UEM EDGENTA BERHAD ANNUAL REPORT 2021 1 2 3 4 5 6 7 MANAGEMENT DISCUSSION & ANALYSIS 77 76 The Group is committed to creating positive economic impact for stakeholders and the local economy through our operations either by contributing to the development in the local areas or communities in which we operate by prioritising local suppliers in procurement process or expanding our presence in the international market. In 2021, we continue to push ahead with our journey of optimisation to deliver sustainable economic value to our clients through cost and operational efficiency measures. One notable example is from our Infrastructure Services business where we managed to obtain substantial savings from various initiatives jointly conducted with PLUS Malaysia Berhad. As we continue to spearhead our EoTF2025 vision, we developed our first digital ecosystem platform, Edgenta NXT, with the objective of propelling businesses towards digital transformation and sustaining resilience in the new normal. Our emphasis is on digitalising our operations through data engineering and AI to reflect our core philosophy in employing new approaches to achieve our sustainability goals. In terms of supply chain management, our efforts are centred on upholding ethical procurement practices as well as supporting local vendors in the regions of our operating locations. In addition, we continue to emphasise on our contractor development programme through our very own Projek Perintis, where we are committed in ensuring our business partners achieve a 5-Star Rating in HSSE performance by providing a healthy and safe workplace for their employees. This was done through a series of trainings and assessments to ensure our sub-contractors adhered to all the health and safety policies set by the Group. SUSTAINABLE ECONOMIC GROWTH SUSTAINABILITY STATEMENT SUSTAINABILITY STATEMENT UEM Edgenta’s focus is on creating positive economic impact for its stakeholders and the local economy through its operations. We contribute to economic development in the local communities through remuneration and local hiring, as well as market expansion as a subset of our broader business strategy. For more information of Business and Financial Highlights, Value Added Statement & Value Distribution and Financial Statements, please refer to pages 5, 39, and 163 to 314. Economic Development At UEM Edgenta, we create positive economic impact through our business activities which contribute to the local economy directly by distributing value to our employees, supporting the nation through taxes paid and by providing returns on the investments made in us by Khazanah Nasional Berhad, the Malaysian sovereign wealth fund and our minority shareholders. Across all our operations, we adhere to minimum wage legislation. In Malaysia, our minimum wage exceeds local requirements, whereas in Singapore, we adhere to the progressive wage model that is compulsory for the cleaning sector. We also support the hiring of locals for senior management positions, where 85% of UEMS Singapore’s senior management are from the local community. Beyond wage considerations, we are committed to distributing value to our employees via contributions to retirement savings. In Malaysia, this involves mandatory contributions to the Employees Provident Fund, and in Singapore, to the Central Provident Fund. In Taiwan, we provide a retirement plan that provides benefits based on the length of service and base salary at the point of retirement. Expanding Marketplace One of the main ways in which we contribute to local economies is through our business strategies which now sees the Group operating in six countries in Asia and the Middle East, with more than 22,000 employees serving our customers worldwide. In 2021, 40% of our revenue and 54% of new contracts originated from international markets, indicating its importance to the long-term sustainability of our business. This outcome was a result of our EoTF2025 business strategy, which saw us pursuing market expansion through diversification into new geographies and services. In April 2021, we have made further headway in our expansion strategy by exploring how we can establish a more solid presence in Saudi Arabia to demonstrate our capabilities, technology and solutions to potential clients. The potential establishment of a local entity in Saudi Arabia would increase the number of countries that the Group has operations in to seven, while generating job opportunities and economic activities. % of UEM Edgenta revenue from international markets 2021 2020 2019 40% 39% 31% ECONOMIC DEVELOPMENT
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