Home / 2018 Sustainability Report / Creating and Sharing the Value of Growth for a Sustainable Future Sustainable Sourcing
GRI 204-1, GRI 308-1, GRI 414-1

  • 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

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%

Direct Materials
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%

Local suppliers
  • 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
Sustainable Sourcing Policy
ThaiBev has announced the enforcement of the Supplier Code of Practice in order to establish a standard for suppliers’ business operations besides financial aspects. The Code covers environmental and social aspects and corporate governance, and encourages suppliers to apply the Code in their business operations, and communicate it to their own suppliers. A target has also been set, specifying that 100 percent of suppliers doing business with the company must accept and comply with the Code by 2020, to be part of disseminating a sustainable procurement practice and create a sustainable supply chain at the national level. This supply chain is also intended to be consistent with the UN Sustainable Development Goal 12 (UN SDG 12), which promotes the development of public procurement practices that are sustainable and in accordance with national policies and priorities.

Business Ethics

Human Rights

Environmental Management

Occupational Health and Safety
Ratio of Suppliers complying with Supplier Code of Practice
Enforcing the Code of Practice
ThaiBev has specified responsibility in enforcing the Supplier Code of Practice from management at the highest levels of the organization, to operational levels, to communicating with suppliers regularly through online channels. This includes sharing the vision of executives at our annual Business Partner Conference to ensure that every stage of the procurement processes is consistent with the company’s strategies, policies and operating targets.

Chief Supply Chain Management

Formulate supply chain strategy and sustainability objectives

Managing Director of Procurement Unit

Establish procurement policy in alignment with the strategy and objectives

Procurement Manager

Oversee procurement operation and ensure compliance with the policy, strategy and objectives

Procurement Officer

Procure goods and services in compliance with the policy, strategy and objectives
Identifying Critical Materials and Suppliers

Critical Tier 1 suppliers
ThaiBev identifies critical materials and suppliers according to their procurement spend and level of risks to prioritize and mitigate risk efficiently by considering high spend merchandise items (materials) and suppliers, risk levels, and the impact on the company’s revenues.
Number of Critical Tier 1 Suppliers by Risk Factors

Number and Proportion of Procurement Spend via Critical Tier 1 Suppliers
Sustainability Risk in Procurement
In ThaiBev’s sustainable procurement process, the company considers risk factors covering corporate governance, the environment and society. This includes the selection of new suppliers, the screening of suppliers before trading (pre-qualification), the evaluation of supplier performance, the monitoring of results and the continuous development of suppliers to improve efficiency in the supply chain to support the growth of the business.
Registration of New Suppliers
New suppliers must accept and adhere to the Supplier Code of Practice.

of suppliers acknowledge and adhere to ThaiBev’s Supplier Code of Practice

Screening of Suppliers Prior to Purchase
ThaiBev has a sustainability risk assessment process for suppliers, classifying them into groups according to their risk level and capabilities.

of new suppliers undergo sustainability risk assessments before doing business

Supplier Selection
ThaiBev includes a sustainability clause in every contract awarded to a supplier, to prevent violations or malpractice of the principles of good governance, the environment or human rights.

of contract spending contains a sustainability clause

Supplier Performance Evaluation
ThaiBev has an on-site auditing process for suppliers after purchase, and classifies suppliers into groups according to their performance evaluation results.

of critical suppliers undergo performance assessments after purchase at sites of operation as scheduled

On going Monitoring and Supplier Development
ThaiBev identifies issues based on supplier performance evaluation results, and determines measures for suppliers to submit corrective action plans within the predefined period.

of suppliers receiving complaints submit corrective action plans to address the complaints, following ThaiBev’s requirements
Supplier Award Program

of participants have maintained their working standards and improved quality
The Supplier Award Program is intended to promote supplier capacity-building, stimulate business competition, and spur innovation in the industry. The Supplier Award Committee and awarding criteria have been established to ensure that the awardees have excellent working standards and are models of sustainable business operations for other suppliers.
Long-term Roadmap
The company has set a long-term roadmap to promote continuous supplier capability-building

Foster collaboration for long-term sustainable partnership


Sustainability Award


Included sustainability factors among award criteria


Awards focused on quality, commercial aspect, delivery, innovation and service


Project started



Saroj Chayavivatkul
President, Thai Beverage Can Limited

ThaiBev’s Supplier Award Program drives us to constantly develop ourselves so that we can compete with other suppliers in terms of costs, quality and standards. It also helps us to be aware of doing business on the basis of sustainability, with responsibility to our stakeholders. In the near future we will also introduce sustainable business practices to our own suppliers to create a sustainable beverage can supply chain locally.

Managing Non-tier 1 Suppliers
Critical Non-tier 1 suppliers

Migrant labor legally hired and treated equally

The company has cooperated with logistics outsourcing company, who are encouraged to give migrant labor the rights and welfare equal to local labor, and undergo registration required as specified by the law
Non-tier 1 suppliers are suppliers that do not directly supply goods and services to the company. However, ThaiBev is aware of their impacts on procurement processes. ThaiBev has established criteria for risk assessment, which identify critical non-tier 1 suppliers based on both business impact and sustainability factors; for example, dependency and market influence, their contribution to a sustainable supply chain, and the frequency of sustainability risks detected.
The company has set short term and long term targets for procurement in alignment with the sustainability development practice.

Short term targets for 2020
of suppliers are local suppliers
of procurement spend is from suppliers complying with the Supplier Code of Practice
of new suppliers undergo a sustainability assessment
of critical suppliers are audited on-site
of suppliers submit corrective action plans to address complaints following ThaiBev’s requirements

Long term targets for 2025
Tier 1 suppliers being assessed on a regular basis

Definition : Supplier is defined as a manufacturer, distributor, contractor or service provider

2018 Sustainability