Value Chain Management

Challenges and Commitments

From the desire to become a leader in the oleochemical industry, GGC places great importance on managing and building good relationships throughout the value chain through efficient supply chain management. This covers everything from the process of selecting Critical Tier- 1 suppliers and partners, to assessing the risks from the operations of suppliers, as well as encouraging business partners to operate with regard to the impact on the environment, society, and good corporate governance according to the ethical business practices of manufacturers, procurement of goods, raw materials and services, along with customer satisfaction and respond to changing customer needs, whether in the development of a variety of products or good and quality service, to maintain the main customer base appropriately and promote sustainable growth alongside partners and customers.

Key Stakeholders

Customer

Supplier and Business Partner

Goals

All suppliers and business partners acknowledge and comply with the Supplier Code of Conduct

Critical Tier-1 suppliers and business partners have been assessed regarding Environmental Social Governance (ESG)

Encouraging 800 smallholder farmers to obtain RSPO certification by 2024

The number of suppliers and business partners who violate labor rights, human rights, good corporate governance, or business ethics amounts to 0

Customer Satisfaction Score is
92 percent

Build Brand Loyalty
for Customer Retention through the development of long-term customer satisfaction

Remark: *The Customer satisfaction has been changed to conduct bi-annually

Supply Chain Management

GGC manages the supply chain efficiently to be able to deliver quality products to customers by promoting the procurement of products, raw materials, and services that are environmentally conscious in line to achieve Net Zero emissions by 2050 through the Decarbonization Pathway, which focuses on creating environmentally friendly chemical products (Portfolio-Driven). GGC divides its suppliers into 3 main groups: Feed Suppliers, Non-Feed Suppliers, and Service Suppliers.

Supply Chain Management Process

	Manage relationships and communicate the Business Code of Conduct Handbook to the Company’s suppliers, along with developing the potential of procurement department employees through various training sessions to ensure procurement is in line with the Company’s sustainability strategies and goals.
	Evaluate Significant/Critical suppliers annually in ESG Risk Screening, supplier selection and registration process, and supplier risk management, for Supplier Identification.
	Promote and support supplier Capacity Development through various projects to create awareness and develop suppliers' business operations to be more socially and environmentally responsible.

Supplier Code of Conduct

GGC has set business guidelines for suppliers and business partners in line with the Company's good corporate governance policy by assigning the Corporate Governance and Sustainable Development Committee to review and improve the business ethics of producers, procurers of goods, and procurers of services to be consistent with legal requirements and not violate human rights and labor laws, as well as take into account occupational health and safety and the environment regularly. GGC also conducts audits of suppliers’ business operations, which cover Environmental, Social and Governance issues or ESG and compliance with relevant laws, regulations, criteria, and standards to promote transparency and build confidence among all groups of stakeholders throughout the supply chain.

GGC also adheres to a sustainable procurement protocol that the company has established to drive the ESG practices in the purchasing activities especially for feedstock procurement of palm oil and other agricultural products. The requirements consist of 4 elements, including

	Feedstock Procurement Policy No procurement from brokers Observe the suppliers’ FFB price purchasing from the DIT announcement Sourcing CPO in line with or above the DIT price announcement from suppliers who purchase FFB at the market price or DIT price.
	Supplier Qualifications Supplier operate according to the sustainable procurement policy Comply with standards or policies in Fair labor practices, Workforce health and safety, anti-corruption and bribery, and Environmental protection
	Reducing the environmental impact of logistics Switching from road transportation to marine transportation to reduce carbon emissions for feedstock transported from the Southern Part of Thailand
	RSPO Feedstock Procurement Sourcing RSPO feedstock at a premium price (an average of 145 tons per month in 2024)

In 2023, all 153 of GGC’s Significant/Critical Suppliers received information about the Business Code of Conduct Handbook, which contains guidelines for suppliers under the topic of Supplier Code of Conduct. This represents 100 percent of all Significant/Critical Suppliers of the Company.

