………Warren Buffett

It's only when the It's only when the tide goes out tide goes out that you learn that you learn

who's being who's being swimming naked.swimming naked.

http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Enduring_Ideas_The_business_system_2379

Globalization Globalization

Customer Proximity - pipe line inventoryCustomer Proximity - pipe line inventory

Trade embargo Trade embargo

Environmental Goods liberalizationEnvironmental Goods liberalization

GHG mitigation / GHG mitigation / adaptationadaptation

EMEMS S

product carbon product carbon footprint footprint

Just in Time Just in Time ManufacturingManufacturing

WTO –Doha round WTO –Doha round

Protectionism Protectionism Competition or partnershipCompetition or partnership

CSR CSR

Banking reform Banking reform Liquidity Liquidity

Technology transfer / Technology transfer / IPR IPR

Human Right / Labor Human Right / Labor protectionprotection

Multi- LateralismMulti- Lateralism

Protectionism Protectionism

Bi-Lateral Bi-Lateral

Climate change: Hot , Humid & Crowded

Life Cycle Life Cycle AnalysisAnalysis

Poverty Poverty alleviation alleviation

Risk aversion Risk aversion

Consumerism

Figure 10.2 Current policy versus transition management

LITE: Low Impact To EnvironmentRetrospect and Future Prospect

5

( Label your product honestly )

Source: Mckinsey Quarterly

Internalize external social cost before everything else

Companies should:

Maximize Innovation by customization & SPSS

Kris SchneiderKris Schneiderexecutive directorexecutive directorChina Industry-University-Research Insitute Collaboration Association China Industry-University-Research Insitute Collaboration Association Secretary general – Secretary general – www.ecological-development.comFounding Partner –Founding Partner –www.Liteleather.com

1.1. Heshan Tan Tec leather product Ltd Heshan Tan Tec leather product Ltd 2.2. Saigon Tan Tec leather ltdSaigon Tan Tec leather ltd3.3. Mississippi TanTec Inc.Mississippi TanTec Inc.

TMTM

TMTM

Raw materials Raw materials semi finished semi finished componentscomponents commoditiescommodities retailretail

LITE=Low Impact to Environment

A branded sustainable technology- to produce -

• energy efficient products

- to outreach -• its combined formula technologies

• and applied energy conservation service

- to co-partner –- with customers on environmental protection

On site view of our production facilities

Commitment to economic sustainability

Environmental production is not a cost center, it’s a profit center Continuous investment in latest machinery and technology Long-term relationship with suppliers guarantees a sustainable growth for

both sides in terms of quantity, quality… In depth cost monitoring (Cost centers) and benchmarking systems Centralized purchase gives buying power

• Energy and resources : Continuous Improvement phase one spending USD 1.5 mio Phase two USD 3.0 mio Phase three USD 5 mio and the plan goes on …

• Amotization average in 24 month in energy efficiency

• PP&E Rationalization• New Retanning vessels• New Direct application equipment• New lighting system• Heat exchangers• many more items on Retro fits

• Amortized by savingsTMTM

Winning during uncertaintiessustainability analysis :

Quadruple bottom line Corporate Mission Value Creation

market leadership : At the market –be the vocal point Niche, sometimes Small is Beautiful

strategic road mapping: Measure what matters & Walk the talk

Value delivery Process: Branding – customer cognitive recognition, brand awareness , PSS Design

& implementation Innovation – Differentiation Design in – ODM instead of OEM, supply chain review & integrity, Outside in –customer orientation , customer centered process control, Inside out – EMS at your finger tips, Quality & reliability is given , What else makes a happier customer and their end consumers

That’s what they teach outside, what do we do ?

LITE manufacturing system targets the optimization of applied energy

through the production process

= energy efficiency + energy saving

Resource Efficiency :Resource Efficiency :•Closed loop Manufacturing - by sections •Reduce – Water , Electricity Conservation•Regenerate –transform shaving waste (collagen) into auxiliaries / fillers •Recycle -Floor water & solid waste into cement

Resource Productivity ( 2 patents )Resource Productivity ( 2 patents )

•Yield , yield & yield•technology: Chemistry , Formula , Mass Balance •by Quality Function Deployment & design-in activities•appearance ,Cost, Performance & Reliability checks

TMTM

Patented technologyPatented technology

Continuous improvement

Energies:Electricity , diesel, gas, renewable energies

Production

Formula ,process control

measureCO2-Emission

cold waterEnvironmental friendlychemicals

affluent Reedbed bio treatment

Wet-Blue

<CO2

LITE-Leather

<CO2

Water

Chemicals

waste

LITE-Process

Benchmarking

Recycle

Laufende, nachhaltige Verbesserungenin der Produktion

TMTMTMTM

Abfall

design

Investment

Management & Support

Continuous Improvement

direct savings by avoidance

energy transportation

facilities buildings

components, pumps , motors , drivers

JIT production planning

energy sources & re-usage

customer Logistics

Energy Management

Information Management

SustainabilityCheck

Market

The bamboo wall provides natural air circulation The sun-reflecting roof lowers the temperature of the building The transparent roof panels provides natural lighting during the daytime LED Lighting system for night shift

