The Covid-19 pandemic has kept the pharmaceutical industry as busy as a bee. However, the rising concern on climate change has made it clear that no sector is too busy to become green and sustainable.
The climate issue has led consumers and investors to become more aware of the importance of sustainability. It then urges stakeholders of all sectors to take necessary sustainable measures in their organisations.
Being a giant pharmaceutical manufacturer in the country, Duopharma Biotech Berhad showed no exception as it expressed its determination to champion sustainability.
“Sustainability is something that Duopharma has pushed for quite a long time now,” said Leonard Ariff Abdul Shatar, the Group Managing Director of Duopharma Biotech Bhd, adding the initiative at the company started 30 years ago by ensuring that it provided a safe workplace for employees.
“It then evolved into looking at how we fit as a member of the community and the contribution made towards it. It was before the UN Global Compact etc., and before it was fashionable. So, in a way, Duopharma had a headstart to a certain degree because of our historical background.”
Duopharma Biotech’s commitment to sustainability has been acknowledged by many. As a result of its resilience in the area, the company has been included in the FTSE4Good Bursa Malaysia Index since June 2020 and awarded the Prime Minister’s Hibiscus Award for Notable Achievement in its environmental performance.
“Our ESG rating has improved from 2.9 in 2020 to 3.2 in 2021,” added Leonard Ariff.
In going green, Leonard revealed Duopharma Biotech never compromised its priority in providing safe, quality healthcare. He mentioned the preference in providing such services was also part of Duopharma Biotech’s commitment to sustainability.
“In Malaysia, we refer and adhere to the Current Good Manufacturing Practice (cGMP) and Good Distribution Practice (GDP) guidelines. These are advocated by the Pharmaceutical Inspection, Co-operation Scheme (PIC/S), International Council on Harmonisation (ICH) Guidelines for Pharmaceuticals, National Pharmaceutical Regulatory Agency (NPRA) GMP/GDP Guidelines and Eudralex to ensure the quality, safety and efficacy of our pharmaceuticals.
“We also actively seek cGMP certification by the relevant authorities in our international markets. Thus, we continuously strive for ISO 9001 certifications, ISO 13485 certifications, GMP certifications from NPRA and ISO 17025 accreditation. The reason we maintain all these practices is because we want to provide the best quality products to our customers.”
In an interview with @green, Leonard Ariff talked about Duopharma Biotech’s sustainability practices, the misconception on sustainability, its continual improvement initiatives, green initiatives, energy, resources and waste management, and its inclusion in the FTSE4Good Bursa Malaysia Index.
Sustainability at Duopharma Biotech
According to Leonard, all sustainability initiatives at Duopharma Biotech are led by the Board of Directors, who are ultimately accountable for the company’s strategic direction.
“As far as sustainability is concerned, we’ve elevated it into the board level. So, there’s a committee at the board called the Risk Management and Sustainability Committee. Here, we have an element of top-down, and at the same time, we have a sustainability department within the organisation that reports to the chief manufacturing officer.
“This ensures our sustainability values are instilled in our business operations as our governance tone is directed from the top.
“We have also crafted a sustainability policy based on stakeholder engagements and advocate for our sustainability culture within our business operations. Moreover, we have integrated sustainability-related risks into our Enterprise Risk Management (ERM).”
He shared the company also conducted sustainability training for staff of various departments. The training, led by sustainability specialists, aimed to enhance staff’s awareness and knowledge on sustainability and apply it in their daily operations where applicable.
The misconception on sustainability
In pursuing the green pharmaceutical route, Leonard Ariff said: “We’ve been monitoring our energy usage and also water usage for several years. At the moment, we have specific targets in terms of intensity of use.
“The intensity of use means when you produce a litre of product, a certain amount of water is used. The higher the demand for the product, obviously, the more water you’re going to use.
“When we say intensity, it’s not the absolute amount of water we’re using. It’s more to do with the fact that for every bottle you produce, you don’t create additional wastage.”
He believed the intensity concept had to be correctly understood by people who opted for sustainability. He highlighted that sustainability did not mean manufacturers would have to use less electricity but more optimally.
“If your sales for next year double your sales this year, then you want to make sure your electricity usage doesn’t exceed double the amount. The intensity should be the same. So, this concept is what many people are confused about when they talk about sustainability.
“It’s not about using less, but making sure what you use you’re using it optimally.”
Continual improvement initiatives by OE team
He highlighted the core business for Duopharma Biotech was manufacturing and supply chain. Therefore, he believed it was essential to drive optimal efficiency in all related processes to underline sustainability.
“Operational excellence is driven by continual improvement (CI) activities covering our entire supply chain, from our manufacturing plants to our warehouses and up to our customers’ premises. Our Operation Excellence (OE) team uses LEAN methodology to lead these CI initiatives under the sustainability department.
“Duopharma Biotech has committed to reducing our electricity consumption intensity by five per cent every year by implementing energy efficiency initiatives such as replacing old fluorescent tubes and metal halide high bay lights with similar versions using light-emitting diodes (LED).
“We even have various water recycling initiatives implemented to minimise water waste, such as rainwater harvesting.
“Lastly, in a bid to reduce plastic pollution, we embarked on a pilot project to switch from using non-biodegradable plastic to biodegradable plastic for storing materials to prevent contact and contamination.
“We even conduct recycling in our operations by applying the 3Rs (reduce, reuse, recycle) for non-scheduled wastes.”
