Supplier Management

SDG

Performance highlights in 2022

Local procurement accounted for 85% of our overall procurement

100% of our suppliers received a Tier 1/Grade A rating as shown in the supplier evaluation results

Significance to CSCC

We establish reliable supplier resources through supplier development, survey, selection, collaboration, and evaluation to ensure a stable supply of materials for our company.

Goals

Short-term goals (2023)	Medium-term goals (2024～2027)	Long-term goals (2028 and beyond)
Include environmental issues, labor conditions, human rights issues, and code of social conduct as items for new supplier evaluation Achieve zero major workplace safety incident among transportation providers Proportion of locally procured raw materials > 60%	Conduct an ESG promotion and implementation survey among our top 10 suppliers and include it as a bonus point item in supplier evaluation Achieve zero major workplace safety incident among transportation providers Proportion of locally procured raw materials > 65%	Have at least three out of the top 10 suppliers with a Grade A rating in ESG evaluation Achieve zero major workplace safety incident among transportation providers Proportion of locally procured raw materials > 70%

Management strategies

Conduct supplier evaluation and carry out continuous control, as well as realize sustainable development with our suppliers through the identification and management of significant actual and potential adverse impact in the supply chain

Resources invested and implementation outcomes

Kindly refer to Annual ESG Plan and Implementation Outcomes in this Report for more details.

Supply Chain Composition

Supply chain is the main source of materials or services, such as raw materials and related transportation, equipment maintenance, etc., required for production and sales activities. CSCC has signed long-term contracts with suppliers of main raw materials and bulk packaging materials as well as transportation contractors to ensure the stability of the costs and supply of various products.

In 2022, our purchases of raw materials accounted for approximately 89% of our total procurement amount, with nearly 90% of our raw materials coming from China Steel Corporation and Dragon Steel Corporation. As these two companies are also the local subsidiaries of CSC Group, the supply of raw materials to CSCC is quite stable. Specifically, the raw materials purchased from China Steel Corporation are transported by pipeline, which in turn reduces carbon emissions from transportation by vehicle. Only 7% of our products were delivered using packaging materials. On the other hand, up to 93% of our products were delivered using recyclable containers (e.g., chemical tankers, tank trucks and ISO tanks), significantly reducing packaging waste in the process. Information on CSCC's procurement in 2022 is presented as follows: