ltd.hasbecomeastrategicpartnerwithleadingcompaniesinsuchsectorsasconsumerelectronicsandautomotive.ShenmaHuaweiPlasticCo.,Ltd.hasjointlyestablishedaR&DplatformwithShanghaiShenmaEngineeringPlasticsCo.,Ltd.Thelatterhasestablishedtechnicalcooperationrelationshipswithmultiplehighereducationinstitutionsandresearchinstitutes,boastingstrongR&Dcapability.
ShenmaCorporationhasconsistentlyprioritizedenhancingitsR&Dcapabilityasastrategicfocus,andhasincreaseditsfinancialsupportforthedevelopmentofcoreproductsandtheresolutionofkeytechnologiesyearbyyear.Leveragingitstechnologicaladvantages,ShenmaCorporationacceleratestheindustrializationofscientificandtechnologicalachievements,enhancesproductqualityandtechnologicalcontent,andfocusesonservingcustomersandthemarket.Ithasestablishedatechnologicalinnovationsystemthatprioritizesproductdevelopmentandissupportedbytechnologicaldevelopment,ensuringthatitsproductsandtechnologiesremainattheforefrontoftheindustry.ToensuretheeffectiveimplementationofShenmaCorporation'sR&Dstrategy,itssubsidiarieshaveestablishedspecializedR&DmanagementdepartmentsandimplementedtargetedR&Dpolicies.Forexample,ShenmaCordFabricDevelopmentCo.Ltd.hasestablishedaTechnicalCommittee,thehighestandmostauthoritativeorganizationintermsoftechnologydevelopment,responsibleforreviewing,evaluating,anddeclaringachievementsofkeyscienceandtechnologyprojects.IthasalsoformulatedandissuedtheIncentiveMeasuresofPingdingshanShenmaCordFabricDevelopmentCo.,Ltd.forScientificandTechnologicalInnovationAssessmentintheNewEra(Trial)applicabletoscienceandtechnologyprojectsandresearchtasks.Tobettermotivatehigh-enduniversitygraduatesintheirwork,ShenmaCordFabricDevelopmentCo.Ltd.hasformulatedandissuedtheMeasuresofShenmaCordFabricDevelopmentCo.Ltd.forPerformanceAppraisalofHigh-EndUniversityGraduates(Trial).IntermsofR&Ddirection,ShenmaCorporation'ssubsidiariessettheirR&DdirectionsandgoalsbasedoncustomerneedsandShenmaCorporation'soverallstrategy.
Nylon Chip Engineering
Plastics
Nylon Fiber / Innovative
Applications
ShenmaCordFabricCompanypossessesanational-levelenterprisetechnologycenterandalaboratoryaccreditedbyChinaNationalAccreditationServiceforConformityAssessment(CNAS).Ithasreceived18scienceandtechnologyprogressawardsattheprovincial,municipalandGrouplevels,andhasdraftedandformulated2nationalstandardsand3textileindustrystandards.ShenmaCordFabricDevelopmentCo.Ltd.hasatotalof9R&Dlaboratories,5pilotproductionlaboratories,and2pilotteststations.Eightindustry-leadinganalyticaltestingequipmenthavebeennewlyadded.IthasbeenbasicallycompletedandmeetsthecurrentR&Dneedsforfivemajorhigh-endnylonfiberresearchtaskss,including"highstrength,finedenier,flameretardant,civilianuse,andeco-friendliness".In2023,33scientificresearchprojectswereorganizedandimplemented,including1majorscienceandtechnologyproject("openbidding")inPingdingshanCity,1majorstrategicresearchtask,2projectsforthetransformationofscientificandtechnologicalachievements,and3sector-focusedkeyresearchtasks.
ShenmaCordFabricCompany
hasgraduallyexpandeditsbusinessfromproducingnylon66industrialyarnsandcordfabrics,whichwerethemainframeworkmaterialsforrubbertires,tovariousfieldsincludingnon-tireproductsanddual-useproductsformilitaryandcivilianpurposes.Byimplementingadevelopmentstrategyof"focusingonyarnsandfabricswhilepursuingrelateddiversification",itaimstodriveitsgrowthtowardsbecomingagloballeaderinhigh-endfunctionalmaterials.
ShenmaCordFabricDevelopmentCo.Ltd.has
undertakentheconstructionoftheKeyFull-ProcessLaboratoryforNylonFiberswithinthe"sixbatches"systemfortechnologicalinnovationoftheGroup,encompassingtheentireresearchprocessfrombasicresearchonnylonpolymersandfibers,tothedevelopmentofnewproductsandtechnologies,toindustrializedapplicationresearch,andtoperformancetestingandanalysisevaluation.
Aramid, BPA, and Others
IntermsofR&Dplatformestablishment,ShenmaPolycarbonateMaterialCo.,Ltd.hassetupaR&Dcentertopromoteinnovationandtransformationfrommultipledimensions,includingbasicresearch,newproducts,newmaterialapplicationsandtechnologicalbreakthroughs.In2023,tobetterleverageexternaltechnologicalresources,itappliedforandwasapprovedtoestablishaprovincialpolycarbonatetechnologyR&Dcenter,aimingtoenhanceitscoretechnologyreservesandachievehigh-qualitydevelopment.Intermsoftalentteambuilding,itiscommittedtonurturinginternallygrowntalentsandactivelyrecruitinghigh-endtalentsfromtheindustrytobuildavibrantR&Dteam,enablingcontinuousevolutionofitsorganizationalsystem.InaccordancewithShenmaCorporation'sworkethosandguidance,ShenmaAramidFiberTechnologyDevelopmentCo.,LtdhascompletedtheprojectinitiationoftheHigh-PerformancePara-AramidFiberPreparationIndustrializationTechnologyDevelopmentandDemonstrationInnovationTeamjointlywithHenanProvincialAcademyofSciences,andsubmittedtheapplicationonthelatter'sofficialwebsite.IthasalsocompiledmaterialssuchastheprojectproposalanddetailedspecialfundallocationsforthetaskHigh-PerformancePara-AramidFiberPreparationIndustrializationTechnologyDevelopment,andcompletedtheinitiationofmajorscientificresearchprojectsfortheGroup.Additionally,itisresponsibleforsummarizingthequarterlyprogressoftheachievementtransformationprojectHigh-PerformancePara-AramidFiberPreparationIndustrializationTechnologyDevelopmentandDemonstrationProjectandsubmittingcorrespondingsupportingmaterialstotheGroup'sScientificandTechnologicalInnovationDepartmentforprojectevaluation.555655565354
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InnovationAchievements
In2023,ShenmaCorporationcontinuedtointensifyscientificR&Deffortsbasedondomesticandinternationalmarketdemandsanditsdevelopmentstrategies,identifyingseveralkeyresearchtasks.Onthebasisofindependentinnovation,ShenmaCorporationstrengthenedindustry-academia-researchcollaboration,achievedbreakthroughsinalargenumberofsignificantkeytechnologies,andfurtheracceleratedthetransformationofscientificresearchresults.TheseeffortscomprehensivelyenhancedShenmaCorporation'scorecompetitivenessandpromotedhigh-qualitydevelopment.
Awards andQualifications(2023)
ResearchBreakthroughs
Market Recognition
?NylonChemicalCo.,Ltd.hasreceivedoneHenanProvincialScienceandTechnologyProgressAward,andhasbeencertifiedasa"NationalIntellectualPropertyAdvantageousEnterprise".Additionally,itshigh-techenterprisecertificationisstillvalid.?ShenmaPolycarbonateMaterialCo.,Ltd.hasbeenrecognizedasa
provincial-level"High-techEnterprise".?ShenmaHuaweiPlasticCo.,Ltd.hasbeenrecognizedasaprovincial-
levelspecialized,refined,innovativeanduniqueenterprise,aswellasan
innovativesmallandmedium-sizedenterprise.?ShenmaEngineeringPlasticsCo.,Ltd.wasrecognizedasahigh-tech
enterprisein2010,andShenmaEngineeringPlasticsTechnology
DevelopmentCo.,Ltd.wasrecognizedasahigh-techenterprisein2021,
bothofwhicharestillvalid.?ShenmaCordFabricDevelopmentCo.,Ltd.hasbeencertifiedasahigh-
techenterprise,andactsasHenanProvincialFiberFrameworkMaterial
EngineeringTechnologyResearchCenter,HenanProvincialEnterprise
TechnologyCenterandotherR&Dplatforms.In2023,itwasalso
awardedthetitleof"GazelleEnterprise"inHenanProvince.In2023,ShenmaCorporationanditssubsidiariessuccessivelycarriedoutandcompletedresearchtaskssuchastheDevelopmentandApplicationofHigh-endSerialProductsforInjectionMoldingona40,000-tonContinuousProductionLine,theDevelopmentandApplicationofNylon66ResinforHigh-ViscosityIndustrialYarn,theResearchandApplicationofa40,000-ton/yearNylon66ContinuousPolymerizationPlanttoMeetDiversifiedProductNeeds,theDevelopmentandApplicationofAramidCanvasProcessTechnology,theResearchandApplicationofBio-basedNylon56SerialFibers,andtheLong-lastingandEnvironmentallyFriendlyAnti-DripFlame-RetardantNylonFibers,achievingabundanttechnicalreserves.In2023,ShenmaCorporationimprovedthequalityofNylon66high-endserialproductsforspinning,activelyexpandingtheNylon66spinningmarket,increasingthemarketshare,andachievinggoodeconomicbenefits.ShenmaCorporationsuccessfullydevelopedthesecondgenerationofultra-high-strengthnylonindustrialyarnforuseinaircrafttires,andhasprovidedvariousspecificationsofself-developedultra-high-strengthindustrialyarntomanyinternationalanddomestickeycustomers.Theproductindicatorsfullymeetcustomerrequirements,makingitanothernewprofitgrowthpointforShenmaCorporation.
In2023,ShenmaCorporationobtained18inventionpatentsand58utilitymodelpatents,ofwhichtwopatentsweregrantedbyothercountries.Thenationalandindustrystandardsitparticipatedindrafting,includingthenationalstandardPara-aramidFilamentYarns,theindustrystandardNylon66Salt,theindustrystandardCyclohexanolforIndustrialUseandtheindustrystandardCyclohexeneforIndustrialUse,werereleasedandimplemented.
Key Performance
Case｜Research Breakthroughs of ShenmaCord Fabric Development Co., Ltd. after Open Bidding
In2023,ShenmaCordFabricDevelopmentCo.,Ltd.participatedinthemajorscienceandtechnologyprojectofPingdingshanCitytitledDevelopmentandApplicationResearchofHigh-performanceAirSpringSpecialDippedCordFabric.Throughanalyzingtheairsuspensionsusedindifferentbrandsofautomobiles,itobtainedinformationontheskeletonmaterialsandbladderrubberlayersusedinairsuspensions.Furthermore,itdevelopedahigh-adhesiondippingsystemforairsuspensions,whichimprovedtheadhesionperformanceby8.3%comparedtotheoriginalbasis.Thisnotonlyenhanceditscorecompetitivenessintheautomotivecomponentsfieldbutalsoimprovedthedurabilityandsafetyofairsuspensionsthroughtechnologicalinnovation,layingasolidfoundationforexploringthehigh-endautomotiveaccessoriesmarket.In2023,ShenmaCordFabricDevelopmentCo.,Ltd.completedthedevelopmentoftechnologiesforthestableproductionofultra-high-strengthNylon66industrialyarnforaircrafttiresthroughtheResearchonProcessTechnologyandApplicationofSpecialUltra-High-StrengthNylon66FrameworkMaterialforAviationTires.Thisachievementhasenabledthecontinuousandstableproductionofultra-high-strengthindustrialyarn.Furthermore,itcompletedthedevelopmentoftechnologiesfortwisting,weavinganddippingofultra-high-strengthNylon66frameworkmaterial,demonstratingastableindustrializationcapability.Additionally,thetransformationofthedouble-bathdippingmachinewascompleted,enablingthestableindustrializedproductionofaramidandaramidcompositecords.Thismarksasignificantbreakthroughinthefieldofaviationtirematerials,notonlysatisfyingthedemandforhigh-performancematerialsintheaviationindustrybutalsoenhancingproductionefficiencyandproductqualitythroughtechnologicalinnovation.Itprovidescrucialmaterialsupportforthesustainabledevelopmentoftheaviationindustry.
ShenmaIndustrial Co., Ltd.
Case｜Development and Application of Bio-based Nylon 56 Serial Fibers by ShenmaCordFabric Company
ShenmaIndustrial Co., Ltd.
57585758
Toexplorethespinning,twistinganddippingprocessesofNylon56andtodevelopNylon56finedenieryarnsandindustrialyarnsaswellasNylon56industrialyarndippedtypecordfabric,ShenmaCordFabricCompanyconductedresearchonNylon56spinningprocessesin2023.Ithasachievedstablespinningonasinglespindle,andthestrengthoftheindustrialyarnshasmettheexpectedtarget.Currently,ShenmaCordFabricCompanyisconductingfollow-upevaluationsoftwistinganddipping,anditisexpectedthatacompletesetoftechnologicalpackagesfortheindustrializedproductionprocessofrelatednewproductswillbeformedinthefuture.
Case｜Development of Post-consumer Nylon 66 Recycled Fibers by ShenmaCord Fabric Company
ShenmaIndustrial Co., Ltd.Inordertodeveloppost-consumerrecycledfibers,promotethehigh-valueutilizationofpost-consumerNylon66,andpromotethegreenandsustainabledevelopmentoftheenterprise,ShenmaCordFabricCompanyhasinitiatedthedevelopmentofpost-consumerNylon66recycledfibers.Currently,therecycledfibersandrecycledchipshaveobtainedtheGlobalRecycledStandard(GRS)certification.Ithascompletedthefiber-formingtestsfor4typesofpost-consumerNylon66recycledchipsandisconductingdownstreamtrialexperiments.Inthefuture,ShenmaCordFabricCompanyiscommittedtoachievingstablemassproductionofpost-consumerrecycledfibersandestablishingastablesupplycapability.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
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GreenInnovationShenmaCorporationisdeeplyawareoftheprofoundsignificanceofgreenR&DstrategiestotheCompany.Therefore,wearecommittednotonlytopromotingtheinnovationofproductsandtheupgradingoftechnologies,butalsotodevelopingmoreenvironment-friendly,low-energyconsuming,andhighlycost-effectivechemicalproducts,therebysharpeningthecompetitiveedgeandenhancingtheimageofourbrands.Forasociety,greenR&Dstrategiesareanimportantmeansofachievingsustainabledevelopmentofthechemicalindustry.Reducingtheemissionofhazardoussubstancesandmitigatingthepollutionofenvironmenthelptoprotecttheecologicalenvironmentandpromotetheharmoniousco-existencebetweenmanandNature.Thewidespreaduseofnylonhasbroughtmultifacetedvalueandimpacttothehumansociety.Bycontinuousimprovingourproductiontechnologiesandoptimizingourproductionprocesses,wearecommittedtoimprovingtheperformanceofournylonproductsandsignificantlymitigatingtheirimpactontheenvironmentthroughouttheprocessoftheirproduction.LightweightandEnergyConservationNylonisalightmaterial.Itcanbeusedtosubstitutemetalpartsandhelptolightenproducts,thusloweringenergyconsumptionandtransportationcost.Inturn,thishelpstoreduceenergyconsumptionandcarbonemissions,andisthereforeofpositivesignificancetoenvironmentalprotection.DurabilityandLengthenedServiceLife
Nylonishighlywear-resistantanddurable,andcanthereforehelptolengthentheservicelifeofproductsmadeofthematerial.Thisnotonlysavesresourcesandcost,butalsoreducesthegenerationofwasteandtheoccurrenceofenvironmentalpollution.InnovationandTechnologicalAdvancementTheconstantimprovementandapplicationofnylonmaterialsboostthetechnologicaladvancementandinnovationacrossindustries.Forinstance,intheautomobileindustry,theuseofnylonbooststhedesignofmorelightweightandefficientenginepartsand,inturn,improvesthefuelefficiencyofautomobiles.
Case| The Innovation of Green Nylon
Thehigh-endinjectionmouldingandspinningN66productsofShenmaEngineeringPlasticsCo.,Ltd.,haveenteredthestageofindustrialization.Theinjectionmouldingnylon66hasnowreplaceditsequivalentpreviouslyusedbytheCompanyforthesamepurposes.Thankstonewprocessesandadditives,itcutsdownonthepollutiongeneratedbyoldproductsandthereforecontributestotheimprovementofproductionenvironment.Therawliquid-coloredandhigh-strengthnylon66,aproductdevelopedbyShenmaCordFabricDevelopmentCo.,Ltd.,hassuchstrengthsashighcolorfastnessandlowgenerationofwastewaterinthedyeingandprintingprocesses.Asagreenfiberadvocatedathomeandabroad,ithasbeencertifiedwithChinaChemicalFibersAssociationandshortlistedasatrendyChinesefiberproduct2024/2025.
ShenmaIndustrial Co., Ltd.
DigitalTransformation
TheCompanyiscommittedtocreatingasmartfactorythatisintelligentinallrespectsandthatdeeplyintegratesITwithmanufacturingtechnologiestomakethemanufacturingindustrymoreintelligent,automated,anddigitalized.TheseveralcriticalinformationnetworksalreadyestablishedbytheCompanyandthesmartapplicationspreliminarilyenabledbythemhavelaidasoundfoundationforthecreationofsuchsmartfactory.TheCompanyhasacceleratedthedeepintegrationofITwithmanufacturingindustries,whichisthecoredriverfortheconstructionofasmartfactory.ByintroducingadvancedITtechnologies,suchascloudcomputing,internetofthings(IoT),bigdataanalytics,etc.,theCompanynotonlymakesitsproductionprocessesmoretransparentandcontrollable,butalsomakesitsdecision-makingmuchmorescientificandtimely.Suchin-depthintegrationnotonlyoptimizestheallocationofresources,butalsoimprovesboththeefficiencyofproductionandthequalityofproducts.Bytheendof2023,theCompanyhasestablishedseveralinformationnetworks,includingQIMS.TheintroductionofQIMSenablesthemonitoringofqualityacrosstheproductionchainfromtherawmaterialscomingintothefinishedproductgoingout,becausethesystemcollectsandanalyzesdatainrealtimetoensurethatproductsmeetthehighestqualitystandardsandthereforesignificantlylowersthedefectiverateofproductsandraisesthesatisfactionlevelofcustomers.Meanwhile,theuseoftheERPlogisticsmanagementsystemmakesthemanagementofthesupplychainsmoreefficientandprecision,thushelpingtooptimizethemanagementofinventoryandsignificantlylowerthecostoflogistics.TheconstructionoftheMotiveEnergyCloudPlatform,ontheotherhand,furtherimprovestheefficiencyofenergyusebyintelligentlyregulatingittoreducewaste,therebyassistingenterprisestoachievegreenandsustainabledevelopment.Regardingintelligentapplications,theCompanyhaspreliminarilyintelligentizedtheproductionandwarehousing,amongotherthings,ofsuchkeyproductsasindustrialyarnsandcordfabrics.Byintroducingintelligentequipmentandautomatedproductionlines,theCompanyhasmanagedtopreciselycontrolitsproductionprocessandmakeitoperateefficiently.Thesmartwarehousingsystem,moreover,adoptsIoTtechnologiestoautomaticallymanageandintelligentlydispatchesinventory,thusmakingthewarehouseoperationsmoreefficientandaccurate.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
Upholdingtheconceptthat"qualityisthelifelineofanenterprise",ShenmaCorporationhascreatedanall-roundqualitymanagementsystem.AccordingtolawsandregulationsofthePeople'sRepublicofChinasuchastheEnvironmentalProtectionLaw,theProductionSafetyLaw,theProductQualityLaw,etc.,andfocusingoncustomersatisfaction,theCompanyhasimplementedthequalitysystemateverylinkofitsoperationsfromproductR&D,rawmaterialsprocurement,manufacturing,finishedproductinspection,allthewaytoafter-saleservices.Moreover,theCompanyhasensuredthestabilityandexcellenceofitsproductqualitybyenforcingrigorousqualitycontrolstandardsandintroducingadvancedqualitytesttechnologiesandtools.Inaddition,ongoingqualityimprovementefforts,qualityawarenessraisingonthepartofemployees,andtheclosecollaborationbetweentheupstreamanddownstreamoperationsalsobolstertheCompany'squalitymanagementsystemandhelptolayasolidfoundationforitslong-termdevelopment.
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Quality Assurance
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Quality Control ofIncoming Materials
TheCompanystrictlyimplementstheincominginspectionofqualityforprocuredmaterials.Tothisend,oursubsidiarieshavemaderulesandregulationsgoverningthequalityinspectionofincomingmaterials.Morespecifically,thesubsidiarieshavedonesoindetailaccordingtothecharacteristicsandrequirementsoftheirrespectivebusiness.Suchtieredmanagementstrategythattakeslocalconditionsintoaccounthelpstoensurethateachsubsidiarycaneffectivelycontrolthequalityofincomingmaterials.Forinstance,ShenmaCordFabricCompanyelaboratesinitsQualityHandbooktheprocesses,standards,andrequirementsofinspectionforitsincomingmaterials.NylonChemicalCo.,Ltd.issuestheInspectionControlProceduresforIncomingMaterials,prescribingthatlabsareresponsibleforassuringthequalityofrawmaterials.ShenmaCordFabricDevelopmentCo.,Ltd.formulatesaQualityHandbookandaCollectionofProceduralDocumentsfortheQualityManagementSystemthatcoverallaspectsofqualitymanagementand,particularly,settargetedstandardsfortheinspectionofincomingmaterialstoensurethatallmaterialsenteringtheproductionlinemeettheCompany'sstandardsandeffectivelypreventthewasteofresourcesandtheincreaseofcostduetothequalitydefectsofrawmaterials.
TheCompanyisdeeplyawarethatproductionequipmentisthefoundationofandthekeytocorporateproductionactivities.Therefore,weserviceourproductionequipmentonaregularbasisaccordingtothecharacteristicsofourproductionprocessesandthestateofourequipment.Tostandardizetheservicingprocess,forexample,NylonChemicalCo.,Ltd.hasissuedtheEquipmentandFacilityControlProcedurestoelaboratetherequirementsandstepsoftheroutinemaintenance,regularservicing,faulttroubleshootingandrestorationforitsproductionequipment.Asaresult,itnotonlyensuresthatitsproductionequipmentisingoodconditionsandthereforelengthenstheservicelifeofsuchequipment,butalsoimprovestheefficiencyofitsproductionandlowersitslossfromshutdownattributedtoequipmentfailures.Ontopofthat,theCompanyencouragesallemployeestoparticipateinthemaintenanceandservicingofitsequipmentandcreatesanenvironmentwhereallpeopletakepartinmaintainingequipment,thusprovidingastrongsupportforitssteadydevelopment.
Maintenance ofProduction Equipment
Thestandardizationofproductionprocessesbearsdirectlyonthequalityofproducts.Forthisreason,theCompany'ssubsidiarieshaveissuedrelevantrulesandregulationstostandardizetheirproductionprocesses.Forexample,theDepartmentofProductionTechnologies,NylonChemicalCo.,Ltd.hascarefullyformulatedandthoroughlyenforcedtheOperationsControlProceduresfortheProductionProcess.Theproceduresaredesignedtostandardizeproductionflows,tightenthemanagementofprocesses,andexercisedelicacymanagementoverthemonitoringandmeasurementactivitiesthroughouttheproductionprocess.RelyingonitsQualityHandbook,ShenmaCordFabricCompanyandShenmaCordFabricDevelopmentCo.,Ltd.,haselaboratedtherequirementsandstandardsforitsqualitymanagement.ThesemeasuresnotonlyensurethattheCompany'sproductionprocessesoperateinanorderlyandefficientmanner,butalsosignificantlyimprovesthestabilityandconsistencyofproductquality.
StandardizingProduction Processes
Undoubtedly,Thequalitycontrolofnon-conformingproductsisofgreatimportancetotheCompany'sproducts.Infact,itisakeylineofdefensetoensurethattheCompany'sproductscomplywithduestandardsandsafeguardthereputationoftheCompany'sbrands.Therefore,theCompanyanditssubsidiarieshaveformulatedperfectprocedurestoassurethequalityofnon-conformingproducts.ShenmaPolycarbonateMaterialCo.,Ltd.hascreatedaclose-knitqualitymanagementsystemthroughaslewofwell-developeddocuments,suchastheGeneralGuidelinesforMonitoring,Measurement,Analysis,andAssessment,theOutputControlofNon-conformingProducts,theNon-conformity,CorrectiveActionsandEmergencyControl,andtheGeneralGuidelinesforContinuousImprovements,toeffectivelypreventandcontrolthemanufacturingandcirculationofnon-conformingproducts.Inpractice,thesystemhasensuredthestabilityofproductquality,forestalledtheoccurrenceofqualityincidents,andfurtherconsolidatedtheCompany'sleadingpositionacrosstheindustry.
Non-conformingProduct Control
TheCompanyrecognizestheimportanceofstandardizingsalesprocessesandcustomerreviewtothequalityofitsproducts.Therefore,theCompanyhasensuredthateverylinkofitsoperationsrangingfromproductiontodeliveryrevolvesaroundtheneedsofitscustomersandeffectivelyforestallsqualityproblemsattributedtoinformationasymmetryormisunderstanding.ShenmaPolycarbonateMaterialCo.,Ltd.formulatessuchsystemsasProductSaleandCustomerRequirementsReview,andOutsourcedProcesses,Products,andServicestopreciselycaptureandmeetcustomerneedsthroughsystematicreviewand,inthemeantime,strictlycontrolthequalityofproductsandservicesfromexternalsuppliers,withaviewtosecuringtheexcellenceandstabilityofitsproductqualityinallrespects.
Sales and Customer
Review
Lifecycle Quality Control
Key PerformanceIn2023,allkeysubsidiariesofShenmaCorporationhavepassedqualitymanagementcertification.Specifically,subsidiariessuchasShenmaCordFabricCompany,ShenmaCordFabricDevelopmentCo.,Ltd.,ShenmaEngineeringPlasticsCo.,Ltd.,andShenmaHuaweiPlasticCo.,Ltd.haveallpassedtheISO9001andIATF16949qualitymanagementcertifications;NylonChemicalCo.,Ltd.hasbeencertifiedwiththeISO9001qualitymanagementsystem;andShenmaHuaweiPlasticCo.,Ltd.hasadditionallypassedtheCQC,UL,andGRScertifications.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
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ProductQualityTrainingShenmaCorporationisdeeplyawareofthecrucialsignificanceofqualitycultureconstructiontotheCompany.AstheCompany'sslogan"EmpoweringtheCompanywithQualitytoCreatePremiumProducts"indicates,qualitystandsforcorporatereputationandimage,andisthecoreconnotationofabrand.Tostrengthenemployees'awarenessofquality,theCompanytriestoestablishamongitsemployeesasenseofcrisisthat"qualitybearsondevelopmentbecauseitbearsonmarketandinturnonbenefits".Followingaquality-orientedapproach,theCompanyinfusesqualityawarenessintoitscorporatecultureandthemindofitsofficersandemployees,withanaimofturningitintovoluntaryactionsbyeveryemployee.Inanindustrythatisincreasinglycompetitiveandstrictinproductquality,theconstructionofaqualityculturenotonlygivesprominencetothequalityawarenessandprofessionalskillsofemployees,butalsopromotestheunderstandingandimplementationofthequalitymanagementsystemacrosstheCompany.Byconductingqualitytrainingactivitiesonaregularbasis,theCompanyhasensuredthateveryemployeeactivelyparticipatesinandpromotesqualitymanagement,thusmakingcontributiontoitseffortstoimproveproductquality,sharpenmarketcompetitiveness,andachievesustainabledevelopment.Case| Construction of Quality Culture by Nylon Chemical Co., Ltd.In2023,NylonChemicalCo.,Ltd.madesignificantachievementsintheconstructionofitsqualityculture.Inclosecollaborationwithrelevantdepartments,thesubsidiary'sProductionDepartmentmadethoroughanddetailedplansforitsproductionprocesses.Itnotonlypreparedelaborateprocessflows,processdocuments,andoperationinstructions,butalsoinnovativelyestablishedarandominspectionmechanismtoensurethateverylinkcompliesstrictlywithestablishedstandards.Onaweeklybasis,thedepartmentorganizedpersonneltoinspectthecompliancewithprocessspecificationsinallrespects,effectivelypromotingtheimplementationandcontinuousimprovementofprocessstandards.Toensureitsleadershipintechnologicalterms,NylonChemicalCo.,Ltd.sparednoeffortstopromotetheR&Dandapplicationofnewprocesses,technologies,andmaterials.Throughindependentinnovation,ithasmadesuccessivebreakthroughsinthedevelopmentofbottlenecktechnologies,securingitsleadingpositionintermsofproductiontechniques.Theseeffortsnotonlyimprovedthecompetitivenessofthesubsidiary'sproducts,butalsoenabledittobetteradapttothemarket.NylonChemicalCo.,Ltd.implementedaslateofqualityandsafetytrainingprogramsthatcoveredthetrainingofoccupationalskillsandenhancedtheappraisalofinternalperformancetraining,andtherefore,significantlysharpenedemployees'professionalismandoperatingskillsinpractice.Particularly,NylonChemicalCo.,Ltd.organizedstudysessionstohelpraisetheeducationlevelofitsemployees,thusgivingitslowlyeducatedemployeesvaluableopportunitiestoseekcontinuingeducation.Whilestrengtheningqualitytraining,ithelpeditsemployeesobtainhigherdiplomasordegrees,honetheirprofessionalcompetences,andexpandtheircareerdevelopmentspace.Inaddition,NylonChemicalCo.,Ltd.undertookextensivequalitycontrol(QC)activities.Intheseactivities,systematictrainingenabledthesubsidiary'semployeestousestatisticaltoolsskillfully,thussignificantlystrengtheningtheirdataanalyticcapabilityandinnovativethinking.Themeasurenotonlyoptimizedthecontroloftheproductionprocess,butalsostokedemployees'creativity,injectingapowerfulimpetusintothesubsidiary'scontinuousimprovementsandhigh-qualitydevelopment.
