1. Supplier Management Strategy

To avoid risks of cost increases or supply abnormalities, the purchase strategy focuses on diversified suppliers. Under reasonable prices, long-term cooperation models are established with suppliers to maintain price and quality levels, stabilize sources, and reduce raw material supply management risks. While maintaining good mutual trust and cooperation relationships with existing suppliers, Taisun continuously develops new suppliers and cultivates suppliers that meet requirements.

For raw material supplier selection, Taisun conducts strict reviews. Cooperating suppliers must operate legally, and their products or services must meet production requirements, with reasonable prices and high cooperation. The entire raw material procurement process must be reviewed and confirmed by relevant departments such as R&D and quality assurance, with priority given to suppliers with food-related certifications to enhance quality management standards.

Additionally, Taisun actively promotes the signing of the “Integrity and Sustainable Development Commitment” by suppliers. The commitment covers integrity management, labor rights, environmental protection, consumer protection, and respect for third-party intellectual property rights, advocating for suppliers to value corporate social responsibility. In 2023, 14 new raw material suppliers with transaction amounts over 100,000 TWD all signed the integrity management commitment, achieving a 100% signing rate.

2. Supplier Evaluation

Taisun conducts annual supplier audits, gathering relevant personnel to fill out the “Taisun Cooperative Supplier Management Review Scoring Form.” Based on the review scores, a supplier evaluation plan is drafted, and written or on-site evaluations are conducted according to the plan. For deficiencies or improvement plans, suppliers are required to propose improvement measures to ensure delivery quality standards. Evaluation results serve as a reference for subsequent follow-ups.

Since 2022, safety, health, and environmental protection have been included in the evaluation items, hoping that suppliers will pay more attention to social responsibility and meet social ethics, legal, environmental, and public requirements standards. Through practical management methods, Taisun maintains sustainable cooperative relationships with suppliers.

3. Evaluation Items

Upon the arrival of the raw materials at the factory, quality assurance personnel conduct inspections according to the item specifications. If they do not meet acceptance standards, suppliers are notified for return. Once the inspection is completed and the conformity is confirmed, they are screened again during production to control quality.

4. Management Results

① Local Procurement of Suppliers
In 2023, 55.8% of first-tier suppliers obtained certifications. Due to insufficient production in Taiwan, major commodities like soybeans and edible crude oil are mainly purchased from abroad. Other raw materials prioritize local Taiwanese vendors. Excluding soybeans and edible crude oil, the procurement amount from local suppliers in Taiwan accounts for 95.9% of raw material procurement costs. Raw materials from first-tier suppliers that have passed GFSI-recognized food safety certification standards account for 10.8% of raw material procurement costs. First-tier raw material suppliers from high or extremely high water stress areas account for 3.0% of raw material procurement costs. In the future, Taisun will strengthen its influence and urge suppliers to propose Water Resources Management policies to ensure sustainable Water Resources Management.
1) First-tier suppliers refer to vendors who issue invoices.
2) Certification broadly refers to vendors who have passed quality, food safety, environmental protection, and occupational safety certifications and obtained third-party verification.

② Evaluation Results
According to Taisun’s “Cooperative Supplier Management Review Scoring Form,” supplier comparisons are conducted. Risk scoring items are divided into four major aspects: stability, importance, quality, and delivery time. When the risk score reaches 75 or above, or there are other consideration factors, on-site evaluations are required. In 2023, on-site evaluations were conducted for 59 suppliers, accounting for 29.6% of this year’s total number of suppliers. The results of the on-site evaluations are shown as below, with Grades A and B combined accounting for 96.61%.

③ Raw Material Acceptance Status

In 2023, the total weight of externally purchased packaging materials was 12,539 tons, with 89% being recyclable materials. Following the “Application Process for Suitability of Recycled PET Resin Raw Materials for Food Container and Packaging Manufacturing” announced by the Food and Drug Administration in 2022, Taisun will discuss its feasibility with packaging material suppliers in the future and work towards the goal of reducing packaging materials to decrease environmental impact.

