Mitr Phol Group Sustainability

Menu
Menu
Edit Template

Key Stakeholders: Shareholders/ Farmers/ Communities/ Suppliers/ Customers and Consumers

Mitr Phol stresses the importance of sustainable supply chain management, encompassing the environmental, social, and governance aspects. The Company adheres to the Code of Conduct to prevent risks that can directly and indirectly impact its image and operations. Hence, effective supplier relation management is vital. The Company holds an annual supplier conference and communicates the Supplier Code of Conduct to its suppliers and ensure that suppliers understand the Procurement Policy, procedures, updates, and supplier management approach. Mitr Phol Supplier Code of Conduct has been formulated to ensure transparent, fair, and equitable treatment and build supplier trust in the selection process. This approach helps suppliers to maintain business operating standards and compliance with environmental laws, human rights, fair treatment of workers, safety and occupational health standards, and good governance while also preventing exploitation. Additionally, it promotes collaboration with suppliers in developing potential and creating innovation toward achieving sustainability.

2023 Target and Performance
Target
Performance
The significant suppliers
are assessed for environmental, social, and governance risks.
100%
73.42%

Management Approach

Sustainable Procurement Process

Mitr Phol Group places importance on management and risk management throughout the supply chain. The Chairman of the Board oversees the overall operations of sustainable procurement through the Sustainable Procurement PolicySupplier Code of Conduct Mitr Phol Group places importance on management and risk management throughout the supply chain. The Chairman of the Board oversees the overall operations of sustainable procurement through the Sustainable Procurement Policy and a Supplier Code of Conduct that covers environmental issues, human rights, fair treatment of workers, safety, occupational health, good governance, and prevention of exploitation. The procurement practice is always reviewed to ensure it is aligned with the Supplier Code of Conduct and to avoid potential conflicts with ESG requirements. These standards are communicated to suppliers to ensure strict compliance, and all suppliers must acknowledge and agree to the Supplier Code of Conduct before becoming a Mitr Phol supplier. The Company employs a supplier risk management system based on sectors of products and services according to the Supplier Position Model. It has strict procedures to verify the qualifications of all suppliers seeking to register as new suppliers with the Company, including an assessment of environmental, social, and governance (ESG) risks at the country, industry, and product levels.

The Company also requires an annual audit and evaluation of supplier performance, either through self-assessments using questionnaires which are re-evaluates by the Quality Management Department, or through 2nd party on-site assessments conducted by procurement division/ material sourcing section together with the sustainability department. Additionally, 3rd party on-site assessments based on standards such as Bonsucro, Supplier Guiding Principles, and Sedex Members Ethical Trade Audit. The Company communicates the results of these evaluations to suppliers via email or 2Way2Grow Application. Suppliers have access to the evaluation results from benchmarking against other suppliers to promote improved environmental, social, and governance performance. The comprehensive evaluation criteria cover issues like production control, product quality, and standards to help suppliers improve continuously. Moreover, the Company supports and monitors suppliers in the development program, providing technical training through joint projects with interested suppliers.

In addition, the Company requires monitoring and evaluation of environmental, social, and corporate governance performance every 3 years for central and raw material suppliers. This ensures that suppliers strictly adhere to the Supplier Code of Conduct. If a supplier violates human rights or fails to comply with the Code, the Company will issue a notice and set an improvement plan with a timeframe and monitor the improvements. Non-compliance may result in sanctions, contract termination, and removal from the Company’s registered supplier list. For example, if it is found that suppliers cannot meet the minimum ESG requirements (e.g., encroachment on reserved forests, forest areas, or conservation zones), the supplier will be excluded, and the contract terminated. Suppliers with better ESG performance according to the Company’s evaluation criteria will be awarded honors such as special awards, certificates of recognition, or being named a “Model Farmer”. Currently, the Company has assessed the environmental, social, and governance risks of the Significant Tier-1 Suppliers, including the use of chemicals, packaging, contract workers, and all new central suppliers. The assessment results in 2023 are as follows:

In 2023, a total of 5,592 new suppliers were evaluated on environmental, social, and governance (ESG) criteria, accounting for 89.89% of all new suppliers. For significant suppliers, a total of 906 were assessed for ESG Assessment. This evaluation was conducted through desk assessments, and/or on-site assessments by the Procurement Division/Material Sourcing Section.