ShenmaIndustrial Co., Ltd.
HSFManagementThechemicalindustrychaintheCompanybelongstomayinvolveseveralhazardoussubstances,whicharemainlyderivedfromrawmaterials,production,andwastetreatment,amongotherthings.TheCompany'srawmaterialsmaycontainsuchhazardouschemicalsubstancesasheavymetalsandpolycyclicaromatichydrocarbons.Ifnotproperlyhandled,thesesubstancesmaybeleftbehindinproducts,thuscausingthreattotheenvironmentandhumanhealth.Thesolventsandcatalystsusedinproductionmayalsogeneratevolatileorganiccompounds(VOCs)andhazardouswastegasesthatpolluteworkshopenvironmentandtheatmosphere.Improperlytreatedwastemayleadtotheleakofhazardoussubstances,soilpollution,andwatercontaminationaswell.Toeffectivelycontrolhazardoussubstances,ShenmaCorporationhasestablishedasoundpolicysystem,includingstrictprocurementstandardsforrawmaterials,toensurethatsuchmaterialspurchasedbytheCompanycomplywithenvironmentalrequirementsandtoreducetheuseofharmfulsubstances.Moreover,theCompanyhasutilizedcleanproductiontechnologies,andoptimizeditsproductionprocesses,tocutbackonthegenerationandemissionofhazardoussubstances.Furthermore,ithastightenedthemanagementofwastetoensureitsproperdisposalandpreventtheleakofhazardoussubstances.SomeoftheCompany'ssubsidiarieshavepassedinternationalcertifications,suchastheROHSandREACHsystems,demonstratingthattheirproductionandproductsconformtointernationalstandardsforenvironmentalprotection.
Case| Regular Quality Review by Shenma Huawei Plastic Co., Ltd.
Instrictaccordancewithvariousrequirementsofthequalitymanagementsystem,theCompanyenforcesseamlessqualitycontrolthroughoutitsoperationsfromproductdesign,production,inspectiontodeliveryinordertoensurethateverylinkmeetsestablishedqualitystandardsandcustomerexpectations.Tocontinuouslyvalidateandimprovetheefficacyofitsqualitymanagementsystem,theCompanyorganizesregularreviewsforitsproducts,processes,systems,andinternaloperationsonayearlybasistotakestockofitsproductionprocesses,qualitycontrollinks,andmanagementsystemsinallrespects.Inaddition,theCompanyattachesimportancetothemanagementofsuppliers,andensuresthequalityofrawmaterialsandsparepartsattheirsourcesthroughsupplierreview.Withrespecttovariousreviews,theCompanycollectsandanalyzestheirresultsindetail,andonthatbasis,conductsmanagementreview.Thisexerciseisnotonlyasummaryandreflectionofwhatwasdoneinthepastyear,butalsoaplanningandprospectofwhatistocomeinthefuture.Accordingtofindingsfromthemanagementreview,theCompanyputsforwardplanstomakeongoingimprovementssoastooptimizeitsmanagementprocesses,improveitsabilitytomanageproductqualityandprocesses,andsecureitsleadingpositionacrosstheindustry.
ShenmaIndustrial Co., Ltd.
Case| Reduction of Hazardous Substances by Shenma Huawei Plastic Co., Ltd.ShenmaHuaweiPlasticCo.,Ltd.adoptsagreenapproachtoitsrawmaterialsbystrictlyenforcingthehazardoussubstancemanagementrequirementsforelectricandelectronicproducts.Inadditiontomeetingtherequirementsofdomesticandforeignregulationsgoverningthemanagementofhazardoussubstances,ittakestheinitiativetolimittheuseofotherharmfulelements.Forinstance,ituseshalogen-freeglassfibersthatdonotcontainfluorine,andmaterialsthathavebeenROHSorREACH-certified.
ShenmaIndustrial Co., Ltd.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
Followingthe"QualityFirst,andCustomerForemost"concept,theCompanyhasoptimizeditsservices,enhancedcommunicationwithcustomers,andlistenedtothemtoofferexcellentcustomerexperiencesinstrictaccordancewithapplicableprovisionsgoverningthelabelingofproducts,inadditiontosuchlawsastheConsumerProtectionLaw,Anti-unfairCompetitionLaw,andE-commerceLawofthePeople'sRepublicofChina.ShenmaCorporationentruststhesaleofitsproductstoInternationalTradeCo.,Ltd.FollowingthespecificationsandrequirementsoftheISO9000system,thelatterhasestablishedaclosed-loopcomplaintmanagementprocessconsistingofsuchstepsas"acceptance,handling,andfollow-upinterview"toensurethatcustomercomplaintsareaddressedinatimelyandpropermanner.TheCompanyofferscustomerssoundafter-saleservices,includingthereplacementandreturnofproducts.Ithasprofessionalserviceteamstorespondtocustomerinquiriesandcomplaintsinatimelymanner,tosolvecustomers'problems,andtoimprovecustomersatisfaction.
Customer Service
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The Companyundertakes to offercustomers premiumproducts conformingboth internationalstandards andcustomerrequirements, so asto ensure that itsproducts are safe,reliable, and durable.Through strict qualitymanagementsystems, iteffectivelysupervises andcontrols its suppliers,production andinspection processesto ensure thestability andimprovement of itsproduct quality.
According to marketdevelopments andcustomer needs, theCompany formulatesreasonable pricestrategies to ensurethe pricecompetitiveness andprofit margin of itsproducts. With aflexible pricingmechanism, itadopts differentiatedpricing for differentcustomers, regions,timing, etc. to meetdiversified customerneeds.
According tocustomer choicesand requirements,the Company allowsfor a variety ofdelivery modes,such as FOB, CIF,and T/T (30 days, 45days, etc.). Byoptimizing logisticsnetworks, it choosesthe besttransportation meansand channels toensure that itsproducts aredelivered in a timelymanner and arrive attheir destinationssafe and sound.
The Companypromises to offercustomers soundafter-sale services,including thereplacement andreturn of products. Ithas professionalservice teams torespond to customerinquiries andcomplaints in atimely manner, tosolve customers'problems, and toimprove customersatisfaction.
Product qualityPrice strategiesDelivery methodsAfter-sale services
Tolearnaboutcustomerneedsinatimelyandthoroughmanner,doagoodjobinservicesbeforeandinthemiddleofsale,andaddresscustomerneedsandfeedbackpromptlyandeffectively,theCompanyhasformulatedtheMarketingServiceProcedures,asystemdesignedtomanagecustomerfeedback.Underthesystem,theCompanyhassetupa"1234"quickservicemechanismtostandardizeafter-saleserviceflows,makequickresponsetocustomerappeals,andprovidecustomerswithsolutionsefficiently.Onayearlybasis,theCompanyregularlyplans,implements,measures,analyzes,andassessesactivitiesaimedtomeetcustomerneeds,anddelivercustomersatisfactionreports,tovalidatetheconformityofitsproductsandservices,ensurecontinuousandeffectiveimprovementsofitsqualitysystems,andraisethelevelofcustomersatisfaction,thusimprovingtheimageoftheShenmabrand.
"1231" Quick Service Mechanism
Customer Feedback Handling Process
"1231" Quick
ServiceMechanism
WithrespecttocustomercomplaintsandgrievancesclearlycausedbytheCompany,theDepartmentofProductionTechnologiesisresponsibleforpreliminarilyidentifyingcustomerinformationanddeliverittotheresponsibleunitwithinoneday.
Aninitialreplywillbegiventocustomerswithinthreedays.Accordingtotherequirementsofcustomers,thesituationofcorrectionandthecorrectiveandpreventivemeasureswillbefilledintothe8DreportsdesignatedbycustomersorpreparedbyInternationalTradeCo.,Ltd.UponconfirmationoftheDepartmentofProductionTechnologies,theywillthenbeforwardedtoInternationalTradeCo.,Ltd.
Preliminaryanalyseswillbemadewithintwodays.Tothisend,technology,qualityassurance,logistics,production,andotherpersonnelwillbeconvenedtoholdspecialanalyticmeetings,soastoexaminecausesandidentifyresponsibilities.Withtheconsentofcustomers,InternationalTradeCo.,Ltd.orthesalescompanycanorganizerelevantpersonneltocommunicateandconfirmthesituationonthesiteofthecomplainant.
Withrespecttocustomercomplaints,thepersonsresponsiblewillbeheldtoaccountwithinoneweek.TheresponsibleunitshallmakeanaccountabilityreporttotheCompany'sleadershipforthepurposeofoptimizingprocessesandmakingimprovementonanongoingbasis.
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Department ofProductionTechnologies
Receivecustomercomplaints
Hold specialanalyticmeetings toexamine causesand identifyresponsibilities
Confirmrelevantmeasures or8D reportsConfirm on thesite
According to therequirements ofcustomers, fill thesituation ofcorrection and thecorrective andpreventivemeasures into the
8D reportsdesignated bycustomers orprepared by theCompany itself
Give feedbackto customersand conduct
follow-upinterviews
InternationalTrade/SalesCompany
Technology,QualityAssurance, andLogisticsDepartments,andManufacturing
Plants
Department ofProductionTechnologies
Responsible
Departments
InternationalTrade/SalesCompany
Shenma Industrial Co., Ltd.Sustainability Report 2023TimelyDeliveryShenmaCorporationlargelyadoptsacontinuousoruninterruptedproductionmode.Accordingtosuchfactorsasmarkettrends,customerorders,productandrawmaterialinventories,etc.,itassignsproductiontasksandorganizesproductiononamonthlybasistoensurefulldelivery.Takingoverallmarketsituationanditsproductioncapacityandbusinessgoalsintoaccount,itmakesannualandmonthlyproductionandoperationplansforitsmainproductsforthenextyear.Inaddition,themanagementwillonamonthlybasisdiscussproductionplans,madedecisionsonthem,andthenassignproductiontaskstoproductionunits.Accordingtothemarketingreportsfromthesalesdepartment,themanagementwilladjustthetypesofproductsandthequantitiesoftheirproductionaswell.TheCompanyadoptstheadvancedPLCcontrolsystemthroughouttheprocessofproduction.Duetoahighlevelofautomation,itcaneffectivelylowertheconsumptionofenergy.More,itusestheERPsystemforoperationssuchastheinbound/outboundmovementofinventory,contracting,andsettlement.Thepurposeistoensurethesafetyofproductionandthetimelysupplyofproductsthatmeetboththequalityandquantityrequirements.SuchsoundabilitytocontinuouslysupplyanddeliverproductsisanimportantbasisonwhichtheCompanygainsthetrustofitscustomersandengageinlong-termcooperationwiththem;ithelpstheCompanytowinahighlevelofmarketrecognition.CommunicationandSatisfactionSurveywithCustomersCommunicationisakeymeansofbuildingdeeprelationsandunderstandingbetweentheCompanyanditscustomers.RegularandeffectivecommunicationwithcustomersenablestheCompanytodirectlygetfeedbackfromandlearnabouttheneedsofitscustomersand,inturn,providestheCompanywithvaluablemarketinsightsandproductdevelopmentorientations.ThevoicesofcustomerscanhelptheCompanyoptimizeexistingproductsandservices,makethembettermeetmarketdemand,andimprovethesatisfactionandloyaltyofitscustomers.Inthemeantime,communicationwithcustomershelpstocreateandmaintainagoodcorporateimage,enhancecustomerperceptionandtrust,andlayasolidfoundationforthelong-termdevelopment.Ontopofthat,theCompanyconductscustomersatisfactionsurveysonaregularbasistoassessthequalityofservices,theperformanceofproducts,andtheeffectivenessofcustomerrelationsmanagement.Throughsystematicandscientificsurveys,theCompanycangetatrueandholisticviewofcustomers'feelingsandexpectationsaboutitsproductsandservices,anddetectpotentialproblemsandinadequacies.Thedatafromsuchsurveysnotonlypointoutthedirection,butalsoquantifytheresults,oftheCompany'simprovementmeasures,makingthemmoretargetedandeffective.
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Case| Customer Satisfaction Surveys by International Trade Co., Ltd.
Inanefforttobettergetfeedbackfromthemarket,ineachDecember,InternationalTradeCo.,Ltd.willdistributeormailsatisfactionquestionnairestoaround40customersthroughthepersonnelofitssalesdepartment.Inthefirstquarterofthenextyear,thequestionnaireswillbecollectedandforwardedtothemarketingdepartment,andthemarketingdepartmentwillberesponsibleforrecordingtheresultsofthesurveyandkeepingtherecordproperly.TheprocessensuresthattheCompanyandInternationalTradeCo.,Ltd.canobtaincustomerfeedbackonaregularbasis,soastocontinuouslyimprovestheirproductsandservicesandraisetheleveloftheircustomersatisfaction.
ShenmaIndustrial Co., Ltd.
SatisfactionSurveyImprovement
Delivery
Case| The Company's Business Visits to Jiangsu and Shandong Provinces
Toeffectivelyaddressthegrimmarketlandscapeandfurtherintegratethedomesticandoverseasmarkets,shortlyafterthebusinesstriptoNorthAmerica,theExecutiveDeputyGeneralManagerofShenmaCorporationandtheExecutiveDirectorofInternationalTradeCo.,Ltd.embarkedonyetanotherbusinesstourtotapthedomesticmarket.FromMay25to27,2023,thetwoleadersledabusinessdelegationtovisitJiangsuandShandongProvinces.OnMay25,thedelegationvisitedtheTORAYChina'sSuzhouPlantinJiangsuProvinceandheldbusinesstalkswithitsGeneralManager.Thetwosidesagreedtotakeadvantageofthevisittobooststrategiccooperationinengineeringplastics.TheycommunicatedonthedevelopmentofShenmaCorporation,emphasizingthegoodolddaysofcooperationbetweenthetwoparties.Also,theyhopedtostrengthentheirfriendshipthroughthevisit,achievestrategiccooperation,andmoveforwardtowardthegoalofmeetingeachotherhalfwayandrealizingwin-wincooperation.Bothsidesenvisionedabrandnewchapterofcooperationforabrightprospectforthem.Thetwosidesalsocommunicatedonthehistory,advantages,andmainbusinessofTORAY.TheJapanesecompanysaidthatithighlyvalueditspartnershipwithShenmaCorporationandwasfullyconfidentandhighlyexpectantofthefuturedevelopmentofbothcompaniesafterthecooperationbetweenthetworesumed.OnMay26,thedelegationwenttoYantai,ShandongProvincetovisitLinglongTireCo.,Ltd.andholdtalkswiththelatter'sVicePresident,ChiefFinancialOfficer,andChiefMarketingOfficer.Thetwosidedreachedaconsensusonstrengtheningcooperationinthenextstage.TheCompany'sleadersstressedthatLinglongTireCo.,Ltd.isastrategicpartnerofShenmaCorporationandisalsoalong-termcustomeroftheCompany'ssubsidiaryInternationalTradeCo.,Ltd,andthepotentialofcooperationbetweenthetwosidesishuge.Theyhopedthatthetwosideswouldenhancecommunicationanddeepencooperationinthenextsteptomakeuseoftheirmutuallycomplementaryadvantagesforcommondevelopment.OnMay27,uponinvitation,theCompany'sleadersattendedinQingdaotheopeningceremonyofthefirstsportsmeetorganizedbytheNationalEngineeringResearchCenterforRubberandTire.Aftertheceremony,theyheldtalkswithPresident,AssistanttoPresident,andGeneralManageroftheProcurementCenter,ofSailunGroupCo.,Ltd.Thetwosidescomparednoteswithregardtoproductquality,demandandsupply,andmarketsituations,amongotherthings,andreachedaconsensusonbilateralcooperation.
ShenmaIndustrial Co., Ltd.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
InstrictaccordancewiththeConsumerProtectionLawandAdvertisingLawofthePeople'sRepublicofChina,ShenmaCorporationhascreatedaprofessionalmarketingteam.Ittakessuchfoundationalmeasuresasimprovingrulesandregulations,standardizingbusinessprocesses,etc.toensurecomplianceand,particularly,avoidallformsoffalseadvertisingorhyping.TheCompany,aswellasitssubsidiaryInternationalTradeCo.,Ltd.,makesinternalpoliciestoemphasizetheimportanceofhonestpublicityandresponsiblemarketing.Inpractice,itusestruedataandstatisticalresultstosupportthecommunicationofitsproducts,thusensuringthattheeffectsorfeaturesitclaimsarefullyevidenced.Accordingtotherequirementsofthehazardouscommunicationstandards(HCS),theOccupationalSafetyandHealthAdministration(OSHA),andlocalauthorities,theCompanyexpresslydescribesinitsproductlabelssuchinformationasingredients,thecontentofhazardoussubstances,themethodofsafeuse,andthemethodtorecycle/dispose,amongotherthings,toensurethattheinformationonitsproductsandontheirsafeusearehighlytransparent.Duringthereportingperiod,theCompanyprovidedallmarketingpersonnelwithtrainingonunfaircompetition,soitdidnotgiverisetoanylitigationsconcerningresponsiblemarketing.
59605960
Case| Participation in CHINAPLAS 2024 by Shenma CorporationCHINAPLAS2024,aninternationalrubberplasticexhibition,wassuccessfullyheldattheNationalExhibitionandConventionCenter(Shanghai)fromApril23to26,2023.Theexhibitionwasunprecedentedintermsofitsscale.ShenmaCorporationhadeightinternalorganizationsparticipateintheexhibition.Tofacilitatetheexhibition,themarketingdepartmentorganizedaworkinggroupofmorethan20peopletoprovidetechnical,commentary,andsalesservicesonsite.Thestarproductsofthenylonindustrychain,aswellastheirdownstreamapplications,wereexhibitedattheevent.TheyfullydemonstratedtheCompany'sstrengthandtechnologicalprowessinparticularasaresultofdecadesofhardworkinthenylonindustry.Focusingonthekeymessages"agloballyoutstandingflagshipenterpriseforhigh-endfunctionalmaterials"and"greenfactoriesforgreenlife",theCompanychoseboothsandboothconstructionplanssuitableforitscorporateimage.Aftercarefulinitialselection,theworkinggroupcontinuouslyupgradedthehigh-enddownstreamapplicationstobedisplayedattheexhibition.Ontheexhibitionsite,theCompanysetupanexhibitionareadedicatedtoitshigh-endproducts.TheareasystematicallydisplayedtheapplicationoftheCompany'sproductsinsuchfieldsasautomobile,railtransit,electronicproductsandelectricappliances,aviationandspace,militaryindustryandfirefighting,health,civilianuse,andcleanenergy.
ShenmaIndustrial Co., Ltd.
Case| Technical Exchange and Training by International Trade Co., Ltd.OnJune20,2023,InternationalTradeCo.,Ltd.invitedXuShuliang,ChiefAdvisorofShandongSailunGroupCo.,Ltd.andNationalEngineeringResearchCenterforRubberandTire,andExecutiveDeputyDirectoroftheEveRubberInstitute,toattendatechnicalexchangeandtrainingevent.PresentattheeventwereExecutiveDeputyGeneralManager,andDeputyGeneralManagerofShenmaCorporation,ExecutiveDirector,andPartySecretaryofInternationalTradeCo.,Ltd.,aswellasrelevantleaders,keybusinesspersonnel,andstaffmembersofInternationalTradeCo.,Ltd.,ShenmaCordFabricCompany,andShenmaCordFabricDevelopmentCo.,Ltd.Onthatoccasion,DeputyDirectorXustartedhislecturebylookingbackonthehistoryandfuturedevelopmentorientationsoftires,andthenwentontoelucidatethedesignconcepts,productfeaturesandperformanceadvantagesofliquidgoldtyres.Thepresentationwashighlyinformative,vivid,andbrilliant.Attheendoftheevent,XuinteractedwithhisaudienceandansweredquestionsontheR&Dandproductionoftiresindetail.Asaseniortiredesignerwhohaddesignedclosetoahundredtypesoftiresformedium-to-high-endautomobiles,XuhadhisuniqueunderstandingoftheR&Dandproductionoftiresingeneral.Hispresentationimpartedparticipantswithalotmoreofnewerandhigher-levelknowledgeontires,andwasthereforehighlyenlighteningforthemtoimprovetheirprofessionalskillsanddoabettermarketingjobinthefuture.
Responsible Marketing
ShenmaIndustrial Co., Ltd.
Responsible Marketing Training
Case| International Trade Co., Ltd. Improved Marketing Compliance through Job Rotation Training
OnFebruary2,2023,leadershipmembersofInternationalTradeCo.,Ltd.,includingExecutiveDirectorandGeneralManager,escorted32newlyrecruitedcollegegraduatestoShenmaCordFabricDevelopmentCo.,Ltd.toparticipateina40-dayjobrotationtraining.ThetrainingwashighlyvaluedbyleadersofShenmaCorporationandstronglysupportedbyShenmaCordFabricDevelopmentCo.,Ltd.Itwasdesignedtohelpnewrecruitsgainabetterunderstandingoftheproductionprocessesandperformancecharacteristicsofcordfabricsandindustrialyarns,thusfacilitatingthemarketingworkinthenextstep.
ShenmaIndustrial Co., Ltd.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
23242324
Climate andEnvironment
Committedtogreenandsustainabledevelopment,ShenmaCorporationhasanardentsenseofresponsibilityandmissioninthesphereofclimateandenvironmentalprotection.TheCompanyisdeeplyconvincedthatagoodenvironmentisthebedrockoflong-termdevelopment,soitincorporatesenvironmentalprotectionintoitsdevelopmentstrategy.In2023,ShenmaCorporationprioritizedsuchworkasdeepeningenergyconservationandemissionreductionmeasures,increasingtheshareofcleanenergyuse,andboostingthegreenrenovationofproductionprocesses,withaviewtocuttingdownoncarbonemissionandpollutantdischarge.Inthefuture,theCompanywillactivelyparticipateinthecarbontradingmarket,soastohelpachievethecarbonemissionreductiongoalsthroughmarketmechanisms.Throughtheforegoingmeasures,ShenmaCorporationwilltrytodoitspartintheglobaleffortstoaddressclimatechangeandprotecttheEarth,ourhome.KeyESGPerformancenIn2023,ShenmaEngineeringPlasticCo.,Ltd.,ShenmaCord
FabricCompany,ShenmaCordFabricDevelopmentCo.,Ltd.,andNylonChemicalCo.,Ltd.disbursedRMB8.7million,23.69
million,6.60million,and45.80millionin
environmentalprotection,respectively,indicatingtheCompany'sstrongconcernfortheenvironment.Duringthereportingperiod,theCompanydidnotgiverisetoanyaccidentswithmajorenvironmentalimpact.nBytheendof2023,theCompany'ssubsidiaries,includingNylon
ChemicalCo.,Ltd.,ShenmaCordFabricCompany,ShenmaCordFabricDevelopmentCo.,Ltd.,andShenmaHuaweiPlasticCo.,Ltd.,havepassedtheISO14001environmentalmanagementsystemcertification.Meanwhile,ShenmaCordFabricDevelopmentCo.,Ltd.wasgiventhetitle"NationalGreenFactory"bytheMinistryofIndustryandInformationTechnology.
71727172
Sustainable Development Goals (SDGs) of theUN Addressed in This Chapter
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Shenma Industrial Co., Ltd.Sustainability Report 2023
InarigorousefforttocarryouttheecologicalcivilizationthoughtofGeneralSecretaryXiJinping,ShenmaCorporationdeliversonthegreendevelopmentphilosophythat"lucidwatersandlushmountainsareinvaluableassets,andanenterprisewillnotsurviveifitfailstoprotecttheenvironment".Ontheconditionofsafetyandgreendevelopment,theCompanysharpensitssenseofurgencyandresponsibilitytotreattheenvironment,anddoestheenvironmentalprotectionandmanagementworkinstrictaccordancewiththeEnvironmentalProtectionLawandEnvironmentalImpactAssessmentLawofthePeople'sRepublicofChina,toensurethatthewastewaterandwastegasesitemits,thenoisesitmakes,andthesolidwasteitgenerates,aswellastheirmanagement,meettherequirementsoflawsandregulations.Moreover,itestablishesandcontinuouslyimprovesitsenvironmentalprotectionpoliciesandsystems.TheCompanyhasformulatedclearenvironmentalprotectiongoalsandindicators,andincludedsuchgoalsintoitsperformanceappraisalsystem.Moreover,itreportsanddisclosesitsenvironmentalperformanceonaregularbasis.
Environmental Management
636463646364
NameEnvironmental Management SystemEnvironment Risk
ManagementComprehensive Environmental Management System
ShenmaPolycarbonateMaterialC
o., Ltd.
EnvironmentTreatmentConceptandObjectives
?Upholdingthesustainabledevelopmentphilosophyandrevolvingaround"theGreenEnterpriseActionPlan",ShenmaPolycarbonateMaterialCo.,Ltd.haslaunchedaslewofmeasurestoenhancethemanagementofitsenvironmentalimpactandrisksandtominimizetheenvironmentalfootprintofitsoperations.SystemandPolicy
?Thecompanyhasenactedanenvironmentalprotectionsystemwiththefollowingfivemeasuresasitspillars:theMeasuresfortheManagementofBiologicalandEnvironmentalIncidents,theMeasuresfortheManagementofAccountabilityforBiologicalandEnvironmentalIncidents,theSpecialResponsePlanforEmergencyEnvironmentalIncidents,andtheMeasuresfortheManagementofRadioactivity.
NameEnvironmental Management SystemEnvironment RiskManagement
Thecompanyconductsenvironmentalriskidentificationandassessmentworkonayearlybasis.In2023,thecompanyidentifiedatotalof20tier-1environmentalrisks.Byformulatingandimplementingatieredenvironmentalriskcontrolplan,delegatingtheriskcontrolresponsibilities,treatinghiddenproblemsthatmayentailenvironmentalrisks,andacceleratingtheexitoffacilitieswithintheecologicalredlines,itmanagedtodowngrade10ofsuchtier-1environmentalrisks.
ShenmaCord FabricCompany
EnvironmentTreatmentConceptandObjectives?Undertheconditionofprotectingtheenvironment,complywithlawsandregulations,pursuecontinuousimprovement,andtakethesustainabledevelopmentpath.Strengthenthemanagementofwastewater,wastegases,andsolidwaste,strictlycontrolthetotalamountofpollutantemissions,andachievetherecyclingandreuseofresourcesforthepurposeofimprovingtheenvironmentcontinuously.
Thecompanyconductsenvironmentalriskidentificationandassessmentworkonayearlybasis.Accordingtothecompany'senvironmentalriskassessmentreport,environmentalrisksatthecompanyareassignedtothecategoryofrelativelylargerisks.
ShenmaCord FabricDevelopment Co., Ltd.
EnvironmentTreatmentConceptandObjectives
?Inrecentyears,followingagreendevelopmentmodelfeaturingenvironment-friendliness,energyconservation,andemissionsreduction,thecompanyplannedandimplementedastringofenvironmentalprotection,energyconservation,andequipmentrenovationprojects.Thankstoitsadvancedtechnologiesanddelicacymanagement,thecompanyhaspassedtheenvironmentalmanagementsystemcertification.SystemandPolicy?Accordingtotherequirementsthat"thePartyandtheadministrationareequallyresponsible,andaposthasdualresponsibilities,forenvironmentalprotection"andthat"onewhomanagesanindustrymustalsomanageenvironmentalprotectionacrosstheindustry;onewhomanagesproductionmustalsomanageenvironmentalprotectionintheproductionprocess,andonewhomanagesoperationsmustalsomanageenvironmentalprotectionduringtheoperations",thecompanyhasestablishedsoundenvironmentalprotectionorganizations,andspecifiedtheirrespectiveresponsibilities.
Onayearlybasis,thecompanyconductsenvironmentalriskassessment,improvesitsriskpreventionandcontrolmeasures,andmakesemergencyenvironmentalincidentresponseplansthatarefiledwiththeenvironmentalauthorities.Inaddition,itundertakeswastewater,wastegas,noise,soil,andgroundwatertests,withtheresultsfoundtocomplywiththepollutantemissionstandardsintheirentirety.
ShenmaHuaweiPlastic Co.,Ltd.
