KMG Chemicals is committed to excellence in environmental, health and safety performance. We take pride in being a welcome corporate citizen and making a positive difference in the communities in which we operate. We are guided by an unwavering focus on the safety of our employees and customers, an adherence to environmental stewardship and a respect for the communities in which we operate.
Our Sustainability-related efforts encompass three main focus areas: Safety, Energy Efficiency and Environmental Footprint. In each of these areas, we analyze and measure our performance annually against a baseline (our fiscal 2014 year) and have set a target goal for performance (our fiscal 2018 year).
Since developing our baseline goals in 2011 KMG Chemicals has divested in some areas and expanded in other areas. The large acquisition of the OM Group’s Ultra Pure Chemicals business in 2013 caused us to reset our baseline year from 2011 to 2014 to account for the large difference in metrics.
As we continue to grow we are still making changes to the metrics baseline but have decided to keep fiscal 2014 as our baseline. In fiscal 2015, KMG closed its Fremont, California site and consolidated its operations into other sites. In fiscal 2015 and 2016, KMG Chemicals acquired additional sites in the United States and Singapore. Both the divestitures and acquisitions had an impact on KMG Chemicals’ environmental, health, safety, and sustainability performance as evident below.
We measure our safety performance using protocols developed by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA). In the chart below, we summarize our safety performance in terms of recordable injuries and illnesses per 200,000 employee work hours. In fiscal 2016, we recorded 1.4 injuries/illnesses per 200,000 employee work hours, up from 0.42 injuries/illnesses per 200,000 employee work hours in fiscal 2015. In fiscal 2016, we recorded nine recordable events, up from three in fiscal 2015. By fiscal 2015, we aim to generate an overall recordable injury/illness rate of 0.61. While fiscal 2015 was a record setting year for injury/illness performance at KMG Chemicals, fiscal 2016 was a struggle. Several of our injuries in fiscal 2016 were at the newly acquired sites, but as we move forward into fiscal 2017 we can already see a steady improvement in our safety commitment and performance at our new sites. As KMG Chemicals develops a larger global presence, all our sites are constantly striving to improve their safety performance to become a world-class leader in safety.
We focus on materials and energy conservation through the careful management of the environment and of our natural resources. Each year, we set specific objectives to lower our power usage per pound of product produced and to reduce our waste generation versus an established baseline.
By fiscal 2018, we aim to achieve a 5% increase in product produced per unit of energy (including electricity and natural gas) consumed. For electricity consumption, this means producing 5% more kilograms of product per kilowatt hour consumed. For natural gas consumption, this means producing 5% more kilograms per cubic meter of natural gas consumed.
Energy Efficiency — Electricity
Electricity energy efficiency increased slightly in fiscal 2016, as we produced 3.97 kg of material per kWh of electricity used compared to 3.95 kg of material produced per kWh of electricity used in fiscal 2015.
Energy Efficiency —Natural Gas
We improved our natural gas efficiency by 4% in fiscal 2016, producing 53.24 kg of material per cubic meter of natural gas vs. our baseline of 51.2 kg . Natural gas usage is influenced by temperature at many of our sites with gas being used for heating of the occupied spaces and to prevent freezing of pipes.
Our Environmental Footprint initiatives encompass three main focus areas: 1) greenhouse gas emissions; 2) water consumption; and 3) waste reduction through recycling and reuse. We are also engaged in the implementation of Environmental, Health, Quality, Safety and Security policies at all our locations.
Greenhouse Gas Emissions
We reduced our greenhouse gas (GHG) emissions by 1% in fiscal 2016 compared to our baseline level in 2014. Levels also decrease some from what we recorded in fiscal 2015. Specifically, KMG generated 16,506 tons of carbon dioxide (CO2) equivalent in fiscal 2016, down from 16,903 tons of CO2 equivalent in fiscal 2015.
We measure our water utilization in terms of kg of material produced per cubic meter of water consumed.
In fiscal 2016, our water utilization efficiency increased by 3% vs. our base year fiscal 2014, as we produced 441.47 kg of material/cubic meter of water vs. 426.74 kg of material/cubic meter of water in fiscal 2014.
This decrease in water utilization efficiency from fiscal 2015 reflects in part a decrease in product produced and that our manufacturing operations are not strongly influenced by water usage. By fiscal 2018, we aim to produce 448.08 kg of material per cubic meter of water consumed, an increase of 5% from our fiscal 2014 baseline level.
As a result of our recycling and reuse efforts, our operations produce little waste. In fact, KMG generated 0.0261 kg of waste per kg of material produced in fiscal 2016. While this is up slightly compared to 0.0232 kg of waste in fiscal 2015 sites continue to search for outlets to recycle and reuse. By fiscal 2018, we aim to generate 0.0227 kg of waste/kg produced, representing a 5% decrease from our fiscal 2014 baseline level.