Energy-efficient Production Plan

Modern Drum-Technology in Retanning:

Energy reduction

drums: 56,217 kWh/yearWaste water: 88,145 kWh/year

CO2-Reduction: drums: 136,689 kg CO2/JahrWaste water: 76,469 kg CO2/Jahr

Slow motion, special inner-technolgy:

water: 65 % of old technologyEnergy: 24 % of old technology Chemicals: 75 % of old technology

Setting out machine with Recycling of coolingwater

Lights switched by motion control自动控制开关的照明

Hotwaterboiler instead of Steamboiler to heat 46 m³/d water up to 70°C

Measurment in China:

Efficiency-steam boiler: 34%Efficiency-hot water boiler: 62%

Reduce heavy oilIn hot water boiler: 55 t/year

Reduce CO2: 166,876 kg/year

Energy savingsEnergy savings

in Water recycling in Water recycling

Engineered Constructed Wetlands

Reduction of 245 kwh / year / sqm (or 1.1 Mio kwh / year) Reduction of 232 kgs CO2 / year / sqm (or 1.0 Mio kgs CO2 / year) No CO2 emission but creation of Biomass for later usage to generate energy

Final Cleaning of Wastewater using a Reedbed

Energy saving: waste water: 23,929 kWh/ Year

CO2-Reduction: waste water : 20,808 kg CO2/ Year

Effluent after 1st Cleaning

Using pre-cleaned wastewater for Waste water treatment operation

Energy saving 能源节约 : 21,935 kWh/YearCO2-Reduction 减排 CO2 : 19,074 kgCO2/Year

Process integrated Recyling in wet blue re-wetting

Energy saving: waste water: 23,929 kWh/ YearCO2-Reduction: waste water : 20,808 kg CO2/ Year

Result Producing 87% of leather by using direct application= reduction of Air emission

Reduction of:

-VOC-emission-Chemical consumption-Electrical power

Energyreduction (75% instead of 50% rollercoater) 1 rollercoater instead of spray machine

rollercoater: 19,250 kWh/yearWaste water: 16,740 kWh/year

CO2-Reduction: roller-coater 16,844 kg CO2/JahrWaste water: 14,694 kg CO2/Jahr

Waste Management

We have a recycling centre where all incoming waste is registered and more than 70% can be recycled on site

Examples for LITE® Waste solutions: Shavings sold to leather board manufacturers 5,45 t per day of condensed water from the vacuum dryer

is used for cleaning the floor

Because of the transparency we create in our production system, we give clear

numbers relating to product’s environmental impact targets

expressed as:

Kgs CO2/1,000 sqft each of our products

and start corrective actions

Electricity consumption Kamban

0

10

20

30

40

50

CLIA (China noStandard)

BLC (Inter.Standard)

ISA-TanTec

average energy consumption (MJ) to produce 1 m2 of finished leather out of Wet-Blue

51.9 33.0

Convert total energy consumed (electricity, diesel oil, heavy oil and gas) into MJ

0

5

10

15

20

25

30

35

40

45

50

CLIA (ChinaStandard)

BLC (Inter.Standard)

ISA-TanTec SaigonTanTec (goal)

Energyconsumption (MJ) for production of 1 m²finished Leather from Wet-Blue

LITEA branded sustainable technology

- to produce -• energy efficient products

- to outreach -• its combined formula technologies

• and applied energy conservation service

- to co-partner –- with customers on environmental protection

Commitment to technical innovation

LITE : low CO2 emission, less water consumption and overall monitoring of energy sources

Cutting department helps to utilize all selections labels & shoes In- process water recycling at WB soaking, retanning, drying, hydraulic

cooling Centralized R&D

• Optimization Optimization of the production in respect to of the production in respect to • Energy , Water, Chemical consumption and Energy , Water, Chemical consumption and • waste water output ;waste water output ;

• Monitoring, Calculation and Evaluation of Monitoring, Calculation and Evaluation of tt• hese relevant environmental impacts hese relevant environmental impacts • of the manufacturing processof the manufacturing process in form of CO2-Emission in form of CO2-Emission (kg CO(kg CO22););

• Clear Carbon footprint Clear Carbon footprint for each Leather productfor each Leather product (unit: kg CO(unit: kg CO22 / m² leather); / m² leather);

• Global Benchmark Global Benchmark possiblepossible for all Leather products , for all Leather products , tanners & brands ;tanners & brands ;

• Customer can adjust his/her Customer can adjust his/her purchase purchase according toaccording to Environmental Classification Environmental Classification (kg CO2 / m2 leather);(kg CO2 / m2 leather);

• All Leathers produced at ISA Tan Tec usingAll Leathers produced at ISA Tan Tec using lowest Energy and water consumption.lowest Energy and water consumption.

