This report is prepared by Fujian Shenma New Materials Co., Ltd. based on the specific situation of the company in fulfilling its social responsibilities. The report truly and objectively expounds the specific work done by Fujian Shenma New Materials Co., Ltd. in fulfilling its social responsibilities in 2022, hoping to accept the supervision and guidance of external stakeholders and enterprise employees, so as to promote the company to better fulfill and assume its social responsibilities.

1. Company profile

Fujian Shenma New Materials Co., Ltd. was officially established on February 13, 2018 in Lianjiang County, Fujian Province, with a registered capital of 352 million yuan, located in Lianjiang County Kemen Industrial Park, a key planned industrial zone in the province with convenient transportation and beautiful scenery, adjacent to Lianjiang Kemen Port, a natural deep-water port of 10 million tons. On July 1, 2021, Shenma officially became a wholly-owned subsidiary of Hengshen Group. 

The company now has more than 530 employees, and it is expected that the number of employees will reach about 570 after the completion of the third phase, of which 98.3% are employees with college degree or above, and 88% are under the age of 30.
Fujian Shenma New Materials Co., Ltd. has two main units, cyclohexanol and dehydrogenation, of which the cyclohexanol plant has eight processes and the dehydrogenation unit has five processes; The Shenma cyclohexanone plant adopts the most advanced cyclohexanol water process route, which has lower unit consumption, less pollution, higher efficiency and safer than the traditional oxidation process. It has the characteristics of high yield, low energy consumption, and low waste emissions.

The company has built two sets of cyclohexanone plants with an annual output of 200,000 tons, with a total investment of more than 2 billion yuan, and the annual output value is expected to reach 4 billion yuan after full production. After the project is put into operation, it will comprehensively optimize the industrial structure, so that Hengshen Group has a complete eight-way industrial chain, and at the same time improve the production capacity and output of high-quality cyclohexanone in our country, drive the improvement of the local and even the entire textile industry, and will have a profound impact on the competitiveness of domestic textiles in the international market.
The company's main product, cyclohexanone, is a colorless transparent liquid with an earthy smell and a minty smell when it contains traces of phenols. As one of the important organic chemical raw materials, cyclohexanone is the main intermediate for the manufacture of nylon, caprolactam and adipic acid, and is also an important industrial solvent.

In order to further consolidate and enhance comprehensive competitiveness, Shenma opened the second phase of the 200,000-ton cyclohexanone project while preparing for the construction of the first phase of the cyclohexanone project, and the second phase of the project has been completed and put into operation. The total output of the second phase of the Shenma New Materials project can reach 400,000 tons per year, which constitutes a dual-circuit supply of the group's cyclohexanone raw materials with the Phenol Phenol-pallahexanone project of Shenyuan New Materials, further consolidating and enhancing the comprehensive competitiveness of the group's industrial chain.

2. Development strategy

In recent years, the company has been committed to technological innovation, conforming to the development trend of new materials at home and abroad, market-oriented, science and technology-based, and benefit-centered, vigorously carrying out scientific and technological projects, increasing technological transformation, and striving to improve the productivity of cyclohexanone products and reduce the comprehensive energy consumption per unit product of cyclohexanone.

In order to further improve the innovation of the enterprise and make the enterprise change from scale growth to quality and efficiency, the next step is to improve the technical content and added value of products. Continuously absorb new technologies and achievements, actively develop high-tech and high-value-added products, promote the continuous optimization and upgrading of the structure, and gradually implement the famous brand strategy. Second, it is necessary to continue to improve the ability of independent innovation, build a technological innovation system with enterprises as the main body, market-oriented, and a combination of industry, education and research, so that enterprises can truly become the main body of research and development and the application of innovative achievements, and comprehensively improve the independent innovation ability of enterprises.

3. Green concept

The report of the 19th National Congress of the Communist Party of China pointed out that "we must adhere to the policy of giving priority to conservation, protection first, and natural restoration, and form a spatial pattern, industrial results, production methods, and lifestyles that conserve resources and protect the environment, and also naturally be peaceful, harmonious and beautiful." Fujian Shenma New Materials Co., Ltd. continues to integrate the concept of green environmental protection and energy conservation into all aspects of manufacturing, supply chain management through the exploration and innovation of green technology, and adopts the "full life cycle" project management thinking at the operational level, in order to protect the environment to the greatest extent, save resources, reduce pollution, reduce noise, and create green, healthy and environmentally friendly reliable products with a responsible attitude to the end.

