Sustainable Supply Chain
Suppliers are important partners to the Company. Therefore, CWTC values the sustainable development of its suppliers. We implement “Sustainable Development Best Practice Principles” to encourage our suppliers to fulfill their corporate social responsibilities by protecting the environment, reducing carbon emissions, improving safety and health, valuing human rights, managing risk, and adhering to ethical compliance. Together, we aim to establish a stable and sustainable supply chain.
Quality Management for Suppliers
Through the supplier purchasing process, CWTC reviews each supplier's qualifications, including general information, financial status, and relevant system certifications such as quality management and environmental management. Depending on the assessment, it may conduct factory visits and evaluations covering quality management, delivery dates, system management and sustainability risk assessment to ensure that the suppliers comply with relevant regulations. To become a qualified supplier, the supplier must obtain approval from the purchasing, quality, and engineering departments, as well as other relevant units. In addition, CWTC conducts regular on-site evaluations annually to ensure that suppliers continue to meet the requirements. In 2023, there were no factory visits or evaluations, as we did not have any new major raw material suppliers.
Relevant Value Chains of Main Products (Material Stability and Price & Inventory Control)
Quality Audit Process for Suppliers
To understand the current status of suppliers in depth, CWTC evaluates the performance of “key suppliers of the current year" or "key suppliers rated as Class C in the previous assessment." The assessment includes 11 aspects: document control, design control, quality systems, quality records, procurement, process control, management of non-hazardous materials, control of non-conforming products, verification management, product protection, storage, packaging and transportation, product identification, and batch tracking management. These aspects are covered in both the suppliers' self-assessments and the Company’s on-site evaluations.
Supplier Tier Management
Supplier Assessment
To proactively manage risks and enhance overall supply chain quality, CWTC conducts sustainability risk assessments for suppliers. CWTC distributes self-assessment questionnaires to primary materials suppliers to investigate their potential environmental and social risks. Based on the results, suppliers are categorized into five risk levels. High-risk suppliers are required to make improvements within a prescribed timeframe. Those who fail to make improvements on time will be disqualified from our supplier list. In 2023, we assessed 13 primary materials suppliers, and none of them were found to have significant or potential negative social impacts.
Conflict Minerals Policy
CWTC has long been committed to complying with the standards and initiatives of the Responsible Business Alliance (RBA), the Global e-Sustainability Initiative (GeSI) and the Responsible Minerals Initiative (RMI). We clearly state that conflict minerals originating from the Democratic Republic of Congo (DRC) and its neighboring areas, controlled by armed groups—such as gold (Au), tantalum (Ta), tungsten (W), cobalt (Co), tin (Sn), and other conflict minerals—are not accepted in our supply chain. Suppliers are also required to comply with the RBA Code of Conduct. Specific measures are as follow:
1.Do not use conflict minerals from illegal sources, and do not purchase conflict metals produced in conflict-affected and high-risk areas.
2.Encourage all suppliers in our supply chain to participate in programs such as the RBA (Responsible Business Alliance) and the RMI (Responsible Minerals Initiative).
3.Commit to conducting due diligence on conflict minerals to ensure more transparent sourcing of conflict metals and minerals.
Local Procurement
CWTC has been committed to promoting local procurement to reduce carbon emissions from material transportation and improve procurement stability, while also fostering local employment and economic development. Local procurement also helps strengthen relationships with local suppliers, enhancing the flexibility and efficiency of the supply chain. In 2022, we expanded our facilities in Taiwan, increasing production capacity and gradually raising the proportion of self-produced materials while reducing overseas procurement. In 2023, the proportion of local procurement for raw materials reached 48%.
Proportion of Local Procurement Amount of Raw Materials in Our Plants