Sustainable Supply Chain Management
Main raw materials pose significant environmental impacts. FENC gladly takes on the responsibility to manage and minimize such impact.
Main raw materials purchased by FENC are PX, PTA, MEG and Bio-MEG. The main raw materials constitute the largest expenditure category for FENC and a critical factor for ensuring product quality.
As a response to stakeholders’ concerns on the possible environmental impact of main raw materials, FENC has set standards that are above the industry norm. We adhere to internal procurement management procedure and regulations, choosing main raw materials suppliers that comply with government regulations and ESG guidelines. Company audits are conducted by third-party audit firms. PX, PTA and MEG: Compliance with REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) and Halal Certification are required.
We support the use of renewable and environmental-friendly materials. Meanwhile, we are developing and using renewable and plastic materials that, such as Bio-MEG, Bio-PTA, 100% Bio-PET and PLA.
Main raw material shipping at APG Polytech is conducted through railway and marine transport. To ensure safety, APG Polytech must maintain close communication with material suppliers and transport carriers. Strict adherence to the rules and regulations must be ensured to prevent accidents and leakages. All suppliers of primary raw materials for the company are participants of American Chemistry Council’s Responsible Care Program. The program advocates the environment, health, safety and safeguarding (EHS&S) in the international chemical engineering industry. It also demonstrates the commitment to health and safety of the employees, local communities and the overall environment from the industry. When the suppliers become members of this program, they gain access to its resources, such as seminars, training and consultation to enhance operational safety and performance in EHS&S.
Risk and Response on Main Raw Material Procurement
Risk | Corresponding Strategies | |
Stockout Risk | Solicit diversified suppliers | The Company selects reputable suppliers of a certain scale with a mix of different manufacturing methods to incorporate diversity in the selection process and achieve the goal of stable supply. |
| Cultivate quality and strategic partnerships | FENC maintains long-term and mutually benefitting partnerships with domestic and international suppliers and exchanges market information regularly. | |
Quality Risk | Request higher yield rates from suppliers | Raw materials must meet quality standards set by the plant to reduce waste of energy and resources due to defective products. |
Climate Change Risk | GHG Reduction | Suppliers must identify and manage climate-related risks. They are encouraged to set GHG reduction targets at the company level and seek cost-effective ways to achieve the targets. |
| Enhance resource efficiency | Aiming to reduce overstocking and waste of resources, ongoing review of procurement plans is conducted. | |
Price Risk | Utilize diversified procurement guidelines | The Company makes price forecast and responds to market changes with agility. We choose procurement timing and utilize both futures and spot price. We also control the stockpile of raw materials based on changes in market price to reduce the impacts of fluctuating price. |
Credit Risk | Select suppliers with international qualifications | The Company chooses reputable suppliers that are members of ICA and comply with international standards to ensure that the raw materials provided satisfy Company standards as stipulated in the procurement contract. |
Transportation | Adopt multi-modal transport | Raw materials are fully insured during the shipping process. Detailed shipping information is requested to enable tracking and ensure the safety of raw materials and carriers. In cases of force majeure, the shipping model is modified immediately in order to maintain the pace. |
Procurement of Main Raw Materials (Usage)
Unit: 1,000 metric tons
| 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
PX | 1,574 | 1,369 | 1,192 | 913 |
PTA | 1,838 | 1,773 | 1,389 | 1,756 |
MEG and Bio-MEG | 783 | 687 | 671 | 758 |
