Rajratan is a leading manufacturer and supplier of bead wires for tires. With factories in India and Thailand, its clients are mainly global tire manufacturers, including Bridgestone, Goodyear, Michelin and Sumitomo Rubber. Originally a family-owned company in India, it has now grown to 600 employees. EcoVadis began assessing the company's Thailand plant in 2019 (and Rajratan India in 2021). Just two years later, Rajratan ramped up its sustainability efforts and received the EcoVadis Bronze Medal for its efforts.
We spoke with Yashovardhan Chordia, director of Rajratan and a driving force behind its rapid growth in the Thai market. We explore what the EcoVadis rating means for Rajratan, the sole producer of tire bead wires in Thailand, and the future of sustainability in the manufacturing industry.
Prior to the EcoVadis assessment, what were your focus areas of sustainability?
Prior to the EcoVadis assessment, our main focus was on increasing efficiency and improving productivity. In other words, reducing costs and consumption. This includes reducing the consumption of chemicals, water, and electricity by running machinery more efficiently. However, I don't think we considered these as comprehensive sustainability initiatives.
Also, we are a publicly-traded and listed company in India. To fulfill our social responsibility, we have also focused on CSR-related projects. An example is the Rajratan Foundation, which aims to support education, medical care, nursing care, and assistance to people with disabilities.
In Thailand, during the pandemic, we are the first company in Thailand that provided Covid-19 vaccines to not only for the local employees but also their family members and set up an isolation camp where people who test positive for covid-19 receive essential care and are provided with daily necessities. In this way, we were able to run production continuously without any closure due to the spread of Covid within the company.
What led you to undergo the EcoVadis assessment?
Our big clients, such as Bridgestone or Continental Tire, were the ones that originally requested us to undergo the assessment. At first we didn't take it very seriously, but as the company grew, it became more and more important to have a corporate structure that properly takes sustainability into account. We felt that the time had come to formalize our efforts and establish new policies.
In order to do so, we had to compile documents and evidence. I must confess that we had a hard time getting the required information to the experts at EcoVadis. We thought we had sustainable practices, but they were not properly documented. However, thanks to EcoVadis, such information is now being documented. It took a lot of groundwork in the first few years, but it is now an essential asset to the company's operations.
It has been four years since the first EcoVadis assessment. How do the regular reassessments impact the business?
I think they have made us start to focus on improving our working environment. In the past, we tended to focus on external initiatives such as CSR, but over the past few years, we have realized that improving things within the organization is also important. It has made us think about how to improve employee happiness and retention.
One of the focuses has been diversity. Previously, we had not properly looked at the diversity ratio of the company. I think in our industry, a lack of female operators was considered normal. In fact, when EcoVadis began its assessment, the percentage of female employees at our Thai factory was about 15%. This made us realize that this needed review, and we began recruiting female operators for each region. This has gradually improved, and today, about 40% of our Thai factory operators are women. In the future, we hope to apply these lessons learned in Thailand to our operations in India.
I also believe that we are now able to pay more attention to the health of our employees than ever before. All machines in the plant are equipped with dust collectors, creating a clean working environment. We are also very conscious about using natural resources. The regular reassessments have made us more intentional, especially in the consumption of water.
I believe that the EcoVadis assessment instills confidence in our customers, which is why I feel it is our biggest selling point.
How have you created sustainability champions internally?
In Thailand, it is mandatory to obtain a certification called the Environmental Impact Assessment (EIA). It's an assessment by the government that is required as a company grows. It assesses all aspects including the working environment, community activities, social activities, and resource use and pollution. It is similar to the initiatives and data evaluated by EcoVadis.
It took a good amount of time to get people to understand the importance of sustainability. It is true that some employees found it burdensome to prepare documents and materials for the tests. But after we were rated highly in the first EcoVadis assessment, everyone's opinion changed. They became motivated to achieve even better results. It has also made local assessments like the EIA easier as we already had the necessary documents.
Do you have any advice for companies that are just starting out in their efforts to promote sustainability?
I feel that any company should take sustainability seriously. It is not simply for the good of society, there are business benefits as well. Increasing production efficiency leads to sustainability, and reducing the use of plastic and paper saves money. Increasing employee happiness undoubtedly increases productivity. In other words, sustainable businesses reap long-term benefits.
Many small businesses may not yet fully understand the importance of sustainability. It’s a very complex process, so it’s great to have a ratings agency like EcoVadis that offers a single platform to point us in the right direction and help us move forward on our sustainability journey.
Do you think Southeast Asian companies, especially those based in Thailand, will continue to make progress with regard to sustainability in the future?
We learned a great deal from the pandemic, such as the importance of having a secure supply chain and having alternative suppliers. I think one of the biggest challenges companies face today is making their business more resilient and stronger.
Southeast Asian countries will play an increasingly important role in the future. Among these, Thailand is very advanced in terms of manufacturing. There will be more and more opportunities for countries like Thailand to grow and make the leap to becoming a global supplier. This is where an assessment company like EcoVadis becomes important.
We live in an era in which sustainability initiatives are always assessed when exporting products to Western countries. The sustainability standards of our Western customers are much higher and more stringent than those in APAC. If we want to expand our business even further, we have to think about staying competitive in the global marketplace. In this sense, I believe that undergoing an assessment such as EcoVadis is essential.
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