Supplier Management Policy
Tung Ho Steel regards its suppliers as important partners in its operation. In addition to ensuring the quality, cost, delivery and quality of service of its suppliers, the Company also urges its suppliers to jointly implement environmental protection, climate change response and disclosure of information of labor rights and human rights to fulfill the social responsibility, aiming at growing with its suppliers and establishing a mutually beneficial, long-term and stable supply chain.
- To urge suppliers to comply with laws and regulations to achieve sustainable development and create a win-win situation in the three major aspects, including economic, environmental and social aspects as the core of common development.
- To protect the stakeholders’ rights and interests and at the same time include topics of social responsibility, labor safety, human rights and environmental protection as the basis for management decision and implementation.
- To attach importance to business ethics and morality, equal opportunities and fair trade as the prime directives for the interaction of the supply chain to eliminate illegal interests and severely punish illegal acts.
- To jointly strengthen the response and information disclosure concerning the impact of climate change and take actions on GHG emissions.
→Management of and Strategies for Climate Change Risks and Opportunities
Tung Ho Steel’s products are steel materials for building and construction. There are no products or packaging materials that can be directly recycled. Rather, when the building reaches its service life, these steel materials will be recycled through the scrap steel resource recycling system and will be sold back to the steelmaking works as the raw materials for electric furnace steelmaking. In terms of the ratio of heads and tails after the cutting of rolled steel or the return scrap in 2021, the rebar accounted for 2.07% while formed steel accounted for 5.07%.
In Tung Ho Steel, more than 90% of the primary raw materials are scrap steel. Ore resources are non-renewable raw materials, but their characteristics are that they can be reused and remanufactured, making them the materials that are with the highest recycling rate. They also play an important role in the regenerative cycle.
We have established the ISO 9001 management system and set up standards for steel scrap acceptance inspection and electric furnace operation. We increase the procurement amount of domestic scrap steel based on the monthly production plan, set up the crush workshop and increase the recovery rate in the steelmaking process to reduce the consumption of raw materials and energy to further reduce the environmental impact. The use of raw materials over the years is detailed as follows.
The connection of upstream, midstream and downstream of the industry
Our suppliers are important partners for the operation of Tung Ho Steel. Through close cooperation, we jointly pursue corporate sustainable management and growth. There were about 1,529 suppliers and contractors working with us in 2021.
The evaluation and selection of cooperating suppliers is based on their product capability. Under the concept of win-win partnership, we not only carry out evaluation but also propose improvement strategies and provide our suppliers with assistance to establish long-term, stable, and trustworthy relationships.
The Company has set up the Regulations Governing the Selection and Evaluation of Suppliers of Primary Raw Materials, Secondary Materials and Materials and established basic information of suppliers to have a series of effective management of supplier selection and evaluation. We carry out self-inspection or inspection carried out by a third-party notarization for every batch our suppliers deliver. Every 6 months, we make evaluation of our suppliers in terms of quality reliability, delivery quantity, price level, handling quality improvement for customers, and corporate social responsibility. We will explore the causes of the defects and improvement plans with our suppliers, and the results of improvement will be tracked for the reconfirmation of deficiency improvement, aiming at growing with our suppliers and establishing a mutually beneficial, long-term and stable supply chain. In 2021, our domestic scrap steel providers all met the domestic scrap steel supplier evaluation standards. A total of 192 secondary materials suppliers for our Taoyuan Works and Miaoli Works accepted the supplier evaluation in 2021, and the passing rate reached 99%, showing that there were no suppliers that had significant or potential impact on the environment or society.
We guide secondary material suppliers to take into account regulations concerning product quality, energy saving and environmental protection. For example, whether the selected suppliers pass the ISO 9001 quality management system verification and the ISO 14001 environmental management system verification, whether the products have the environmental protection mark, whether the products have eco-friendly and recyclable packing methods and materials, and whether the suppliers comply with our environmental protection policies and regulations concerning reduction in industrial waste, energy conservation, pollution prevention and environmental regulations.
In 2020, Tung Ho Steel has incorporated corporate social responsibility into the supplier management regulations, requesting the suppliers to sign the Supplier Social Responsibility Commitment, and the commitments include labor rights and human rights, environmental protection, emphasis on climate change mitigation and adaptation, integrity management and ethics. In 2021, a total of 358 suppliers signed the Supplier Social Responsibility Commitment, accounting for 86.4% of the procurement volume, and the proportion of domestic steel scrap manufacturers signing this commitment reached 100%. In February, 2022, the Trading Dept. and the Plant Material Section used a questionnaire to investigate the suppliers’ status of GHG inventory and verification.
In addition, to strengthen the prevention of disasters causing losses from contractors’ workers or temporary workers during construction or repair work in the factory area, we have also set up the Safety and Health Management Regulations for Contractors to allow every worker to understand the potential hazards of his work before operation and also require them to comply with the safety regulations to maintain work safety. In 2021, there were no suppliers with significant or potential negative impact. Tung Ho Steel works with its suppliers to jointly step toward sustainable management and fulfill corporate social responsibility to reach co-existence, win-win situation and co-prosperity.