Steel wire rod is the main raw material used for the manufacturing of steel wire products. Bekaert purchases different grades of wire rod from steel mills from around the world and transforms them into steel wire and steel wire products by using mechanical and heat treatment processes, as well as by applying unique coating technologies. The wire products produced by Bekaert are shipped to industrial customers who further process our material into half or end products; or to end customers, directly or via distribution channels.
Bekaert has about 20 000 active suppliers of which 52% are delivering into EMEA, 8% in Latin America, 9% in North America and 31% in Asia Pacific.
Steel wire rod represents more than half of the total Bekaert spend and is ordered from vendors from all over the world. The supply process is managed by the Purchasing function.
(GRI 102-9 + GRI 102-10))
Bekaert’s purchasing department continued its engagement with suppliers to enhance sustainability awareness and control. The Bekaert Supplier Code of Conduct outlines environmental, labor and governance related requirements that suppliers must comply with (or deliver proof of following its principles). At the end of 2018, this supplier commitment represented 91% of our spend, compared with 82% in 2017, putting us well on track to achieve our targets.
The use of Key Supplier Agreements remains very important for the purchase of wire rod and was expanded to the other supply categories. Key supplier agreements are multi-year partnerships in which sustainability, supply chain integration and innovation are explicit building blocks.
All wire rod suppliers, as well as suppliers of other critical materials and all new suppliers, are formally evaluated on a yearly basis, and corrective action plans are put in place when the minimum required levels have not been reached. These action plans are closely monitored in order to keep the focus on improvement high.
At Bekaert we closely monitor the EU REACH regulation to confirm compliance. We are in contact with our suppliers to verify their REACH compliance in the supply process of raw materials.
Bekaert conducted 39 supplier audits in 2018, up from 30 in 2017. In 2017, Bekaert had set a target to conduct 35 audits annually by 2020 and 40 audits annually by 2025. Since we already reached the target for 2020 in 2018, we have sharpened our targets to 40 by 2020 and 45 by 2025.
(GRI 308-1 + GRI 407-1 + GRI 408-1 + GRI 409-1 + GRI 414-1 + GRI 414-2)
Bekaert recognizes the importance of responsible sourcing. In 2018, all suppliers covered by the Responsible Minerals Initiative (RMI), formerly known as the Conflict Free Sourcing Initiative (CFSI), signed the Bekaert Supplier Code of Conduct (or delivered proof of following its principles) and 100% of our tin and tungsten suppliers completed the most recent Conflict Minerals Reporting Template (CMRT). This is an initiative of the Responsible Business Alliance (RBA), formerly known as the Electronic Industry Citizenship Coalition (EICC), and the Global e-Sustainability Initiative (GeSi), that helps companies from a range of industries to address conflict mineral issues in their supply chain.
88% of suppliers covered by the RMI endorsed Bekaert’s Conflict Free Minerals policy and compliance plan.
In 2017 Bekaert set a target to have 100% of its tin and tungsten suppliers complete the Conflict Minerals Reporting Template (CMRT) annually by 2020. We already reached that target in 2018. We have also set up a plan to comply with the anticipated 2021 legislation changes.
In sourcing raw materials and other supply needs, Bekaert sources locally (i.e. in the same region as where the materials are being processed), unless the sourcing options are inadequate in terms of quality or cost.
Bekaert supply sources and use by region (regions: EMEA, North America, Latin America, and Asia Pacific).
Direct economic value generated and distributed: all data are available in the Financial Review chapter of the Bekaert Annual Report 2018 §5.3, § 5.4, § 5.6, § 6.12 .