Mitr Phol Suppliers ESG Program

Suppliers should operate their businesses in alignment with the Mitr Phol Supplier Code of Conduct and be aware of ESG principles. Suppliers with better ESG performance, according to the Company’s evaluation criteria, will be awarded honors such as special awards, certificates of recognition, or being named a “Model Farmer.” Additionally, suppliers who participate in co-projects with the Company will receive extra points. Suppliers who do not meet the minimum evaluation score must improve their performance and submit evidence of improvement to the Company. The Company will then consider and unlock their status.

Farmers who deliver burned cane will have their cane price deducted. However, they will receive extra payment if they deliver fresh cane, with the price determined according to the government announcement. If it is found that suppliers cannot meet the minimum ESG requirements (e.g., encroachment on reserved forests, forest areas, or conservation zones), the supplier will be excluded and the contract terminated.

All suppliers and farmers, especially significant suppliers, are invited to join the training programs, which include ESG components, at least once a year. These programs are: the Annual Seminar for Suppliers, the Farmer Association and Sugar Mill Annual Meeting.

Supplier Classification

Mitr Phol classifies suppliers into two groups: central suppliers and raw materials suppliers,
as detailed below. 

Central suppliers

are providers of products and services or domestic and foreign contractors. They consist of four subgroups as follows:

Raw materials suppliers

The Company classifies its suppliers based on procurement spend and the significance of their products in order to develop efficient plans and strategies for supplier management. The criteria for identifying significant suppliers are as follows: 

  • Suppliers offering special products, including chemicals for manufacturing and packaging, which meet Mitr Phol Group standards 
  • Rare vendors with the necessary expertise and technology to manufacture products according to Mitr Phol Group’s specifications 
  • Vendors with high order volumes as per Mitr Phol Group’s criteria 
  • Contractors seeking approval for manpower to work in various departments 
  • Suppliers conducting business with adherence to Environmental, Social, and Governance (ESG) principles
In 2023, the company had a total of 38,363 suppliers, consisting of 94.13% Tier-1 Suppliers and 5.87% Non Tier-1 Suppliers. Among these, there were 1,179 Significant Tier-1 Suppliers, accounting for 3.26% of all Tier-1 Suppliers, and 55 Significant Non Tier-1 Suppliers, accounting for 2.44% of all Non Tier-1 Suppliers. The spending on Significant Tier-1 Suppliers accounted for 43.26% of the total spending on all Tier-1 Suppliers.

Mitr Phol Procurement System

The Mitr Phol Purchasing System (MPS) is a web-based platform designed to streamline order placement for customers and order tracking for suppliers. It also functions as a real-time news portal for suppliers and facilitates supplier ratings based on product or service delivery. Integrating MPS data with the SAP system facilitates audits and ensures end-to-end transparency and traceability throughout the procurement process.

After suppliers deliver food contact materials that can affect food safety, such as chemicals used in manufacturing and packaging, via the MPS system, these materials will be tracked for product quality, manufacturing origin, and safe transportation. If delivered products fail to meet specifications or pose food safety concerns, suppliers must promptly correct any issues within the given timeframe.

Annual Supplier Conference and Award Presentation

Mitr Phol holds an annual supplier conference to communicate the Supplier Code of Conduct, procurement regulations, quality standards for purchases and sales. Additionally, the Mitr Phol Supplier ESG Program was communicated to suppliers to inform them about the organization’s sustainable practices. This included training to raise awareness of the importance of sustainable business development throughout the supply chain (ESG Awareness Training), focusing on environmentally friendly business operations (Environmental), respect for human rights and communities (Social), and conducting business with good governance (Governance). This annual conference allows the Company to listen to suppliers’ opinions and expectations, enhancing collaboration in developing work processes. It also strengthens relationships, minimizes business operation risks, and improves efficiency for both the Company and suppliers to mutually achieve sustainable business growth.

