Sustainable Supply Chain Management
Main raw materials pose significant environmental impacts. FENC gladly takes on the responsibility to manage and minimize such impact.
The main raw materials purchased by FENC are para-xylene (PX), purified terephthalic acid (PTA), monoethylene glycol (MEG) and Bio-MEG, which constitute critical components in FENC’s cost structure, and one that poses direct impacts on product quality and compliance with customers’ standards.
To address stakeholders’ concerns regarding potential environmental impacts of main raw materials, FENC sets standards above the industry norm. As stipulated by the internal procurement management procedures and regulations, the Company selects main raw material suppliers that comply with government regulations and ESG guidelines with third-party audit and assurance.
The procurement of PX, PTA, and MEG must strictly comply with the Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) enacted by the European Union and Halal Certification to ensure market access and compliance risk management.
Meanwhile, FENC is developing and incorporating recycled and biomass materials, such as Bio-MEG, Bio-PTA, 100% Bio-PET and polylactic acid (PLA) to reduce the reliance on fossil feedstocks and support the circular economy.
Main raw material shipping at APG Polytech is conducted through railway and marine transport. To ensure safety, APG Polytech must maintain close communication with material suppliers and transport carriers. Strict adherence to the rules and regulations must be ensured to prevent accidents and leakages. All suppliers of primary raw materials for the company are participants of American Chemistry Council’s Responsible Care Program. The program advocates the environment, health, safety and safeguarding (EHS&S) in the international chemical engineering industry. It also demonstrates the commitment to health and safety of the employees, local communities and the overall environment from the industry. When the suppliers become members of this program, they gain access to its resources, such as seminars, training and consultation to enhance operational safety and performance in EHS&S.
Risk and Response on Main Raw Material Procurement
Risk | Risk Scale | Response Strategy | Corresponding Strategies |
Supply Disruption Risk | 🔴High | Reinforced supply chain resilience |
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Quality Risk | 🟡Medium | Quality control at the source |
|
Price Fluctuation Risk | 🟡Medium | Locked in low costs and risk hedging |
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Climate and Sustainability Risk | 🟡Medium | Green supply chain management |
|
Compliance and Qualification Risk | 🟢Low | Supplier due diligence |
|
Logistics and Transportation Risk | 🟢Low | Diversified logistics deployment |
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Note: The risk scale is divided into high, medium and low based on the risk score, which ranges from 1 to 25 from the lowest to highest. Risk score = likelihood of occurrence (1-5) × severity (1-5). |
↪More information：Procurement of Main Raw Materials (Usage)