For more details about the Supplier Code of Conduct, see Good Corporate Governance and Business Ethics Handbook

Purchasing Officer Training

GGC has organized training programs to develop the potential of staff in the procurement department. These programs enhance knowledge and understanding of operational principles related to procurement that are in line with the Company's sustainability strategy and goals by applying information technology to increase the efficiency of the procurement process, making it more accurate and time efficient.

For more details about the Training for the Company's Buyers Officer, see the Company's Integrated Sustainability Report 2023

Suppliers Knowledge Sharing on ESG Procurement Program: GGC, in partnership with PTT Global Chemical Public Company Limited or GC, hosts an annual Procurement Training focused on Sustainability Procurement. Employees from the Procurement Department and other departments, such as the Quality Safety Health and Environment Department, attend the training. The training covers a refresher on the procurement process and how to integrate Sustainable Procurement Standards, including ESG aspects, into GGC's Procurement Process.
Smart Work Request App Project: GGC uses the Smart Work Request System or “SWR” procurement software system from GC Group's Share Service to develop a more efficient work order management system and various reports with business partners. The partners and suppliers can access the system to prepare quotations. Said quotations will be stored in a central database. Furthermore, the procurement staff can contact partners and suppliers and urge them to come in to work according to the contract through the same system.

ESG Risk Screening for Supplier

GGC has a supplier selection process that considers various risk types, including Environmental, Social, and Governance (ESG) factors. These factors encompass human rights, employee and labor standards, business ethics, compliance with environmental laws, and risks relevant to the business. Additionally, the process evaluates Country-Specific risks related to price volatility of palm oil and crude palm kernel oil due to government announcements in supplier countries. Sector-specific risks are also assessed, focusing on biodiversity loss in Southeast Asia caused by the deforestation of rainforests for oil palm cultivation, which damages critical habitats and ecosystems. Commodity-specific risks, such as market volatility and feedstock prices, as well as uncertainty around biodiesel composition and palm oil production policies, are also taken into account.

In 2023, the Company performed a supplier risk assessment for 154 significant/critical suppliers, covering Environmental, Social, and Governance (ESG), and found that “there is no risk from suppliers” because all suppliers have no operations that violate labor rights, human rights, or good corporate governance, and business ethics. No suppliers received complaints about human rights, ethics, and compliance with the law or business ethics through the Company’s Vendor Criticism system.

Supplier Assessment

GGC has developed a Self-Assessment Questionnaire (SAQ) for suppliers to assess them across 5 key areas. Suppliers with stronger ESG (Environmental, Social, and Governance) performance are preferred, and ESG criteria are weighted as follows: 1. Industry Standing (20%), 2. Supplier Flexibility and Negotiating Power (6%), 3. Financial and Accounting Capabilities (4%), 4. Ability to Provide Raw Materials and Services (8%), and 5. Supplier Competitiveness (12%), along with evaluating key ESG risks of suppliers on an annual basis to develop and monitor the operations of suppliers in accordance with the Supplier Code of Conduct, in line with GGC’s sustainability operational goals, such as compliance with the law, ethics, human rights and safety, occupational health and environment, as well as compliance with international standards such as ISO 9001 ISO 14001 RSPO, etc.

5 Key Areas of Supplier Self-Assessment Questionnaire

Industrial State

Weight = 20%

Quality Confirmation /Product Quality
Document Support
Warning Report from Logistic Agencies
Ability to Report
Certificate & Industrial Standards cover ESG topics:
- Governance
  - Quality Management Systems (QMS) - ISO 9001 or relevant policy
  - Anti-Bribery Management Systems (ABMS) – ISO 37001
- Environment
  - Environmental Management Systems (EMS) - ISO 14001 or relevant policy
  - Occupational Health and Safety (OH&S) Management Systems - ISO 18001 or relevant policy
  - Roundtable on Sustainable Palm Oil (RSPO)
  - KOSHER standard
  - HALAL
- Social
  - Thai Labor Standard 8001-2020

