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LiuGong's Sustainability Commitment: Key Milestones in 2024 and Beyond

As we enter 2024, LiuGong (000528.SZ) stands as a beacon of sustainability in the global landscape. The company has taken substantial strides towards sustainable development through innovative practices and collaborations that truly reflect its dedication to an eco-friendly future. Having recently celebrated one year of the Green Alliance, LiuGong remains steadfast in its commitment to sustainability, reinforcing its strategic goals for the years ahead.

The Green Alliance Initiative

At the end of 2023, LiuGong established the Green Alliance, a collaborative effort bringing together prominent customers, distributors, and non-profit organizations. This initiative allocates part of LiuGong's annual revenue from electrical products to philanthropic projects in Africa, showcasing the company's commitment to social responsibility.

In May 2024, the Green Alliance reached a significant milestone with a charitable project involving the installation of water wells in South Africa. This initiative delivered the first electric construction machinery to the continent and improved access to clean water for over 25,000 households via a 150-meter deep solar-powered well established in Mabeskraal.

Advancements in Electrification

Beyond the Green Alliance, LiuGong has been proactive in its broader sustainability efforts. The company has made significant advancements in the electrification of its products, enhancing its green manufacturing capabilities. Through dedicated research and development, LiuGong is nurturing an industrial ecosystem focused on electric components. As of now, the company boasts an electric product range across 11 categories, contributing to carbon emission reductions of approximately 330,000 tons—equivalent to planting over 18 million trees.

In 2023 alone, more than 10% of LiuGong's international product sales were electric, effectively reducing its carbon footprint and emphasizing its commitment to a sustainable future. Additionally, the firm has emphasized the independent development of key components by launching a battery manufacturing phase and various energy replenishing facilities. Notable technological advancements include autonomous chargers and rollers deployed in mining and highway settings, enhancing operational efficiency and effectively reducing costs.

Environmental Management Initiatives

LiuGong is not only focused on product development but is also committed to maximizing resource recycling and aiming for zero pollution. In 2023, the company invested 41.61 million yuan in lifecycle product management, focusing on energy conservation and emission reduction. Wastewater and exhaust emissions adhered to compliance standards while hazardous waste management was conducted effectively, with no reported pollution incidents.

Over the year, LiuGong executed 27 targeted projects aimed at reducing VOC, welding fumes, and other pollutants. Energy consumption was optimized through solar initiatives generating 52 million kWh annually, lowering emission levels and contributing to sustainability. Employee training and promotion of a green culture are integral to LiuGong's environmental sustainability strategy.

Strategic Supply Chain Management

Strategically, LiuGong aims to create an efficient green supply chain through multiple initiatives. This includes integrating eco-friendly practices from demand analysis to product acceptance, prioritizing high-efficiency products and substituting conventional packaging materials with reusable tools. Strong supplier management includes audits focused on financial capability, product quality, and ESG metrics, fostering long-term partnerships.

Digitization through the SRM platform has allowed LiuGong to save 4.3 tons of paper annually, with a collaborative cloud platform enhancing real-time interactions with over 1,500 suppliers to drive greater efficiency throughout the supply chain.

The Road Ahead

Looking forward, LiuGong is committed to ongoing integration of sustainability into its business practices. The Green Alliance is set to expand its mission with plans for constructing a second water well in Gambia, reinforcing LiuGong's commitment to sustainable development on a global scale.

Ultimately, LiuGong's initiatives reflect a comprehensive approach to achieving sustainability, showing that a combination of innovation, collaboration, and proactive policies can lead to significant environmental and social impact.