Access the UCMS Reporting System Website

Eco Efficiency ICT design Eco Efficiency ICT design -Need inputs from CSO, CFO, COO, VP Marketing -Focus: tacit, user friendly, fool proof & Real Time -Strategy: Life cycle ( Gate to Gate first ), TPM, Smart-meter, ODM, boundary-less -applied : Emission management EMS ( environmental management system) Demand-Pull material management , JIT, Quality management, kambam , t KPI, Labour productivity & incentive system, Security / SHE (safety health environment) -Value communication : outside-in & inside –out-Benefits: training our customers to use & grow into it

- Dissemination & Capacity Building- Value Chains Carbon Profiling- Product Carbon Footprint labeling

The VISIONs ---from LAB to MARKETSThe VISIONs ---from LAB to MARKETS

Operator Selects Time Period by Start & End Dates

Utility Consumption Report Utility Consumption Report By Area and per work station / MachineBy Area and per work station / Machine

After Pressing the Trend

LITEA branded sustainable technology

- to produce -• energy efficient products

- to outreach -• its combined formula technologies

• and applied energy conservation service

- to co-partner –- with customers on environmental protection

Commitment to strong relationships with clients

All hierarchy-level customer relationship management Exchange trainings and organize workshops with brands and shoe

factories & offering shoe making expertise Production facility and support organization close to shoe factories

(Vietnam, China and soon USA)

Core customer 1 Core customer 2 Developing customer

Commitment to economic sustainability

Environmental production is not a cost center, it’s a profit center

Continuous investment in latest machinery and technology

Long-term relationship with suppliers guarantees a sustainable growth for

both sides in terms of quantity, quality…

In depth cost monitoring (Cost centers) and benchmarking systems

Centralized purchase gives buying power

Early Adopters/Pioneers

Mass Market/Followers

End of Life

Numberof

customers

CustomerCustomer

segmentsegmentMaterialMaterial

Strategy Strategy Market Market

focusfocus

Value Value

positioningpositioning

Product Product

Design Design

procurementprocurement

Quality Quality systemsystem

Sales Sales

Service &Service &

MarketingMarketingEnd userEnd user

approachapproachSystem System

integerinteger

AchieveAchieve

Customer Customer value value

It is people who make it happen !

Game changerGame changer

47

MIGRATION AND SPATIAL DEVELOPMENT : Cases from the Coastal and Interior Regions in Contemporary China-Yongning Li , Guangzhou, China -Kassel, 2007

People - The agent of Change : Invest in our Human Capital to sustain growthPeople - The agent of Change : Invest in our Human Capital to sustain growthIn the natural , ISA abides in full conformity to the laws and regulations , all employees are 100% labor contract protectedWe also do:Securities Securities : Pension Fund , Health Insurance, Housing reserve fund, and Housing Loans work time management (i.e., flexible work time, overtime control and KPI reward system) Health / Leisure: In-house doctor / nurse, first aide care room , training centers, training programs , libraries Karaoke Leisure hall , soccer placeVoluntary high temperature subsidy, workers well-fare fund, Yearly free physical examination Safety / EnvironmentDaily audit team (SHE department) on hygiene, worker’s safety, security and environmental protection execution PPE use management, security & environmental protection investment check systemLITE: Low – Impact – To – Environment Procurements

48

49

Phase I

ImplementingTop down Down TopSelect Key bridges

Phase II

Learningtraining

Phase III

Growingwith guide by brands

Phase IV

MaturingRobust , autonomous audit tooling, ‘bridge’ between the management/workers

Phase V

Partner continuous improvement

Commitment to employees

Training for employees: English classes, on-job and third party training Health insurance with 24-hour service from day one and comprehensive

health clinic in house Helmets and raincoats offered to workers Ergonomic workspace design Paid trip home for national holidays

Commitment to the community Organize the yearly earth day in Vietnam in cooperation with Timberland World vision: support 50 Vietnamese children in need for their studies Operation Smile:

• Organize fund raising events• Sponsor documentary movies

Commitment to the community

Commitment to employees

54

(funded by the German Federal Ministry for Economy and Technology)

German Energy Agency

ISO 14001:2004 & LWG Gold Rated

-> 42% Reduction on conventional electricity-> 56% Less water Consumption -> 35% Reduction on total CO2 Emissions

* LWG benchmark

New achievement 2014The Best Tannery of The year 2014

And finally……..

We strive to achieve a

Competitive Profitable

Environmental friendly

Growth together with our stakeholders

Our Company vision 2018

ECONOMIC GROWTH

SOCIAL PROGRESS

ENVIRONMENTAL STEWARDSHIP

The 4th buttom line : The 4th buttom line : Shared ValueShared Value

Green Affordable HousingGreen Affordable HousingFor our For our employeesemployees