EnvironmentTreatmentConceptandObjectives
?Pollutioncontrolandpreventionconcept:giveprioritytothepreventionofpollution,andreducetheadverseimpactonenvironmentbywayoftechnologicalimprovements,andmanagementandcontrolmeasures.?Environmentalresponsibilityandprincipleoffairness:anorganizationshallassumetheresponsibilityfortheenvironment,includingbytakingmeasurestoreducetheimpactontheenvironment,andprotectingtherightsandinterestsofitsemployees,thecommunities,andotherstakeholders.SystemandPolicy?Thecompanymakesconcreteactionplanstoachieveitsenvironmentalgoalsandindicators,andhasseniormanagementassesthesuitability,adequacy,andefficacyofitsenvironmentalmanagementsystem.
Onayearlybasis,thecompanyconductsenvironmentalriskassessment,improvesitsriskpreventionandcontrolmeasures,andmakesemergencyenvironmentalincidentresponseplansthatarefiledwiththeenvironmentalauthorities.Inaddition,itundertakeswastewater,wastegas,noise,soil,andgroundwatertests,withtheresultsfoundtocomplywiththepollutantemissionstandardsintheirentirety.
In2023,ShenmaCordFabricCompany,ShenmaCordFabricDevelopmentCo.,Ltd.,NylonChemicalCo.,Ltd.,andShenmaEngineeringPlasticCo.,Ltd.disbursedRMB23.69million,6.60million,45.80millionyuan,and8.70millioninenvironmentalprotection,respectively,indicatingtheCompany'sstrongconcernfortheenvironment.Duringthereportingperiod,theCompanydidnotgiverisetoanyaccidentswithmajorenvironmentalimpact.
Key Performance
73747374
NylonChemical
Co., Ltd.
EnvironmentTreatmentConceptandObjectives?Upholdingtheconceptthat"anenterprisewillnotsurviveifitfailstoprotecttheenvironment",thecompanysetsthe"zeroviolationsandzerocomplaints"goalforitspollutantemissions.SystemandPolicy?Thecompanyhascreatedsuchmanagementsystemsastheenvironmentalprotectionresponsibilitysystemforallandtheenvironmentalprotectionperformanceappraisalsystem,includingtheMeasuresfortheManagementofSimultaneousDesign,SimultaneousConstruction,andSimultaneousUseofEnvironmentalProtectionFacilitiesforprojectsDevelopedbytheCompanyandtheEnvironmentalProtectionResponsibilitySystem.
ThecompanyhaspreparedanEmergencyEnvironmentalIncidentResponsePlan,andafterexpertreview,fileditwiththecompetentauthorityforenvironmentalprotection.Moreover,itorganizesrehearsalsfortheplanonaregularbasis.Thecompany'semissionsofpollutantshaveallmetstandards,withoutdealinganyimpactonitsemployeesandlocalcommunities.
ShenmaEngineeringPlastic Co.,Ltd.
EnvironmentTreatmentConcept?Instrictaccordancewithlawsandregulations,preventaccidents,lowerrisks,optimizeoperatingenvironment,pursuecontinuousimprovement,andtakethesustainabledevelopmentpath,withenvironmentalprotectionastheconditionprecedentandsafeproductionasthesafeguard.?EnvironmentalObjectives:
?1.toavoidalltypesofenvironmentalpollutionaccidents;?2.tomeettheemissionstandardsforwastegases:theconcentrationofnon-methanehydrocarbonemittedshallnotexceed60mg/m3,whilethatofthesmokedust,sulfurdioxide,andnitrogenoxideshallnotgobeyond5mg/m3,10mg/m3,and30mg/m3,respectively.
SystemandPolicy
?TheOccupationalhealth,SafetyandEnvironmentManagementHandbookisaframeworkdocumentfortheHSEmanagementsystemofShenmaEngineeringPlasticCo.,Ltd.Itdetailsthecompany'sHSEguidelinesandobjectives,andputsforwardconcreterequirementsforthecompany'sHSEmanagementsystem.
ShenmaEngineeringPlasticCo.,Ltd.conductsenvironmentalriskidentificationandassessmentworkonayearlybasistopreventandcontrolvarioustypesofemergencyenvironmentalincidentsinallrespects.Thecompanyoptimizeditsenvironmentalriskidentificationandassessmentmethodsandprocessesintermsoftheassignmentofvaluetoriskcontrolcapabilityindexes,thecorrectioncoefficientforriskindexes,andthedistributionoftheenvironmentalriskratings,workedoutanEmergencyEnvironmentalIncidentResponsePlan,andorganizedalldepartmentstotryandevaluateit.In2023,thecompanycarriedoutaseriesofmeasures,suchasmakingandimplementingatieredenvironmentalriskcontrolplan,delegatingtheriskcontrolresponsibilities,treatinghiddenproblemsthatmayentailenvironmentalrisks,andacceleratingtheexitoffacilitieswithintheecologicalredlines.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
TheCompanyiscommittedtocurbingpollutioninanall-roundmannerandinstrictaccordancewithlawsandregulations,suchastheWaterPollutionControlandPreventionLaw,theAirPollutionControlandPreventionLaw,theSolidWastePollutionControlandPreventionLaw,andtheNoisePollutionControlandPreventionLaw.Intheproductionprocess,weadoptadvancedenvironmentalprotectiontechnologiesandequipmenttoensurethatthewastewater,wastegas,andsolidwasteweemitandthenoisewemakemeetnationalstandardsintheirentirety.Atthesametime,theCompanyhasestablishedasoundenvironmentalmonitoringandmanagementsystemthatconductsenvironmentalprotectionauditsandevaluationsonaregularbasistoensurethatallpollutioncontrolandpreventionmeasuresareputinplace.Throughtheserigorouscontrolmeasures,theCompanyhaseffectivelyameliorateditsimpactontheenvironment,continuouslypromotedgreendevelopment,andearnestlyperformeditssocialresponsibility.AccordingtotheStateCouncil'sActionPlanforContinuousImprovementofAirQuality,PingdingshanCityisoneofthe"2+36"citiesdesignatedbytheChinesegovernmentasfocalareasforairpollutioncontrolandpreventionacrosstheBeijing-Tianjin-Hebeiregionanditssurroundingareas.Withrespecttosuchregionwithrelativelyhigherenvironmentalcompliancerisks,theCompanyrespondedactivelybyadjustingtheNOxemissionstandardforitsheatconductionoilfurnaces(steamboilers)to30mg/m3from50mg/m3andrenovatingitsoilheatingfurnacesaccordingtohigheremissionstandardsforNOx.
AirPollutionManagementAccordingtotherequirementsofitspollutantemissionpermits,theCompanyshouldmonitoritswastegasoutletsbywayofself-andonlinemonitoringmeasures,amongotherthings,andcomparetheresultsofsuchmonitoringwiththenational,local,andindustrystandardstodeterminewhetheritswastegassatisfiesthesaidstandards.Inthemeantime,theCompanyconstantlyinvestigatesandresearchesstate-of-the-artpollutiontreatmentprocessesandtechnologies,withaviewtooptimizingitsproductionprocesses,adjustingitsproductionstructure,improvingitsenergyefficiency,andreducingitswastegasemissionsbytechnologicalmeans.In2023,theCompany'smainpollutantsincludedNOx,sulfurdioxide,particulates,non-methanehydrocarbon,formaldehyde,ammonia,etc.,andtheoverallcompliancerateforitswastegasesstoodat100%.
Environment-related Honors and Credentials
Bytheendof2023,ShenmaCordFabricCompany,ShenmaCordFabricDevelopmentCo.,Ltd.,NylonChemicalCo.,Ltd.,andShenmaHuaweiPlasticCo.,Ltd.,allofwhicharesubsidiariesoftheCompany,havepassedtheISO14001environmentalmanagementsystemcertification.Meanwhile,ShenmaCordFabricDevelopmentCo.,Ltd.wasgiventhetitle"NationalGreenFactory"bytheMinistryofIndustryandInformationTechnology.
Key Performance
ShenmaCorporationhasproactivelyimplementedtheNoticeonFurtherPromotingtheReviewofCleanProductioninKeyIndustriesissuedbytheChinesegovernment.ItssubsidiarieshaveeachsetupaleadinggroupforenvironmentalprotectiontocarryouttheCompany'sguidelinethat"acomprehensiveapproachtopollutiontreatmentshallbeadoptedtoadvancecleanproductionandbuildagreen,safeandharmoniousenterprise".In2023,theCompanyenforcedastrictenvironmentalmanagementsystem,furthersteppedupitsenvironmentalprotectionefforts,andscoredsignificantachievements.Wearecommittedtomitigatingtheenvironmentalimpactofourproductionbyactivelyrollingoutenergyconservationandemissionreductiontechnologiesandensuringtheeffectiveimplementationofvariousenvironmentalprotectionmeasures.Insuccession,wehavewonmultipleimportanthonorsandcredentialsrelatedtoenvironmentalprotection,includingtheinternationallyacceptedISO14001environmentmanagementsystemcertificate,whichevidencesouroutstandingperformanceinenvironmentalmanagement.What'smore,wehavebeenratedaNationalGreenFactory,whichnotonlyreflectsourleadingpositioningreenmanufacturingandsustainabledevelopment,butalsoimprovesoursocialimageandmarketcompetitiveness.
Display of Key Environment-related Honors and Credentials
Pollution Emission Control
NameUnitParticulatesNOxVOCSO2Non-methane
HydrocarbonShenmaCord Fabric CompanyMetric Ton--8.99--Shenma Cord Fabric Development Co., Ltd.Metric Ton7.3214.1723.81--Nylon Chemical Co., Ltd.Metric Ton11.57136.75-35.90-Shenma Engineering Plastic Co., Ltd.(including Shenma Engineering PlasticsTechnology Development Co., Ltd.)
Metric Ton-5.891.13-0.06Shenma Boliemai (Pingdingshan) Air BagWire Co., Ltd.
Metric Ton6.45---10.12Shenma Nylon Technology Co., Ltd.Metric Ton0.86---0.41Shenma Puli Materials Co., Ltd.Metric Ton----0.43ShenmaPolycarbonateMaterialCo., Ltd.Metric Ton6.601.031.48--
Total Amount of Air Pollutant Emissions
Biodiversity ManagementShenmaCorporationupholdsitsresponsibilityandmissionofprotectingtheenvironmentononehandandiscommittedtoimprovingitscleanproductionontheotherhand,thuspromotingpollutantreductionandcarbonemissionreductionsimultaneously.In2023,theCompanyhadnobusinessthatislocatedwithinorinthevicinityofecologicalconservationareas,andthereforedidnotexertdirectorindirectimpactonbiodiversity.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
Treatment of Waste Water
Toputthewaterpollutionriskunderstrictcontrol,theCompanyhascarriedoutcleanproductioninallrespects,tightenedthemanagementofwaterpollutioncontrolandpreventionfacilities,andupgradedrelevantpollutioncontrolandpreventionworkaccordingtorequirementsthatareevenstricterthanthenationalandlocalstandards.Atthesametime,accordingtogovernmentrequirements,wehaveinstalledonlineambientenvironmentmonitoringfacilitiestomonitortheemissionsofwaterpollutantsinrealtime,andtakenpre-alertandreportingmeasurestodetectandmanageourproblemsinatimelymannerandensurethecomplianceofourwaterpollutantemissions.In2023,theCompanyprimarilytestedpollutantssuchasCOD,ammonianitrogen,totalnitrogen,totalphosphorus,suspendedsubstances,formaldehyde,andabsorbableorganichalideaccordingtothenationalstandardsIntegratedWastewaterDischargeStandard,andEmissionStandardofPollutantsfortheSyntheticResinIndustry,amongothers.NameUnitCODAmmonia Nitrogen
Shenma Cord Fabric CompanyMetric Ton79.907.80Shenma Cord Fabric Development Co., Ltd.Metric Ton5.310.18Nylon Chemical Co., Ltd. (including ShenmaEngineering Plastic Co., Ltd.)
Metric Ton124.706.30Shenma Engineering Plastics TechnologyDevelopment Co., Ltd.
Metric Ton4.680.07Shenma Boliemai (Pingdingshan) Air BagWire Co., Ltd.
Metric Ton0.470.04Shenma Puli Materials Co., Ltd.Metric Ton1.340.06ShenmaPolycarbonateMaterialCo., Ltd.Metric Ton9.100.05
Total Amount of Water Pollutant Emissions
Case | Air Pollutant Management System of Shenma Engineering Plastic Co., Ltd.
ShenmaEngineeringPlasticCo.,Ltd.haslaiddowntheGuidelinesfortheImplementationofAirPollutionControlandPrevention,andconstructedVOCtreatmentfacilitiestopreventuntreatedwastegasesfrombeingemitteddirectlyintotheatmosphereandensurethattheemissionofsuchwasteisuptostandards.Moreover,ithasinstalledVOConlinemonitoringfacilitiestokeeptrackofitspollutantemissionsandprovideabasisforitscomplianceinpollutantemissions.Furthermore,itinspectsitsenvironmentalprotectionfacilitiesonadailybasisandservicesthemonaregularbasistoensuretheirnormaloperation.In2023,weupgradedourfacilitiesandprocessestoimprovetheefficiencyofwastegastreatmentandreducetheemissionofpollutants,andinstalledautomobileGPSpositioningandmonitoringsystemsandsmartaccessmanagementsystemstoautomaticallyidentifythelevelofemissionsfromvehiclesenteringourpremisesandprohibitthosethatdonotcomplywiththeemissionstandardsfromaccessingourproperties.Inaddition,wesetthegoalof"cutting10%oftheNOxgeneratedperunitofourproductioncapacityby2025incomparisonwith2021".
ShenmaIndustrial Co., Ltd.
Case | Air Pollutant Management System of ShenmaCord Fabric Development Co., Ltd.
Inrecentyears,ShenmaCordFabricDevelopmentCo.,Ltd.upgradedthewastegastreatmentfacilitiesfordippingoperationsatitsdippingplant#1,dippingplant#2,anddippingplantfortheeasternquarters,installedonlinemonitoringsystemsforwastegasesandenvironment-friendlyaccessmanagementsystemfortrucks,andstandardizedtheconstructionofwarehousesforhazardousandwastesubstances.Byinvestinginhardwareconstruction,tighteningmanagement,anddefiningresponsibility,ithassecuredtheoperatingefficiency,safety,andstabilityofitsenvironmentalprotectionfacilities.nIntheprocessofcondensationpolymerization,Nylon66willproducethewastegas
Hexamethylenediamine(HMDA),whichiseasilydissolvableinwater.Toensurecompliancewiththeemissionsstandads,ShenmaCordFabricDevelopmentCo.,Ltd.adoptsthedisinfectionandrecycling,andclose-headfoam-watersprinklersystemstotreatthewastegas.nN66indsutrialyarnwillproducelowmolecularpolymers,awastegas,inthespinningprocess.Thegas
willbecollectedandfedintothebagfiltersfortreatment.Itwillbedischargedonlyafteritisfoundtohavemettheemissionstandards.nN66indsutrialyarnwillproducesoot,awastegas,inthespinningprocessduetotheuseofspinningoil.
Thegaswillbecollectedandfedintotheelectrictarremoversfortreatment.Itwillbedischargedonlyafteritisabsorbedbythehigh-voltage,staticelectricitycapturemethodandfoundtohavemettheemissionstandards.
nThenaturalgasboilersandheatconductingoilfurnaceshavebeenrenovatedtoreducetheleveloftheir
nitrogenemissionsduringcombustion.nTheN66dippedtypecordfabricwillproduceaslitherofformaldehydeinthedippingprocess,andthe
burningofnaturalgasmaygenerateparticulates,sulfurdixodie,andNOx.Totreatthepollutants,the
dippingplant#1adoptstheprocessthatcombinestheclose-headfoam-watersprinklerandHIWactive
carbonabsorbersystems,whilethedippingplant#2andtheplantintheeasternquartersresortstothe
processthatcombinesthesprinkler,highgravityfieldseparator,andwetelectrictarremoversystems.
nThewastegasesatthesewagetreatmentstationsaredisposedofthroughsprinklersandintegrated
biologicalfiltersanddischargedonlyaftertheyareuptostandards.
ShenmaIndustrial Co., Ltd.
Case | Air Pollutant Management System of ShenmaPolycarbonate Material Co., Ltd.
ShenmaPolycarbonateMaterialCo.,Ltd.hasdevisedandimplementedaSpecialActionPlanforOzonePollutionControlandPrevention.Ontopofthat,ithasadoptedmultiplehighlyeffectivemeasurestoreducetheemissionsofwastegases,includingbyremovingcoaldust,wastegases,anddustthroughbagfilters,treatingthewastegasesfromretiredoilfurnacesandBPAfacilitiesthroughhigh-temperaturecombustion,anddisposingofthePCmodifiedwastewaterthroughactivecharcoalabsorptionequipment.Intheend,allwastegasesareuptostandardsanddischargedthroughtheexhaustpipes
ShenmaIndustrial Co., Ltd.
Case | Waste Water Discharge Control Measures of Subsidiaries
TheCompany'smainsubsidiarieshavedevisedtheirwaterpollutioncontrolandpreventionpolicies,respectively.Forinstance,ShenmaEngineeringPlasticCo.,Ltd.hasworkedouttheGuidelinesfortheImplementationofWaterPollutionControlandPreventiontostrictlylaydowntheprocessesforthetreatmentanddischargeofwastewater.Inaddition,ShenmaEngineeringPlasticCo.,Ltd.,ShenmaCordFabricDevelopmentCo.,Ltd.,andShenmaCordFabricCompanyhaveeachimplementedintegratedandadvancedstrategiestotreatandreducetheamountoftheirwastewater.Thephase1projectoftheirsewagetreatmentworksadoptanefficient3-levelcombinedtreatmentprocess.Thefirstlevelistheenhancedpre-treatmentthatremoveslargeparticulatesandsuspendedsubstancesfromthewastewater;thesecondlevelistheA/Obiochemicalprocessthatusesmicroorganismstodowngradeorganicsubstances;andthethirdlevelisthedeepprocessingtreatmentthatfurtherpurifiesthewatertoensurethatitmeetsahighstandardwhendischarged.WithregardtotheVOCsgeneratedintheprocessofsewagetreatment,theCompanyhasspecificallydesignedaVOCcollectionandtreatmentsystemthatintegratesmultipletechnologiessuchasalkalinewashingtowers,biologicalfilterbeds,andplantextractremovaltoeffectivelygetridofhazardousgases.Thetreatmentfacilityisasteelstructurecoveredbyfluorocarbonfiberfilms;itisnotonlyefficientinprocessingwaste,butisalsoenvironment-friendlyandpleasingtotheeyes.Thewastewaterthathasgonethroughthewholeprocessoffinetreatmenthascompletelysatisfiedthedischargestandardsand,intheend,safelydischargedintothemunicipalsewagetreatmentplants.AllthismanifeststheCompany'ssoundcommitmentandactionsinenvironmentalprotection.
ShenmaIndustrial Co., Ltd.
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Shenma Industrial Co., Ltd.Sustainability Report 2023
Management of Waste
AccordingtotheSolidWastePollutionControlandPreventionLawofthePeople'sRepublicofChina,theCompanymanagesthewastegeneratedintheprocessofproductionandoperationsbycategory,andcomprehensivelyusesornon-hazardouslydisposesitall.Moreover,followingthefourprinciplesof"reduction,recycling,safedisposal,andplanning"forthetreatmentofsolidwaste,theCompanyhascontinuouslyimprovedrelevantpoliciesandsystems.TheindustrialsolidwasteproducedbyCompanyincludes,amongotherthings,dryoilstreaks.Theyareallreusedtoreducetheamountofthesolidwastegenerated.Ontheotherhand,thehazardoussolidwasteoftheCompanyhasbeenentrustedtothecareofqualifiedcompaniesaccordingtolawsandregulations,andhasbeen100%treated.InaccordancewiththeSolidWastePollutionControlandPreventionLaw,HazardousWasteTransferManagementMeasures,andNationalCatalogueofHazardousWasteofthePeople'sRepublicofChina,ShenmaCorporationhasformulatedaSolidWasteManagementSystemandaHazardousWasteManagementSystemtomanagedangerouswastebycategory.Inaddition,ithastriedtominimizetheamountofwastebyimprovingitsproductionprocessesandenhancingitsmanagement,amongothermeasures,andregularlyentrustedqualifiedthird-partyproviderstohandleitshazardouswasteforcompliancepurposes.Meanwhile,ithasorganizedregulartrainingonhazardouswastemanagementtoraiseemployees'awareness.
NameUnitAmount of
Hazardous SolidWaste Generated
Hazardous SolidWaste DisposalRateShenma Cord Fabric CompanyMetric Ton197.29100%Shenma Cord Fabric Development Co., Ltd.Metric Ton322100%Nylon Chemical Co., Ltd.Metric Ton445.48100%Shenma Engineering Plastic Co., Ltd. (includingShenma Engineering Plastics TechnologyDevelopment Co., Ltd.)
Metric Ton16.64100%ShenmaPolycarbonateMaterialCo., Ltd.Metric Ton1,175.06100%
Total Amount of Waste Generated
Case | Waste Management System of Shenma Cord Fabric Company
Withrespecttothemanagementofwaste,theCompanyhasadoptedmulti-tieredreductionandcompliancemeasures.Ononehand,itresellswasteyarnstoothercompaniestoachievecircularuseofresources;andontheotherhand,withintheCompanyitself,itreuseswasteinsulatedcottonthatisreusabletoreduceitsdependenceonrawmaterials.Withrespecttogeneralindustrialsolidwastethatcannotbedirectlyused,theCompanyentrustsprofessionalthirdpartyserviceproviderstodisposeofitinanenvironment-friendlymannertoensurethatitisproperlyprocessed.Withregardtohazardouswaste,theCompanychoosesqualifiedprofessionalcompaniestohandleitevenmorestrictlyinaccordancewithlawsandregulationstoensureenvironmentalsafety.ThesemeasurestogetherconstitutetheCompanyholisticandeffectivewastereductionandmanagementsystem.
Shenma Industrial Co., Ltd.
NameUnitAmount of General Industrial
Solid Waste Generated
Shenma Cord Fabric CompanyMetric Ton5,405Nylon Chemical Co., Ltd.Metric Ton215,680
The data cover key waste-generating enterprises.
Case | Waste Management Cooperation with Third Parties by ShenmaHuawei Plastic Co., Ltd.
Toensuresafe,lawful,andefficientwastetreatment,ShenmaHuaweiPlasticCo.,Ltd.strictlyscreensthirdpartyproviderstoconfirmthattheyhavetheprofessionalqualificationsandcapacitiesnecessarytodisposeofparticulartypesofwaste.Inthatprocess,ShenmaHuaweiPlasticCo.,Ltd.carefullyexaminesthetrackrecord,technologicalprowess,environmentalprotectionfacilities,andcompliancerecordofthecandidatestoensurethattheyarecompetenttodothedelegatedtasks.Subsequently,ShenmaHuaweiPlasticCo.,Ltd.signsdetailedwrittenagreementsorcontractswiththethirdpartycompaniesselected,explicitlyprovidingforkeydetailsoftheservices,suchasthetype,quantity,andexpectedtreatmentmethodofthewaste,theamountoffees,andthetermoftheservicesagreedupon.Thepracticenotonlysecurestherightsandinterestsofthetwoparties,butalsoensuresthattheentireprocessofwastetreatmentistransparentandtraceable.Duringtheimplementationofthecontractssigned,ShenmaHuaweiPlasticCo.,Ltd.'senvironmentalprotectiondepartmentwillassumethesupervisoryresponsibilitytokeepacloseeyeontheentireprocessofwastetreatmentbythethirdparty,includingthecollection,transportation,andultimatetreatmentofwaste.ShenmaHuaweiPlasticCo.,Ltd.requiresthatallstepsmustbeinstrictaccordancewiththestandardsandproceduresagreedupbythetwosidesononehandandcomplywithnationalandlocalenvironmentalprotectionlawsandregulationsontheotherhand.Bywayofregularinspection,on-siteaudit,anddatacomparison,itensuresthateverylinkofthewastetreatmentprocessisuptothehigheststandardtoeffectivelyavoidenvironmentalpollutionrisksandmaintainthesustainabilityofboththeenterpriseandthesocietyatlarge.
ShenmaIndustrial Co., Ltd.
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Water ConservationFollowingthescientificoutlookondevelopment,ShenmaCorporationhasconstantlyimprovedthemanagementofwaterresourcestobuildawaterconservation-orientedenterprise,achievethereasonableallocationofwaterresources,andraisetheoverallutilizationrateofthesame,focusingontheobjectiveofloweringthewaterintakeperunitofproduct.TheCompanyhasstrengthenedthecommunicationandeducationeffortstoraisetheawarenessofwaterconservation.Moreover,ithasestablishedalong-termwaterconservationmechanismtodoitspartinthebuildingofawaterconservation-orientedsociety.TheCompany'swatersourcesareprimarilymunicipalwatersupplyenterprises,soitdoesnotadverselyaffecttheuseoflocalwaterresources.ItssubsidiarieshaveallcreatedsoundwaterresourcesmanagementframeworksandsystemstomaketheuseofwatermorereasonableandreducetheconsumptionofwateracrosstheCompany.Forexample,ShenmaEngineeringPlasticCo.,Ltd.issuedaWaterMeteringManagementSystemandaWaterConservationManagementSystem;ShenmaCordFabricDevelopmentCo.,Ltd.improveditswaterconservationmanagementorganizations,revised,enactedandimplementeditswatersupplyandconservationsystemsinatimelymanner,includingtheWaterConservationManagementSystem,theWaterUseManagementandAppraisalMeasures,theResponsibilitySystemforWaterConservationManagementPersonnel,etc.;NylonChemicalCo.,Ltd.setupaleadinggroupforthewaterconservationworkanddesignatedthemanagementdepartmentandpersonnelforwateruseandconservation;andtheShenmaCordFabricCompanyalsoimproveditswatermanagementsystembyestablishingawaterconservationleadinggroup.Everyyear,thesubsidiariesappointedprofessionalcompaniestodetectleaksacrosstheirrunningwatersupplynetworksandrepairdamagesinatimelymanner.Meanwhile,theCompanypreventswaterleaksthroughregularinspection.Thankstoawaterreclaimationsystem,itmanagestousethereclaimedwatertoflushtoilets.Inaddition,theCompanymakesenergyconservationeducationplansonayearlybasis,andparticipatesinwaterconservationpublicityevents,e.g.,theWorldWaterDayandtheChinaWaterWeek,toreducewaterconsumptionandtapthepotentialtosavewater.
Resource Conservation andCircular Economy
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Key Performance
Case | Water Conservation Policies and Measures of ShenmaCord Fabric Company
Inanactiveresponsetothewaterconservationcall,ShenmaCordFabricCompanyhasimplementedaseriesofeffectiveandsustainablemeasuressettoreducethewasteandimprovetheutilizationofwaterresources.
Leak Detection across the Underground Water Supply NetworkThecompanyregularlyappointsprofessionalteamstoconductcomprehensiveandcarefultestontheundergroundwatersupplynetworktodetectpotentialleaks.Throughadvanceddetectiontechnologiesandequipment,themeasurepreciselyidentifiesthepointsofleakacrossthenetworksandrepairsthedamagesinatimelymanner.
Intelligent Renovation of Toilets to Save Water
Tosavewateronadailybasis,thecompanyrenovatesitstoiletsforthepurposeofsavingwaterintelligently.Concretemeasuresincludeinstallinginduction-typefaucetsandflushes,whichcanautomaticallyturnthedevicesoffaftertheusersleave,thuspreventingwasteofwaterattributedtonegligence.
Promoting the Use of Water-saving DevicesThecompanyactivelypromotestheuseofwater-savingdevices,e.g.,faucetsandsprinklers,intheofficeareasandtheworkshops.Bymeansofadvancedwater-savingtechnologiesanddesigns,e.g.,flowthrottlesandairinjection,thesedeviceshelptoeffectivelyreducethewasteofwaterineverydayoperations.
Case | Water Conservation Policies and Measures of ShenmaCord Fabric Development Co., Ltd.
ThewaterproductionsystemofShenmaCordFabricDevelopmentCo.,Ltdadoptsthereverseosmosistechnologythatcanextractpurewaterfromrawwaterthrougheffectivemembrane-basedseparation.Theacidandalkaliconsumptionisjust2-3%oftheionexchangetechnology.Therefore,itgreatlyreducesthedischargeofwastewaterandraisestheoverallutilizationrateofwaterresources.ShenmaCordFabricDevelopmentCo.,Ltd.iscommittedtorenovatingwaterusefacilities,suchasthoseintheofficeareasanddininghalls,eliminatingdevicesandfacilitiesthatdonotcomplywithwaterconservationstandards,andinstallingwater-savingfaucetsandflushtoiletssuchastheinductionfaucetscomplyingwithnationalstandards,andtheself-closingflushvalves,tosaverawwater.
