Sustainability Supply Chain
Bohui Paper has formulated and continuously improved a number of supplier management system documents such as the Procurement Management Procedures, the Supplier Evaluation Procedures, the Supplier Risk Assessment, and the Emergency Procurement Operation Instructions, and strengthened standardised management in supplier investigation and screening, risk assessment, performance evaluation, improvement communication, etc. The Company categorises its suppliers mainly in the following classifications: wood pulp and waste paper suppliers, wood chip suppliers, chemicals suppliers, equipment suppliers, engineering suppliers, spare parts suppliers, packaging suppliers, logistics suppliers, and services suppliers. By the end of 2022, the Company had a total of 2,783 suppliers, of which local Chinese suppliers accounted for 96.4%, 3.2 percentage points higher than the previous year.
In terms of supplier selection criteria, the Company requires suppliers to have the necessary qualifications regarding their products and services, and takes into account the performance of suppliers in terms of labour rights, health and safety, environmental impacts, etc. The Company conducts risk assessment on all suppliers, covering their business qualifications, financial risks, credit degree, litigation risks and reputation risks. Each assessment is valid for 3-5 years and needs to be re-assessed beyond the time limit. Suppliers can only be awarded permission tenders after passing the risk assessment.
When signing contracts, the suppliers must sign the Corporate Social Responsibility Statement and Pledge to make commitments to business ethics, respect for human rights, environmental protection, intellectual property protection, social responsibility management of upstream suppliers, green product management, social responsibility procurement, management system certification, etc., and continuously improve their performance. The Company has formulated the Supplier Performance Evaluation Questionnaire and the Supplier Performance Evaluation Scorecard, and conducts supplier performance evaluations for the previous year in the first quarter of each year, covering aspects such as quality, service, environmental protection, and adaptability. The Company urges the suppliers who fail to pass the performance evaluation to make rectifications. If there is still no effective improvement after communication and feedback, the suppliers will be included in the list of suspended suppliers, for whom a re-evaluation will be required before reactivating its supplier status. Suppliers with unacceptable business practices will be blacklisted by the Company.
Wood chips and wood pulp are important raw materials for papermaking enterprises, and their sources are closely related to forest protection and sustainable forestry development.
The Company continuously strengthens the responsible procurement management of raw materials. When purchasing wood chips and wood pulp, the Company requires suppliers to provide detailed certification documents on the source of raw materials to ensure that only fibre raw materials with traceable and legitimate sourced are purchased. The Company formulates and implements the plan for sustainable certification wood chip procurement, actively promotes the procurement of wood chips and wood pulp that have obtained FSC certification and CFCC/PEFC certification, and promotes the sustainable management of forests. In 2022, the proportion of certified wood chips and wood pulp accounted for 16.8% and 5.62% of the total amount of wood chips and pulp procurement of the Company, respectively.