Suppliers’ Flexibility and Bargaining Power

Weight = 6%

Dependency on Single Supplier
Business Diversification

Accounting Finance and Other Perspectives

Weight = 4%

Being Listed Company Business
Business Existence

Ability to Deliver Raw Materials and Services

Weight = 8%

Reliability of supply

Competitiveness of Supplier

Weight = 12%

Competitive Price
Credit Term
RSPO Product Availability

In addition, GGC conducts supplier on-site assessments by employee representatives from the procurement department or other functions/ departments (2nd party assessment) who contact those suppliers using the assessment form called “Criteria for evaluating the sustainability potential of vendors,” which has questions consistent with ESG operations.

Furthermore, GGC has implemented a sustainability management platform system certified according to the standards and methodologies of a recognized industry or multi-stakeholder initiative called EcoVadis. This system is used to evaluate and monitor suppliers' sustainability performance. The evaluation criteria cover environmental issues, labor and human rights, ethics, and sustainable procurement. Suppliers are categorized into different quality levels - very good, good, average, average to be monitored, and low. GGC will establish different purchasing conditions for raw materials based on the supplier's level.

EcoVadis is an internationally recognized assessment methodology utilized to rate the sustainability performance of suppliers and companies operating within the supply chain. The sustainability issues are determined by internationally recognized standards such as:

21 Sustainability Criteria

Environment

Operations

Energy Consumption & GHGs
Water
Biodiversity
Local & Accidental Pollution
Materials, Chemicals & Waste

Products

Product Use
Product End-of-Life
Customer Health & Safety
Environmental Services & Advocacy

Labor & Human Rights

Human Resources

Employee Health & Safety
Working Conditions
Social Dialogue
Career Management & Training

Human Rights

Child Labor, Forced Labor & Human Trafficking
Diversity, Discrimination & Harassment
External Stakeholder Human Rights

Ethics

Corruption
Anticompetitive Practices
Responsible Information Management

Sustainable Procurement

Supplier Environmental Practices
Supplier Social Practices

Supplier Selection and Registration Process

In addition to the supplier ESG risk assessment process above, GGC has assigned the GGC’s Credit Rating Committee to carry out the selection and registration of suppliers by evaluating the qualifications of suppliers who can be registered to the Approved Vendor List (AVL) by answering the Vendor Qualification Form, which covers Environmental, Social and Governance (ESG) as well as the Company’s business relevance, which consists of evaluation criteria covering technical aspects, quality, occupational health and safety, environment, finance, ethics, legal operations, and social responsibility.

For more details on the Supplier Selection and Registration Process and the number of new suppliers and total suppliers in 2023, see the GGC’s Integrated Sustainability Report 2023

Supplier ESG Risk Management

GGC has adopted the Supply Positioning Model (SPM) to manage risk and prioritize suppliers by considering the relationship between Spend Analysis and Risk Assessment, which covers risks to the Company’s operations and ESG risks. Results from the model analysis will be used to create relationship management plans for each type of supplier, as well as used to monitor and evaluate the performance of suppliers and determine guidelines for further development of potential for suppliers. From the above model, GGC has divided suppliers' priorities into 3 levels: Strategics Supplier, Key Supplier, and Manage Supplier, resulting in increasing efficiency in Relationship Management (SRM) and raising the level of procurement.

Significance Level	Definition	Strategic Management	Management Tools
Strategics Supplier	Suppliers that are extremely important to the Company’s operations with a high risk of causing impacts on the communities and organizations of the suppliers themselves. This may have a severe impact on the business and corporate image.	Develop relationships and increase the potential of suppliers in accordance with the Company's policies and directions.	Supplier Code of Conduct Self-Assessment Questionnaire ESG Risk Assessment Supplier Capacity Development Supplier Relationship Management
Key Supplier	Suppliers that distribute products to consumers may have a high impact on the business and corporate image.	Set goals together to improve the service level.	Supplier Code of Conduct Supplier Capacity Development
Manage Supplier	Suppliers that carry out the majority of operational work may affect the community or nearby communities and have little to moderate risk to buyers.	Follow up on suppliers' operations according to the contract's conditions.	Supplier Code of Conduct