Case | Key Water Conservation Policies and Measures of Shenma Corporation
ShenmaCorporationkeepsusingwaterinacircularwaytoreduceitsdependenceonnaturalwaterresourcesandloweritswaterbillsandwastewatertreatmentcost,whileshowingitscommitmenttoenvironmentalprotectionanddeterminationtopursuegreendevelopment.
nForinstance,itsShenmaCordFabricCompanyinvestedoverRMB3millionin20210toimplementawastewaterdeep
processingandreclamationproject.Onadailybasis,theprojectmanagedtoreclaimandreuse1,200tonsofwastewater,withtherecyclingratereaching60%.Thereclaimedwaterwasmainlyusedfornon-domesticpurposessuchasirrigation,toiletflushing,andsprinkling(steam-condensatedwater)intheproductionareas.
nShenmaCordFabricDevelopmentCo.,Ltd.decreasesthereplenishmentoffreshwaterbyhavingthecirculatingandfreezing
watercirculateonitsown,notchingupareutilizationrateof96%.
nLikewise,ShenmaHuaweiPlasticCo.,Ltd.circularlyusesthecoolingwaterforproduction-purposedprofiles,thecoolingwater
forgearboxes,andthepurecoolingwater,withthereutilizationratestandingat30%.nNylonChemicalCo.,Ltd.mixesthecircularlyusedwaterwiththewaterreclaimedbythepublicutilitiesandusesthemixedwatertoreplenishitscircularwatersystemdesignedforsanitationandgreeningpurposes.Theshareofthewatersocircularlyusedis97%.
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SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
In2023,ShenmaCordFabricDevelopmentCo.,Ltd.consumedatotalof1.14milliontonsofwater,withtheconsumptionintensitystandingat22tonsperunitofproduction,andthecircularutilizationrateat97%.In2023,NylonChemicalCo.,Ltd.'stotalwaterintakestoodat9.90millionm3,including4.10millionm3fromwatersupplycompanies,and5.80millionm3fromreclaimedwaterresourcesofthepublicutilities.Thesubsidiaryproduced2.62millionm
ofreclaimedwaterbyitself,withthereclaimedwatercircularutilizationratestandingat26%.In2023,ShenmaHuaweiPlasticCo.,Ltd.consumedatotalof30,000tonsofwaterthroughouttheyear,withtheunitwaterconsumptionstandingat1.76tonsperunitoftheproductionmeasuredbyton,andthecircularutilizationrateat30%.
Raw Materials and Circular Economy
ShenmaCorporationisdeeplyawareofthedirectrelationshipbetweenthecirculareconomyandtheemphasisonthemaximumuseofresourcesandtheminimumgenerationofwaste.Throughcircularuseandreclamation,theCompanymanagestoreduceitsdependenceonnewresources,alleviateenvironmentalpollution,andachievesustainabledevelopment.Forenterprisesinaresource-intensiveindustry,strengtheningthemanagementofrawmaterialsandpromotingthedevelopmentofcirculareconomynotonlyhelptodecreasetheirproductioncostandincreasetheireconomicbenefits,butalsohelptoreducetheirenvironmentalpollution,improvetheircorporateimage,andlayasoundfoundationfortheirlong-termsteadygrowth.In2023,inanactiveresponsetotheglobaltrendtoseeksustainabledevelopment,theCompanytookthecircularuseofresourcesasoneofitscoredevelopmentstrategies.Throughtechinnovation,processoptimization,andpersonneltraining,amongotherefforts,itmanagedtopushthecircularuseofresourcesforward.
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Shenma Industrial Co., Ltd.
Shenma Industrial Co., Ltd.
Shenma Industrial Co., Ltd.
Energy ManagementTheCompany'senergysourcesareprimarilyelectricity,naturalgas,steam,andcoke.EnergyconsumptionistheprimarysourceofthegreenhousegasesproducedbytheCompany.Followingtheprinciplesofconservingenergyandreducingitsconsumption,theCompanyhastakenastringofmeasures,suchasimprovingitsenergyconservationtechnologiesanddetectingunreasonableuseofenergy,toraiseitsenergyefficiencyandincreasebothofitsenvironmentalandeconomicbenefits.TheCompanyhasstrictlycompliedwithlawsandregulationssuchastheEnergyConservationLawandRenewableEnergyLawofthePeople'sRepublicofChina.Itssubsidiarieshavealsoestablishedsoundenergymanagementframeworksandsystemstoimprovetheirenergyconsumptionandconservationandreducetheiremissionofgreenhousegases.
nShenmaCordFabricCompanyhascreatedanEnergyManagementSystem,andauditedthesystemonayearlybasis,asrequired.In2023,ShenmaCordFabricCompanyfurtherreviseditsEnergyManagementPerformanceAppraisalPlanandenforcedthenewversionoftheplan.Moreover,theCompanysetupaleadinggroupfortheenergyconservationmanagementwork,andhaditsinternalorganizationsdesignateheadsandpersonnelresponsibleforenergymanagement,thuscreatinganenergymanagementnetwork.
nShenmaCordFabricDevelopmentCo.,Ltd.formulatedEnergyManagementPerformanceAppraisalMeasuresandconsolidatedtheincentivesandprocessesforenergymanagementbyincludingenergy-relatedperformanceintothescopeofperformanceappraisalagainstrelevantleaders.nShenmaEngineeringPlasticCo.,Ltd.andShenmaPolycarbonateMaterialCo.,Ltd.respectivelycreatedanEnergyManagementSystem,setupaleadinggroupfortheenergyconservationmanagementwork,andhadtheirtopmanagementtaketheresponsibilityforenergymanagement,thusforminganenergymanagementnetwork.nInlightofitsproductionandoperations,NylonChemicalCo.,Ltd.workedoutsuchenergymanagement
documentsasEnergyManagementHandbook,ProceduralDocumentfortheEnergyManagementSystem,EnergyManagementOperatingDocument,andEnergyManagementSystem.TheEnergyManagementOperatingDocument,particularly,laiddowntherequirementsforareassuchasthedivisionofresponsibility,theclassificationofenergy,thestatisticalmeasurementofenergy,themanagementofstatisticalmeasurement,andtheincentivesandpunishmentforenergymanagement.Inthemeantime,theCompanyhasbeencertifiedwiththeISO50001:2018energymanagementsystem.
Case| Circular Use of Gypsum Side Products by ShenmaAramid Fiber Technology DevelopmentCo., Ltd.Inproducingcontinuouspara-aramidfiberfilaments,ShenmaAramidwillproducewastewatercontainingthinsulfuricacidattheconcentrationof8%orso.Atpresent,thewastewaterisneutralizedwithsolidcalciumhydroxide.Intheprocessofneutralization,thesulfuricacidwillreactwiththecalciumhydroxide,andproducesolidcalciumsulfate.Theslurrycontainingsolidcalciumsulfatethengoesthroughthefilterpresstoremovethesolidgypsum.Afterward,theliquidisdischargedafterthepHvaluecontrolprocess.Theresultingsolidgypsum,whichcontains30%orsoofwater,ispackagedintotonbagsandsoldtothirdparties.InthepilotproductionofShenmaAramidFiberTechnologyDevelopmentCo.,Ltd.,thecompanymanagedtoproducearound135tonsofgypsumonamonthlybasiswithasingleproductionlineputintooperation,andaround300tonswhentwolineswereputintooperation.Afterthepara-aramidprojectwithaproductioncapacityof4,000tonsperyearisputintooperationin2024,thecompanywillbeabletoproducearound29,000tonsofgypsumonayearlybasis.Thegypsum,achunk-likesideproduct,hasawatercontentof30%andisnotdirectlymarketable.Therefore,acircularuseideaforthesideproductistoreduceitswatercontent,addadditionalequipmenttoprocessit,andutilizeitaccordingtomarketdemand.Inaddition,thankstothecompany'sadvantageinindustrialsynergy,expandingtheuseofthegypsum,i.e.,usingittorefillexcavatedmines,isanothergoodidea.
(1) Brick Making with Gypsum
Unlikeothercompaniesthatusesteamorelectricheatingtodisposeofthegypsum,ShenmaAramidFiberTechnologyDevelopmentCo.,Ltd.takesadvantageofitsindustrialsynergytohandlethesideproduct.Morespecifically,itusestheresidualheatofthehigh-temperatureexhausttodryandbakethegypsum.Inthisway,itonlyneedstomakealittleinvestmentinequipmenttorecycleandreusetheresidualheatandgypsumresources,thusfurtherloweringthecostofproductionandoperation.
(2) Mine Filling Experiment
Outoftheneedtofillmines,thecompanysendstechnologicalpersonneltofindouttheproportionofgypsumtobeaddedtothefillingmaterials.Todotheexperiment,thetechnologicalpersonneladdacertainshareofgypsumtotherockrefuseusedasthefillingmaterial,putitinamould,andobservehowlongittakesforthemixturetocondensateandsolidify.Moreover,theytestthestrengthoftheproducttodeterminewhetherithasmetthetechnicalrequirements,suchasthedesignedtimeforittocoagulateandthebearingstrength.
Key Performance
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Rock RefuseSiloMixerWater PoolFly Ash SiloAdditive
FeederFine CrusherFiller Buffer SiloGypsum Mixer
Sifter
Filling WorkPlaneRock Refuse PowderSiloBeltConveyor
SHENMA INDUSTRIAL CO., LTD.
In2023,ShenmaCordFabricCompanyconsumedatotalof51.991.5tonsofstandardcoal,withelectricityaccountingfor54.87%,naturalgasfor30.68%,steamfor14.25%,andgasolineanddieselcombinedfor2%.In2023,ShenmaCordFabricDevelopmentCo.,Ltd.consumedatotalof39,208tonsofstandardcoal.Fromthestructuralpointofview,theconsumptionofelectricitytotaled23,455tonsofstandardcoal,accountingfor60%;theconsumptionofnaturalgastotaled12,870tonsofstandardcoal,accountingfor33%;andotherconsumptionsaccountedfor7%.In2023,ShenmaEngineeringPlasticsTechnologyDevelopmentCo.,Ltd.consumedatotalof
6,931tonsofstandardcoal,withtheconsumptionpertonofproductstandingat0.20tonsofstandardcoal.In2023,ShenmaHuaweiPlasticCo.,Ltd.usedatotalof5GWhofelectricity,withtheconsumptionpertonofproductstandingat376kWh.
TheCompanyiscommittedtoenergyconservation,environmentalprotection,andgreenandlow-carbondevelopment.Ithasconductedtechnologicalrenovationforitsofficeareas,andstronglyadvocatedenvironment-friendlyofficepracticestocutdownonthewasteofresourcesandraisetheutilizationrateofresourcesandenergyinitsoffices.TheCompanyencouragesitsdepartmentsandoperationsatalllevelstopracticethegreendevelopmentphilosophybymeasuressuchasrecyclingwastebycategory,savingenergy,adoptinggreenmeansofmobilityandgreencateringservices,etc.,thusputtinglow-carbonoperationsinplace.In2023,insupportoftheTCFD'sinitiative,theCompanyreferredtotheTCFDframework,identifiedtheclimate-relatedrisksandopportunitiesthatmayhaveanimpactonit,andtookeffectivecountermeasures.TheCompanyintegratestheESGconceptdeeplyintoitsbusiness,andconsiderstheclimateandenvironmentfactorsineverylinkofitsoperations.
Climate Risk Management Framework
TheCompanyactivelyrespondstothegovernment'sDualCarbon(i.e.CarbonPeakingandCarbonNeutrality)goals.In2023,itestablishedanESGgovernancesystemledbyitsBoardofDirectors,andinthemeantime,incorporatedtheresponsibilitiesrelatedtoclimaterisksandopportunitiesintothetermsofreferencesforitsESGmanagementteam,withaviewtocreatingafoundationalclimategovernanceworkingsystemacrosstheCompany.
Board of Directors
ESG Management
Team
SubsidiariesBusinessDepartments
lDisclosetheresultsoftheeffortstoidentifyclimate-relatedrisksandopportunitieslAssesstheimpactofrisksandopportunitiesontheCompany'sbusinesslMake green production, green operations and other related plans
lDevisecountermeasuresforclimateriskswithreferencetotheindustry'sbestpracticesandinlightoftheCompany'srealitylIdentifyandconductbasicassessmentonclimateriskslTakestockoftheCompany'scarbonemissions
Management of Climate Risks andOpportunitiesShenmaCorporationattachesgreatimportancetotheimpactofclimatechangeonthesustainabledevelopmentofitsbusiness,andreferstothedisclosureframeworkoftheTaskForceonClimate-relatedFinancialDisclosure(TCFD)toidentifymajorclimaterisksandopportunitiesfacingtheCompany.WithreferencetotheTCFDframework,theCompanyhasidentifiedtheclimate-relatedrisksandopportunitiesthatmayhaveanimpactonit.TheCompanyintegratestheESGconceptdeeplyintoitsbusiness,andconsiderstheclimateandenvironmentfactorsineverylinkofitsoperations.
lGuide the formulation and perfection of climate-related strategies, supervise andreview the adoption of action plans to address climate change.lThe Board is responsible for identifying, assessing, and managing important climate
risks and opportunities.
Against Climate Change
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Risk TypesRisk DescriptionsCountermeasuresTransitionalRisks
Policy andLegal Risks
?InthecontextoftheDualCarbongoals,thegovernmentispushingtheshiftfromfocusingonthetotalamountandintensityofenergyconsumptiontofocusingonthetotalamountandintensityofcarbonemissions,andaccordingly,mayissuemorerigorouslawsandregulationsaimedatrestrictingorcurbingcarbonemissionstopushenterprisestoembarkonthegreenandlow-carbontransitionpath.Thiswillbringcomplianceriskstohigh-emittingandhighenergy-consumingindustries.Likewise,thismayincreasetheCompany'sinvestmentinenergyconservationandemissionreductionandinturnincreaseitscompliancecost.?ChinaCarbonEmissionsTradingExchange（CCETE)hasbeenestablishedandbeguntoimplementthecarbonemissionsquotasystem.Inthefuture,keycarbon-emittingindustrieslikepetrochemicalmaybeincludedintothemarket.Therefore,theCompany'scompliancecostintermsofcarbonemissionsmaygrowaccordingly.?Thegovernmentiscontinuouslydeepeningtheformaldehydeemissionscontroleffortsbymakinglawsandregulationssettoreducetheemissionandescapeofformaldehyde.Asaresult,theCompanymayhavetoconstantlystepupthebuildingofaMRVtechnicalsystemfortheemissionsofformaldehyde,increaseinvestmentinrelevantfacilitiesandtechnologies,andatthesametime,takemoreeffectivemeasurestominimizetheleakofformaldehyde.AllthismayaddtotheCompany'soperatingcost.
TheCompanywilladheretotheconceptof"energytransitionforgreendevelopment",acceleratetheoptimizationofitsindustrialstructure,andrampuptechinnovationtopushitsenergyconsumptiontoshiftfromahigh-carbonmodetoalow-carbononeandfromafocusonfossilenergytoafocusoncleanenergy,thusforminggreenproductionandconsumptionpatternsmorequicklyandcontributingtotheecologicalcivilizationandsustainabledevelopment.?Astheeconomygrowsandthedemandforenergyincreases,theCompanywillproactivelyadjustitsenergymix,cuttheuseofcoalforheatingandpowergenerationpurposes,vigorouslydevelopcleanenergy,andmaximizetheuseofnewenergysuchaswindpowerandsolarpower.?Trytoadjustthestructureofproducts,develophigh-performance,green,safe,andspecialchemicals,increasethevalueaddedtoproducts,andlowertheenergyconsumptionperunitofproduct.Theprojectcanextendtheadipicacidindustrychain,increasethevalueaddedtoproducts,andexpandthescaleoftheupstreamproductswhilediversifying,serializingandrefiningdownstreamproducts,thusmakingthestructureofproductsmorereasonable.?Strengthentechinnovation,enhanceenergyconservationmanagement,upgradeorrenovatetraditionalequipmentthroughtechnologiesthatcansystematicallyoptimizeenergysupply,saveelectricity,oruseresidualheatandpressure,andpromoteefficientenergy-savingtechnologiestoimprovetheenergyefficiencyofequipment.Analyzethethermalenergyofdifferentequipmentwithaviewtousingitcomprehensivelyaccordingtoitsgrade,renovatethetrapsacrossthestreampiping,androlloutenergy-savinglighting,tolowerenergyconsumption.?Acceleratetheresearchonthecontrolofgreenhousegasandairpollutantcoordinatedtreatmenttechnologies.ConducttechnicalrenovationonexistingCDMgreenhousegasemissionreductiondevices.Withreferencetothecontentcontrolrequirementsforpollutantsintheexhaustgasesofadipicacid,focusthewastegastreatmentonthefluegasfromtheadipicacidoperations,suchasthehigh-concentrationN2OandNOx.DevelopanewN2Odecompositioncatalystthatishighlyselective,active,andenvironment-friendlyandfeatureslowcostandlowbulkdensitytoreplacetheimportedcobalt-nickel-zirconiumcatalysts.Thenewcatalystisasupportedmolecularsievecatalystthathaslowbulkdensity,lowactivationtemperature,andhighefficacyandcanthereforehelptoreducecarbonemissions.Sofar,ithasbeenindustriallyappliedtotheadipicacidfacilityonapilotbasisandproventobehighlyeffective.?ApartfromdigestingandabsorbingtheCDMcarbonreductiontechnologies,in2022,theCompanyimplementedaNOxemissionreductionprojectonitsadipicacidfacility.TheprojectadopteddirectcatalyzationmethodtoprocessthewastegasesfromtheCompany'sadipicacidfacility,suchasthegreenhousegasesNOxandN2O.Withareductionrateof98%,itmanagedtocuttheemissionofgreenhousegasesby11.60milliontonsofcarbondioxideequivalentonayearlybasis,soitwashighlyeffective.Atthesametime,theCompanycouldprovidehigh-qualityadipicacidtothemarkettomakeexistingnylonproductsmorecompetitive.?ActivelycontacthigherlearninginstitutionsandresearchinstitutestoresearchthepossibilityofusingCO2toproducecarbon-basedmaterials(e.g.,carbonnanotubes)andlightweightfoamingmaterials,aswellaschemicalsofhighvaluesuchasDMF,degradableplastics,andaceticacid,amongotherthings.Currently,wearestudyingthefeasibilityofsupplyingourCO2tothePCindustrialpark,andplanningtobuildafood-gradeliquidCO2projectwithanannualcapacityof300,000tonsinpartnershipwithothercompanies.Byimplementingtheforegoingmeasures,wecanturnCO2into"atreasure","clean"and"reducethecarbonemissions"oftraditionalcoalchemicalindustry.Meanwhile,thespaceontheCompany'spremiseswillbeusedtodevelopsustainableenergy,e.g.,windandsolarpower,withaviewtoreducingtheemissionofCO2throughtheusegreenelectricity,buildingaleadingdemonstrationbaseforcarbonemissionreductioninChina,andprovidingastrongsafeguardforhigh-qualitydevelopment.
Market Risks?Thesocietyisincreasinglyconcernedaboutclimate
changeandsustainabledevelopment.Inthefuture,agrowingnumberofconsumerswillbeinclinedtousegreenandlow-carbonproductsandservices,thusdentingthedemandfortraditionalenergyproductswithrelativelyhighercarbonemissionintensity.TechnologicalRisks
?Thetransitiontolow-carboneconomyisdrivingfastdevelopmentanditerationoftechnologies,sotheCompanymustcontinuouslyratchetupitsR&Dandinvestmenteffortsinareassuchasrenewableenergy,energyconservationandemissionreduction,toprovidesupportfortheachievementoftheDualCarbongoals,butthiswillleadtoanincreaseintheoperatingcost.ReputationalRisks
?Thechemicalindustry'sactionstoaddressclimatechangearelavishedmoreandmoreattentionbystakeholders.IftheCompanyfailstotakesubstantiallyinfluentialmeasures,itmaybeincreasinglychallengedbyinterestedparties,includinginvestors,andthereforehaveitscorporatereputationadverselyaffected.Physical
Risks
Acute RisksExtremeweatherevents,suchasstormrains,typhoons,
andfloods,areoccurringatanincreasinglyhigherfrequency.Theymaydamageproductionequipment,interrupttransportation,anddisruptthesupplychain,andinturn,leadtoloweredproductioncapacity,increasedoperatingcost,andnarrowedprofitmargin.?Extremeweathereventsarelikelytocausesecondarydisastersandproductionaccidents,whichmayposeathreattopersonalsafetyandecologicalenvironmentandinflicteconomiclosses.
?Monitorandguardagainstextremeweatherevents,maketargeteddisasterresponseplansinlightofthecharacteristicsofthebusinessplace,conductemergencyresponsedrillsonaregularbasis,andbuildaregularreserveofdisasterpreventionandreliefmaterials.? Inspect production and operation facilities on a regular basis, upgrade and renovate them asrequired, and elevate the level of disaster control and prevention.Chronic Risks?Changesintheprecipitation,extremefluctuationsofthe
climate,andlong-termrisesoftheaverageairtemperature,amongotherthings,mayraisetheCompany'scapitalconstructioncost(e.g.,bywayofprotractedprojectterm,andaccelerateddepreciationofequipment),andtheinsurancepremiumforequipmentandpersonnel.?Theriseorfallofaverageairtemperaturemayleadtoanincreaseinthedemandforcoolingwaterforequipmentorinthedemandforcooling/heatingintheproduction/officeareas,andinturn,causetheCompany'soperatingcosttogrow.
?Encouragesubordinateenterprisestoidentifythevulnerabilityoftheclimateintheirregions,andconsiderclimaterisksintheirinfrastructuredevelopment.?Continuouslystepuptheenergyconservationandemissionreductionefforts,raisetheefficiencyofenergyandwateruse,andlowerthedependenceonnaturalresources.? Provide stakeholders with extensive education on climate change, advocate and carry out thelow-carbon and environmental protection concepts.
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Energy Conservation and Carbon ReductionTheCompanyiscommittedtoimplementingacomprehensiveenergyconservationandcarbonreductionstrategy.Itstrivestoreducecarbonemissionsandpromotesustainabledevelopmentbyoptimizingenergyuses,promotinggreentechnologies,andmakingmanagementinnovations.TheCompanyceasedtousesteamattheendofApril2023,andsuppliessteampreciselyduringtheheatingseason,leadingtoasavingof48,000tonsofsteam,whichisequivalenttoareductionofaround15,000tonsofcarbonemissions.TheCompany'sproductionplanthascompletedthedirectcablingcorderrenovationproject(phase2)andcanthereforesave4.8GWhofelectricity,adirectreductionof2,700tonsofcarbonemissions,onayearlybasis.
SubsidiariesCategory 1 (tons of CO2e)Category 2 (tons of CO2e)Total (tons of CO2e)Shenma Cord FabricCompany
221.98145,708.94145,930.92Nylon Chemical Co., Ltd.30,000,0001,081,00031,081,000
Greenhouse Gas Emissions Statistics
Indicators & ObjectivesTohaveamoreexhaustiveunderstandingofthecompany'scarbonemissions,ShenmaCorporationorganizedeachsubsidiarytocheckontheircarbonemissions,whichcoveredalltheproductionunitsofthecompany;andinvitedSGSTechnicalServicestoconductaninternalauditofthecarbonemissionsdata.Wehavecarriedoutcarbonchecksonmajoremitterswithreferencetothegreenhousegasaccountingsystem,GB/T32150-2015,ISO14064andotherstandards,withthefollowingdataresults.
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Use of Renewable EnergiesThroughself-developmentorpurchase,theCompanyisactivelypromotingtheefficientuseofrenewableenergy,suchassolarandwindpower,tosubstitutetraditionalfossilfuels,reducetheburdenontheenvironment,andachievethewidespreaduseofcleanenergy.
Case | Energy Saving and Carbon Reduction Measures by Shenma Engineering Plastic Co.,Ltd.Single Pump Operation for Single Thermal Oil Heater at Power StationsWeexercisethestrategyofsingle-pumpoperationforsinglethermaloilheateratthepowerstation,andadjusttheheatingloadofthethermaloilheaterandthedeliveryefficiencyofthepumpsinafinewaytoensurethatonlythenecessarynumberofpumpsareusedtomatchthecurrentdemandforthermaloil,thusavoidingoverheatingandineffectivedelivery,significantlyreducingtheenergyconsumptionandoperationcosts,andrealizingthegoalofenergysavingandefficiency.Recycling of Liquid Ring Water for PolymerizerVacuum PumpsIntheproductionofthepolymerizers,wehaveimplementedastrategytorecycleandreusetheliquidringwaterofthevacuumpump.Thisinnovativeapproachnotonlysignificantlyreducesthedirectconsumptionofcleanwaterresourcesinvacuumpumpingoperations,butalsoimprovesoverallenergyefficiencybyoptimizingwaterresourceallocation.Withadvancedtreatmenttechnology,wecanensurethequalityofthereusedliquidringwater,thusmaintainingtheefficientandstableoperationofthevacuumpumps,furtherreducingenergyconsumptionandcostscausedbyfrequentwaterreplacement,andsavingboththeenergyandthewaterresources.
Building Photovoltaic Power
Stations
nInOctober2023,ShenmaCordFabricCompanybegantopushfortheconstructionofa5MWdistributedphotovoltaicpowerstation.ByJune2024,theconstructionofthe5MWPVpowerstationhasbeencompleted,readytogetconnectedtothepowergridandgenerateelectricity.Thusfar,theconstructorhassubmittedthegridconnectionplantorelevantauthoritiesforreview.Onceapproved,thestationwillbeconnectedtothegridassoonaspossibletolowerthecostofelectricityuse.nIn2017,ShenmaCordFabricDevelopmentCo.,Ltd.begantousegreenphotovoltaicpower.By2024,ithas
developedaPVpowergenerationcapacityof34MWandused58GWhofelectricityfromPVpowerstationsonacumulativebasis.In2023,ShenmaCordFabricDevelopmentCo.,Ltd.usedtheremainingunusedroof,openspace,parkinglots,pipecorridors,wallsandotherareastobuild22MWphotovoltaicpowerplants.Wecoordinatedtospeeduptheconstruction,improvedtheaccesssolutions,andstrivedtocompletetheprojectassoonaspossibletoensurethestableoperationofthesystem.
nThedistributedPVpowerplantwithatotalinstalledcapacityof1.13MWhinvestedbyNylonChemicalCo.,Ltd.was
successfullyputintooperationattheendof2023,withanannualpowergenerationcapacityofabout1.1GWh,whichcanreduceabout140tceperyear,whichtranslatesintoreducing600tonsofCO2e.nShenmaEngineering Plastics Technology Development Co., Ltd. has built PV power generation project of cleanenergy in 2023, with an annual capacity of 550 MWh.
Green Power Trading
nShenmaHuawei Plastic Co., Ltd. conducted market-based power procurement in 2023, with about 1.45GWhof the electricity used every year being green power.
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Case | Energy Saving and Carbon Reduction Measures by ShenmaCord FabricDevelopment Co., Ltd.
ShenmaCordFabricDevelopmentCo.,Ltd.efficientlyrecycled,utilizedandtransformedthewasteheatfromtherawsilkproductionprocess,whichhasachievedremarkableresults.Bymakingfulluseofthiswasteheatduringthenon-heatingseason,ShenmaCordFabricDevelopmentCo.,Ltd.managedtodecommissionthesteamsystem,reducingupto32,000tonsofsteamconsumption.Thisinitiativenotonlysignificantlyreducesenergyconsumption,butalsoreducescarbonemissionsfromsteamproduction,contributingsignificantlytothegreenandsustainabledevelopmentofCordFabricDevelopment.
Case | Energy Saving and Carbon Reduction Measures by Nylon Chemical Co., Ltd.
(1)In2023,NylonChemicalCo.,Ltd.carriedoutenergy-savingmodificationofvacuumpumpofthe
KAoilplanttoimproveefficiency,reducesteamconsumptionby16,000tons/year,andsave2,000tonsofstandardcoalperyear,whichtranslatesintoreducing7,000tonsofCO2eperyear.
(2)NylonChemicalCo.,Ltd.hascarriedoutenergy-savingupgradestotheC17401Bsteam-type
lithiumbromideunitatNo.2refrigerationstation.Thisprojectwasputintooperationattheendof2023,saving8,000tonsofsteamperyearand8milliontonsofstandardcoalperyear,whichtranslatesintoaCO2reductionof2,000tons/year.
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SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
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Safety and EmployeeManagementIntermsofsafetyandemployeemanagement,ShenmaCorporationalwaysadherestotheconceptof“people-oriented,safetyfirst”,andregardsthesafetyandhealthofemployeesasthemostvaluableasset.Thecompanyisconvincedthatonlybyensuringthesafetyofeveryemployeecanweguaranteethestableoperationandsustainabledevelopmentofacorporation.In2023,ShenmaCorporationcontinuedtobuilduponoursafetymanagementsystemandplacesafetyasoneofthetopprioritiesofcorporatemanagement.Thecompanymadeplanstoenhancethesafetyawarenessandself-protectioncapabilitiesofouremployeesbystrengtheningsafetyeducationandtraining;atthesametime,wehaveoptimizedthesafetymanagementprocessandimprovedthesafetymanagementsystemtoensurethatallsafetymeasuresareeffectivelyimplemented.Inaddition,thecompanyincreasedinvestmentsinsafetyfacilitiesandintroducedadvancedsafetymonitoringtechnologytoenhanceourcapabilitiesinaccidentpreventionandemergencyresponse.Key ESG PerformancenIn2023,thecompanydidnothaveanyincidentsoflabordiscrimination,harassment,childlabor,forcedlaborandotherviolationstothelaborhumanrights.
nIn2023,ShenmaCorporationtrainedatotalof10,180people,
including7,594peopleinsafetytraining,1,643peopleinskillstraining,447peopleincontinuingeducation,and496peopleinideologicalandpoliticaleducationaltraining.Wealsoorganizedmorethan10thematictrainingscoveringintellectualpropertyrights,thespiritofcontract,psychologicalcounseling,sustainabledevelopment,andorientationforcollegegraduates.
