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  • Procurement is the process of selecting and procuring quality raw materials for production. ThaiBev has implemented the Supplier Code of Practice as a standard for suppliers’ operations in order to reduce the potential impacts on production, the environment, society and the business. It also specifies measures to suspend trading with any supplier who violates the Code of Practice, or any supplier who does not take corrective actions to address a complaint.
  • Determining measures to screen suppliers and strictly inspect quality, with priority given to reducing impacts on the environment and society; and to ensure that products have high quality and are sourced through procurement processes with high standards and environmental and social responsibility.
  • Supporting local suppliers with the objective to promote national economic growth and develop the capability of local suppliers to be equal to their international peers, and distribute income to local communities to help them become more self-reliant.
  • Managing risk by assessing material criticality according to procurement spend and risk levels in procurement, to prioritize and mitigate risk efficiently.
Centralized Procurement
 
ThaiBev uses a Centralized Procurement approach, which specifies frameworks and control of procurement from a central department, in order to gain more bargaining power and enhance competitive advantage in cost management. And most important to this strategy is the control of quality and transparency in the procurement process, with suppliers categorized in two groups according to the merchandise they are supplying as follows:


> 2,500
Suppliers

1. Direct Materials
are merchandise that are product components or used directly in the production process. They are not diverse but their procurement spend is high. They are categorized into packaging, commodities and chemicals.


> 40,000
Million Baht
Procurement Spend in 2018

2. Indirect Materials
are other merchandise not under Direct Materials which ensure business continuity. Procurement spend is not high, but covers a wide range of merchandise such as machinery, spare parts and consumables, etc.

Proportion of Procurement Spend

Procurement Spend for Direct Materials
Packaging 59%
Commodities 36%
Chemicals 5%

66%
Direct Materials
34%
Indirect Materials
Procurement Spend for Indirect Materials
Construction 27%
Machinery 26%
Materials handling 21%
POP/POS/Premium 15%
Services, IT & office automation 6%
Consumables 5%

96%
Local suppliers
Notes
  • 1. “Local supplier” means a supplier operating in a country in which ThaiBev has a production base and who directly supplies the ThaiBev group
  • 2. Data in 2014 covered procurement of goods and services only for ThaiBev spirits and beer business groups in Thailand
  • 3. Data in 2015 onward covered procurement of goods and services only for ThaiBev spirits, beer and non-alcoholic beverages business groups in Thailand
  • 4. Data in 2016 covered the period from January to September 2016 as ThaiBev adjusted its fiscal year structure
  • 5. Data in 2017 covered the period from October 2016 to September 2017