4. Corporate social responsibility

In 2022, on the one hand, the company will actively carry out production and operation, strive to develop the market, optimize the business model, protect the legitimate rights and interests of employees in accordance with the law, focus on improving the happiness index of employees, and build a harmonious atmosphere between the enterprise and employees; On the other hand, establish and maintain a good image of integrity, law-abiding, and fairness, pay taxes in accordance with the law, take the initiative to assume obligations to the natural environment and social and economic development, actively maintain national unity and social stability, support and sponsor social welfare undertakings, pay attention to the living environment of socially disadvantaged groups, alleviate poverty and help the poor, and rescue disasters. The company has integrated corporate social responsibility into the company's business development, and pursued the common progress and development of the company with customers, employees, suppliers and society.

1. Solidly carry out production and operation, and build a harmonious and win-win cooperative relationship

In 2022, under the correct leadership of the company, the company will focus on "resolving business risks and improving economic benefits", and under the unfavorable conditions of the continuous deterioration of the external market situation and the intensification of risk surge, it will overcome all difficulties, work hard, and achieve certain development and progress in various work, and establish a good cooperative relationship with the company with customers and suppliers, and all kinds of products have won unanimous praise from customers.

2. Solidly promote enterprise management and create a global innovation system

The company adheres to the concept of "quality first, customer satisfaction", adheres to the talent policy of "people-oriented management, people-oriented development", and always promotes the development of enterprises with technological innovation and research and development, and has been recognized as "Fuzhou 2022 Industrial Leading Enterprise" by Fuzhou Municipal Bureau of Industry and Information Technology; At the same time, it is also listed as "Lianjiang County Party Member Integrity Demonstration Enterprise" by the Lianjiang County Market Supervision and Administration Bureau. The company adheres to the quality policy of "quality first, customer satisfaction", pursues perfect product quality in the production process, but also pays attention to environmental protection, and has passed the ISO9001:2000 quality management system certification, ISO14001:2004 environmental management system certification; ISO5001: 2018 energy management system certification; ISO 45001:2018 occupational health and safety management system certification.

3. Solidly fulfill corporate social obligations and create a good corporate image

A. Employees' living and office environment and welfare benefits

Since its establishment, the company has been taking "people-oriented management, people-oriented development" as the employment policy, the company conscientiously implements the national policy, continuously improves the working and living environment and labor treatment of employees, and has been advocating the purpose of "sharing benefits with employees", signing labor contracts with employees to reach 100%, and handling five insurances and one housing fund for all employees, with an insurance rate of 100%. In addition, there are livability allowances, commercial insurance, retention incentives and comprehensive allowances to enhance employees' work enthusiasm and sense of belonging, better help employees develop, and escort employees' careers.

In terms of working environment, a lot of money has been invested in the renovation of the factory, production and office areas, equipped with ventilation and exhaust facilities and air conditioning, changing rooms, inspection rooms, sub-restaurants and pantries to create a safe and comfortable working environment for employees In terms of accommodation environment, the company provides employees with youth apartment accommodation qualifications from time to time, which can meet the needs of all kinds of talents, the decoration style is simple and fashionable, each household has an independent balcony and bathroom, providing employees with a clean environment and reasonable layout. In addition to the dormitory with all the functions, it is also supplemented by supporting facilities such as activity room, baking room, board game room, gymnasium, aerobic exercise room, basketball court, badminton hall and staff bookstore to carry out various activities for employees and improve life satisfaction and happiness. Ensure that young employees can not only be active in their work, but also actively participate in group activities in their spare time, expand their circle of friends, and create a comfortable living environment for employees.    

B. Energy conservation, emission reduction and environmental protection

Since its establishment, Shenma Company has not forgotten to assume more social responsibilities while "providing customers with high-quality products and services", especially in terms of environmental protection, the company has invested 600,000 yuan in cyclohexanol 500# and 600# to increase the exhaust gas adsorption device, which can reduce VOC emissions by 480KG per year, which is conducive to environmental protection, and the company has passed the ISO14001:2004 environmental certification system.
Shenma Company has done a lot of work in energy conservation and emission reduction, consumption reduction and efficiency improvement: actively carry out cleaner production audits, energy efficiency benchmarking and other work; continuously improve the rules and regulations of energy consumption management, and gradually standardize the energy management of enterprises; Vigorously implement energy-saving projects such as reducing high-purity water consumption, reducing steam use and increasing recycling.

Fujian Shenma New Materials Co., Ltd
February 26, 2023