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ShenmaCorporation,withouractions,supportstheinternationallyrecognizednormsandtenetsrelatedtorespectforhumanrights,suchastheUNInternationalBillofHumanRightsandtheDeclarationonFundamentalPrinciplesandRightsatWork.AndwealsostrictlyabidebytheLaborLawofthePeople'sRepublicofChina,theLawofthePeople'sRepublicofChinaonLaborContracts,theSocialInsuranceLaw,LaborDisputeMediationandArbitrationLawandotherlawsandregulationswhereweoperate,andweadheretotheconceptsofsafeguardingtherightsandinterestsofouremployees.In2023,therewerenolabor-relatedviolations.Allregularemployeessignedlaborcontracts,andthelaborcontractsigningratewas100%.
Equality and Employment
Human Rights Protection System
?Wefirmlyresistanydisregardforandabuseofhumanrights,andanyformofdiscriminationagainstnationality,gender,
age,race,religion,pregnancyanddisabilityinrecruitment,promotion,trainingandremuneration,andfollowtheprincipleofequalconsultationandmutualbenefit,sothatwecanworktogetherwithouremployeestoachievecommondevelopment.Duringthereportperiod,weupdatedandissuedtheLaborEmploymentManagementMeasuresofShenmaIndustrialCo.,Ltd.(forTrialImplementation)tofurtherstandardizetheemploymentprocessandencouragethecareerdevelopmentofouremployees.
Policies
ManagementMeasures
?If any employee experiences any harassment due to gender, sexual orientation, race, national origin, age,religion, disability, marital status or other inappropriate considerations, or if the employee believes that heor she has been subjected to unlawful discriminatory treatment, the employee should immediately reportthe situation to his or her supervisor or to the Human Resources Department or Risk Control Departmentof the subsidiaries. All instances of harassment should be reported, including those occurring outside theoffice or outside office hours.
Employment in ComplianceShenmaCorporationstrictlyabidesbynationallawsandregulations,keepsstrictcontrolovertheconditionsandrequirementsforemployment,andsignswrittenlaborcontractswithemployeesinaccordancewiththeprinciplesof“equality,voluntarinessandmutualconsent”.Thetextsofthecontractshavebeenapprovedoroverseenbythelocallaborauthorities,coveringthedurationofthelaborcontract,thecontentandlocationofthejobs,workinghoursandpoliciesforpaidtimeoffandvacations,thelaborremunerationprovisions,andtheprovisionsonlaborprotectionandprotectionagainstoccupationalhazards,etc.,whichareallinlinewiththemandatoryrequirementsofthelaborcontractregulations.Inaddition,thecompanyalsohasformulatedacorrespondinglabormanagementsystemforemployeestoensurethatlaborcontractsarestrictlyimplementedandemployees'rightsandinterestsareprotected.
In2023,thecompanydidnothaveanyincidentsoflabordiscrimination,harassment,childlabor,forcedlaborandotherviolationstothelaborhumanrights.
Human Rights ProtectionShenmaCorporationadherestothedevelopmentconceptof“corporatedevelopmentshouldbesharedbyemployees”,andstrictlyabidesbytheInternationalCovenantonEconomic,SocialandCulturalRights,theInternationalCovenantonCivilandPoliticalRights,Discrimination(EmploymentandOccupation)Convention,theInternationalConventionontheEliminationofAllFormsofRacialDiscrimination,andotherinternationalhumanrightsconventionsandnationalhumanrightsplansofactionthathavebeenratifiedorsignedbytheChinesegovernment.WealsostrictlyfollowtheLaborLawofthePeople'sRepublicofChina,theLaborContractLawofthePeople'sRepublicofChina,theCivilProcedureLawofthePeople'sRepublicofChina,theCivilCodeofthePeople'sRepublicofChina,theLawofthePeople'sRepublicofChinaontheProtectionofMinors,theLawofthePeople'sRepublicofChinaontheProtectionofRightsandInterestsofWomenandtheLawofthePeople'sRepublicofChinaontheProtectionofPersonswithDisabilitiesandotherrelevantdomesticlaws,aswellasrelevantlaws,regulations,andrulesofthecountriesinwhichweoperate.Apartfromtheabove,wealsocomplywiththeUniversalDeclarationofHumanRights,theUNGlobalCompact'sTenPrinciplesandtheNationalHumanRightsActionPlanfor2021-2025.Wefullyrespectandprotecttherightsandinterestsofouremployees,suchastherighttoparticipateandtherighttosupervise.Werejectanybehaviorthatdisregardsandtramplesonhumanrights,treatemployeesofdifferentgenders,regions,races,andreligiousbeliefsfairlyandimpartially,andcontinuetobuildadiversifiedandequalworkforce.Atthesametime,wemakesustainedeffortstosafeguardthesafetyandhealthofouremployeesinacommitmenttocreatingasafeandhealthyworkingenvironmentforouremployees.
Recruitment and Employment Termination
●Recruitment:ShenmaCorporationandallthesubsidiariesformulateanequalrecruitmentpolicy,suchastheRecruitment
ManagementMeasuresforCollegeGraduatesofShenmaCordFabricCompany,adheringtotheprincipleoffairrecruitment,equalcompetition,merit-basedemployment,andmakingthepersonnelemploymentmechanismmoreprofessionalandreasonable.
●Employmenttermination:inaccordancewiththeLaborContractLaw,LaborDisputeMediationandArbitrationLawandother
lawsandregulations,ShenmaCorporationandthesubsidiariesformulatestandardizedterminationpolicies,suchastheProvisionsonHandlingEmployeeViolationsofShenmaCordFabricCompany,andterminateemploymentinaccordancewithrelevantregulationsandrules.
Remuneration and Promotion
Working Hours and Vacation
●Remuneration:weadheretotheprincipleofequalpayforequalwork.Thecompanyandallthesubsidiaries
haveintroducedremunerationpoliciesaccordingtotheemployees'positions,abilityandperformance,andcompetenceinthetalentmarket,suchastheRemunerationManagementSystemofShenmaCordFabricCompany,TrialSchemeofEmployeePerformanceEvaluation,andCompany-widePerformanceEvaluationSchemeofShenmaEngineeringPlasticCo.,Ltd.,andwehavedesignedranksmatchingthepositionsandthecorrespondingremunerationstructuretoprovidetheemployeeswithmarket-competitivesalaryandwages.
●Promotion:promotionisopentoallemployeesandisbasedontheirdailyperformanceandbusinessknowledge
andskills,etc.toensurethatoutstandingtalentscangetdevelopmentandincentives.
●Thecompanyandthesubsidiarieshaveformulatedattendanceregulations,suchastheFaceRecognitionAttendance
ManagementRegulationsofShenmaCordFabricCompany(Trial)andtheSickLeaveManagementRegulationsofShenmaCordFabricCompany,coveringannualleave,sickleave,maternityleave,etc.toensurethattheemployeesenjoylegitimatepaidtimeoffforrestandvacation.Alltheseregulationshavebeeneffectivelyimplemented.
Employment System in Compliance
Key Performance
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Toprovidecareforandsafeguardthehealthrightsandinterestsoffemalestaff,thelaborunionofNylonChemicalCompanyorganizeda15-dayhealthcheckupforfemalestaff,and678femalestaffunderwentspecialhealthcheckupsbybatches.Intermsofcheckups,thelaborunioncarefullyselectedthecheckupitemstoensurethatourstaffcouldreceiveallthenecessarycheckups,whichcoveredcolorDopplerultrasoundformammaryglandsandgynecology,cervicalTCTscreening,etc.
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Care for Female EmployeesShenmaCorporationattachesimportancetotheprotectionoffemaleemployees,andsetsupafemaleworkers'committeeinthelaboruniontoprovidespecialcareforfemaleemployees.Weprovidespecialphysicalexaminationforfemaleemployeeseveryyear,activelyimplementtheprovisionsofmaternityandbreastfeedingleave,setupbreastfeedingroomforfemaleemployees,careforthephysicalandmentalhealthoffemaleemployees,andincludethespecialprotectionforfemalelaborinthecollectivecontract.WestrictlyimplementtheSpecialProvisionsonLaborProtectionforFemaleWorkersandEmployeesinHenanProvince,grantingsanitaryfeesforspeciallaborprotectionduringmenstruationandspecialhealthcheck-upsforfemaleworkersandemployees.ThecompanyandthesubsidiariesrigorouslyimplementtheprovisionsofArticles25and32inChapter5oftheRegulationsonPopulationandFamilyPlanningofHenanProvince.Beforethechildofanemployeereachestheageofthree,wewillgranttendaysofparentalleaveperyeartoeachofthespouses.Afterreachingtheageof60,childrenwillbegrantednursingleaveofuptoatotalof20daysperyearduringhospitalization.
Equality and Diversity
Ourrecruitmentisacombinationofopenrecruitmentandcampusrecruitment,attractingthebesttalentswithourphilosophy,culture,achievementsandopportunities,aswellasourpoliciesandbenefits.Duringrecruitmentandhiring,weplaceemphasisonthequality,potential,personalityandacademicqualifications,andhireemployeesinaccordancewiththeprincipleof“openness,fairness,impartialityandmeritocracy”.Werecruitoutstandingcollegegraduatesthroughaseriesofprocedures,includingthereleaseoftherecruitmentplan,CVsubmission,CVscreening,writtentests,interviews,physicalexaminations,signingofinternshipagreements,andultimately,signingofcontracts.AsofDecember31,2023,ourtotalnumberofemployeesreached10,164,ofwhichatotalof3,214,or31.6%,werewomen.Ouremploymentcanbecategorizedintocontractemployees,returningretirees,interns,part-timers,andoutsourcedemployees.
Total Number of Active
Employees
Case | Special Health Checkups for Female Employees at Nylon Chemical Co., Ltd.
TherecruitmentofcollegegraduatesforCordFabricCompanystrictlyimplementstherelevantregulationsandtheprincipleof“sevenunification”,includingunifiedreleaseofrecruitmentnotices,unifiedregistrationthroughtherecruitmentplatform,organizationofpublicexaminationwithunifiedstandards,unifiedallocationtotheemployeraccordingtotheplan,unifiedorganizationofeducationandtrainingbeforeonboarding,unifiedmanagementduringtheinternshipperiod,andunifiedrecruitmentprocedures.
Case | Unified Recruitment of College Graduates for ShenmaCord Fabric Company
Accordingtotheactualneedsofdevelopment,NylonChemicalCo.,Ltd.hasformulatedthestrategicobjectivesandactionplansforhumanresourcesinthenearandlongterm.Accordingtotherequirements,NylonChemicalhasformulatedtherecruitmentplantorecruitandtraingraduateswithbachelor'sdegreeinrelatedmajorsfordifferentpositions,soastomeettheactualmanpowerneedsofproductionandprojects.
Case | Annual Recruitment Plan Developed by Nylon Chemical Co., Ltd.
Composition of All ActiveEmployees in 2023
| 10,358 10,278 10,164 2021年2022年2023年 | 4,231 4,043 2,878 2021年2022年2023年 |
Number of Active Employees at
Parent Company
Employee Composition of theParent Company in 2023
| 75%2%10%2%11%生产人员销售人员技术人员财务人员行政人员 | 2%28%33%37%硕士及以上本科专科高中及以下 |
70%
30%
男性女性
70%
30%
男性女性
3%
33%64%
研究生及以上本科专科
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SHENMA INDUSTRIAL CO., LTD.
ProductionstaffSalesstaffTechnicalstaffFinancialstaffAdministrativestaff
MaleFemale
BachelorDiplomaofjuniorcollegeMaster'sdegreeorabove
BachelorDiplomaofjuniorcollegeMaster'sdegreeoraboveHighschoolandbelow
Case | Free Books for Employees at Nylon Chemical Co., Ltd.
ShenmaCorporationiscommittedtoenhancingthewell-beingoftheemployeesbyprovidingcomprehensivesocialinsuranceforregularemployees,includingpensioninsurance,medicalinsurance,work-relatedinjuryinsurance,maternityinsuranceandunemploymentinsurance.Employeesareprovidedwithprotectionandbenefitsinthefaceofvariouskindsofrisksanddifficulties.InternsandreturningretiredemployeesarealsoincludedinourEmployeeSafetyandBenefitsProgram,andenjoyaccidentalcommercialinsurancecoverageprovidedbythecompany.Ifanaccidentoccursinthecourseofworkorunderspecialcircumstances,employeeswillreceiveappropriatecompensationandcare.Webelievethatthehappinessandsatisfactionofouremployeeswillcontinuetogrowinthefuture,thuscontributingpositivelytothedevelopmentofthecompanyandthecohesionoftheteam.
Employee Welfare and Care
Employee Welfare
ShenmaCorporationpaysemployees'remunerationinfullandontimeeverymonth,establishesandcontinuouslyimprovestheemployeeremunerationandwelfaresystem,andinaccordancewiththerelevantnationalandlocalpoliciesandregulations,payssocialinsurancecoveringpension,medicalcare(includingmaternity),work-relatedinjuries,unemployment,etc.,andhousingprovidentfundinfullandontimeforemployees.Atthesametime,weprovideemployeeswithshuttlebuses,staffcanteens,honoraryconvalescenceandrecuperation,financialhardshiprelief,supplementarymedicalcare,employeemutualaidactivities,aswellasMid-AutumnFestivalandSpringFestivalbenefits.
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Remuneration System
ShenmaCorporationbringstheroleofremunerationintofullplay,deepensthereformofthewagedistributionsystem,continuouslyoptimizestheimplementationplanofperformanceevaluation,inanefforttostimulatetheendogenousimpetusforhigh-qualityandhigh-efficiencydevelopment.In2023,weformulatedtheWageManagementMeasuresofShenmaIndustrialCo.,Ltd.andtheJointManagementMeasuresonWageofShenmaIndustrialCo.,Ltd.in2023.Inaccordancewiththestrategyofpromotingcorporatehigh-qualitydevelopmentandthestrategyofreasonabledistributionofremuneration,thetotalwagebaseisreasonablydeterminedalongwiththeevaluationresults,takingintoaccountthecorporation'sannualproductionandoperationtargets,economicperformance,laborefficiency,thelevelofemployees'wages,thematchingofwagedistributionwithlaborqualityandefficiency,affordability,andthewageguidelineissuedbythegovernmentalagencies.ShenmaCorporationbringstheroleofremunerationintofullplay,deepensthereformofthewagedistributionsystem,continuouslyoptimizestheimplementationplanofperformanceevaluation,inanefforttostimulatetheendogenousimpetusforhigh-qualityandhigh-efficiencydevelopment.Wehaveestablishedanincomedistributionsystembasedonquality,efficiencyandeffectiveness,improvedthemechanismwhereincentivescanadjustthewagedistribution,andrealizedtheprinciplesof“morework,morepay;nowork,nopay”and“tiltingtheincometowardsthekeytechnicalpositions,aswellasthepositionsinvolvinghardwork,dirtyenvironment,wearinessanddanger,andtiltingtheincometowardstheemployeeswhohavehigh-levelbusinessandtechnicalskills,strongperformanceability,andgreatcontribution”,andreasonablyadjustedthewagedistributionamongvarioustypesofpersonneltobetterreflecttheorientationandincentiveeffectsofourremunerationandbenefits.
Inordertohelpthestafftostriveformoreadvancementintheirwork,wehavebeencarryingoutreadingandself-studyactivitiestoimprovetheoverallqualityoftheworkforce.Inpositiveresponsetothelaborunion'scallformorereadingandbetterreading,wehaveadvocatedthecampaignofreadingforall,mobilizedtheenthusiasmofemployeestoread,enhancedtheirculturalliteracy,andthuspromotedhigh-qualitycorporatedevelopment.ThelaunchingceremonyofthereadingcampaignwasheldonApril23,2023.WespentRMB7,683.98tobuyanddistributeatotalof203booksto21grassrootsunits.Multi-dimensionalRemuneration
Incentives
Assessments based onProduction, Quality, Safety, etc.
Combination of PerformanceEvaluation and Basic Salary
Somesubsidiarieshaveimplementedadistributionpolicythatparallelsremunerationincentivesandnon-remunerationincentives,andhavebuiltamulti-levelremunerationdistributionsystembasedonmulti-dimensionalfactorssuchasthevalueoftheposition,thelevelofcompetence,andthecontributionofperformance.Theyhavealsobenchmarkedtheremunerationwiththemarkettoimprovetheremunerationcompetitivenesstoattractkeytalents.
Theremunerationpoliciesofcertainsubsidiariesareprimarilybasedontheassessmentsofproduction,quality,safetyandon-sitemanagementwhenevaluatingandallocatingremunerationtoemployees.Certainsubsidiariesadoptthe“fixedsalary+performanceevaluationsystem”forremuneration,whichcombinesperformanceevaluationwithbasicsalary,whileemphasizinghierarchicalmanagementandperformanceevaluationforallstaff.
Case | Celebrative Activities for Frontline Workers by Nylon Chemical Co., Ltd
DuringtraditionalfestivalssuchasDragonBoatFestivalandMid-AutumnFestival,thelaborunionofNylonChemicalCo.,Ltd.wouldcarryoutcelebrativeactivitiesforthefront-linestaffstillworkingonholidays,andsendthemfestivegreetingsandpresentssuchasricedumplings,mooncakes,pomegranatesandcantaloupes.
Medical and Health Care
Housing andTransportation Subsidies
Paid Leave and Annual
Leave
Holiday & BirthdayBenefits
Retirement & Pension
Team Building and Social
ActivitiesOn traditional holidays or on specificholidays of the company, we will sendholiday bonuses or gifts to ouremployees to convey the company'sappreciation for their hard work.
Some subsidiaries provide pensioninsurance for employees to make surethat they will be able to enjoy theappropriate pension benefits afterretirement.
We also organize regular team buildingactivities, outdoor development, potlucks,annual meetings, etc. to enhancecommunication and collaboration amongemployees and foster team cohesion.
The company purchases medicalinsurance for the employees tocover basic medical expenses.
In order to alleviate the financialpressure on employees in terms ofhousing, some subsidiaries wouldprovide housing subsidies or rentalsubsidies for employees.
We offer paid annual leave to ouremployees in accordance with nationallaws and regulations, so that they canhave a full rest after their busy workinghours.
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Internal CommunicationsShenmaCorporationestablishesandcontinuouslyimprovesrulesandregulationsoncollectiveconsultation,staffrepresentativeassemblyaswellasopenanddemocraticmanagement;formulatesworkplansfordemocraticmanagement;ensuresthelegitimaterightsandinterestsofemployees,suchastherighttoknow,therighttoparticipateandtherighttosupervise;andencouragesemployeestofullyparticipateinthedemocraticmanagementsoastoenableeachandeveryemployeetomakecontributionstothedevelopmentofthecompany.
Nylon Chemical Co.,
Ltd.
Laborunion:allemployeesareeligibletojoinlaborunion,andthecompanyrespectsthewishesofemployeestojointhelaborunion.Laborunionhasavarietyofcommunicationchannelsthroughwhichemployeescanraiseissuesofimmediateconcern.Staffrepresentativeassembly:thecompanyholdsstaffrepresentativeassemblieseveryyeartoguaranteetheemployees'rightstoknow,participate,expressandsupervise,toallowemployeerepresentativestofullyplaytheirrolesindemocraticmanagementandsupervision,andtosafeguardthelegitimaterightsandinterestsoftheemployees.Wehaveimprovedandperfectedthemechanismofthestaffrepresentativeassembly,andhaveconsideredandadopted11draftresolutionsonsalarysubsidies,applicationforoutstandingemployeeawards,systemrevisions,performanceevaluationprograms,andsoon.Employeecounselingsessions:toconducttheemployeecounselingsessions,wewouldholdontothe“employee-oriented”managementconcept,listentotheopinions,suggestionsandvoicesoftheemployees,reinforcethecommunicationbetweenthecompanyandtheemployees,understandtheneedsoftheemployees,andtrytosolvetheirpracticalproblems.RaiseStaff'sAwarenessofDemocraticParticipation.ShenmaPolycarbonateMaterialCo., Ltd.Byestablishingthestaffrepresentativeassemblysystem,wemakesuretoprotectthelegitimaterightsandinterestsofemployees,suchastherighttoknow,therighttoparticipateandtherighttosupervise,andencouragesemployeestofullyengageinthedemocraticmanagementoftheenterprise,sothateveryemployeecancontributetothedevelopmentofthecompany.Atthesametime,theBoardofDirectorsincludesemployeedirectorstoperformtheirdutiesfortheemployeesinaccordancewiththelaw.Everyyear,wewouldconvenethestaffrepresentativesassemblytodiscussandreviewthemotionssubmittedbythestaffrepresentativesandaddressthemonebyone.
Management System and Policy
Thecompanytakesanactiveroleinorganizingandcarryingoutcollectiveconsultation.Onthebasisofthestaffrepresentatives'opinionsextensivelysolicited,thecompanywouldstrengthenthecommunicationbetweenthelaborunionandtheadministrativedepartmentstoletthemdiscusstogethertherelevantclausesofcollectivescontractandspecialcontracts.Onceapproved,thesecontractswouldbesignedbyrepresentativesofthelaborunionsideandrepresentativesoftheadministrativeside,soastomakethecontractstrulyreflecttheneedsoftheemployeesandsafeguardtherightsandinterestsoftheemployees.Thestaffrepresentativeassemblyisoneofthemostimportantchannelsofcommunicationbetweenthecompanyandtheemployees.ThecompanyholdsstaffrepresentativeassemblyonaregularbasistoorganizestaffrepresentativestomakeproposalsoncorporateEHS,environmentalprotection,corporatemanagement,productionandoperation,remunerationdistribution,staffeducationandwelfare,etc.Theseproposalsarethencollectedandfedbackbytheresponsibledepartments.Atthesametime,thecompanyestablishesaperfectclosed-loopfeedbackmechanismfortheprocessingofsuchproposals,andgivestimelywrittenfeedbacktorespondandgiveexplanationstotheproposalsthathavenotbeenofficiallyfiledforrecordandimplementation.Thecompanyhasalwaysbeencommittedtobuildinganopenworkingenvironment,establishinglaborunionandlabordisputemediationcommitteeandholdingstaffrepresentativeassemblyonaregularbasis.Duringthereportperiod,ourlaborunionhasorganizedaseriesofevents,suchastalkswithfemaleworkers,togainanin-depthunderstandingofthecollaborativeproblemsencounteredbyouremployeesinthecourseofourbusinessandtocollectthevoicesofouremployees,soastocreateabetterenvironmentforthepersonaldevelopmentandtoenhancethesenseofidentityandbelonging.ShenmaCorporationvaluesemployeefeedback.Inordertofindourownshortcomingsandbetterservethestaff,weregularlyconductonlineandofflineemployeesatisfactionsurveys.Basedonthesurveyresults,wewouldinvestigate,verifyandrectifytheproblems,monitortheproblemsregularlythroughvisitsandquestionnaires,listentothestaff'sneeds,collecttheiropinionsandcomments,keepthestaff'sconcernsandaspirationsinourheart,andtryourbesttoimproveourselvesandhelpthestaff.Atthesametime,thecompany'slaborunionandlaborcommitteeactivelylistentothestaff'svoices,collectopinionsandsuggestions,andstrivetosolvetheproblemsencounteredbythestaff,offercomforttotheworkersinhardship,andmaintaintheGoldenAutumnSchoolAidprogrameveryyearsothateveryoneofthestaffcanaffordtoseeadoctor,andeveryoneofthestaff'schildrencanaffordtogotoschool.
Internal Communications and Performance Evaluation
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Key Performance
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ShenmaCord FabricDevelopment Co., Ltd.Thecompanyhascreatedastaffrepresentativeassembly,alaborunionaswellascommitteesthatconsistofalifestylecommittee,astaffsupportcommittee,andalaborcommittee.Allmajordecisionsarevotedintoeffectviathestaffrepresentativeassembly.Ifemployeesandthelaborunionfindanyviolationsofstateregulations,theycanfileacomplaintorengageinmediation.Inaddition,thecompanywouldpublicizethethreelevelsofmanagement,i.e.companylevel,sub-factorylevelandteamlevel.Staffincomeandattendancewouldbepublicized,andtheemployeeswouldactivelyengageinthedemocraticmanagementandparticipateinthestaffrepresentativeassembly.
ShenmaCordFabric Company
Laborunion:allemployeesareeligibletojoinlaborunion,andthecompanyrespectsthewishesofemployeestojointhelaborunion.ThelaborunionoperatesanERPworkshopwhereemployeescanraiseissuesofimmediateconcerntothem.Staffrepresentativeassembly:thecompanyholdsstaffrepresentativeassemblieseveryyeartoguaranteetheemployees'rightstoknow,participate,expressandsupervise,toallowemployeerepresentativestofullyplaytheirrolesindemocraticmanagementandsupervision,andtosafeguardthelegitimaterightsandinterestsoftheemployees.9596
In2023,ShenmaCorporationconductedanannualemployeesatisfactionsurvey,aimingtogainadeeperunderstandingofemployees'perceptionsandfeelingsaboutvariousaspectsofthecompany.Withthesefeedbacks,wewouldbeabletooptimizeourmanagementstrategiesandboostemployees'dedicationandoverallworkexperience.Thenumberofemployeesthatshouldjointhissurveywas2,044,andthenumberofemployeeswhoactuallyfilledoutthequestionnaireswas1,725.Theparticipationratewas
84.4%.
Basedontheanalysisofthesurvey,theemployeededicationin2023showsaprettyhealthytrend.Fromvariousorganizationalperspectives,employeesinmostorganizationsarerelativelysatisfiedwiththecompany'sworkenvironment,remunerationandbenefits,careerdevelopment,andteamwork.Comparedonaglobalscale,ShenmaCorporation'semployeededicationisinthemiddletouppertier,reflectingtheexcellentleadershipofthecompany'smanagementandthepositiveinfluenceofthecompany'sculture.
ShenmaCorporationcloselyfollowsthe"High-QualityActionPlanof'CertificateforEveryonetoBuildaSkilledWorkforceinHenan'',highlightsthetwomajorprinciplesof"safety"and"quality",stressessafetyandskillenhancement,improvesthetrainingresponsibilityandmanagementsystem,promotestheeducationandtrainingdevelopment,andprovidesstrongtalentsupporttobuildthecompanyintoahigh-qualityandmodernizedenterprise.Inordertoacceleratethecultivationofoperatorswithmultipleskillsandabilitiestofitindifferentpositions,thecompanyhascomprehensivelypromotedtheStarEmployeeEvaluationSystem,setupalearningplatformforcorporatedevelopment,supportedjobtrainingandskillcompetitions,andmotivatedstafftoengageinthehigh-skilledtalentselectionandskillcompetitions,andguidedthemajorityofthestafftogrowintheirpositions.
Employee Training andDevelopment
Training System
Employee Training
TheemployeetrainingsystemofShenmaCorporationfocuseson“safety”and“quality”,adherestothebenefit-centeredapproach,strengthenssafetyandskillimprovement,andimprovesthetrainingresponsibilityandmanagementsystem.Wehavesetthehumanresourcesdepartment(trainingdepartment)asthebusinessdepartmentinchargeofstaffeducationandtraining,withtheorganizationdepartment,publicitydepartment,laborunion,productionunits,technologyunits,safetydepartmentandotherdepartmentsassupportingdepartments,soastobuildupathree-leveltrainingmodelinvolvingthecompanylevel,thefactorylevel,andtheteamlevel.Wefocusonthetrainingofpersonnelinthe“threepositions”,teamleadersandgeneralpractitioners.Wealsoworkontrainingoperatorswithmultipleskillsandabilitiestofitindifferentpositionssothatemployeeinonepositioncanshouldermultipleresponsibilitiesandimprovetheiroverallcompetence.Weactivelypushforwardtheactionofvocationalskillelevationandcultivatehighlyskilledtalents.Atthesametime,thecompanysupportsemployees'careerplanningandprovidessufficienttrainingresourcesforemployeestorealizetheirpersonaldevelopmentvisions.Intraining,thecompanyintegrateseducationandtrainingwithemployees'careerdevelopment,createsmultipleformsoftrainingsuchasschool-enterprisecooperation,ordertraining,scenariosimulation,on-siteinstruction,etc.,andformulatescostreductionpoliciestostimulateemployeestoexpandtheirknowledge,getmorequalifications,andrealizetheirownvalue.
