Sustainable Supply Chain

Policies on Procurement and Sustainable Supply Chain

Tata Steel (Thailand) Public Company Limited has a clear policy under the framework of the Tata Code of Conduct (TCoC) in treating suppliers with transparency, accountability and fairness which considered as the same unity practices for Tata Steel Group including paying attention to the collaboration between the Company and Suppliers.

Download Procurement Policy for Sustainability

Analysis, Selection of Business Partner and Risk Assessment

The Company has created suppliers’ database by checking the qualifications of those who will be registered as the Company’s suppliers which shall pass all 5 aspects criteria including the technical performance, quality control and assurance, safety, health and environment, finance, ethics, and labour law compliance. The Company has conducted the supplier risk assessment to support the Company’s operation continuously in the long run by assessing the risk of the major group suppliers in 2 dimensions as follows;

  1. The suppliers who are at risk of the Company’s business operations considered from specified criteria such as the spend base per annum more than 10 million Baht, supply material and service which directly impact finish goods quality or irreplaceable supplier/manufacturer/service, etc.
  2. The suppliers with the risk of environment, society and corporate governance. In addition to the suppliers’ registration assessment according to the above criteria, the Company has also considered using various strategies to reduce risk of main raw materials shortage for the production which is a major risk of the Company’s. In order to mitigate the aforementioned risks, the Company, therefore, exchanges supplier information within the Tata Steel Group in order to access reliable sources. Moreover, the Company works closely with suppliers and users to find alternative sources of raw materials in order to reduce the risk of raw material shortage. To manage suppliers related to service and transportation, the Company gives an important to the management of safety, health, environment and society.

Policy and Principle of Procurement

Principle 1: Health and Safety

“The Company is committed to ensuring that employees of the Company, contractors, and communities in which the Company is operating shall not be harmed. The Company does not allow any action that shall cause harm to those in the Companies’ supply chain.”

The Company expects that its suppliers shall operate the business in the highest level of health and safety management to protect their employee’s health and safety.

Code of conduct: Provide training and knowledge concerned with safety rules for suppliers and contractors. Also, specify standard procedures and safety rules to concerned parties for acknowledging before entering any operation in the Company.

Principle 2: Fairness Business Operation

“TCoC has specified the ethics requirement for all employees of the Tata group to adhere to and aims that everyone in the Company’s supply chain shall acknowledge all concerned requirements. To demonstrate compliance with this requirement, suppliers shall present the evidence showing that these requirements are already included in the policy and/or their operations.”

Tata Code of Conduct has identified the fairness of business operation and the Company expects that its suppliers shall apply this principle as well.

Code of conduct: TCoC shall be attached to every contract made with suppliers. In addition, the Company sends a letter signed by the President and CEO together with the Tata Code of Conduct handbook to suppliers and contractors to be a channel for reporting to the Company as soon as there is a violation of the Tata Code of Conduct. The Company shall maintain payment conditions for suppliers and concerned parties who comply with agreements, rules, and laws only.

Principle 3: Environment Conservation

“The Company is committed to complying with the relevant laws in both the country and the region in which the Company operates to ensure the efficient use of natural resources and energy including reducing environmental impact from the Company’s production through continuous sustainable practices. This commitment is a part of the Company’s operation and the Company expects that suppliers shall follow this commitment as well.”

The Company needs to have suppliers that maintain the policies, processes, and procedures for effective environmental impact management.

Code of conduct: Meet suppliers to share experiences and best practices for environmental conservation.

Principle 4: Human Rights

“The Company respects the human rights of employees and the communities in which the Company operates and the Company is committed to promoting these principles with its suppliers.”

The Company expects that its suppliers shall develop and implement policies and procedures to ensure that human rights are maintained in their business operations and to encourage their suppliers to perform the same.

Code of conduct: Group accident insurance must be provided for the contractor’s employees. The Company has the policy to inspect all operations of contractors and suppliers to ensure that their employees comply with relevant laws and regulations. Besides, the Company has followed work procedures and criteria for supplier selection and evaluation to ensure that the suppliers are qualified and also provided cooperation to develop suppliers such as work-shops and special projects.

Principle 5: Local Community Development

“The Company business operation philosophy is; the community is not just another stakeholder in business but is in fact, the every purposes of its existence.”

The Company expects that its suppliers shall devote themselves to society, economy, and community development in the area in which the Company operates.

Code of conduct: The procurement team attends workshops and social responsibility activities. The team also provides supports to the Company’s suppliers to attend the Companies’ social responsibility activities for community development and fair business operations.

Trade Credit Policies and Terms

The Company has a credit management policy that determines rules and procedures for giving credit compared to competitors. The Company also considers collection and payment period to be consistent and do not affect the Company’s financial liquidity and determine the payment period to business partners to be on time. In this regard, the Company will take into account the costs and financial risks that may arise from foreign currency exchange rates, which consist of:

Financial Ratio (Days) FY2022 FY2021 FY2020 Average 3 years
Average Collection Period 20 14 12 15
Average Payment Period 11 12 10 11

In the past fiscal years 2019 – 2020, 2020 – 2021, and 2021 – 2022, the Company has made payments to business partners on time every time in order for business partners to have financial liquidity and the ability to continue doing business.