ENVIRONMENTAL
Water Management
Responsible water management remains a key environmental priority for Masteel as we strive to minimise water-related risks and ensure sustainable withdrawal practices at both our Bukit Raja and Petaling Jaya operations. We actively engage with local communities, regulators and water authorities to understand shared concerns and collaboratively develop practical water stewardship measures. Our Water Conservation Policy provides the framework guiding efforts to optimise usage, reduce wastage and support long-term resource sustainability. We conduct periodic stakeholder consultations to enable us to assess local water challenges, evaluate emerging risks and identify opportunities for improved efficiency, ensuring alignment with regulatory expectations and community needs.
Transparency is embedded in our water management approach. Masteel discloses water withdrawal performance, risk assessments and mitigation measures on an annual basis. We also utilise recognised analytical tools such as the World Resources Institute Aqueduct Water Risk Atlas to evaluate exposure across our sites. The assessment confirms that both the Petaling Jaya and Bukit Raja facilities operate in low water-risk locations, with no withdrawals occurring in water-stressed areas. This mechanism allows us to further enhance our risk evaluation capabilities in particular to water management.
Although our operations are located in low water-risk areas, Masteel continues to prioritise responsible water stewardship. The installation of a rainwater harvesting system at the Bukit Raja and Petaling Jaya facility demonstrates our ongoing commitment to conserving water resources by reducing dependence on municipal supply and improving operational efficiency. To further strengthen this commitment, Masteel set an annual target to reduce total water withdrawal by 2%. This target was significantly exceeded, with water withdrawal decreasing from 372,527.88 m³ in FY2024 to 283,749.20 m³ in FY2025, representing an approximate 23.83%, compared to the target reduction of 2%. The reduction was mainly driven by greater utilisation of harvested rainwater, and process efficiency improvements implemented during operational upgrades in FY2024.
We will continue advancing sustainable water management through initiatives such as water recycling, rainwater utilisation and efficiency enhancements. Guided by our Water Conservation Policy, Masteel remains focused on optimising water usage while balancing operational growth with environmental responsibility.
Masteel has implemented two Rainwater Harvesting Systems (“RHS”) across our operational sites in Bukit Raja and Petaling Jaya as part of our ongoing sustainability and resource efficiency initiatives. Developed in collaboration with site personnel, the systems are engineered to capture, and store rainwater for operational reuse, helping mitigate potential supply disruptions while strengthening environmental stewardship. The harvested rainwater is primarily utilised in cooling-related applications within steel production, including product cooling, equipment cooling, dust suppression and ancillary operational cleaning activities. By substituting treated water with harvested rainwater for non-potable industrial purposes, Masteel reduces dependency on municipal water sources, improves process efficiency and lowers the environmental intensity of production. This initiative supports Masteel’s commitment to responsible water management and contributes to Malaysia’s broader ESG and circular economy aspirations.
Beyond operational resilience, the RHS forms part of Masteel’s broader water risk management strategy by diversifying water sources and improving adaptability to climate variability, seasonal rainfall fluctuations and potential regulatory constraints on water abstraction. By enhancing alternative water availability, the system safeguards operational continuity during periods of supply pressure while reducing exposure to water-related cost volatility. In FY2025, Masteel harvested a total of 11,926.20 m³ of rainwater, comprising 10,387.17 m³ from the Petaling Jaya plant and 1,539.03 m³ from the Bukit Raja plant, directly offsetting a portion of raw water withdrawal. In parallel, we actively promotes employee awareness and behavioural change programmes aligned with our Water Conservation Policy. Training and on-site awareness initiatives encourage efficient water usage practices, early leak detection, responsible housekeeping and reporting of abnormal consumption patterns. Together with operational optimisation measures, these efforts foster a culture of water stewardship, supporting continuous reduction in raw water intake and reinforcing our long-term commitment to sustainable manufacturing and environmental responsibility
Our primary water sources comprise treated municipal supply supplemented by controlled extraction from groundwater bodies, in accordance with applicable regulatory approvals. Rainwater harvesting further complements these sources to reduce dependence on externally treated water. Water consumption is largely associated with domestic use and process cooling activities. To enhance efficiency, we have optimised our cooling infrastructure through closed-loop circulation systems, significantly lowering withdrawal requirements while maintaining stable operational performance.
In addition, Masteel fully reuses wastewater generated from operations for machinery and product cooling, resulting in zero process water discharge since the commencement of operations. Prior to recirculation, all wastewater undergoes appropriate treatment in compliance with applicable environmental regulatory standards to ensure safe and sustainable reuse. This closed-loop water management approach reflects circular economy principles by minimising waste generation and maximising resource utilisation. We are currently in the process of obtaining formal recognition and certification from the Department of Environment (“DOE”) Malaysia for our 100% wastewater reuse practice. Consequently, no discharge volume is recordeddue to our zero-water discharge approach, demonstrating our commitment to responsible water stewardship and conservation.
We have implemented an advanced wastewater recycling treatment system that integrates environmental sustainability with operational efficiency. The system minimises water losses, reduces reliance on external water sources, and ensures compliance with environmental regulations. It operates through several structured treatment stages, each designed to optimise water reuse while maintaining the quality required for our operational processes.
Masteel’s unwavering commitment to sustainable water management is further demonstrated by our impeccable compliance record, with zero incidents of non compliance related to water quality, quantity permits, or regulatory standards. This achievement is a testament to our stringent monitoring systems, continuous improvements in water efficiency, and proactive engagement with environmental regulations. As we move forward, we will continue to explore and implement innovative water-saving technologies, expand our rainwater harvesting capabilities, and enhance employee-driven conservation initiatives. Through these concerted efforts, Masteel remains focused in our mission to protect and preserve this finite and precious resource, ensuring sustainable water management across our operations