If it is determined that a significant or critical supplier is at high risk of not meeting the criteria, those suppliers may need to develop and submit a corrective action or improvement plan to manage the identified risks and non-compliance to mitigate the negative impacts. Concurrently, GGC will offer remote or onsite guidance and support to those suppliers to help them develop and implement a corrective action plan. In addition, GGC will monitor, check, and re-evaluate supplier performance according to their corrective action plan to prevent identified risks. If the supplier cannot meet the requirements within the specified time period, GGC may limit the purchase of raw materials, temporarily suspend procurement, or remove the supplier from GGC’s approved vendors list.

Furthermore, GGC has compiled the results of supplier ESG assessment, which covers various risk observations, such as environmental management risks, management of occupational health and safety, human rights, compliance with laws and regulations, and management of economic matters arising from suppliers, along with suggestions and measures to correct and develop suppliers' operations.

Examples of Suggestions and Corrective Measures or Measures to Develop the Operations of Suppliers

Environmental	Suggestions and Corrective Measures or Measures to Develop the Operations of Suppliers
Environmental Management	Record and systematically and continuously store energy use data, such as electricity, water, oil, etc., systematically and continuously to promote efficient resource use. Use the operating results to analyze and identify ways to prevent and mitigate the effects of risks arising from greenhouse gas emissions. Organize training programs to increase knowledge and skills in developing environmental innovations. After the project ends, organize a test to assess understanding. Store training results systematically.

Environmental

Suggestions and Corrective Measures or Measures to Develop the Operations of Suppliers

Environmental Management

Record and systematically and continuously store energy use data, such as electricity, water, oil, etc., systematically and continuously to promote efficient resource use. Use the operating results to analyze and identify ways to prevent and mitigate the effects of risks arising from greenhouse gas emissions.
Organize training programs to increase knowledge and skills in developing environmental innovations. After the project ends, organize a test to assess understanding. Store training results systematically.

Social	Suggestions or Corrective Action/Improvement Measures
OHS Management	Collect data on occupational health and safety operations systematically.
Human Rights	Prepare employment contracts for temporary employees

Governance & Economic	Suggestions or Corrective Action/Improvement Measures
Compliance with Laws and Regulations	Communicate policies, such as the Sustainability Policy, Quality Policy, Environment Policy, Occupational Health, and safety Policy, Social Responsibility Policy, Confidentiality, and Data Privacy Policy, Anti-corruption and Anti-bribery Policy, and Human Rights Policy to stakeholders throughout GGC’s supply chain. Set guidelines and concrete success indicators related to various policies the organization has established.

Governance & Economic

Suggestions or Corrective Action/Improvement Measures

Compliance with Laws and Regulations

Communicate policies, such as the Sustainability Policy, Quality Policy, Environment Policy, Occupational Health, and safety Policy, Social Responsibility Policy, Confidentiality, and Data Privacy Policy, Anti-corruption and Anti-bribery Policy, and Human Rights Policy to stakeholders throughout GGC’s supply chain.
Set guidelines and concrete success indicators related to various policies the organization has established.

Supplier Promote and Support on Capacity Development

GGC values developing and strengthening the potential of its suppliers to ensure that their operations are consistent with the Business Code of Conduct and Supplier Code of Conduct and with the goals of sustainable development throughout the supply chain.

