In 2022, 80% of critical suppliers have responded to the Supplier Code of Conduct Acknowledgment. The following procurement processes were undertaken according to the AMATA Group Procurement Manual:
Download1. Critical Supplier Identification
In 2022, the Company have a total of 527 tier-1 suppliers and contractors in the supply chain. The critical tier-1 suppliers are those who have conducted business with the Company continuously and met at least one of the following conditions; representing the first 80% of total procurement value, being distributors of primary raw materials or services that are critical to the Company’s operation, being a few seller in their category that are irreplaceable or non-substitutable.
In 2022, there were 85 critical tier-1 suppliers and contractors, which accounted for 80% of the total procurement value. Tier-1 comprises 11 critical suppliers in real estate and rental businesses and 74 critical suppliers in utility and service businesses, representing total procurement values of 7% and 93%, respectively.
2. Risk Assessment in Supply Chain
The Company has implemented a supplier ESG risk assessment by giving priority to critical suppliers and all new suppliers through a self-assessment questionnaire (SAQ) that covers economic, social, and environmental dimensions as well as good governance. For suppliers with medium-to-high risk (self-assessment score less than 80%), the Company will make a site visit to perform an additional on-site ESG audit. Furthermore, the Company has assigned the Procurement Department and business units using the supplied products or services to conduct an annual supplier quality assessment, but with a different frequency depending on the risk level. Critical and high-risk suppliers are required to present preventive and corrective measures, which will be assisted by the Company as a way to build a good relationship with suppliers.
The Company targets all critical and new suppliers and contractors to be assessed for both economic and sustainability risks, including environmental, social, and governance risks. In 2022, the Company achieved its target of conducting 100% risk assessments on all critical and new suppliers and contractors, representing 85 and 11, respectively. It was found that none of the critical suppliers had economic risks. However, there was one critical supplier with a high level of corporate governance risk in corruption and data privacy due to a lack of written policy and management approach and no procedure on customer data privacy protection, which accounted for 1.17% of all critical suppliers. The Company conducted an immediate on-site audit and demanded the critical suppliers prepare additional policy documents, including promulgating them for all employees to be informed of and comply with the policy. The next on-site audit of this critical suppliers will be conducted by the Company’s purchasing department and related parties in 2023.
3. Supplier Audit and Evaluation
The Company requires all critical suppliers and contractors that have already passed the economic and sustainability risks assessment by using the Self-Assessment Questionnaire (SAQ) to have an audit on the economic, environmental, social, and governance topics at their workplaces (on-site ESG audit). The patterns and frequency of the on-site ESG audit depend on the risk level. The critical suppliers with high risk will have an on-site audit as soon as possible; those at moderate risk will be audited once a year; and those at low risk will be audited every two years. The auditing items are set according to the Company’s criteria and the environmental management system (ISO 14001) standards and will be conducted by examining relevant documents and an on-site audit by the AMATA Procurement Working Committee.
In 2022, there were 11 critical suppliers that must be audited according to the set criteria, and all of them were on-site audited by the Company (100%).
Additionally, the Company mandates that suppliers and contractors who have business transactions with the Company undergo an annual performance evaluation and relationship assessment following the delivery of their goods or services. The results will be taken into account for the subsequent procurement.
The Company has put in place risk management measures for each supplier and arranged supplier development activities to reduce the likelihood of risk and the impact of such risks. However, the Company has not yet terminated business relationships with any assessed suppliers or contractors (0%).
4. New Supplier Registration
The new supplier selection process includes reviewing the qualifications and past performance of suppliers and contractors to determine whether they meet the Company's requirements. All new suppliers are required to complete an ESG risk assessment using a self-assessment questionnaire prior to new supplier registration. If a passing score is achieved and no economic, social, and environmental risks are found, the new supplier will sign the Supplier Code of Conduct Acknowledgement and be registered as a new supplier. If a passing score is not achieved or there are risks, the supplier must develop and submit a preventive or corrective plan and implement it until the score is acceptable before it can be registered as a new supplier.
In 2022, the Company had eleven new suppliers. All of them passed the specified new supplier selection process (100%).
5. Supplier Support and Development
The Company places importance on conducting business with suppliers in a fair manner. In order to promote liquidity in cash management and capital management for both the partners and the Company, the Company ensures adherence to agreements and commitments with partners based on fair and appropriate trade credit duration which is one of crucial factors for sustaining long-term business growth. The Company has established a Credit Term Policy for trade credit, which entails paying suppliers within a period of 30-45 days. The Company uses a banking channel to process payments, which helps build trust with suppliers and ensures timely payments within the policy framework. However, the actual payment period may deviate from the policy due to various limitations specific to each business, such as the type of business, product or service specifications, contract terms with suppliers, and quality standards of the products and services offered. The average credit term for the Company's products and services can be found in detail in the information provided.
The Company places importance on the development of suppliers and contractors in its supply chain, especially critical suppliers of utility and industrial services, to reduce social and environmental risks and impacts as well as compliance risks. It also encourages suppliers and contractors to improve their efficiency to be in line with the Company’s standards, i.e., encourage the critical suppliers and contractors to develop management systems and obtain appropriate international standard certifications, such as ISO 9001, ISO 14001, ISO 17025, and OSHA 18000.
- On 26 June 2022, AMATA Facility Services Co., Ltd. organized a solid waste spill recovery drill for garbage picking and sorting workers at the contractor’s waste sorting plant, aiming to enhance knowledge and skills in waste and environmental management and elevate the safety standards and operational efficiency of the contractor’s employees.
- On 2 July 2022, AMATA Facility Services Co., Ltd. organized a training on safe and proper forklift driving for contractors’ employees working in the Company’s area.
- On 24 September 2022, AMATA Facility Services Co., Ltd. organized a training on basic firefighting and evacuation for contractors’ employees working in the Company’s area.
- On 15 November 2022, AMATA Water Co., Ltd. invited its business partners to visit its water management facility to get a better understanding of the industrial estates’ water management.
- On 28 November 2022, AMATA Water Co., Ltd. held an annual general meeting for the members of water-user organizations at AMATA City Rayong Industrial Estate to report on the 2022 performance.
- On 8 December 2022, AMATA Water Co., Ltd. organized a webinar to keep factory operators informed about the water situation in 2023 and to ensure efficient water management within the AMATA industrial estates.
- On 4 January 2023, AMATA Water Co., Ltd. held an annual general meeting for the members of water-user organizations at AMATA City Chonburi Industrial Estate to report on its 2022 performance.
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