The Company also presents awards to suppliers with outstanding performance annually. In 2023, 74 suppliers, who demonstrated excellent performance for 2 consecutive years, received certificates and special awards from Mitr Phol Group. These award winners account for 3.08% of the total suppliers.

Mitr-Phol Collaborative Projects with Customers
for Sustainable Development

Green Procurement Project

Mitr Phol has implemented the international standard ISO 20400:2017 as a framework for sustainable procurement and established a Sustainable Procurement Policy to promote green procurement. In 2023, the Company increased its procurement of environmentally friendly products and services by 37% compared to the purchase of such products and services in 2022*, representing 20% of the total procurement value in 2023. These items include electric appliances, cleaning and construction equipment, office supplies, paper products, as well as vehicles and accessories. Mitr Phol also plans to expand green procurement to other categories of products and services.

*The goal is to increase green procurement by 2% from the previous year’s purchase value.

Sustainable Sugarcane and Sugar Production Management
under Bonsucro Standards

Mitr Phol encourages farmers to obtain Bonsucro certification, a global standard for sustainable sugarcane and sugar production, aiming to reduce environmental and social impacts of sugarcane and sugar production processes while promoting enhancing production efficiency and competitiveness. For Further details about sustainable sugarcane and sugar production Management under Bonsucro Standards, please visit the Farm and On-Farm Management section.

Sustainable Rubber Plantation Management
According to Forest Stewardship Council Standards

Since 2014, Panel Plus Company Limited has managed rubber plantations sustainably according to Forest Stewardship Council (FSC) standards, aiming to help farmers care for and manage their plantations sustainably. The Company invites interested small farmers who agree to the project conditions to join. Eligible rubber plantation areas must have legal documentation, such as land title deeds, Nor Sor 3, or Sor Por Kor, and must not encroach on reserve forests, protected areas, or high-value resources. Farmers joining the project must attend training on rubber plantation operations, and the Company regularly monitors their performance. If their operations do not meet the criteria, they will be requested to make corrections; otherwise, their membership will be terminated.

As of 2023, the project had 3,456 members with plantation areas totaling 68,378 rai. The project purchased 49,035 tons of rubber wood raw material from members, amounting to 49.29 million baht. The total rubber volume of all age groups was approximately 1,309,783.20 cubic meters, with an average annual growth rate of 1.56 cubic meters per rai. The rubber plantations in the project are divided into 3 phases based on the age of the rubber trees as follows:

In addition, the Company has organized various social and environmental activities for members of this project as follows:

Training Program: This initiative educates members and contractors on various topics, such as occupational safety, labor and social welfare, human rights, waste sorting and management, conservation of rare species, and Trichoderma production for disease and pest control to reduce chemical use.

Biodiversity Survey: This project surveys flora and fauna species within community forest areas that have committed to becoming nature reserves. The project covers a total of 4,586 rai across 5 community forest areas:

  • Ban Thung Hua Mueang Community Forest: 965 rai
  • Ban Ton Sai Community Forest: 1,033 rai
  • Ban Chong Khao Community Forest: 395 rai
  • Ban Pa Phong Community Forest: 1,993 rai
  • Khao Kho Hong Protected Area: 200 rai
    Project officers and the communities will consistently collaborate to monitor, care for, and conserve resources and the environment in these areas.

    • Establishment of Learning Centers: In collaboration with Prince of Songkla University, the project aims to transfer knowledge and enhance the quality of life for its members and their communities. As part of this project, 2 learning centers were established in Khlong Hoi Khong district, Songkhla province: The Organic Fertilizer Production Learning Center and the Household Waste Management Learning Center, which engage about 50 households.

    Promoting and Adding Value to Latex with FSC Standards: This project aims to increase revenue and ensure the sustainability of members' rubber-planting career. It has benefited 1,520 members, who sold 3,662 tons of
    FSC-certified dry rubber, adding 3,662,000 baht in value.
    The project helps raise awareness about the significance of rubber planting in accordance with international standards and enhances the sustainability of the Company's system and raw materials.

    Related Policy and Statements

    Sustainable Procurement Policy

    View