Management of the Supply Chains
Raw material and equipment suppliers are CSS's main suppliers, which amount to a total of 40,854 enterprises. In 2023, a total of 1,795 equipment and material suppliers had signed contracts with CSC, of which 1,440 were domestic suppliers and accounting for 80.22% of the total number of contracts signed. Among the domestic suppliers; 760 of them are located in Kaohsiung and Pingtung, accounting for 52.78% of domestic suppliers.
Management of Raw Materials
Short-, medium-, and long-term goals related to the management of raw materials
Corresponding UN Sustainable Development Goals (SDGs)
Goal 12
12.2 Sustainable management and utilization of natural resources: CSC will achieve the sustainable management and efficient utilization of natural resources by 2030.
Corresponding Taiwan SDGs (T-SDGs)
Core Goal 8
8.4 CSC has a full grasp of the utilization of key materials, incorporates it into the sustainable management of the material life cycles, and promotes the sustainable utilization of raw materials.
Core Goal 12
12.2 The same as that of Goal 8.4.
Highlights in 2023
4 new sources for coal, iron ore and flux were developed in 2023.
Moreover, the previously developed and successfully trialed Australian coking coal and Indonesian semi-soft coking coal have been contracted as long-term partners in 2023.
Short-term goals (2024)
The number of suppliers accepting the Supplier Code of Conduct
≥ 2,550
Mid-term goals (2025)
The number of suppliers accepting the Supplier Code of Conduct
≥ 3,700
Long-term goals (2030)
The number of suppliers accepting the Supplier Code of Conduct
≥ 4,500
Policies or Commitments
CSC is the largest upstream steel producer in Taiwan. The main products are steel plates, steel bars, wire rods, electromagnetic steel coils, galvanized steel coils, and others. The main raw materials used are coal, iron ore, and limestone, the majority of which are imported. In recent years, the raw materials market has changed from a buyer's market to a seller's market; therefore, the management of raw materials has become one of the important issues for a steel mill to secure profits.
In order to avoid the monopolization of raw material suppliers or the impact of extreme weather on the stable supply of raw materials, CSC holds a regular weekly review of the purchase, transportation, and inventories of all raw materials. Moreover, it adjusts the planning of the purchase, utilization, and storage of the raw materials in a timely and flexible manner based on the current domestic and international conditions. CSC also actively conducts the development of new sources and types of raw materials as well as recycling and reutilization of steel scrap to reduce costs, diversify material sources, and avoid material shortages and monopolization of miners.
Development of New Material Sources
CSC proactively searches for new material sources that meet its production needs as its development policy in new material sources, and the implementation progress is tracked and reviewed to achieve the purpose of diversifying risks. A total of 4 new sources for coal, iron ore, and limestone had been developed in 2023 on a trial basis.
In its purchase contracts with coal and iron suppliers, CSC requires that they comply with relevant ESG clauses. In addition, with reference to international norms and standards, the “Code of Conduct for CSC Suppliers” has been established, including ethics, labor and human rights, health and safety, environmental standards, and management systems. Depending on the requirements of the case, special clauses will be added to contracts in the hope that suppliers also adopt the same standards.
A total of 2.54 million tons (Mt) of limestone, 4.26 Mt of coal, and 12.30 Mt of iron ore had been purchased in 2023. Among them, about 83% of the limestone was imported from abroad while serpentine and limestone from the Hualien area accounted for about 17%. Coal and iron ore were also imported from abroad.
The Statuses of Raw Material Procurement and Ratios of Supplying Countries from 2021 to 2023