For more details about the Supplier Promote and Support on Capacity Development Program, see GGC’s Integrated Sustainability Report 2023

Supplier Conference: GGC, together with PTT Global Chemical Public Company Limited (GC), holds an annual supplier meeting for consultations and identifying solutions to problems, as well as developing ESG model operations in accordance to GC’s and GGC’s requirement on ESG practices with suppliers, to drive operations towards sustainable supply chain management. In 2023, the main discussion of the training involves “NAVIGATING THE ROAD TO SUCCESS WITH GLOBAL MINDSET AND DIGITAL TRANSFORMATION” which is considered as an in-depth technical support to the suppliers.
Sustainable Palm Oil Production and Procurement (SPOPP): GGC has partnered with the German International Cooperation Agency (GIZ) and the Thailand Oil Palm Smallholder Academy (TOPSA) to promote oil palm smallholder farmers in Thailand to proceed according to the standard and receive RSPO accreditation by jointly promoting, supporting, and improving the quality of life of smallholder oil palm farmers. The Company introduces the Thai Oil Palm Smallholder Development Program (TOPSA) to create a connection for the network of farmers with oil palm extraction factories and to prepare the farmers to enter the Roundtable on Sustainable Palm certification. Oil (RSPO) by 2024. In addition, the Company has followed up on the results of the project every year. Currently, the project is operated in 4 pilot provinces: Krabi, Trang, Phang Nga and Chumphon. There are 7 oil palm extraction mills and 1,000 farmers' networks participating in the project.

KPIs for Supplier Screening, Assessment and Development in 2023

Customer Relationship Management

GGC strengthens and maintains good relationships with customers. GGC builds confidence and creates customer satisfaction by establishing a channel to receive complaints from customers through the customer relationship management system. GGC collects feedback and complaints from customers in order to establish a plan to meet the needs of customers accurately, appropriately, and effectively. In addition, GGC also analyzes customer needs and determines future business development and marketing strategies.

Customer Satisfaction Survey

GGC has a bi-annual customer satisfaction survey process to measure the success of GGC's operations and make changes according to the results so that operations are more accurate and efficient, contributing to customer satisfaction. GGC surveys our customer satisfaction levels through the Customer eQTM Index method, a tool and criteria used to analyze organizational management and recognized internationally. This survey aims to improve the processes, results, and overall perspectives of the organization.

Factors Affecting Customer Satisfaction Survey

Product

Quality of products
Consistency of product quality
Whether or not the product can respond to the needs of customers

Delivery

Punctuality
Speed of delivery
Safe delivery
Whether or not the quantity and quality of the products can respond to the needs of the customers

Communication & Marketing Promotion

Organizing activities such as conferences and seminars to educate the public
Organizing Customer appreciation events
Relevant and appropriate promotions and offers

Purchase, Ordering, Payment & Financial Support

Organizing activities such as conferences and seminars to educate the public
Organizing Customer appreciation events
Relevant and appropriate promotions and offers

Sales, Technical Support & Service Agent

Ease of contact and whether or not problems can be solved in an efficient and timely manner
Fast and accurate coordination

As previously mentioned, GGC conducted biannual customer satisfaction surveys. In 2023, the percentage of satisfied customers and customer satisfaction score remained consistent with 2022 at 96% and 95%, respectively, surpassing the target.

	2020	2021	2022	2023	Target 2023
Percentage of satisfied clients	92	95	96	96	95
Customer satisfaction results (Score)	91	92	95	95	92

More details about customer satisfaction results can be found in Performance Data 2023

In 2023, GGC has evaluated its performance, divided into success factors and factors that should be improved as follows:

Success Factors

Communication and Positive Customer Relationship Building

Coordinate and communicate with customers closely when the factory has problems. Implement a plan with the customer to reduce as much customer risk as possible.
Build good relationship and always show concern for customers.

Factors that should be improved

Quality and sufficiency of products, on time delivery, and communicating the delivery status

Maintain product availability, especially Fatty Alcohols, in order to support GGC's export markets.
Maintain a fast and efficient delivery level according to the set delivery plan, including communication and updates of the delivery status to create transparency. Provide a timely solution in case of late delivery.

For more about the project management and building good relationships with customers, see GGC's 2023 Integrated Sustainability Report at Integrated Sustainability Report 2023

Sodium Lauryl Ether Sulfate (SLES) Products Project to extend the business to the Home & Personal Care (HPC) market and respond to customer needs regarding environmentally friendly products.