Supply Chain
Supplier Sustainability Management Policy
Nan Pao regards its suppliers as long-term partners. Competitive quality, technology, delivery, and cost are essential requirements for all suppliers. To achieve sustainable development within the supply chain, Nan Pao ensures that suppliers comply with social and ethical standards, understand and adhere to applicable laws, and proactively address environmental and social issues. Suppliers are expected to assume corporate social responsibility and continually improve and enhance their practices.
Given that Nan Pao Resins operates across Taiwan, Mainland China, and Vietnam, the procurement units take into account regional regulatory differences by establishing additional evaluation standards for different types of cases and incorporating corresponding clauses into contracts. This ensures that suppliers comply with both legal and corporate requirements, and the list of required signatories has been extended to cover the entire Nan Pao Group.
As of 2024, none of the suppliers at Nan Pao Resins’ major operating sites employed child labor or engaged in activities that caused significant or potential environmental impacts. The Group’s key suppliers’ manufacturing facilities were located in Asia (Japan, Korea, Mainland China, Vietnam) and in Europe and the United States (Germany, Belgium, the United States, Spain, and Italy), with no procurement activities involving high-risk regions.
Supplier Management
To achieve the goal of sustainable supply chain development, Nan Pao specifies environmental requirements in theNan Pao Supplier Code of Conduct, including compliance with environmental permits, resource conservation and pollution prevention, hazardous substance management, waste and emission control, and material management. Suppliers are required to comply with these requirements and provide signed confirmation. In 2024, the return rate of the signed Supplier Code of Conduct reached 96.3%.
Starting in 2024, the Taiwan headquarters has followed the Supplier Management and Evaluation Procedures under the ISO 9001 Quality Management System to guide supplier selection and management. In addition, Nan Pao has established the Supplier ESG Risk Assessment Criteria to evaluate key suppliers on sustainability risks across environmental, social, human rights, and corporate governance dimensions. Assessments are conducted through the Supplier ESG Risk Self-Assessment Questionnaire, and through ongoing communication and improvement actions, the Company works to advance sustainability throughout the supply chain.
Local Procurement
Nan Pao Group is committed to promoting a local procurement policy, actively fulfilling the Company’s responsibility to support local economies and communities. This initiative not only fosters local business development but also effectively reduces the environmental impact of transportation, thereby strengthening the Company’s long-term sustainability.
In Nan Pao’s products, raw material costs account for the largest portion of production costs, while raw material quality is a key factor influencing product yield. Therefore, ensuring a stable and high-quality supply of raw materials has always been our top procurement priority.
In 2024, the proportion of locally sourced raw materials at Nan Pao Taiwan reached 76.2%, a 4% increase compared to 2023, and has consistently remained above the 70% target. For procurement related to services, engineering, and equipment, the local sourcing ratio was 87.4% in 2024, slightly lower than 99.5% in 2023. This decline was mainly due to the advance purchase of equipment by Spark Foamtech Enterprise Co., Ltd., a newly established joint venture in Taiwan, which will be resold once its land and facilities are ready. Excluding this internal transaction, the local procurement ratio for services, engineering, and equipment still reached 99.1%, consistent with the previous year.
With production sites across multiple countries, Nan Pao Group will continue to deepen collaboration with local suppliers at each site, promoting local procurement strategies and contributing to the creation of a healthier and more resilient business environment.