Sustainable Supply Chain Management
Supporting the SDGs Goals
Commitment
- Tanachira Group is committed to managing its supply chain efficiently while conducting business responsibly toward society and the environment. The Company emphasizes responsible sourcing, waste reduction, fair collaboration with suppliers, and adherence to good governance principles to ensure stable and sustainable business growth.
- Support local businesses by sourcing at least 80% of procurement and purchasing from domestic suppliers.
Goals and Performance Highlights
Goals
- Conduct ESG risk assessments covering at least 100% of critical suppliers by 2027.
- Promote suppliers' compliance with the Company's ESG principles and Supplier Code of Conduct throughout the supply chain.
- Develop the supplier management system in alignment with Sustainable Supply Chain Management practices and ESG risk management.
- Promote Responsible Sourcing and support the procurement of raw materials, packaging, and services that take environmental and social impacts into consideration.
- Strengthen collaboration with suppliers to enhance their ESG capabilities, reduce environmental, social, and governance risks, and reinforce the long-term continuity and resilience of the supply chain.
Performance in 2025
Conducted supplier risk assessments, including ESG risk assessments.
95.2% of procurement was sourced from domestic suppliers, while 4.8% was sourced from international suppliers.
Challenges and Opportunities
Supply Chain Management is a key component that enables Tanachira Group to operate efficiently, respond effectively to market demands, and deliver customer satisfaction. Beyond enhancing business capabilities, the supply chain also plays a vital role in promoting Environmental, Social, and Governance (ESG) responsibility, ensuring sustainable growth across the Group’s entire value chain.
Management Approach and Value Creation
Tanachira Group places strong emphasis on sustainable supply chain management by integrating social and environmental responsibility alongside business efficiency through the following practices:
Fairness and Transparency in the Supply Chain
Group of Companies operates under good governance principles, promoting fair business practices with partners and suppliers, while emphasizing ESG risk management throughout the supply chain.
Responsible Sourcing
Supporting procurement from environmentally and socially responsible sources, such as selecting raw materials from sustainable producers and supporting local suppliers.
Waste Reduction and Resource Efficiency
Minimizing waste across all processes in the supply chain, including the use of recyclable or reusable packaging.
Long-Term Supplier Relationships
Building strong partnerships with suppliers by focusing on mutual growth and supporting them in complying with labor, environmental, and business ethics standards.
Labor Responsibility in the Supply Chain
Promoting fair labor practices in accordance with laws and international standards, with zero tolerance for child labor and illegal labor, while supporting safe and fair working conditions.
The Role of Internal Functions in Integrating ESG Across the Supply Chain Group of Companies Integrates Environmental, Social, and Governance (ESG) Principles Into Its Internal Operations to Promote Sustainable Development Throughout Its Supply Chain.
Tanachira’s supply chain functions span several key departments, each playing an important role aligned with sustainability practices as follows:
Identification of Key Suppliers
Tanachira Group identifies key suppliers, including both those who directly conduct business with the Company and those who do not directly engage with the Company, as follows:
Key suppliers of Tanachira Group are categorized into two main types:
1.1 Critical Tier 1 Suppliers (Direct Suppliers)
- Suppliers that are most critical to the Company’s operations.
- Directly engaged in business transactions with the Company, such as key raw material suppliers, manufacturers, core logistics providers, or service providers essential to operations.
- Any disruption from this group would have a direct impact on the Company’s production processes and service delivery.
- Examples include major raw material suppliers and key logistics providers.
1.2 Critical Non-Tier 1 Suppliers (Indirect Suppliers)
- Indirect suppliers who may not have direct transactions with the Company but have an impact on the Company’s supply chain.
- These may include providers of raw materials or services to the Company’s direct suppliers.
- Examples include suppliers of key partners (second-tier suppliers), technology support providers, or smaller suppliers that influence the quality of raw materials delivered to the Company.
Tanachira Group evaluates key suppliers based on five main criteria:
1. Business Criticality
Suppliers must have a significant impact on production processes, business operations, and business continuity.
2. Transaction Volume
Suppliers with substantial purchasing value or transaction volume that is important to the Company’s business.
3. Associated Risks
Risks related to quality, legal compliance, environmental, and governance (ESG) factors that may affect the Company.
4. Standards Compliance
Suppliers must comply with legal requirements and industry standards.
5. Financial Stability
Suppliers should have strong financial standing to minimize business risks.
Based on these criteria, the Company identified 11 critical direct suppliers, representing 13% of its total suppliers and accounting for 68% of the Company's total procurement value.
3.1 Tanachira Group applies selection criteria for both new suppliers and procurement suppliers, considering the following:
- Capability Assessment: Evaluation of business information, financial status, and the ability to deliver products and services.
- Trial and Testing: May include trial orders or testing of product and service quality.
- Contractual Agreement: Establishment of business terms and conditions, quality requirements, and ESG-related requirements.
3.2 Tanachira Group assesses and monitors risks arising from supplier operations through the following practices:
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Performance Monitoring and Evaluation
- Establish regular review periods, such as quarterly or annually.
- Utilize performance data, including delivery efficiency, product quality, and financial stability.
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Early Warning System and Risk Mitigation Plan
- Implement corrective actions when issues are identified, such as adjusting backup supplier plans.
- Assess potential risks that may impact the Company and develop appropriate mitigation measures.
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Business Relationship Development
- Implement supplier development programs to enhance capabilities and align with the Company’s standards and requirements.
Tanachira Group integrates ESG (Environmental, Social, and Governance) considerations as a key factor in both the selection of new suppliers and procurement processes. ESG assessment is also included as part of ongoing supplier performance monitoring. All suppliers are required to comply with the following criteria:
| Category | Assessment Criteria |
|---|---|
| Environmental | Demonstrate measures to reduce environmental impact, such as lowering greenhouse gas emissions and using environmentally friendly materials. |
| Social | Comply with labor standards, prohibit child and forced labor, and support workers’ rights. |
| Governance | Operate with transparency, comply with applicable laws and international standards, and have no involvement in corruption-related litigation or legal cases. |
Tanachira Group distributes a Supplier Self-Assessment form to its suppliers. Suppliers who achieve a score of 60 points or higher are classified as low-risk suppliers. For those scoring below 80 points, they are required to submit a corrective action plan addressing areas that do not meet the Company’s criteria and complete the improvements within the specified timeframe. Otherwise, the Company may consider suspending procurement or business engagement with such suppliers until the required improvements are fully implemented.
Supplier Support and Development
The Company collaborates closely with suppliers to enhance operational efficiency and continuously explore new approaches in business processes that promote social and environmental responsibility. This includes knowledge sharing to improve product quality and service standards, as well as developing products in alignment with international standards to expand business opportunities.
Stakeholders Directly Impacted
