Raw Material Management Guidelines and Measures 

FENC devotes ongoing efforts in monitoring raw material usage while improving the production process and technology. By incorporating innovative technology and systems, the Company reduces raw material consumption while increasing the recycling rate. With standards more rigorous than the industry norm, the selection of raw material suppliers strictly follows the internal procurement management process and operational guidelines. FENC forms partnerships with those who abide by governmental regulations and sustainable guidelines, and commissions independent testing companies to examine the raw materials. To stabilize product supply, FENC procures raw materials from multiple suppliers, which ensures agility amid the capricious market conditions. Meanwhile, the Company interviews the suppliers and collects market information to assess their operational conditions and stay ready to respond swiftly in times of change.

Packaging materials are tailored based on production, marketing, customer types and delivery approaches. Priority consideration is given to packaging materials or operations that involve recycling, reuse or less material consumption. Safety is also assured in terms of management. The recycling quantity, recycling rate and completion rate are tabulated monthly. Unmet goals are examined. Managing the recycling of packaging materials may extend material life cycle while reducing consumption, costs and waste. In addition, FENC combines forces with suppliers and customers, working together and expanding our influence to create optimal packaging design that promotes recycling.

Management Procedure for Raw and Packaging Materials

FENC has long been recycling packaging materials such as pallets, paper tubes and pegboards through continuous dialogues with customers to establish a robust recycling mechanism and management system. In 2021, 65% of the packaging materials at all production sites are recycled. The recycling rate from participation in external organization is 45%.

Value Chain Collaboration

OGM works with Foundation of Taiwan Industry Service and inspects the recycled PET bales from suppliers on Wednesdays and Fridays in accordance with regulations established by Environmental Protection Administration on subsidy requirements for recycling businesses. The regulation stipulates that if the bales contain more than 1% impurities, the subsidy shall be deducted proportionately. The regulation aims to maintain the quality of the bale, preventing recycling businesses from mixing non-PET materials into the bale. OGM also discusses the testing results with suppliers, seeking to reduce impurity in raw materials and the scrap rate.