We actively inculcate sustainability principles into every aspect of our operations and business decisions. This approach enables us to achieve synergy and cost efficiency across the Group while also training our focus to the future with the objective of sustaining our business and contributing to economic growth.

In line with this, we nurture and support the development of vendors in our industries' ecosystem by fostering collaborative initiatives and providing them with training and skills upgrading. Through our business, we create positive economic multiplier effects to the host areas.

Developing Vendors

Under the VDP scheme, BHIC has registered 31 companies out of a total of 2,984 vendors registered with the Group as at 31 December 2018, and has helped nurture their capabilities and expand their business. This underscores our commitment to recruit and develop reliable and competent local vendors in our defence, commercial and energy segments.

Through the VDP, we help our vendors develop project management skills and technical know-how. In addition, we also expose them to various methodologies and industry best practices to better integrate with our shipyards' production processes and to enhance the quality of their products and services. With this, our vendors get the opportunity to build a track record for themselves, grow their business and gain experience that allows them to handle sizable projects.

Our VDP scheme helps promote value-added activities in areas such as shipbuilding, engineering and fabrication. This enriches the ecosystems of our industries and fosters growth in local economies, while supporting the national agenda of developing SMEs which are the backbone of Malaysia's economy.

Creating Jobs

BHIC contributes towards job creation in our industries and along the supply chains that support them. These jobs range from vocational types such as piping, welding and electrical wiring to sophisticated, innovation driven and highly skilled ones such as systems integration, naval design and MRO works. In 2018, we created 185 new jobs from our various projects, many of which are high skilled occupations in the defence and security segment.

Through job creation, we generate multiplier effects that help spur the economies of the host areas and surrounding vicinities. This also encourages the development of human capital which is vital for our growth and the advancement of our industries.

We are especially proud of our contribution to creating employment opportunities for ex-army personnel by providing them with essential training and exposing them to various skills and entrepreneurial opportunities through the VDP.

Through the jobs we create, we contribute to transforming Malaysia's economy through highly skilled, technology driven and knowledge based occupations.

Promoting High-Tech Activities

Through our projects, BHIC acts as a catalyst to the involvement of local companies in high-tech activities in the defence and security, marine, energy and aerospace industries.

Many businesses and enterprises supporting our shipbuilding, ship repair, MRO, fabrication and defence related projects utilise advanced technologies. Some of them have built a track record and a name for themselves, as evidenced by winning national awards, clinching big projects and even venturing into foreign markets.

Through the projects mentioned above, we help spur the development of local companies using high technologies. This augurs well with the aim of enhancing Malaysia's competitiveness in today's high-tech and digitalised global economy.

Developing Skilled and Innovative Human Capital

All three of BHIC's business divisions depend heavily on the availability of skilled and innovative human capital.

Through their activities, we promote the development of skills and innovation among Malaysians in areas such as design, engineering and systems integration. In this regard, we contribute to the fullfilment of the national agenda of transforming the economy into a developed one through high income activities. BNS for example, stimulates the development of highly skilled and innovative human capital in naval shipbuilding and ship repair among companies based in Lumut, Perak where it is located. As a result, many of them have expanded their business by undertaking sophisticated and complex projects.

A notable success story of ours in this area is the creation of a pool of highly skilled workforce at Boustead DCNS Naval Corporation Sdn Bhd (BDNC), our joint venture company responsible for the maintenance of the submarines of the Royal Malaysian Navy (RMN). When BDNC was awarded the In-Service Support (ISS) contract in 2009 by the Malaysian Government to maintain the submarines, the company had to rely heavily on foreign engineers and technicians to undertake the task. Today, as a result of the transfer of skills and know-how in BDNC, several local workers have earned qualifications to be involved in many aspects of submarine maintenance management and engineering. Additionally, all key positions in the company, including Chief Executive Officer, Chief Operating Officer and the Head of Operations for the ISS are now held by Malaysians.

In June 2018, BHIC achieved yet another milestone in developing its human capital when the Head of Engineering Department of BDNC, Chan Ling Ket was qualified by Naval Group from France as the Maintenance Authority personnel to approve on the diving safety of RMN's submarines. He is the first Malaysian to receive this prestigious qualification.

This is certainly an outstanding individual achievement and one that we at BHIC are proud of as it validates the effort we have put in towards developing skilled and innovative human capital.

Promoting Value Adding Activities

Through our projects such as the Littoral Combat Ships (LCS) and Littoral Mission Ships (LMS) and the provision of ISS and refit services to RMN's submarines, BHIC provides the opportunity for local companies to partake in big projects.

Their involvement enables them to gain experience and knowledge in undertaking complex jobs in value adding activities such as MRO work, systems design and integration, and high end manufacturing. These areas involve state-ofthe- art equipment, technologies and systems and required skill personnel.

By creating value adding activities through the LCS, LMS projects and submarines services, we are promoting high technology and increasingly embracing Industry 4.0. In this way, we are contributing towards moving Malaysia's economy up the value chain and creating high income jobs.

Supporting National Agendas

BHIC plays a notable role in advancing the nation's defence capabilities not only through building and servicing strategic assets but also through the provision of training programmes and supporting the Government's initiatives related to defence. Besides contributing towards making Malaysia a self sufficient nation in defence and reducing the outflow of foreign exchange, we help fulfil the national agenda of economic transformation. We also promote the development of SMEs through our VDP scheme, in line with the goal of increasing the contribution of SMEs to Malaysia's economic growth. In addition, we also support the development of local contents and promoting self-reliance in the defence industry.