Supply chain

Commitment and Policy

Based on the development of business activities, suppliers are THC’s important and long-term partners. By our collaboration, THC expects to be prospering with suppliers. Therefore, THC request suppliers to comply with related standards on the topics of environmental, occupational safety and health, and labor right so as to together fulfill social responsibilities.

Abide by laws and resolutions, ensure stable business growth, and balance the three dimensions of sustainable development—economic, social and environmental—to fulfill social responsibilities.
Establish a supply chain that protects the labor and human rights, occupational safety and health, environmental protection, green manufacturing/products, and sustainable development.
Meet our requirements in the sustainable procurement policy, and effectively manage their standards in quality, delivery, and cost.
THC performs products and risk assessments of each aspect on suppliers and the results are one of the most important THC procurement strategic references.
Commit to business integrity and forbid any inappropriate profit acceptance, corruption, extortion, or defalcation to establish an identification confidential mechanism for whistleblower and violator.

Supplier Management Measures

Supplier Selection Process

THC carries out supplier assessment of quality, finance, business registration, occupational safety and health management, labor and human rights, environmental protection, and signing the Representations and Warranties on Honesty and Integrity. Those suppliers who meet the requirements of the assessment can be qualified suppliers. For factories and related contractors, THC confirms whether they possess complete environmental safety and health management system, industrial safety/environmental protection organization, control, training and emergency response plans. Outsourcing companies of THC need to comply with the environmental protection and safety regulations we made.

Supplier Contracts and Agreements

Both parties, THC and suppliers, agree on the rights and obligations of quality, delivery date, product inspection standards, late delivery penalties, method of loading, insurance fee, warranty liability, obligation to maintain secrecy, force majeure clauses, etc. For facility, engineering, and related contractors, THC signs contracts with them for construction period, payment terms, compliance with environmental safety regulations and construction occupational safety and health requirements, change order clause, inspection clause, delay penalties, warranties, termination clause, obligation to maintain secrecy, force majeure clauses, etc.

Supplier Evaluation

THC regularly evaluate suppliers’ performance including quality, delivery, responsiveness, occupational safety and health management, labor rights, environmental protection, etc. Each supplier is rated according to our evaluation criteria. Those suppliers rated with poor score should perform improvements; if the supplier still fails to meet the requirements, THC will terminate the procurement contract or cancel the qualification of qualified supplier.

Supplier On-site Inspection

The supplier on-site inspection is conducted by our auditors from different departments (Quality Assurance Department, Procurement Section, Occupational Safety and Health Center, etc.) to perform regular audits in accordance with the Company’s requirements. In the inspection, we measure and evaluate suppliers’ performance in specific areas, such as quality system and document control, measuring instrument management, products and process management, factory and environmental management, environmental safety and health, and human rights management, etc. In addition, suppliers of raw food materials shall submit required test reports, such as the Certificates of Origin and its registration information, upstream traceability of products and certification information, inspection report, raw material hazard analysis form, food additive license, etc. We also conduct on-site inspection of food raw material suppliers and risk assessment of food safety factors. If the evaluation result is inferior to the requirements, THC will terminate the procurement contract or cancel the qualification of qualified supplier.

Evaluation Results for the Last Three Years

In 2022, the total number of suppliers for the Beverage Business is 111, including 60 suppliers (54%) invited to join the on-site evaluation. The evaluation result is that 100% of suppliers have a low level of risk. The total number of suppliers for the Packaging Business is 185, including 25 suppliers (14%) invited to join the on-site evaluation.

Beverage Business	2020	2021	2022
Invited suppliers	40	24	60
Total	111	105	111
Percentage	36%	23%	54%

Packaging Business	2020	2021	2022
Invited suppliers	13	19	25
Total	191	193	185
Percentage	7%	10%	14%

Suppliers Consultation

THC classifies suppliers in accordance with type and risk level; in the annual audit process, THC will counsel suppliers to improve their capability according to the classification, so as to conform to the Company’s requirements.

Suppliers Analysis

Key Suppliers : Raw material supply, the top 30 purchases (except for outsourced and trader), exclusive raw material supply.
Tier 1 Suppliers: Own production plant, self-produced and sold.
Non-Tier 1 Suppliers: Outsourced, Agents, Trader.

Beverage Business

Packaging Business

Supplier Risk Management

THC has made the supply chain contingency plans to take proper response actions upon the occurrence of a supply chain accident. Suppliers need to establish procedures for their supply of goods and services to ensure the normal operation of the company.

Supplier Integrity

All suppliers need to sign the representations and warranties of honesty and integrity to prohibit any unethical acts, such as accepting improper benefits in whatever form, corruption, blackmail, misappropriation of public funds (including anti-corruption).

Legal Compliance

All contractors are required to obtain the permits and relevant certificates issued by the government, comply with environmental safety regulations and the Occupational Safety and Health Act, and sign the environmental safety and health commitment statement to implement practices of disaster prevention and management and safety management. Contractors with serious environmental protection or occupational safety and health issue, or refusing to sign the commitment statement will be disqualified.

Personnel Security

To ensure personnel safety at work, contractors need to provide essential protective equipment, and confirm that they have maintained insurance for all personnel and equipment.

Predicting Danger

Implement “integrated inspection”; establish checkpoints and implement inspection before, during, and after contractor operation. For high risk operation, implement specialized audits to prevent the occurrence of occupational hazards.

Reinforce Educational Training

THC holds annual safety and health education and training.
Use the “follow in step” method of larger plant helping the smaller plant to guide contractors and reinforce their self-management ability.

Manage Cooperative Operation

Hold group meetings; review and assess contractors and recommend/reward high quality contractors while eliminating substandard contractors.