Training Indicators and Targets for 2023
ThesubsidiariesofShenmaCorporationhaveestablishedatrainingmanagementnetworkwiththeChairmanoftheBoardofDirectorsandtheGeneralManagerastheleaders,andwiththeheadsofeachfunctionaldepartmentaswellasthemanagersandPartysecretariesofproductionplantsastheprimaryresponsibleindividualsforemployeetraining.TheDepartmentsofOrganizationandHumanResourcesserveasthefunctionaldepartmentsforemployeetrainingandaremainlyresponsibleforthemanagementofemployeetrainingandforvocationalskilltrainingandexaminations.Thegrassrootsunitshavealsoestablishedtechnicalandtrainingadministrators.Inthisway,everylevelinthistraininghierarchycanbesupervisedtoproperlyimplementallthetraining.
Key Performance
Employee Training Policies andPrograms at a Glance
NylonChemicalCo., Ltd.
ShenmaPolycarbonateMaterialCo., Ltd.
Combinedwiththerealityofthecompany,thecompanyhasformulatedandissuedtheAnnualTrainingPlanforEmployeeEducationandTraining,andtheCorporateTrainingandEvaluationMeasures.Wehavealsoestablishedandattachedgreatimportancetoaseriesofmanagementsystemstomakesureallthesystemsareproperlyimplemented,includingManagementMeasuresforEmployeeTraining,SafetyTrainingandEducationManagementMeasures,MentorshipManagementMeasures,andManagementMeasuresforOnboarding,TransferringandCertificationExaminations.
In2023,theemployeesattendedthesafetytraining,skilltraining,continuingeducationandideologicalandpoliticaltrainingorganizedbyShenmaCorporation,socialinstitutionsandNylonChemicalCo.,Ltd.Jointlyorganizedonlineandon-sitetrainingsessionswithtraininginstitutesforsafetysupervisors,teamleadersandgeneralpractitionerstohelpthemcompletethesafetyqualificationtraining.ConductedjointtrainingwithPingdingshanQualitySupervisionBureauandPingdingshanSafetyTechnologyServiceCenterforcertificatesofspecialoperationspersonnel.Organizedtrainingfortechnicians,ideologicalandpoliticaleducationandtraining,andcontinuingeducationforprofessionalandtechnicalpersonnel.
9910099100
Henan ShenmaLong'anChemical Co.,Ltd.
Bycombiningtheoryandpractice,wereceivetransferredworkers,providetheoreticaltrainingattheindustryandtradevocationalschoolandtheZhongpingInformationCenter,andprovidethemwithprofessionalknowledgetrainingthatcombinespracticaltrainingofourchemicalengineeringcounterparts.
ShenmaCord FabricCompany
WehaveformulatedtheEmployeeTrainingManagementRegulationsforShenmaCordFabricCompanyandImplementationOpinionsonEmployeeTrainingManagementandEHSTrainingInspectionandExamination.WealsoactivelypracticedthespiritoftheHigh-QualityActionPlanof'CertificateforEveryonetoBuildaSkilledWorkforceinHenan',whichisbeinggraduallyimplementedinlinewiththeactualsituationofthecompanyandtherequirements.
9798
1. The average on-the-job staff training was no less than 40hours with a training rate ≥ 95%.
2. The corporate officers, safety management personnel, special operations personnel and special equipment
operators, team leaders, and other practitioners were 100%licensed to perform their duties.
3. The coverage of onboarding training was 100%, and 100%new employees participated in the three-level
safety training, and all transferred employees were trained and qualified for their new positions.
4. 100%professional technicians were engaged in continuing education.
In2023,ShenmaCorporationtrainedatotalof10,180people,including7,594peopleinsafetytraining,1,643peopleinskillstraining,447peopleincontinuingeducation,and496peopleinideologicalandpoliticaleducationaltraining.Wealsoorganizedmorethan10thematictrainingscoveringintellectualpropertyrights,thespiritofcontract,psychologicalcounseling,sustainabledevelopment,andorientationforcollegegraduates.In2023,thecompanyco-organizedwithresearchinstitutesadvancedtrainingworkshopsonmaterialsandchemicals,settinguppracticalcoursesonprinciplesofchemicalengineering,frontiersofmaterialsdevelopment,andrecentresearchmethodologiesofmaterials.Atthesametime,wealsoco-organizedclassesonintellectualpropertyrightstoenhanceemployees'awarenessofandknowledgeaboutintellectualpropertyrights.
Support for Professional Skills
ShenmaCorporationunderstandstheimportanceofemployees'professionalskillstothedevelopmentofthecompany,andthereforeregularlyorganizesprofessionalskillexaminations,aimingtoprovideaplatformforemployeestoshowtheirprofessionalworkingproficiency.Thecompanywouldrewardemployeeswhoforthefirsttimeobtaincertificatesofmid-leveltechnicalworker,seniortechnicalworker,technicianandseniortechnician.Ifanemployeeobtainsaskillcertificateinaccordancewiththeregulations,thenontopoftheincentivesstipulatedintheabovedocuments,theemployeetakingpartintheskilllevelrecognition(appraisal)forthefirsttimewillbefullysubsidizedfortheexaminationfee.Throughthismechanism,thecompanyisabletoaccuratelyassesstheprofessionalskilllevelofemployeesandprovideacleardirectionfortheircareerdevelopment.
Since2018,thecompanyhasbeguntoselectandrecognizetheoutstandingteamsandindividualsintrainings.TherecognitionceremonyandEHStrainingsareheldtogether,raisingtheimportanceoftrainingstothesamehighlevelasEHStrainings.TheStarEmployeeSystemsetsupdifferenttreatmentbetweenemployeesofdifferentstarratingsandservesasachannelfortheemployee'scareergrowthinordertomobilizetheemployee'smotivationandinitiative,andstrivetomaketheemployeedevelopvariousskillsandabilities.Thecustomizedtraininghelpsemployeestofilluptheskillgaps,bringingthequalityoftheworkforcetoanewlevel.Withafocusonthecustomizedtrainingandpracticalexamination,thecompanyisabletoensuretheemployeesarefullyqualifiedforthejobwhenonboardingandforthepromotionasStarEmployee,andreinforcethesafetyskillsandknowledgeoftheemployees,providingasolidsupportforthesafeandstableoperationofthecompany.
Everyyear,thecompanywouldformulateanapprenticeshiptrainingprogramfornewcollegegraduatesforaperiodof3-6months,coveringthecompany'srawsilk,weaving,dipping,power,qualityassuranceandotherrelatedprocessmodules.Everyyear,theYouthLeagueCommitteewouldorganizeandcarryoutthementorshipprogramtopromotethecompetenceimprovementofnewcollegegraduatesandyoungworkers,aimingtodevelopagroupofyoungtalentsinthecordfabricindustrywhohaveoutstandingbusinessskillsandqualitiestocontributetothebuildingthecompanyintoaworld-classenterpriseandtoensurethestablesupplyoftalents.
Employee Promotion and DevelopmentInordertoensurethattheperformanceoftheemployeescanbeevaluatedreasonably,fairlyandimpartially,thecompanyhasestablishedasetofall-employeeperformanceevaluationmechanismwithclearorientation,rationalevaluation,effectiveincentivesandstrongdiscipline.Thismechanismisbasedonemployees'positionresponsibilitiesanddailyperformance,withkeyperformanceindicators(KPIs)clearlydefinedandquantitativelyevaluatedtoensureobjectivityandfairnessoftheevaluation.Thecompany'sall-employeeperformanceevaluationcoversavarietyofareas,includingthekeypartofanemployee'sday-to-daywork,attendance,commentsfromdepartmentheads,andotheritemsthatmayraiseorlowerthescore.Thiscomprehensiveevaluationsystemensuresthatemployeesarefairlyrewardedfortheireffortsandachievements.Theresultsoftheperformanceevaluationarecloselyrelatedtotheemployees'salary,honors,promotion,etc.,whichmotivatesemployeestocontinuouslyimprovetheirworkperformanceandrealizetheircommondevelopmentgoalswiththecompany.ShenmaCorporationhassetupcorrespondingemployeeperformanceevaluationandpromotionsystemsatthesubsidiarylevel.ShenmaCordFabricCompanyformulatedtheTrialProgramforEmployeePerformanceEvaluation.TheShenmaCordFabricDevelopmentCo.,Ltd.hastheWageAccountingProcedure(Revised)andPerformanceEvaluationMeasures,andimplementsthemanagementregulationsforwagepaymentandpayswagebasedonevaluationeverymonth.ShenmaEngineeringPlasticCo.,Ltd.formulatedtheRegulationsfortheEvaluationandRecruitmentofProfessionalTechnicalandSkilledPersonnel,ImplementationRulesfortheRecognitionofSpecialTalentsbytheCorporatePartyCommittee,andPartyCommittee'sImplementationProgramfortheSelectionandAppointmentofManagersandTeamLeadersatBasicProductionUnits,toimproveanall-aroundtalentdevelopmentmechanism.
Ontheonehand,thecompanyhasasoundmulti-channelcareerdevelopmentdesign.Itconsistsof“fourtypes,threetiersandsixlevels”.First,wehavemultiplechannels.Onthebasisoftheoriginalmanagementchannel,thecompanyhasopenedthreechannelsincludingR&D,technologyandskills,andestablisheda“1+4”systemforpositionsandprofessionalposts,i.e.,theimplementationofcareerdevelopmentdesignforcross-channeltalents+managementforselectionandappointmentofmanagers,managementoftechnicaltalents,managementofskilledtalents,andmanagementofR&Dpersonnel.Westandardizetheselectionandappointmentofmanagersandthemanagementoftechnicaltalentstoachievemulti-channelgrowthandpromotionforemployees.Second,wehavemultiplelevels.Wecategorizethetalentsintothreelevels:keytalent,backbonetalentandassistanttalent,i.e.:threemajorcategoriesofB,CandD,whicharefurtherclassifiedintosixlevels:B1,B2,C1,C2,C3andD1.Thismulti-channelcareer-developmentsystemisestablishedwithclearcategories,straightroutes,clearhierarchyandorderlycompetition,whichwillstimulatethevitalityofinnovationandcreativity,andpromotethefulluseoftalentsandthebestuseoftalents.Ontheotherhand,thecompanyinnovatestheselection,appointmentandmanagementofCategoryDassistanttalents.First,weselectandappointassistanttalentswithstrictprocedures.Consideringtheactualsituationofthecompany,weconstantlyimproveandoptimizethequalificationsfortheselectionofassistanttalents,strictlyimplementtheselectionandappointmentsystemof“threerecommendationsandthreeexaminations”,andappointassistanttalentsthroughopen,fairandimpartialprocedures,soastomakesureweareappointingtheoutstandingtalentsthatarepoliticallytrustworthy,competentatwork,toughinstyle,trustworthytothepublic,ambitious,capable,andproductive.Weaimtoformagoodselectionandrecruitmentmechanismthatemphasizesonperformance,practice,moralcharacterandreputation.Second,wehavebuiltarecruitmentandexitmechanismforassistanttalents.Wehavesetupanappointmentsystemforassistanttalents,specifyingathree-yearappointmenttime,automaticterminationuponexpiration,theneedtore-competeforthepostaftertermination,andautomaticterminationofassistanttalents5yearsbeforetheyreachthestatutoryretirementage.Wekeepstimulatingthevitalityandcompetitivenessoftheassistanttalentpoolwithavarietyofmeasures.Third,wehavestrengthenedthesupervisionandassessmentofassistanttalents.Themanagementandevaluationforassistanttalentsadoptsacombinationofannualevaluationandday-to-daymanagement.Theday-to-daymanagementisconductedunderadynamicmanagementsystemandaperformanceevaluationsystem,andtheannualevaluationisconductedinconjunctionwiththeannualevaluationofmiddle-levelmanagers.Weemphasizetheapplicationofevaluationresults,andtaketheevaluationresultsasanimportantbasisforhonorawarding,promotion,andeconomicbenefits.Inrecentyears,15outstandingyoungtalentsofthepost-80andpost-90generationswhohaveperformedwellintheevaluationhavesuccessivelytakenupthepositionsofmiddle-levelmanagers,furtheroptimizingthemanagementstructure.
Case | 2023 Training Case of Shenma Cord Fabric Company
Case | 2023 Training Case of Nylon Chemical Co., Ltd
Case | Promotion System of Nylon Chemical Co., Ltd
10110210110299100
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
Talent Retention
ShenmaCorporationattachesgreatimportancetotheriskmanagementofhumanresources,buildsharmoniouslaborrelations,promotesthestrategyof“DevelopingaStrongerEnterprisewithTalents”,strengthensthemanagementofcoretalents,expandsthespaceforthedevelopmentoftalents,establishesfourpromotionchannelsofmanagement,expertise,R&D,andskills,carriesoutaccurateandeffectiveincentives,andcreatesagoodecologyofrespecting,loving,andengagingtalents.Allthesemeasureshaveeffectivelyminimizedthelossoftalents.Inrecentyears,thecompanyhashadaverylowturnoverrateandtheproblemoftalentlosshasbeeneffectivelymitigated.
103104
?Foremployeeswhohaveatendencytoresign,wewouldcommunicateactivelywiththemtounderstandtheirrequestsandtryour
besttomakethemstay.Themanagementpersonnelandcarersofthefactoryworkshopwillcommunicatewiththeemployeesintheformofdirectinterviewsandpre-resignationcommunicationmeetings,inordertoprotecttheprivacyoftheemployeesandatthesametimetounderstandthereasonsfortheemployees'departure,soastoanswertheemployees'demandsandtoreducetalentloss.?Weattachimportancetotheindividualneedsofemployeesandtheproductionneedsofdifferentunits,openupsuitablemobility
channelsforemployeesinsearchofanewposition,andactivelycoordinatethebalanceofemploymentamongdifferentunitstoimproveproductionefficiency.?Employeesarerecruitedthroughonlineandofflinechannels,andoutstandingtalentsareofferedsupportintermsofworkenvironment,remunerationandbenefits,developmentandpromotion,andsoon.?AccordingtoShenmaCorporation'sprovisions,wewouldtimelypaythesalaryandone-timesubsidyforsettling-inexpensesto
graduatesofuniversitiesunderthe“DoubleFirst-ClassInitiative”.
Measures to Mitigate Talent Loss
Inordertoensurethathigh-qualityyoungtalentscanjoin,stayandperformwell,thePartycommitteeofShenmaNylonChemicalCo.,Ltd.hasdevelopedandimplementedthe“SparkPlan”foroutstandingyoungtalents.Throughaseriesofmeasuressuchas“continuousreplenishment,seedlingcultivation,boldemployment,strictmanagementalongwithgeneroussupport,andenhancedincentives”,wehavecomprehensivelyimprovedthepoliticalqualityandcompetenceofyoungtalents.Focusingonthenewrequirementsoftheneweraofhigh-qualitytransformationanddevelopment,thecompanyhasdevelopedaloyal,honestandresponsibleteamofhigh-qualityandprofessionalyoungtalentsinsufficientquantityandfullofvitality,ensuringthatthefirecanbepassedontothenextgeneration,andprovidingaconstantflowoftalentsforthecompany'shigh-qualitydevelopment.Inaddition,thecompanyselectsthebestofthebestfromthe“doublehigh”talents.Wefocusonthecultivationandgrowthoftalentswithhighprofessionalexpertiseandhighoperationalskills,andimplementspecialpoliciesfor“double-high”talentsinkeychemicaltechnologyandothercoreareas,soastofacilitatetheirgrowthpaths.First,expertpersonnelarerecognizedasspecialtalents.Eachyear,specialtalentsarerecognizedinstrictaccordancewiththeprocedures,whowillbegrantedamonthlysubsistenceallowance.Second,wewouldalsorecognizeprofessionalsandhighlyskilledpersonnel.Wewouldselectchiefoperatingtechniciansandchiefoperatorsandoffermonthlyallowanceaspertherespectivestandards.Third,weapplyspecialincentivepoliciesforthehigh-leveltalents.Weapplyspecialpoliciessuchasspecialsalaryandbenefitsaswellashousingsubsidiesforthe“DoubleFirst-ClassInitiative"collegegraduatesmajoringinourfields.
Case | Talent Retention Strategy of ShenmaNylon Chemical Co., Ltd
ThecompanycomplieswiththeWorkSafetyLawofthePeople'sRepublicofChina,PreventionandControlofOccupationalDiseasesLawofthePeople'sRepublicofChina,RegulationonWork-RelatedInjuryInsurancesandtherequirementsoflocallawsandregulationsofouroperatinglocations,formulatesandimplementsthemanagementsystemforoccupationalhealthandsafety,andappliessafetymanagementtoallaspectsofthebusiness.Bytheendof2023,ShenmaEngineeringPlasticCo.,Ltd.,ShenmaYingcaiPackagingCo.,Ltd.,ShenmaNylonChemicalCo.,Ltd.,ShenmaCordFabricDevelopmentCo.,Ltd.,andShenmaHuaweiPlasticCo.,Ltd.havepassedthecertificationofISO45001,theglobalstandardforoccupationalsafetyandhealthmanagementsystems.WorkSafety
GovernanceStructure
ShenmaCorporationstrictlyabidesbylawsandregulationsincludingtheWorkSafetyLaw,InterimMeasuresfortheInvestigationandManagementofHiddenDangersinWorkplaceAccidents,ImplementationGuidelinesfortheInvestigationandManagementofHiddenDangersinIndustryandTradeEnterprises,andImplementationGuidelinesfortheInvestigationandManagementofHiddenDangersinHazardousChemicalsEnterprises.Inaddition,wehaveformulatedtheSafetyCommitteeMechanismofShenmaIndustrialCo.,Ltd.,theResponsibilitySystemofShenmaIndustrialCo.,Ltd.onWorkSafety,andtheMeasuresfortheSafetyWageManagementofShenmaIndustrialCo.,Ltd.(Trial).Withthissystematicworksafetygovernancestructure,wehaveestablishedthatthememberdepartmentsundertheWorkSafetyCommitteewouldincludetheSafetyandTechnologyDepartment,HumanResourcesDepartment,GeneralAffairsDepartment,andFinanceDepartment.
Occupational Health and Safety
Risk Managementand Control
103104101102
ThecompanyhasformulatedSafetyManagementSystem,WorkSafetyResponsibilitySystemforAllStaff,ProvisionsforMulti-TierControlforDual-PreventionofSafetyRisksandHiddenDangerInvestigationandManagement,andSafeOperationProcedures.Duetothedifferentproductionprocesses,thesubsidiarieshavealsoformulatedtheirownregulationsandrules,suchastheRegulationsontheManagementofDualPreventionMechanismforMulti-TierWorkSafetyRiskControlandHiddenDangerInvestigationandTreatmentofHenanPingmeiShenmaPolycarbonateMaterialCo.,Ltd.,andtheRegulationsontheManagementofDualPreventionMechanismforMulti-TierWorkSafetyRiskControlandHiddenDangerInvestigationandTreatmentofHenanShenmaNylonTechnologyCo.,Ltd.,andtheActionPlanfortheManagementofDualPreventionSystemforMulti-TierWorkSafetyRiskControlandHiddenDangerInvestigationandTreatmentofShenmaBoliemai(Pingdingshan)AirBagWireCo.,Ltd.Wearecommittedtostrengtheningproductionsafety,preventingsafetyrisks,reinforcingtheinvestigationandcontrolofhiddendangers,andsystematicallypreventingandreducingtheoccurrenceofproductionsafetyaccidents.
AtGovernanceLevel
WorkSafetyCommittee,withthechiefresponsibleindividualasDirector
At Execution
LevelWorksafetyleadershipgroupwiththeheadofthecompanyastheleaderandthepersoninchargeofsafetyastheviceleader
At SupervisionLevelTheSafetySupervisionDepartmentisdedicatedtotheworksafetymanagementinthecompany.
SHENMA INDUSTRIAL CO., LTD.
ShenmaIndustrial Co., Ltd.Sustainability Report 2023FromJanuarytoOctober2023,ShenmaCorporationidentifiedatotalof2,670hiddendangers,ofwhichmorethan2,068werealreadyrectified,with1intheprocessofrectification.Forallkindsofhiddendangersdetectedduringtheinspection,eachunitisrequiredtoformulatepracticalandeffectiverectificationmeasuresandsettherectificationschedule,analyzethereasonsforthehiddendangers,drawlessonsfromthetheseinspections,thoroughlyrectifythedangers,andpreventtherecurrenceofsuchhiddendangers.WealsopostmonthlyinspectionnoticesontheOAsystemtourgeeachunittorectifyhiddendangersonschedule,soastomakethehiddendangermanagementandclosed-looprectificationsopenandtransparent.StrategyInordertoraiseemployees'awarenessofsafetyriskpreventionandtoensureemployeesarereadytorespondtosafetyincidentswhentheyoccur,ShenmaCorporationandthesubsidiarieshaveformulatedEmergencyResponsePlansforSafetyAccidentsandconductregularemergencydrillstoensurethatemployeescantakepromptandeffectiveactionincaseofemergency.Theemergencydrillsinclude“threeprecautions”drillsinsummerandwinter,ammonialeakagedrills,andemergencydrillsforinjuriescausedbyspecialequipments.Thisdiversityensuresthatemployeesareabletorespondtodifferenttypesofemergencies.And,inaccordancewithcorporateregulations,thecompanyconductsemergencydrillsonaregularbasisaccordingtoanannualplan,whichensuresthatemployeeshavetheopportunitytopracticeemergencyresponseduringdifferentseasonsandtimeperiods.Thisalsohelpstoraiseemployees'awarenessofemergencyresponse.
Safety InterlockSystem
?Thecompanyutilizesthesafetyinterlocksystem,whichisanautomatedcontrolsystemusedtoensurethatequipmentandprocessesoperateunderspecificconditions.Asafetyinterlocksystempreventsunsafeoperation,ensuresthattheequipmentoperateswithinsafelimits,andavoidspotentialaccidents.Alarm System
?Thecompanyinstallsalarmsystemsintheproductionunitstomonitorpossiblehazardoussituations
suchasultrahighandlowliquidlevels.Thesesystemscanalertemployeeswhenaproblemoccurssotheycanactquickly.
Technical Measures
for EquipmentSafety
?Thecompanyhasadoptedaseriesoftechnicalmeasuresforequipmentsafetytopreventdangeroussituationssuchasfire,explosionandpoisoning.Thesemeasuresmayinvolvefirealarmsystems,interlocksincaseofultrahighandlowliquidlevels,groundingsystemsforlightningprotectionandanti-staticprotection.Safe Storage of
HazardousChemicals
?Thecompanyhasmadespecialdesignsforthestorageofhazardouschemicalsinordertoensure
safestorageandmanagementofhazardouschemicals.Thismayinvolvealarmsforhighandlowliquidlevels,emergencyshut-offdevices,etc.
Auto-stop System
?Thecompanyhasinstalledanauto-stopsystemintheequipmenttoensurethattheequipmentcanbestoppedimmediatelyintheeventofaproblem,reducingtheoccurrenceandspreadofaccidents.
Protective Measures
?Thecompanyrequiresemployeestowearlaborprotectionitemsonsiteinstrictaccordancewith
regulations,whichincludesprotectivegearssuchashelmets,goggles,earplugs,andsoon.Thesegearscanreducetheriskofinjuriesinahazardousenvironment.
Safety measures for employees and production
Key Performance of Work Safety
Buildastrongsafetymindset.Thecompanyadherestotheapproachof“placesafetyinthefirstplace,focusonprevention,andadoptcomprehensivemanagement”,integratesdevelopmentandsafety,alwaystakessafetydevelopmentasthebasicpremiseofhigh-qualitydevelopment.Wegivefullplaytothefourmajorfunctionsofsafetyculture:guidance,cohesion,incentive,anddiscipline.Throughtheeffectiveall-staffdiscussionsonsafetyconcepts,wehaveignitedthesparkofsafetycultureamongouremployees.Andwithsafetymeetingsofthefactoriesandthepre-shiftandpost-shiftmeetingsofthesections,thesafetyconceptdiscussionsarefurtherpromoted.Asaresult,wecanseesloganscomingoutofthesafetyconceptdiscussionsbytheemployeesareprintedontheirfamilyphotosandpostedintheappropriateareasofthelockersinaccordancewiththeunifiednorms,buildingthiswarmbridgethatconnectstheirprofessionallifeandfamilylife.Afterfulldiscussionfromthebottomup,thecompany'ssafetyculturetorchwaslittoformasafetyconceptadaptedtothecompany'sactualdevelopmentcharacteristics.
Case | Safety Culture Development of ShenmaCord Fabric Development Co., Ltd. in 2023
IndicatorUnit20222023
Amount invested inoccupational injuryinsurance for practitioners(Unit: RMB 10,000)
RMB 10,00013091Occupational injuryinsurance coverage rate
%100100Number of safetyaccidents at workplace
Accident12Number of safetyaccidents per million man-
hours
Accident/million man-hours12Death(s) on dutyPerson(s) involved00Rate of death on duty%00Number of work hours lostdue to safety accidents
Hour8641,680
In2023,allemployeesweretrainedinsafetyandfiresafety;thecompany'sleadership,safetymanagementpersonnel,specialoperators,teamleaders,andgeneraloperatorsweretrainedtoobtaincertificatesofsafetyqualificationsandcertificatesofsafetyoperations;andoperatorsreceivedvariousinternalcorporatetrainings.EmployeeswhofailedtopassthetrainingforcertificatespaidfortheirownexpensesanddeductedRMB100fromtheirperformancesalary;thosewhofailedtopassthetrainingexaminationsorganizedbythecompany,therandomexaminationsbysupervisors,thecertificateexaminationsforonboarding,andthecertificateexaminationsforsafetyqualificationsweregiven1-3monthsoftrainingbeforeofficiallystartingtheirjobs;ifthepersonnelinchargeofsafety,thesafetyproductionmanagers,thespecialoperators,andtheteamleaderswerefoundtoworkwithoutcertificates,theywouldbefinedRMB50,000-100,000foreachpersonfound,andtheirunitswouldbefinedRMB5,000-10,000bythecompany.Forthosewhodonothavequalificationcertificatesandsafetyqualificationcertificates,foreachpersonfound,theirunitwouldbefinedRMB2,000,andtheindividualwouldbefinedRMB500andwouldberequiredtoobtainacertificate.
Case | Safety Culture Development of ShenmaHuawei Plastic Co., Ltd. in 2023
105106103104
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
899089908990
SHENMAINDUSTRIALCO.,LTD.
Occupational Health ManagementOccupationalhealthandsafetyisanimportantpartofthesafetycultureatShenmaCorporation.ThecompanystrictlyabidesbytheWorkSafetyLawofthePeople'sRepublicofChina,LawofthePeople'sRepublicofChinaonPreventionandControlofOccupationalDiseasesandotherrelevantlawsandregulations,andcomprehensivelystrengthensthepreventionandcontrolofoccupationaldiseasesandhealthmanagementofemployees,soastoprotectemployees'physicalandmentalhealthintheirworkandlife.
Occupational Health Management System
Occupational health risk identification and management
Clarification ofthe objectivesand scope ofoccupationalhealth riskevaluation
Datacollection onoccupationalhealth risks
Hazardidentificationandassessment
Developmentofoccupationalsafety controlmeasures
Dataperformancetracking,continuousimprovementand feedback
Occupational Health Risk ControlThecompanyestablishesanoccupationalhealthmanagementsysteminstrictaccordancewithGB/T45001-2020OccupationalHealthandSafetyManagementSystems,identifiesandcontroloccupationalhazards,andestablishesandimplements34occupationalhealthmanagementsystems,includingOccupationalHazardNotificationSystem,OccupationalHazardDeclarationSystem,OccupationalHealthPublicity,EducationandTrainingSystem,ManagementSystemforEmployee'sProtectiveSupplies,ManagementSystemofEmployee'sOccupationalHealthMonitoringFiles,RoutineMonitoringManagementandEvaluationSystemforOccupationalHazards,SpecialLaborProtectionSystemforFemaleWorkers,OccupationalHealthandSafetySupervisionManagementSystem,etc.Meanwhile,thecompanyalsoestablishesoccupationalhealthobjectivesandannualworkplansandimplementationprogramsforthepreventionandcontrolofoccupationaldiseases.