Duopharma Biotech’s green initiatives
With regards to waste management, Leonard Ariff said Duopharma Biotech accepted goods returned by customers. These can’t be resold. They would be written off and disposed of in incinerators in a legal manner.
“As I mentioned previously, we have also embarked on a pilot project to switch from using non-biodegradable plastic in storing materials (to prevent contact and contamination) to using biodegradable plastic, in a bid to reduce plastic pollution.”
He revealed the pilot project started in 2020 as part of their efforts to manage its plastic waste better.
“This initiative is undergoing constant evaluation regarding the efficiency of the project,” he explained.
“Moreover, we have a three per cent annual reduction target for our scheduled waste intensity, which we achieved by efficiently using our materials to minimise waste. We also fully monitor the volume of non-scheduled waste produced and recycled at our sites.
“As one of the biggest pharmaceutical manufacturers in Malaysia, it is vital to ensure our products are available and accessible to patients. Thus, our products are distributed to more than 4,000 government healthcare facilities nationwide via the government-appointed logistics and distribution concession holder and delivered to more than 600 relevant purchasing points.
“As for the private sector, our sales team visits these customers and takes orders from them. In addition to in-person visits and engagement, our newly-formed telesales team communicates and keeps in touch with customers over the phone and online. These efforts contributed to our penetration rate of 85 per cent for the private sector.”
He highlighted the telesales initiative, which was initiated to reduce the company’s mileages and carbon footprints, which was helpful during the movement control order (MCO).
Ensuring optimal use of energy and resources
“To ensure we use our energy optimally, we implemented several energy-saving initiatives. We switched to LEDs and solar panel-powered streetlighting at our manufacturing sites.
“We also upgraded and replaced inefficient machinery such as chillers and installed motion detectors to turn off lights,” explained Leonard Ariff.
He said, in 2020, the company also installed an energy monitoring device (EMD) at its Bangi-based plant to monitor energy usage. He revealed in 2021, Duopharma Biotech planned to carry out energy and water audits at its manufacturing sites to develop effective carbon footprint strategies.
It included the implementation strategy for solar photovoltaic systems. He said these energy and water audits would be aligned with Sustainable Development Goals (SDGs).
“Furthermore, we are involved in an early phase of a pilot project on Dual Condensing System for our air conditioning units. It is to improve energy efficiency and reduce CO2 at the same time.
“The data from this pilot study will be used for the full implementation of this Dual Condensing System at our manufacturing sites in 2021.
“This is very much aligned with indicators for SDG 7, which is ‘Affordable and Clean Energy’. Lastly, we recognise that we cannot take water for granted. Thus, various recycling initiatives are implemented to minimise water waste such as rainwater harvesting.”
On the issue of waste management
Wastes from Duopharma Biotech’s manufacturing activities are classified into scheduled and non-scheduled waste, whereby the recycling of non-scheduled waste such as paper, plastics and aluminium is promoted.
“Any non-scheduled waste that cannot be recycled will be disposed of in municipal landfills according to the Department of Environment (DOE) regulations. As for scheduled waste, we cannot recycle them as DOE regulations do not permit this. Thus, the scheduled wastes such as unused and expired products, lights and many more are either disposed of in landfills, recovered or incinerated.
“Our objective is to reduce all waste produced group-wide and to dispose of our scheduled waste responsibly, according to the relevant regulations and guidelines such as DOE regulations and requirements of the Environmental Quality (Industrial Effluent) Regulations 2009.
“Moreover, we have been encouraging recycling practices among our employees for several years, and there is a strong culture of recycling within the group.”
Since the waste is managed legally, Leonard Ariff argued that there’s still room for improvement for the company’s sustainability journey as the legal and permissible way does not guarantee that it is sustainable.
He said: “The issue for us is sustainable does not equate to being legal. Being legal doesn’t mean that you’re sustainable. So, that’s where we have to improve our performance to make sure that we look at our carbon footprints in a way that is more sustainable, which may mean that it has to be higher than the legal requirements imposed on us.”
Minimising wastage of medicines
To reduce the wastage of medicines in its production and vendors, he highlighted Duopharma Biotech’s CI activities which cover its entire supply chain, from the manufacturing plants to warehouses and up to its customers’ premises, used LEAN methodology.
“This is how we drive optimal efficiency in all related processes to minimise wastage of medicines,” he added.
“Moreover, we ensure On Time in Full (OTIF) performance meets our 24-hour goal at least 85 per cent of the time. The target OTIF performance for our warehouses is even higher, at 97 per cent.
“It means our warehouses cannot be responsible for more than three per cent of delivery delays. It ensures our goods arrive to our customers on time to reduce rejection from customers, thus preventing our medicines from going to waste.”
He said shared as part of Duopharma Biotech’s quality assurance, the company would audit its vendors or suppliers under a vendor management programme to meet the GMP standards. Under its Purchasing Vendor Management System, the company would conduct a Vendor Performance Evaluation (VPE) yearly for open feedback.
“From this programme, we can help our vendors address any challenges they may face in terms of meeting Duopharma Biotech’s expectations on timely supply, product quality and after-sales support.
“The evaluation also draws attention to underperforming vendors. They may be removed from our network if they are unable to rectify and improve in relevant metrics. This reduces wastage of medicines as they are made of high-quality materials that do not spoil easily.”