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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
96 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 2024, all 71 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 2024

  • Project to Promote Knowledge and Understanding of Sustainable Procurement: GGC, in collaboration with GC, held training on sustainable procurement for procurement and related departments, ensuring procurement processes align with sustainability standards and guidelines.
  • KM BATNA Analysis (Feed Supplier) Project: GGC sent six procurement staff to attend training on negotiation skills, focusing on developing and applying BATNA techniques to improve efficiency and maximize company benefits. Topics included BATNA methods and real-world case studies.
  • RSPO Training (HRD) (Feed Supplier) Program: GGC provided RSPO training through an E-Learning program by Bureau Veritas to enhance employees' understanding of RSPO trading, helping them support suppliers and farmers. This supports GGC’s sustainable raw material sourcing. Topics include RSPO principles, certification, traceability, and compliance.
  • EUDR Training Program: To prepare for the EU Deforestation Regulation (EUDR) , GGC organized EUDR Due Diligence training with Bureau Veritas. The training aimed to help employees understand legal requirements, manage risks, and support suppliers. Topics covered included deforestation drivers, EUDR law overview, and documentation and certification requirements.

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.

Additionally, GGC plans to include issues or performances related to ESG as parts of the criteria for supplier selection in the target group. For instance, consideration will be given to including management of climate change, such as target setting and decarbonization plans, as well as water management into the criteria. GGC aims to apply these ESG-related criteria to non-feedstock supplier group, with plans to extend to feedstock supplier group in subsequent phases.

In addition to the abovementioned risk screening, GGC’s suppliers must also pass an assessment which reviews their capabilities and qualifications in order to be included in GGC’s Approved Vender List (AVL). The assessment uses the Vender Questionnaire and the Vendor Qualification Form which contain four risk assessment criteria, namely

  1. Technical: Assessment of the supplier’s ability to comply with GGC’s technical and project requirements, including Management Capabilities & Organization, Equipment/ Tools/ Inventories, Experiences/ Know-How/ Expertise and accreditations and Standard Certification.
  2. Quality Assurance/Quality Control (QA/QC): Assessment of the supplier’s ability to guarantee the quality of products and services.
  3. Safety, Health, and Environment (SHE): Assessment of the supplier’s competence in workplace safety, environmental responsibility and ethical principles.
  4. Commercial: Assessment of prices, payment terms and the supplier’s overall commercial potential.

GGC also prioritizes strong Environmental, Social, and Governance (ESG), including ethics, legal compliance and impact on the society. The weight of ESG performance, which reflects GGC’s commitment to create a sustainable and responsible supply chain.

In 2024, the Company performed a supplier risk assessment for 71 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 2024, see the GGC’s Integrated Sustainability Report 2024

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.
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.

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 2024

  • 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 2024, the main discussion of the training involves “THRIVING TOGETHER AMID ECONOMIC PRESSURED” which suppliers with practical strategies to navigate financial uncertainty while maintaining operational resilience. It emphasizes collaboration, adaptive thinking, and proactive risk management to support sustainable business performance. Through interactive sessions and case studies, suppliers will learn to identify economic stress signals and respond with effective, forward-looking solutions.
  • 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 annually. Currently, the project is being implemented in four pilot provinces: Krabi, Trang, Phang Nga, and Chumphon. In 2024, the project supported more than 1,077 smallholder farmers and helped generate an average income of 17,443 THB per rai for participating farmers.
KPIs for Supplier Screening, Assessment and Development in 2024

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 2024, the percentage of satisfied clients and customer satisfaction at 99% and 96%, respectively, surpassing the target.

2021 2022 2023 2024 Target 2024
Percentage of satisfied clients 95 96 96 99 97
Customer satisfaction results (Score) 92 95 95 96 95

More details about customer satisfaction results can be found in Performance Data 2024

In 2024, GGC has evaluated its performance, divided into success factors and factors that should be improved as follows:

Success Factors
Communicating and building good relationships with customers
  • 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 to 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 2024 Integrated Sustainability Report at Integrated Sustainability Report 2024