107108
ShenmaCordFabric CompanyHazardousfactorsthatmaycauseoccupationaldiseasesinthecompanyinclude:noiseandcompoundssuchasformaldehyde,ammoniaandresorcinol.Fortheidentifiedhazardousfactorsofoccupationaldiseases,wehavesetupcorrespondingoccupationalhealthprotectionfacilities,carryoutinspectionsandmaintenanceinastandardizedmanner,andensuretheeffectiveoperationoftheprotectionfacilities.Everyyear,thecompanycommissionsaqualifiedthird-partyorganizationtocarryoutperiodicinspectionofhazardousfactors,andconductsstatusquoevaluationofhazardousfactorseverythreeyearswiththeresultsreportedtothegovernmentagenciesforhealthadministration.Atthesametime,thecompanywouldfeedbacktheinspectionresultstotheproductionunits,whichwouldpublicizethemtothefactoryemployees.Theproductionunitswouldregularlycarryoutroutinemonitoringofhazardousfactorsforoccupationaldiseases,andtheresultsofthemonitoringwouldbepublicizedontheoccupationalhazardsnotificationcardsandoccupationalhealthbulletinboards.ShenmaCord FabricDevelopment Co., Ltd.Hazardousfactorsthatmaycauseoccupationaldiseasesinthecompanyinclude:noise,radiation,1,6-HMDA,formaldehyde,sodiumhydroxide,ammonia,resorcinol,epoxyresin,etc.;andmajorrawmaterialsandauxiliariessuchasN66salinesolution,nylonslice,spinningoil,potassiumiodide,copperacetate,etc.Beforeaprojectstarts,thecompanywouldorganizepre-evaluationofoccupationalhazards,specialchapterondesignofoccupationalhealthprotectionfacilities,andacceptanceevaluationofoccupationalhealthprotectionfacilities.Wewouldalsoentrustqualifiedthird-partyagenciestoconductmonitoringofoccupationalhazardseveryyearandreportthemonitoringresultstotheHealthCommissionofPingdingshanandtheOccupationalHealthDepartmentofShenmaCorporation,andupdatetheoccupationalhealthmanagementledger.Atthesametime,thecompany'sSafetyandEnvironmentalProtectionDepartmentwouldfeedbackthemonitoringresultstotheproductionunits.Theemployeesoftheproductionunitswouldsignontheresultsasanacknowledgementoftheoccupationalhazardsandthehazardconcentrationintheirpositionsaswellastheprotectivemeasures.ShenmaEngineeringPlastic Co., Ltd.
Hazardousfactorsthatmaycauseoccupationaldiseasesinthecompanyinclude:noise,radiation,andtoxicandhazardousgassulfuricacid.Thecompanycommissionsathird-partyinspectionorganizationtocarryoutroutinemonitoringofoccupationalhazardsonamonthlybasis,andpromptlymakesrectificationswhenitdiscoversoperationpointswherethehazardsexceedthelimits.Wewouldalsoentrustqualifiedthird-partyagenciestoconductmonitoringofoccupationalhazardseveryyearandreportthemonitoringresultstotheSafetySupervisionDepartmentofShenmaCorporationandthenentertheresultsintotheoccupationalhealthmanagementledger.Atthesametime,thecompany'smanagementwouldsendtheresultstoeachgrass-rootsproductionunitandlettheunitstopostnoticesorcirculatetheresultsamongemployeestoinformthemoftheoccupationalhazardsoftheirpositionsandthehazardconcentrationaswellastheprotectivemeasures.
ShenmaPolycarbonat
eMaterialCo., Ltd.Hazardousfactorsthatmaycauseoccupationaldiseasesinthecompanyinclude:dust,carbonmonoxide,chlorine,phosgene,phenol,methylenechloride,triethylamine,hydrochloricacid,sulfuricacid,acetone,noise,power-frequencyelectricfields,andhighandlowtemperatures.Thecompanyhasanemergencyreliefplaninplaceforacutepoisoningbyhazardousgasesandoccupationalheatstrokeaccidents,andisequippedwithemergencyrelieffacilities.WeofferworkersPPEsuchasgoggles,dustmasks,gasmasks,anti-noiseearplugs,anti-staticoveralls,anti-staticshoes,overalls,etc.,andsetupauxiliaryroomssuchaschangingrooms,toilets,offices,bathrooms,etc.;wehaveestablishedoccupationalhealthmanagementdepartmentsandsetupoccupationalhazardwarningsignsatworkplaces;weconductregulartrainingandeducationonpreventionandcontrolofoccupationaldiseases;weregularlycheckandmaintaintheprotectivefacilitiesandkeeprecords;andwerecordthedistributionofPPE.
ShenmaYingcaiPackaging Co. Ltd.
Hazardousfactorsthatmaycauseoccupationaldiseasesinthecompanyinclude:noise.Thecompanywouldentrustqualifiedthird-partyagenciestoconductmonitoringofoccupationalhazardseveryyearandsendtheresultstoproductionunitsandlettheunitstopostnoticesorcirculatetheresultsamongemployeestoinformthemoftheoccupationalhazardsoftheirpositionsandthehazardconcentrationaswellastheprotectivemeasures.107108
ShenmaCorporation has formulated a clear occupational health and safety policy and iscommitted to complying with relevant laws and regulations and continuously improvingoccupational health and safety performance to ensure the health and safety of ouremployees. The company attaches great importance to occupational health managementand strives to promote our health and safety culture. We have set up formal occupationalhealth management policies for every key business. For example, ShenmaCord FabricCompany followed the laws, regulations and relevant standards to formulate theOccupational Health, Safety and Environment Management Manual, procedure documents,operation instructions, Prevention and Control of the Hazards for Occupational Diseases,‘Three Simultaneity’ Management System for Safety and Occupational Disease ProtectionFacilities, Management of Individual Labor Protective Supplies, etc., all of which would serveas a guide for the occupational health of employees.
OccupationalHealth PolicySupervision
OccupationalHealth RiskControlRegular Medical
Checkups
105106
We conduct regular monitoring, periodic inspection and evaluation ofworkplaces, and publicize the results of the inspection. We also set up on-siteoccupational health bulletin boards, notification cards of occupational hazards,and safety warning signs to remind staff to pay attention to the prevention ofoccupational diseases.We also provide employees exposed to occupational hazards with medicalcheckups before employment and upon leaving the company, carry out on-the-jobmedical checkups on a regular basis, inform employees of the results in a timelymanner, and set up personal occupational health monitoring files for employees.
IndicatorUnit20222023Number of occupational hazard
accidents
Accident(s)00Coverage of employee medicalcheckups for occupational diseases
%100100Availability, completeness, and correct
utilization of PPE
%100100
Key performance for occupational health management
In2023,ShenmaCordFabricDevelopmentCo.,Ltd.organizedmedicalcheckupsforoccupationalhazardsbefore,during,andaftertheemployment,aswellasmonthly,quarterly,andannualinspectionsforoccupationalhazards.Thecompanyhasalsosetupformaldehydeandammonialeakagealarmdevice,gluesealedspacetopreventthespreadofodor,windingnoisereductionspacetoreducetheexposuretonoise,andissuedPPEsuchassafetyhelmets,masks,facemasks,andsoon.
Case | Measures to Improve Employee Health by ShenmaCord Fabric Development Co.,Ltd. in 2023
109110
In2023,ShenmaCorporationwasnotoncepenalizedforviolatinglawsandregulationsrelatedtooccupationalhealthandsafetythroughouttheyear,andthecompany'soccupationalhealthtargetswereachievedatarateof100%.Duringthereportperiod,thecompanyhiredathird-partyorganizationtoinspectmorethan100operationpointswithpotentialoccupationalhazards,andtheresultsoftheinspectionshowedthatalltheoperationpointswere100%clearedofhazards.Atthesametime,thecompanyhasissuedtheNoticeofOccupationalHazardstoemployeesinpositionswithpotentialoccupationalhazards,andconductedall-aroundmedicalcheckupsofoccupationalhazardsforthembeforeandduringtheiremployment.In2023,ShenmaCordFabricCompanycompletedatotalof30medicalcheckupsforoperatorsinpositionswithpotentialoccupationalhazards,andCordFabricDevelopmentCompanycompletedatotalof500medicalcheckupsforoperatorsinpositionswithpotentialoccupationalhazards,andtransferredandreassigned9employeeswhowerenotsuitableforthesepositions.
Key Performance
Third-party Safety ManagementShenmaCorporationpaysgreatattentiontotheoccupationalhealthandsafetyofboththeemployeesandthesupplychainlaborers.Forsuppliersandcontractors,thecompanyhasestablishedaproductionsafetymanagementsystemspecificallyforsuppliers,andthesubsidiarieshaveclearlydefinedthesafetymanagementrequirementsforthewholeoperationcyclefromthescreeningofsuppliers,traininginthefactory,managementoftheconstructionprocess,andtheexitprocess.Inaddition,theyhavealsoadoptedthemethodsofindependentmanagementbythebusinessdepartmentinneed,managementbytheappointedpersonnelinchargeofdifferentgridsduringconstruction,andsafetysupervisionandmanagementtostrictlymonitorthesafetyofthesuppliersandcontractorswhentheyareinthefactory,thusensuringthestableandcontinuousoperationofthecompany.
Name
Third-party safety management system
Other keysubsidiaries
Forsuppliersandcontractors,thecompanyhasestablishedaproductionsafetymanagementsystemspecificallyforsuppliers.Basedonthereality,thesubsidiarieshavesetupsystemsandclearlydefinedthesafetymanagementrequirementsforthewholeoperationcyclefromthescreeningofsuppliers,traininginthefactory,managementoftheconstructionprocess,andtheexitprocess.Inaddition,theyhavealsoadoptedthemethodsofindependentmanagementbythebusinessdepartmentinneed,managementbytheappointedpersonnelinchargeofdifferentgridsduringconstruction,andsafetysupervisionandmanagementtostrictlymonitorthesafetyofthesuppliersandcontractorswhentheyareinthefactory,thusensuringthestableandcontinuousoperationofthecompany.
ShenmaCordFabricDevelopment
Co., Ltd.
Forsuppliersandcontractors,thecompanyhasformulatedConstruction(Operations)ManagementProvisionsforOutsourced(Contracted)Labor.WehavealsorequiredtheorganizationsthathavebusinesscooperationwithustosigntheSafetyAgreementonOutsourcingConstruction,paidthesafetydepositinproportion,bookedthethree-leveleducationandtrainingonsafety,andadoptedthemethodsofindependentmanagementbythebusinessdepartmentinneed,managementbytheappointedpersonnelinchargeofdifferentgridsduringconstruction,andsafetysupervisionandmanagementtostrictlymonitorthesafetyofthesuppliersandcontractorswhentheyareinthefactory,thusensuringthestableandcontinuousoperationofthecompany.
ShenmaCord
Fabric
Company
Forsuppliersandcontractors,thecompanyhasformulatedsystemssuchasSafetyManagementSystemforRelatedPartiesandConstruction(Operations)ManagementProvisionsforOutsourced(Contracted)Laborandsignedsafetymanagementagreementswithrelatedparties.Thesemanagementsystemsstipulatethesafetymanagementrequirementsforthewholeoperationcycle,includingthefilerecordingandqualificationreviewofsuppliersandcontractors,reviewofconstructionplans,safetyeducationandtraining,andmanagementoftheconstructionprocess,etc.Bystrengtheningthesafetymanagementofsuppliersandcontractors,andenforcingthesafetyresponsibilityofvariouspersonnelatalllevels,thecompanyensuresthattherelatedoperationscomplywithoccupationalhealthandsafetymanagementregulations.
Emergency response
ReinforcedemergencyresponsebyShenmaCorporationAccordingtotheGuidelinesforenterprisestodevelopemergencyresponseplanforworkplaceaccidents(GBT29639-2020),thecompanyhasrevisedthecomprehensiveandspecialemergencyresponseplansandon-sitehandlingsolutions,andinaccordancewiththeannualdrillingplan,carriedoutemergencyresponsedrillsforspecialcasessuchasextremeweather,poisoningandsuffocationinconfinedspace,andammonialeakage.
Inthefirsthalfoftheyear,thecompanyorganizedvariousdepartments,grass-rootsfactoriestocarry
outatotalof3emergencydrillsand3emergencytraining,involvingmorethan50employees.InJune,
whichisalsothesafetyproductionmonth,thecompanyorganizedanemergencyevacuationdrillon
thesecondflooroftheR&DbuildingoftheZhongshiplant,whichfurtherenhancedtheemergency
awarenessandemergencyresponsecapabilityofthestaff.
Case | Measures to Improve Employee Health by ShenmaAramid Fiber Technology Development Co.,
Ltd. in 2023
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
109110107108
23242324
Social ResponsibilityFulfillment
Intermsofsupplychainmanagementandcommunitycontribution,ShenmaCorporationadheresfirmlytothephilosophyof“win-wincoexistenceandgivingbacktothesociety”.Thecompanyunderstandsthatastableandefficientsupplychainsystemisthecornerstoneofthecompany'ssustainabledevelopment,whileactivelycontributingtothecommunityrepresentsthecompany'ssocialresponsibility.In2023,ShenmaCorporationfocusedonstrengtheningsupplychainsynergyandintegration,andsuccessfullybuiltacloserandmoretransparentsupplychainpartnershipbyoptimizingsupplychainprocessandimprovingsuppliermanagement,inordertoachievewin-winobjectivesofcostreduction,efficiencyimprovementandqualityassurance.Atthesametime,thecompanyactivelyfulfilledcommunityresponsibilitieswithpublicwelfareactivities,donations,andsupportforlocaleducationtogivebacktothecommunity,promotingcommunityharmonyanddevelopment,anddemonstratingagoodsocialimage.Key ESG PerformancenIn 2023, the company committed a total of RMB 371,600todonations and public welfare programs, benefiting 206people.nIn 2023, the company committed a total of RMB 1,884,200topoverty alleviation and rural revitalization programs, benefiting2,709people.
113114111112
Sustainable Development Goals (SDGs) of theUN Addressed in This Chapter
109110
ShenmaCorporationhasalwaysregardedoursuppliersasstrategicpartners,andactivelyseekstoestablishlong-term,stablerelationshipswithcompaniesthatexcelinquality,innovationandsustainability.Wepursuenotonlyasupplychaincooperation,butalsoastrategicandsynergisticpartnership,aimingtorealizesynergisticinnovationincommonareasandjointlypromotethedevelopmentandprogressoftheindustry.Inthecooperationwithoutstandingsuppliers,ShenmaCorporationlooksbeyondbusinesstransactionsandintosharedvaluesandsustainabledevelopmentgoals.WelookforwardtoworkingcloselywithoursuppliersonESGtopicssuchasproductinnovation,qualitymanagement,costcontrolandsupplychainsustainabilitytoaddressthechallengesofthemarketandembracetheopportunitiesofthefuture.Weencourageoursupplierstoprovidecompetitiveproductsandservices,andsharemarketinformationandindustrytrendstobetteradapttochangesinthemarket.In2023,ShenmaCordFabricCompanyhasdevelopedatotalof415suppliers.Atthesametime,ShenmaCorporationvaluestheeconomiccontributiontolocalcommunitiesandpaysattentiontotheenvironmentalimpactofthetransportation.With79.8%ofoursupplierslocatedinwhereweareoperating(HenanProvince),wecancontributetothedevelopmentofthelocalcommunitywhilesavingontransportationresources.InordertoimplementthesupplychainmanagementprinciplesofShenmaCorporationandpreventESGrisksinthesupplychain,wehaveestablishedpoliciesforourdomesticandforeignsuppliers,includingtheSupplierManagementMeasures,ProcurementProceduresforImportedMaterials,SystematicAssessmentFormsofSupplierQuality,andGuidelinesforSupplierQualityControlandEvaluation.Basedonthepoliciesabove,wehaveimprovedthemanagementproceduresandsystemsforallaspectsofthespecificpolicies,measuresandeffectsintermsofsupplieraccess,review,evaluationandgrading,andhaverefinedthemanagementrules.
Supply Chain Management
Supplier ESG evaluation
SuppliersupervisionbyShenmaCorporation'sProcurementDepartmentisoneofthekeymeasurestoensureproductquality,on-timedelivery,andhigh-levelservices.ShenmaCorporation'sassessmentandevaluationregardingsuppliersareprimarilycomprisedofthefollowingdimensions.
9696
Supplier access
First,wewouldinvestigateasupplier'sbasicinformationwiththeQuestionnaireforPreliminarySelectionofSuppliers,carryoutapreliminaryevaluationandriskassessment,andassigntheDevelopmentDepartmenttoorganizeaninspectionofanewsupplierafterthepreliminaryevaluationiscompleted.Wewouldexaminethenewsupplier'sproduction,delivery,corporatemanagement,riskassessment,laboratorycapacity,qualityprocessandgreenproduction,andwriteareportontheexaminationtoaddtothesupplier'sfile.
Supplier review
Werequirethesuppliertohavealegalpersonalityandgoodcreditstanding;asoundandcertifiedqualitymanagementsystem;goodabilitytofulfillcontracts;andcompliancewithsafetyandenvironmentalprotectionlawsandregulations.Afterweexamineallthematerialsprovidedbythesupplier,therelevanttechnicaldepartmentswouldmakeanevaluationreporttobeincludedintheannuallistofqualifiedsuppliersasthebasisforprocurement.
Regular supplierevaluation
Combinedwiththeproductsupplyquality,reputation,qualityassurancecapability,theProcurementDepartmentorganizesannualevaluationonqualifiedsuppliers,duringwhichsuppliersofClassAmaterialsareevaluatedandratedeveryyear,whilesuppliersofClassBandClassCmaterialsareevaluatedonabiannualbasis.Bystrictlycontrollingthesupplierprogram,weareabletoeffectivelymonitorthequalityoftherawmaterialswepurchaseandencourageoursupplierstocontinuouslyimprovetheirquality.Inthisway,weensurethatthequalityoftherawmaterialssuppliedisconsistentandisabletomeetproductionrequirementsonanongoingbasis.Wehavebuiltadigitalsupplychainmanagementplatformtoachievegreenprocurement.Withthe“supplierevaluationprocess”conductedonceeveryyear,weareabletomonitorthehighlevel,greenandstandardizedoperationofoursuppliers,andeliminatethosewhofailtomeetthegreenrequirements.
ESG management system for suppliersof ShenmaCord Fabric Company
ShenmaCorporationrequiressupplierstoprovideproductsthatmeetthecompany'squalitystandardsandspecifications.OurProcurementDepartmentconductsregularinspectionsandsamplechecksofsuppliers'productstoensurethattheirqualityisatthedesiredlevel.Passratemonitoringcoversaproduct'sphysicalproperties,chemicalcomposition,appearance,etc.Thishelpstoensurethattheproductsontheproductionlineareofhighqualityandmeetthecompany'srequirements.
ShenmaCorporationattachesgreatimportancetotheon-timedeliverybysuppliers.OurProcurementDepartmentwouldmonitorifthesuppliersareabletodelivertheproductsontimeinaccordancewiththecontracteddeliverydates.On-timedeliveryiscriticaltoproductionschedulesandclientsatisfaction.Suppliersarerequiredtoproduceanddeliverwithinthecontractedtimeframe,otherwiseitmightimpactourproductionscheduleandalsoourclients'requests.
Inadditiontoproductqualityandon-timedelivery,suppliers'levelofservicealsocomesunderscrutiny.Thesuppliers'serviceincludestheirsupportandassistancetothecompanyinthepre-sales,salesandpost-salesphases.TheProcurementDepartmentwouldassesstheasupplier'scapabilitiesintermsofcustomerservice,technicalsupportandproblemsolvingtoensurethatitisabletoprovidecomprehensivesupporttomeetthecompany'sneeds.
ShenmaCorporationrequiresthesupplierstostrictlyadheretotheagreedcostsandconditionswhentransportingproducts.TheProcurementDepartmentwouldmonitorifthetransportationcostsareconsistentwiththecontractandensurethattherearenoadditionalandunauthorizedcosts.Thishelpspreventunnecessaryadditionalcostsandensurestransparencyandfairnessinthetransportation.
ShenmaCorporationinsistsonenvironmentalmanagementasoneofthekeysubjectsinevaluatingsuppliers,reflectingthecompany'scommitmenttoenvironmentalprotectionandsustainablemanagementphilosophy.Ourevaluationinthisrespectfocusesonsuppliers'certificationofISO9001andISO14001systems,greenproductstandards,etc.Byevaluatingtheenvironmentalmanagementofsuppliers,ShenmaCorporationnotonlyensuresthatourownsupplychaincomplieswithenvironmentalregulationsandstandards,butalsopromotesthecontinuousimprovementofsuppliersinenvironmentalprotection.Thishelpstoreducethecompany'senvironmentalrisks,improveoverallenvironmentalperformanceandcreatemoresustainablevalueforemployees,clientsandsociety.
Product qualityTimely delivery
Customer ServiceTransportation costs
Environmental and social considerations
ForESGmanagementofsuppliers,wesetspecificquantitativetargets,strivingtouse1to3yearstomakesuppliersthatranktop50%intermsofprocurementamountreceivesocialresponsibilityauditsof70%;andmakesuppliersthatranktop30%intermsofprocurementamountareactivelyengagedinregularsupervisionfordual-carbonprojectstopromoteemissionreduction.115116113114111112
InordertoclarifytherespectiverightsandresponsibilitiesofShenmaCorporationandthesuppliers,andinordertopromotethecommitmenttojointlycomplywithbusinessethics,lawsandregulations,ShenmaCorporationandthesuppliershavesignedthe“SupplierCodeofConduct”.ThisCodeisnotonlyaguidingprincipleforcooperation,butalsoacommitmenttoworktogethertoensurethesustainabilityandqualityofoursupplychain.TheSupplierCodeofConductincludesawiderangeoftopicssuchasanti-corruption,humanrights,safetyandhealth,andenvironmentalprotection.
Human rights protection in supply chain
ESG training for supply chain
InordertoenhancethecomplianceawarenessofthesupplychainandstrengthentheESGgovernanceofShenmaCorporation'ssupplychain,wecarryoutsupplierseminars,symposiums,professionaltrainingsandotheractivitiesfromtimetotimetopublicizethecompany'sprocurementpolicies,suppliermanagementconcepts,thecompany'sbusinessoperationsaswellasthelatestdevelopments,soastobuildupagoodbusinessatmosphereofwin-wincooperation.Wehavealsocarriedoutspecialtrainingonsocialresponsibilityauditstopublicizethecompany'scodeofconductonsupplychainandthefocusofsocialresponsibilityintherawmaterialprocurementsupplychain(includingenvironment,labor,humanrights,carbonemissions,etc.).In2023,wecompletedspecialtrainingonsocialresponsibilityforallprocurementstaffandrawmaterialsuppliers.
97989798
(1)Suppliersshallnotemployanyformof
forcedorcoercedlaborforanyreason;
(2)Suppliersshallhireemployeesonthe
basisofwhetheranapplicantmeetsthejobrequirements,andshallnotdiscriminateagainstemployeesduetogender,race,nationality,age,maritalstatus,maternitystatus,sexualorientation,religion,orphysicalhandicap;
(3)Suppliersshallnotemployminorsunder
theageof16aslaborers;
(4)Suppliersshallprovidework
environmentsinwhichthehealthofemployeesisprotectedfromthehazardsoftheworktheyperformandmakesureemployeescanenjoytheaveragestandardoflivingofthelocalpopulation;
(5)Suppliersshallhaveappropriate
communicationmechanismsandcomplaintchannelstoallowemployeestoexpresstheirclaimsandconcernstomanagement;
(1)Suppliersshallhaveasoundhealthand
safetyprotectionsystemwithclearandspecificprecautionstoprotectthehealthandsafetyoftheiremployees;
(2)Suppliersshallprovideemployeeswith
laborprotectiveequipmentthatmeetsnationalorindustrystandards,andconductregulareducationandtrainingforemployeesonworksafety;
Human rights provisions for suppliers
EHS provisions for suppliers
NameSign-up rate of Supplier Code of ConductShenmaCord Fabric Company100%ShenmaCord Fabric Development
Co., Ltd.
90%Nylon Chemical Co., Ltd.100%Shenma Engineering Plastic Co., Ltd.100%Shenma Engineering PlasticsTechnology Development Co., Ltd.
100%
117118115116
In2023,ShanghaiShenmaorganizedavisittotheofficeareasandfactoriesoftheupstreamsuppliers,whichhelpedusbetterunderstandtheimportanceofadoptingleanmanufacturinginordertoachievesustainabledevelopmentofthecompanyandthesuppliersaswellastheentiresupplychain.Byoptimizingproductionprocesses,reducingresourcewaste,andimprovingenergyefficiencyandproductquality,leanmanufacturingnotonlyreducestheenvironmentalfootprint,butalsoenhancesourlong-termcompetitivenessasanenterprise.Thistransformationtowardsleanmanufacturingisnotonlyinlinewithcurrentsocietalexpectationsforgreenandlow-carbonproduction,butalsoopensupamorerobustandsustainabledevelopmentpathforsuppliers.Wefirmlybelievethatbyworkingtogethertopromoteleanmanufacturing,wecancontributetoenvironmentalprotectionwhilepromotingmutualprosperityandsustainablebusinessdevelopment.
Case| Shanghai Shenmavisited upstream suppliers for exchange and communication in 2023
Sign-up rate of the Supplier Code of Conduct of key
subsidiaries in 2023
SHENMA INDUSTRIAL CO., LTD.
113114
Public Welfare and CharityShenmaCorporationactivelyfulfillssocialresponsibilities,payskeenattentiontosocialpublicwelfareundertakings,andiscommittedtoservingasanexemplaryenterprisethatissociallyrewarding,green,andpeople-oriented.Thisconceptisreflectedinthecompany'sactionsovertheyears,includingdonationstodisaster-strickenareas,establishmentofapublicwelfarefundtosupportorphans'schoolingandtheHopeProject,andtheestablishmentofaspecialfundfortheGoldenAutumnSchoolAidprojectandfortheaidforpeoplewithwork-relatedinjuries,etc.,whichdemonstratesthecompany'sstrongsenseofsocialresponsibilityandcharitablespirit.
101102101102
In 2023, the company committed a total of RMB 371,600to donations and public welfareprograms, benefiting 206people.
Key Performance
Case｜Donation event by Nylon Chemical Co., Ltd.
InresponsetoShenmaCorporation'ssocialresponsibilitystrategy,NylonChemicalCo.,Ltd.organized“99PublicWelfare-ReliefProjectforPeopleinDifficultiesin2023”,whichwaswidelypublicizedviathelargescreens,workgroupmessagesandotherplatforms,callingonallthestafftoactivelyparticipateandprovidesupportandhelpforpeopleindifficulties.Thecompany'sleadersandPartymemberssetanexamplebytakingtheleadinmakingdonations,guidingallemployeestoactivelyparticipateincharitablepublicwelfareundertakings.Thiseventendedwithatotalof903donations,amountingtoRMB27,488.28.
Case｜Volunteer Companion Program for the Elderly by ShenmaCord FabricDevelopment Co., Ltd.
OnthemorningofMarch9,2023,thecompany'sCommunistYouthLeagueCommitteeandthelaborunionjointlyorganizedauniquevolunteerprograminmemoryofLeiFeng.Youngvolunteersbroughtbread,milk,eggsandothermaterialstotheKangleyuanSeniorCitizens'ResidenceinYeCountytovisittheelderly,practicingthespiritofLeiFengandpassingonthewarmthoflovewithactions.KangleyuanSeniorCitizen'sResidenceisthelargestseniorcarecenterinYeCountywithcompletefacilitiesandfirst-classservices.Withabeautifullandscapeandrefreshingenvironment,itisagardenapartmentcomplexintegratingelderlycare,fitness,leisure,entertainment,medicalcareandhealthcare.Whenourvolunteersarrived,theseniorsbaskinginthesuninthecourtyardwelcomedtheirvisitswithhappyapplause.Marchisthe“LeiFengMonth”inChina.TocarryoutsuchameaningfulandwarmvoluntaryprograminMarchisnotonlytorememberandpaytributetoComradeLeiFeng,butalsotoeducateandguidethecompany'semployees.Wehopethatwithprogramslikethis,moreemployeescouldparticipateinvolunteerservices,practicesocialistcorevalueswithactions,andshowcasetheexcellentstaffimageandstyleofourcompany.
Case｜Volunteer Program of "Learning from Lei Feng" by ShenmaCord FabricDevelopment Co., Ltd.
InordertoinheritandcarryforwardthespiritofLeiFeng,andtoremaintruetothespiritofvolunteering,onthemorningofMarch11,2023,theCommunistYouthLeagueCommitteeofthecompanyorganizedmorethan10youngvolunteerstocarryoutthe“LearningfromLeiFeng”volunteerprograminHuangwanVillage,ChangcunTown,YeCounty,whichisthevillagewhereweprovidepairedassistance.TheyoungvolunteerscametoHuangwanVillagetocleanthevillageroadsaswellastheofficeofthevillagecommittee.Afterwards,theywenttoHongdingsiPrimarySchoolinHuangwanVillage,distributingschoolbags,stationerycases,watercolorpensandotherschoolsuppliestothestudentsandencouragingthemtostudyhardtorepaythesocietyinthefuture.
119120117118
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
SHENMA INDUSTRIAL CO., LTD.
115116
TheCompanyadherestotheprincipleof"QuantificationandConsistency"indisclosingthequantitativeperformancemetricsthatreflecttheeffectivenessofitssustainabilitymanagement.
Statistics Scope During the Reporting Period
Corporate Governance and Economic Performance
Environment Performance
Performance Table ofQuantified Data
IndicatorUnit202120222023General Meeting ofShareholders
Time4128Board MeetingTime111718
IndicatorUnit202120222023
IndependentDirectors
Person(s) involved333Female DirectorsPerson(s) involved111IndicatorUnit20222023Number of Participants in Anti-Corruption Training
Person(s) involved10,27810,164Number of Anti-Corruption TrainingSessions Held
Time6234Coverage Rate of Anti-CorruptionTraining
%100100IndicatorUnit202120222023Operating IncomeRMB 100 million
134.15135.59129.19Net Profit Attributable toShareholders
RMB 100 million
21.444.271.23Total AssetsRMB 100 million
258.97273.54314.42Total DividendsRMB 100 million
10.701.361.41Total Taxes PaidRMB 100 million
2.970.000.98
NameUnitParticulatesNOxVOCSO2Non-methane
Hydrocarbon
Shenma Cord FabricCompany
Metric Ton--8.99--Shenma Cord FabricDevelopment Co., Ltd.
Metric Ton7.3214.1723.81--Nylon Chemical Co., Ltd.Metric Ton11.57136.75-35.90-ShenmaEngineeringPlastic Co., Ltd. (includingShenmaEngineeringPlastics TechnologyDevelopment Co., Ltd.)
Metric Ton-5.891.130.06Shenma Boliemai(Pingdingshan) Air BagWire Co., Ltd.
Metric Ton6.45---10.12ShenmaNylonTechnology Co., Ltd.
Metric Ton0.86---0.41Shenma Puli MaterialsCo., Ltd.
Metric Ton----0.43ShenmaPolycarbonateMaterialCo., Ltd.
Metric Ton6.601.031.48--NameUnitCODAmmonia Nitrogen
Shenma Cord Fabric CompanyMetric Ton79.907.80ShenmaCord Fabric Development Co.,Ltd.
Metric Ton5.310.18Nylon Chemical Co., Ltd. (includingShenmaEngineering Plastic Co., Ltd.)
Metric Ton124.706.30Shenma Engineering PlasticsTechnology Development Co., Ltd.
Metric Ton4.680.07Shenma Boliemai (Pingdingshan) AirBag Wire Co., Ltd.
Metric Ton0.470.04Shenma Puli Materials Co., Ltd.Metric Ton1.340.06ShenmaPolycarbonateMaterialCo., Ltd.Metric Ton9.100.05NameUnitAmount of Hazardous Solid Waste
Generated
Hazardous Solid Waste Disposal Rate
Shenma Cord Fabric CompanyMetric Ton197.29100%Shenma Cord Fabric Development Co.,Ltd.
Metric Ton322100%Nylon Chemical Co., Ltd.Metric Ton445.48100%Shenma Engineering Plastic Co., Ltd.(including Shenma Engineering PlasticsTechnology Development Co., Ltd.)
Metric Ton16.64100%ShenmaPolycarbonateMaterialCo., Ltd.Metric Ton1,175.06100%NameUnitAmount of General Industrial
Solid Waste GeneratedShenma Cord Fabric CompanyMetric Ton5,405Nylon Chemical Co., Ltd.Metric Ton215,680
Unless otherwise specified, the statistics scope of governance and economic reporting is consistent with that ofthe Company's consolidated financial statements.
101102101102121122119120117118
Social Performance
Environment Performance
IndicatorUnit20222023
Total Internal Energy Consumption10,000 tons of standard coal6.345.19
Fossil Energy Consumption10,000 tons of standard coal1.813.59Non-Fossil Energy Consumption10,000 tons of standard coal4.531.60Proportion of Non-Fossil Energy
Usage
%71.43%69.12%Energy Consumption IntensityTons of standard coal/yuan0.1790.224
IndicatorUnit20222023Total EmployeesPerson(s) involved10,27810,164By GenderMalePerson(s) involved6,9076,950FemalePerson(s) involved3,3713,214By AgeUnder 30 years oldPerson(s) involved1,0651,09831~50 years oldPerson(s) involved8,0797,960Above 50 years oldPerson(s) involved1,1341,106By RegionDomesticPerson(s) involved10,27810,164Overseas (Hong Kong, Macaoand Taiwan)
Person(s) involved00By Education LevelBachelor's Degree and BelowPerson(s) involved1,00679,934Master's DegreePerson(s) involved209227DoctoratePerson(s) involved23By GroupEthnic MinoritiesPerson(s) involved270268Persons with DisabilitiesPerson(s) involved8680
IndicatorUnit20222023Annual Training Expenditure(RMB 10,000)
RMB 10,000199.91,330.0Total Number of TraineesPerson(s) involved10,27810,164Percentage of EmployeesParticipating in Training
%100%100%Senior Staff (Company'sSenior Management)
%100%100%Mid-level Staff (Department
Managers)
%100%100%Junior Staff%100%100%Average Training Hours per
Employee
Hour24
IndicatorUnit20222023Amount invested inoccupational injury insurancefor practitioners (Unit: RMB
10,000)
RMB 10,00013091Occupational injuryinsurance coverage rate
%100100Number of safety accidentsat workplace
Accident12Number of safety accidentsper million man-hours
Accident/million man-hours12Death(s) on dutyPerson(s) involved00Rate of death on duty%00Number of work hours lostdue to safety accidents
Hour8641,680
IndicatorUnit20222023Employee Union Participation Rate%100100Number of Employee Activities HeldTime2423Total Number of ParticipantsPeople9,6809,485Average Participation per EmployeeTime2.292.72IndicatorUnit20222023
Total Investment in Donations and Public
Welfare Projects
%68.1637.16Total Investment in Poverty Alleviation andRural Revitalization Projects
Time70.52188.42
SubsidiariesCategory 1 (tons of CO2e)Category 2 (tons of CO2e)Total (tons of CO2e)Shenma Cord Fabric
Company
221.98145,708.94145,930.92Nylon Chemical Co., Ltd.30,000,0001,081,00031,081,000
In 2023, the Company's statistical scope only includes ShenmaCord Fabric Company
*In 2023, the Company's statistical scope expanded from only the Parent Company to include both the Parent Company andNylon Chemical Co., Ltd.
In 2023, the Company's statistical scope only includes ShenmaCord Fabric Company
103104103104123124121122119120
ShenmaCorporationprepareditsreportfortheperiodfromJanuary1toDecember31,2023,withreferencetotheGRIStandards.TheGRIStandardusedisGRI1:Foundation2021.
Disclosure ItemsSection
GRI2-1Organizational DetailsAbout Shenma CorporationGRI 2-2Entities Included in the Company's Sustainability Report About This ReportGRI 2-3Reporting Period, Frequency, and Contact InformationAbout This ReportGRI 2-4Information RestatementPerformance Table of Quantified DataGRI 2-5External AssuranceNoneGRI 2-6Activities, Value Chain, and Other Business RelationshipsMain Products and BusinessesGRI 2-7EmployeesEquality and EmploymentGRI 2-8Workers Beyond Employees Equality and EmploymentGRI2-9Governance Structure and CompositionGovernance StructureGRI 2-10Nomination and Selection of the Highest Governance BodyGovernance StructureGRI 2-11Chair of the Highest Governance BodyGovernance StructureGRI 2-12
Oversight Role of the Highest Governance Body in
Managing Impacts
ESG Governance SystemGRI 2-13Delegation of Responsibility for Managing ImpactsESG Governance SystemGRI 2-14
Role of the Highest Governance Body in Sustainability
Reporting
ESG Governance SystemGRI 2-15Conflict of InterestGovernance StructureGRI 2-16Communication on Material ConcernsESG Governance SystemGRI 2-17Collective Knowledge of the Highest Governance BodySee 2023 Annual ReportGRI 2-18Performance Evaluation of the Highest Governance BodyGovernance StructureGRI 2-19Compensation PolicyGovernance StructureGRI 2-20Process for Determining CompensationGovernance StructureGRI 2-21Annual Total Compensation Ratio Not Disclosed Due to Confidentiality RequirementsGRI 2-22Statement on Sustainability StrategyChairman's MessageGRI 2-23Policy CommitmentsSee Individual SectionsGRI 2-24Policy Integration CommitmentsSee Individual SectionsGRI 2-25Procedures for Remedying Negative ImpactsSee Individual SectionsGRI 2-26Mechanisms for Seeking Advice and Raising ConcernsStakeholder CommunicationGRI 2-27Compliance with Laws and RegulationsSee Individual SectionsGRI 2-28Association Membership Quality AssuranceGRI 2-29Stakeholder Engagement MethodsStakeholder CommunicationGRI 2-30Collective Bargaining AgreementsEmployee Welfare and Care
Disclosure ItemsSectionGRI 3-1Process for Identifying Material IssuesSubstantive Issue IdentificationGRI 3-2List of Material IssuesSubstantive Issue IdentificationGRI 3-3Management of Material IssuesSee Individual SectionsGRI 201-1Direct Economic Value Generated and DistributedPerformance Table of Quantified DataGRI 201-2
Financial Impact of Climate Change and Other Risks and
Opportunities
Campaign against Climate ChangeGRI 201-3Defined Benefit Plan and Other Retirement PlansEmployee Welfare and CareGRI 201-4Government Financial SubsidiesSee 2023 Annual ReportGRI 202-1
Ratio of Standard Entry-Level Wage to Local Minimum Wage
by Gender
Not Disclosed Due to Confidentiality RequirementsGRI 202-2Proportion of Senior Management from the Local CommunityNot TrackedGRI 203-1Infrastructure Investments and Support ServicesPublic Welfare and Rural RevitalizationGRI 203-2Significant Indirect Economic ImpactsPublic Welfare and Rural RevitalizationGRI 204-1Proportion of Expenditures on Local SuppliersSupply Chain ManagementGRI 205-1Operational Sites Assessed for Corruption RisksPerformance Table of Quantified DataGRI 205-2Communication and Training on Anti-CorruptionPerformance Table of Quantified DataGRI 205-3
Policies and Procedures Confirmed Corruption Incidents and
Actions Taken
Business Ethics and Anti CorruptionGRI 206-1
Legal Proceedings Regarding Anti-Competitive Behavior,
Anti-Trust,and Monopoly Practices
Business Ethics and Anti CorruptionGRI 207-1Tax PoliciesTax Payment According to LawGRI 207-2Tax Governance, Control, and Risk ManagementTax Payment According to LawGRI 207-3
Stakeholder Engagement and Management Related to Tax
Concerns
Tax Payment According to LawGRI 207-4Country-by-Country ReportingNot DisclosedGRI 301-1Weight or Volume of Materials UsedPerformance Table of Quantified DataGRI 301-2Recycled Input Materials Used Resource Conservation and Circular EconomyGRI 301-3Recycled Products and Packaging MaterialsResource Conservation and Circular EconomyGRI 302-1Internal Energy ConsumptionResource Conservation and Circular EconomyGRI 302-2External Energy ConsumptionNot TrackedGRI 302-3Energy IntensityResource Conservation and Circular EconomyGRI 302-4Reducing Energy ConsumptionResource Conservation and Circular EconomyGRI 302-5Reducing Energy Demand for Products and ServicesResource Conservation and Circular EconomyGRI 303-1Company's Interaction with Water as a Shared ResourceResource Conservation and Circular EconomyGRI 303-2Managing Wastewater ImpactsResource Conservation and Circular EconomyGRI 303-3Water WithdrawalResource Conservation and Circular EconomyGRI 303-4Wastewater DischargeNot InvolvedGRI 303-5Water ConsumptionNot InvolvedGRI 304-1
Operational Sites Owned, Leased, or Managed by theCompany in or Near Biodiversity-Rich Areas, Inside or
Outside Protected Zones
Not InvolvedGRI 304-2
Significant Impacts of Activities, Products, and Services on
Biodiversity
Not InvolvedGRI 304-3Protected or Restored HabitatsNot InvolvedGRI 304-4
Species in Habitats Affected by Operations Listed in the IUCN
Red List and the List of State Key Protected Wild Animals
(LSKPWA)
Not Involved
GRI Content Index
111112111112127128125126121122
Disclosure ItemsSectionGRI 404-2
Employee Skill Enhancement and Transition
Assistance Programs
Employee Training and DevelopmentGRI 404-3
Percentage of Employees Receiving Regular
Performance and Career Development
Assessments
Performance Table of Quantified DataGRI 405-1Diversity of Governance Bodies and Employees
Governance Structure, Equality and
EmploymentGRI 405-2Ratio of Basic Salary and Remuneration by Gender
Not Disclosed Due to Confidentiality
RequirementsGRI 406-1
Discrimination Incidents and Corrective Actions
Taken
Equality and EmploymentGRI 407-1
Operational Sites and Suppliers at Risk of ViolatingFreedom of Association and Collective Bargaining
Rights
Employee Welfare and Care, and Supply
Chain ManagementGRI 408-1
Operational Sites and Suppliers at Significant Risk
of Child Labor Incidents
NoneGRI 409-1
Operational Sites and Suppliers at Significant Risk
of Forced orCompulsory Labor Incidents
NoneGRI 410-1
Security Personnel Trained in Human Rights
Policies or Procedures
Not InvolvedGRI 411-1Incidents Involving Violations of Indigenous Rights Not InvolvedGRI 413-1
Operational Sites with Local CommunityEngagement, Impact Assessments, and
Development Plans
Industry Advancement, Public Welfare, and
Rural RevitalizationGRI 413-2
Operational Sites with Actual or PotentialSignificant Negative Impacts on Local Communities
Not InvolvedGRI 414-1Social Standards Applied to Screen New SuppliersSupply Chain ManagementGRI 414-2
Negative Social Impacts in the Supply Chain and
Actions Taken
Supply Chain ManagementGRI 415-1Political Donations Not InvolvedGRI 416-1
Assessment of Health and Safety Impacts ofProduct and Service Categories
Quality AssuranceGRI 416-2
Violations Related to Health and Safety Impacts of
Products and Services
Quality AssuranceGRI 417-1
Requirements for Product and Service Information
and Labeling
Customer ServiceGRI 417-2
Violations Related to Product and Service
Information and Labeling
Not InvolvedGRI 417-3Violations Related to Marketing Communications Not InvolvedGRI 418-1
Confirmed Complaints Involving Violations ofCustomer Privacy and Customer Data Loss
Customer Service
Disclosure ItemsSectionGRI 305-1Direct Greenhouse Gas (GHG) Emissions (Scope 1)Campaign against Climate ChangeGRI 305-2Indirect GHG Emissions from Energy (Scope 2)Campaign against Climate ChangeGRI 305-3Indirect GHG Emissions from Energy (Scope 3)Campaign against Climate ChangeGRI 305-4GHG Emission IntensityCampaign against Climate ChangeGRI 305-5GHG ReductionsCampaign against Climate ChangeGRI 305-6Emissions of Ozone-Depleting Substances (ODS)Campaign against Climate ChangeGRI 305-7
Emissions of Nitrogen Oxides (NOX), Sulfur Oxides (SOX), and Other
Major Gases
Performance Table of Quantified DataGRI 306-1Waste Generation and Significant Impacts of WasteResource Conservation and Circular EconomyGRI 306-2Management of Significant Impacts Related to WasteResource Conservation and Circular EconomyGRI 306-3Waste GeneratedResource Conservation and Circular EconomyGRI 306-4Waste Transferred for DisposalResource Conservation and Circular EconomyGRI 306-5Waste Entering DisposalResource Conservation and Circular EconomyGRI 308-1New Suppliers Screened based on Environmental Assessment Criteria Supply Chain ManagementGRI 308-2
Negative Environmental Impacts of the Supply Chain and Actions
Taken
Supply Chain ManagementGRI 401-1New Employee Recruitment Rate and Employee Turnover RatePerformance Table of Quantified DataGRI 401-2
Full-Time Employees Benefits (excluding temporary or part-time
employees)
Employee Welfare and CareGRI 401-3Parental LeaveEmployee Welfare and CareGRI 402-1Minimum Notice Period for Operational Changes
The Company notifies in accordance with national laws
and regulationsGRI 403-1Occupational Health and Safety Management System Occupational Health and SafetyGRI 403-2Hazard Identification, Risk Assessment, and Incident Investigation Occupational Health and SafetyGRI 403-3Occupational Health ServicesOccupational Health and SafetyGRI 403-4
Occupational Health and Safety Matters: Worker Involvement,
Consultation, and Communication
Occupational Health and SafetyGRI 403-5Occupational Health and Safety Training for Workers Occupational Health and SafetyGRI 403-6Promoting Worker HealthOccupational Health and SafetyGRI 403-7
Preventing and Mitigating Occupational Health and Safety Impacts
Directly Related to Business Activities
Occupational Health and SafetyGRI 403-8
Workers Covered by the Occupational Health and Safety Management
System
Occupational Health and SafetyGRI 403-9Workplace Injuries Occupational Health and SafetyGRI 403-10Work-Related Health IssuesOccupational Health and SafetyGRI 404-1Average Training Hours Per Employee Per Year Employee Training and Development
GRI Content Index
113114113114129130127128123124
DimensionNo.IssueCorresponding Section
Environment
Campaign against Climate
Change
Campaign against Climate Change2Pollutant DischargeResource Conservation and Circular Economy3Waste DisposalResource Conservation and Circular Economy
Ecosystem and Biodiversity
Protection
Environmental ManagementResource Conservation and Circular Economy
Campaign against Climate Change
Environmental ComplianceManagement
Environmental Management6Energy UtilizationResource Conservation and Circular Economy7Water Resource UtilizationResource Conservation and Circular Economy8Circular EconomyResource Conservation and Circular Economy
Society
9Rural RevitalizationPublic Welfare and Rural Revitalization10Social ContributionsPublic Welfare and Rural Revitalization11Innovation-driven DevelopmentSci-Tech Innovation12Technology EthicsSci-Tech Innovation13Supply Chain SafetySupply Chain Management
Equal Treatment for Small andMedium Enterprises
The Company pays procurement amounts tosuppliers according to internal regulations. Foraccounts payable balance at the end of 2023,please refer to the Company's 2023 Annual
Report.
Safety and Quality of Products
and Services
Quality Assurance
Data Security and CustomerPrivacy Protection
Information Security17Employees
Equality and EmploymentEmployee Welfare and CareEmployee Training and DevelopmentOccupational Health and SafetySustainabilityDevelopment and RelatedGovernance
18Due Diligence
Stakeholder CommunicationSubstantive Issue Identification19Stakeholder CommunicationStakeholder Communication
Anti Commercial Bribery and Anti
Corruption
Business Ethics and Anti Corruption21Anti-Unfair CompetitionBusiness Ethics and Anti Corruption
Content Index of the Reference Indicators Systemfor ESG Reports of Listed Companies Controlled byCentral State-owned Enterprises
115116115116
Content Index of the Guidelines No. 14 of ShanghaiStock Exchange for Self-Regulation of ListedCompanies—Sustainability Report (Trial)
Disclosure Content Section, Page Number, or Other NotesCorporate and Report Basic Information
Basic Report Information; About ShenmaCorporationESG Management 1.1 Sustainable Development ManagementESG Risks and Opportunities 1.1 Sustainable Development ManagementStakeholder Communication 1.1 Sustainable Development ManagementAssessment of Material Issues 1.1 Sustainable Development Management
Disclosure Content
Section, Page Number, or Other
Notes
Environmental IndicatorsPrimary Indicator Secondary Indicator Tertiary Indicator
Resource Consumption
Water Resources
E.1.1.1 Freshwater ConsumptionE.1.1.2 Recycled Water ConsumptionE.1.1.3 Proportion of Recycled WaterE.1.1.4 Water Resource ConsumptionIntensity
Resource Conservation andCircular EconomyMaterials
E.1.2.1 Non-Renewable MaterialConsumptionE.1.2.2 Toxic and Hazardous MaterialConsumptionE.1.2.3 Material Consumption Intensity
Resource Conservation andCircular EconomyEnergy
E.1.3.1 Fossil Energy ConsumptionE.1.3.2 Non-Fossil Energy ConsumptionE.1.3.3 Proportion of Non-Fossil EnergyE.1.3.4 Total Energy ConsumptionE.1.3.5 Energy Consumption Intensity
Resource Conservation andCircular EconomyCampaign against Climate
ChangePackaging Materials
E.1.4.1 Packaging Material UsageE.1.4.2 Reduction and Lightweighting ofPackaging Materials
Resource Conservation andCircular Economy
Pollution Prevention and Control
Wastewater
E.2.1.1 Compliance with WastewaterDischarge StandardsE.2.1.2 Wastewater Management andReduction MeasuresE.2.1.3 Wastewater Discharge VolumeE.2.1.4 Wastewater Pollutant EmissionsE.2.1.5 Wastewater Pollutant Concentration
Pollution Emission Control
Exhaust Gas
E.2.2.1 Compliance with Exhaust EmissionStandardsE.2.2.2 Exhaust EmissionsE.2.2.3 Exhaust Emission Concentration
Pollution Emission Control
Solid Waste
E.2.3.1 Compliance with Solid Waste DisposalRegulationsE.2.3.2 Management of General IndustrialSolid WasteE.2.3.3 General Industrial Solid WasteDisposal VolumeE.2.3.4 Hazardous Waste ManagementE.2.3.5 Hazardous Waste Disposal Volume
Pollution Emission Control
Environment
131132129130125126
Content Index of the Reference Indicators Systemfor ESG Reports of Listed Companies Controlled byCentral State-owned Enterprises
115116115116
Disclosure Content
Section, Page Number, orOther NotesClimate Change GHG Emissions E.3.1.1 GHG Sources and Types
E.3.1.2 GHG Emission ManagementE.3.1.3 Scope 1 EmissionsE.3.1.4 Scope 2 EmissionsE.3.1.5 Scope 3 Emissions (CertainSubsidiaries)E.3.1.6 GHG Emission Intensity
Campaign against Climate
Change
Emission Reduction Management E.3.2.1 GHG Emission Reduction
Management
Campaign against Climate
ChangeEnvironmental Rights Trading -Campaign against Climate
ChangeClimate Risk Management E.3.4 Climate Risk ManagementCampaign against Climate
ChangeBiodiversity Impacts of Production, Services,
and Products on Biodiversity
E.4.1.1 Impacts of Production,Services, and Products on Biodiversity
Environmental ManagementPolicies and Measures onResource and EnvironmentalManagement
Low-Carbon Development Goalsand Strategic Initiatives
E.5.1.1 Establishment of Low-CarbonGoals and Strategic Initiatives
Campaign against Climate
ChangeResource Management Measures E.5.2.1 Water Resource Management
E.5.2.2 Material Usage ManagementE.5.2.3 Energy Usage andConservation Management
Resource Conservation andCircular EconomyStatistics, Monitoring, andEvaluation Systems for Energy
Conservation and CarbonReduction
E.5.3.1 Monitoring, StatisticalReporting, and Evaluation System forEnergy Conservation and CarbonReduction
Resource Conservation andCircular EconomyGreen Initiatives andEnvironmental Actions
E.5.4.1 Clean ProductionE.5.4.2 Green Technology Upgradesand RecyclingE.5.4.5 Green Procurement andSupply Chain ManagementE.5.4.6 Environmental Public WelfareActivities
Environmental ManagementSupply Chain ManagementResource Conservation andCircular EconomyCampaign against Climate
ChangePublic Welfare and CharityGreen and Low-CarbonCertifications
E.5.5.1 Environmental ManagementSystem CertificationE.5.5.2 Green and Low-CarbonEnterprise CertificationE.5.5.3 Green and Low-CarbonProduct and Service Certification
Foster Green Living with Green
PlantsEnvironmental ManagementEnvironmental Compliance E.5.6.1 Emergency Response
Planning for Environmental IncidentsE.5.6.2 Environmental Violations andLegal Compliance
Environmental Management
Disclosure Content
Section, Page Number, or Other
NotesEmployees' Rights and Interests Recruitment and Employment S1.1.1 Company Recruitment Policies and
ImplementationS1.1.2 Employee StructureS1.1.3 Prevention of Child Labor or ForcedLabor
Equality and EmploymentEmployee Compensation and Benefits S1.2.1 Compensation Philosophy and
PoliciesS1.2.2 Working Hours and Leave PoliciesS1.2.3 Compensation and BenefitsAssuranceS1.2.4 Employee Democratic Management
Employee Welfare and CareOccupational Health and Safety S1.3.1 Occupational Health and Safety
ManagementS1.3.2 Occupational Safety & RiskPreventionS1.3.3 Response to Safety Incidents andWork InjuriesS1.3.4 Employee Care and Support
Occupational Health and Safety
Employee Development and Training S1.4.1 Employee Incentive and Promotion
PoliciesS1.4.2 Employee Education and TrainingS1.4.3 Employee Career Planning and JobTransition Support
Employee Training and DevelopmentEmployee Satisfaction S1.5.3 Employee TurnoverEmployee Welfare and CareProduct and Service Management Safety and Quality of Products S2.1.1 Policies and Measures for Production
Standard ManagementS2.1.2 Quality ManagementS2.1.3 Product Recall and WithdrawalS2.1.4 Negative Incidents Related toProducts or Services
Quality Assurance
Customer Service and Rights S2.2.1 Customer Satisfaction
S2.2.2 Customer Complaints and HandlingS2.2.3 Protection of Customer Informationand Privacy
Customer ServiceInnovation and Development S2.3.1 R&D and Innovation Management
SystemS2.3.2 R&D InvestmentS2.3.3 Innovation AchievementsS2.3.4 Intellectual Property Protection
Sci-Tech InnovationSupply Chain Safety and Management Supply Chain Management S3.1.1 Supplier Selection and Management
S3.1.2 Supplier Quantity and Distribution
Supply Chain ManagementSupply Chain Link Management S3.2.1 Policies and Measures for Supply
Chain ManagementS3.2.2 Supply Chain Safety Assurance andEmergency Response PlanningS3 2 3 Major Risks and Impacts (SupplyChain)
Supply Chain ManagementSocial Contributions Tax Payments S4.1.1 Tax Payment StatusTax Payment According to Law
Community Building S4.2.1 Policies and Measures for
Participation in Local CommunityDevelopment
Rural RevitalizationPublic Welfare Activities S4.3.2 Investment and Outcomes of
Participation in Public Welfare Activities
Public Welfare and CharityResponse to National Strategies S4.4.1 Industrial Transformation
S4.4.2 Rural Revitalization and RegionalCoordinated DevelopmentS4.4.4 Industry-Specific and Other SocialResponsibility Fulfillment
Public Welfare and Charity
Rural Revitalization
EnvironmentSociety
133134131132127128
Content Index of the Reference Indicators Systemfor ESG Reports of Listed Companies Controlled byCentral State-owned Enterprises
115116115116
Disclosure Content
Section, Page Number, or Other
Notes
Governance Strategy and Organizational
Structure
Governance Strategy and Procedures G1.1.1 Formulation of Governance Strategy
G1.1.2 Supervision Procedures forGovernance StrategyG1.1.3 Approval and Review Proceduresfor Governance StrategyG1.1.4 Leadership through Party Building
Governance Structure
Organizational Composition andFunctions
G1.2.1 Ownership ResponsibilitiesG1.2.2 Organizational Structure andFunctions of the Board of Directors, Boardof Supervisors, and ManagementG1.2.3 Appointment Procedures andComposition of the Board of Directors,Board of Supervisors, and Management
Governance Structure
Compensation Management G1.3.1 Compensation Plans for Directors
and SupervisorsG1.3.2 Transparency of BoardCompensationG1.3.3 Rationality of ManagementCompensation
Governance Structure
Regulatory Governance Internal Control G2.1.1 Internal Audit
G2.1.2 Internal Control Structure,Mechanisms, and Procedures
Compliance and Risk ControlIntegrity Promotion G2.2.1 Integrity Promotion Policies and
RegulationsG2.2.2 Effectiveness of Integrity Promotion
Business Ethics and Anti CorruptionFair Competition G2.3.1 Fair Competition Policies and
RegulationsG2.3.2 Effectiveness of Fair CompetitionMeasures
Business Ethics and Anti CorruptionInvestor Relations Management andShareholder Rights
Investor Relations Management G3.1.1 Investor Relations Management
StrategiesG3.1.2 Investor CommunicationG3.1.3 Establishment of Investor RelationsManagement Department
Governance StructureShareholder Rights G3.2.1 Shareholder (General) Meetings
G3.2.2 Shareholder CommunicationG3.2.3 Shareholders' Right to Informationand Participation in Decision-Making
Governance StructureCreditor Rights G3.3.1 Credit Status
G3.3.2 Performance in the Bond Market
Governance StructureTransparency of Information Disclosure Information Disclosure Policies G4.1.1 Financial Information Disclosure
G4.1.2 Non-Financial InformationDisclosure
Governance StructureInformation Disclosure Quality G4.2.1 Regular Monitoring, Auditing, and
Evaluation of All Disclosed Information
Governance StructureCompliance and Risk Management Compliance Operations G5.1.1 Compliance Operations Policies
G5.1.2 Compliance System DevelopmentG5.1.3 Specific Processes for ComplianceReview
Compliance and Risk ControlRisk Management and Control G5.2.1 Risk Identification and Early
WarningG5.2.2 Risk Control and TrackingG5.2.3 Risk Reporting and Management
Compliance and Risk Control
DearReader,ThankyouforreadingtheSustainabilityReport2023ofShenmaIndustrialCo.,Ltd..Toprovidemorevaluableinformationtoyouandotherstakeholders,andtoeffectivelyenhancetheCompany'sabilityandperformanceinfulfillingcorporatesocialresponsibility,wesincerelylookforwardtoyouropinionsandsuggestions.Pleaseratethefollowingquestionsonascaleof1to5(1beingthelowestscore,5beingthehighest):
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