1. Soybean and Vegetable Oil Raw Material Procurement

Taisun’s international procurement mainly focuses on soybeans and vegetable oil raw materials, with particular emphasis on controlling “quality” and “quantity.” They must meet the quality control specifications and standards set in contracts, balancing company profits and ensuring consumer food safety, supporting sustainable agricultural production through actual procurement actions.

Taisun strictly reviews suppliers and controls the raw materials to comply with procedures from procurement to delivery. This is mainly achieved through implementing supplier evaluation and management, verifying official certifications related to raw materials, quality inspection certificates, or sustainable production certifications to ensure procurement safety.Taisun chooses international large-scale grain merchants or well-known traders as raw material suppliers. Before procurement, thorough investigations of the vendor’s basic information and official registration of their manufacturing plants are conducted, as well as whether they have obtained relevant food quality system certifications. After procurement, product quality management evaluations are implemented, selecting the strong and eliminating the weak. Each batch of imported raw materials must be accompanied by certificates of origin, phytosanitary certificates, third-party quality inspection certificates, etc., to ensure that the raw materials meet contract standards.

The United States, Brazil, and Argentina are the world’s main soybean producing and exporting countries. Taisun Enterprise continues to purchase U.S. soybeans certified for sustainable production by the U.S. Soy Export Sustainability, LLC. In 2023, the total import value of soybeans was 4.584 billion TWD, of which soybeans meeting U.S. sustainable production certification amounted to 1.375 billion TWD, accounting for 29.99% of the total; the estimated proportion based on import quantity was 30.94%. Each year. Taisun sends representatives to visit production states with the U.S. Soybean Export Council and interacts with local suppliers and farmers to understand the overall raw material production process. According to the U.S. Soy Sustainability Assurance Protocol (SSAP), through crop rotation and reduced tillage, energy consumption is reduced to achieve sustainable production goals and protect farmland. According to statistics from the U.S. Soybean Export Council, U.S. farmers adopting sustainable production farming methods can reduce greenhouse gas (GHG) emissions by 42% per bushel of soybeans produced, improve irrigation water efficiency by 61%, increase land use efficiency by 47%, improve energy use efficiency by 45%, improve soil protection by 35%, and increase production per unit of land by 130%. Moreover, with the continuous improvement of breeding technology, production machinery, and input varieties, even with unchanged land area and reduced use of natural resources, the average yield of soybeans can still continue to grow, achieving a balance between environmental protection and overall demand.

2. Stabilizing Feed Raw Material Prices

To reduce the feed cost burden for domestic poultry and livestock farmers, Taisun works to lower bulk raw material procurement costs and control stable raw material prices. This is achieved through implementing raw material position management, strictly controlling procurement costs and delivery gaps, avoiding supply shortages that could lead to market price spikes, and maintaining long-term close relationships with overseas raw material suppliers to avoid excessive raw material fluctuations.

After the COVID-19 pandemic in 2020, logistical disruptions and the La Niña phenomenon caused global climate chaos. Agricultural areas faced rapid climate changes, leading to reduced crop yields. International tensions, such as the Russia-Ukraine war in 2022 and the Israel-Palestine conflict in 2023, further exacerbated the supply of bulk agricultural raw materials. To stabilize consumer prices and reduce the cost burden on edible oil and feed manufacturers, the Taiwanese government extended the import business tax exemption period for soybeans, wheat, and corn to avoid price fluctuations affecting the domestic economy.

To cooperate with the government’s price stabilization efforts, Taisun actively coordinates soybean supplies and strictly controls procurement costs. They closely monitor domestic market demand for raw material shipment schedules to avoid production halts due to supply interruptions, stabilizing domestic soybean supply. On the cost side, they strictly implement position management, closely monitoring soybean growth conditions in producing areas and international agricultural product supply and demand dynamics to reduce import procurement costs.

Due to limited space in Taisun’s factories and production line limitations, they cooperate with excellent industry peers to complement their capabilities. OEM factories are important partners for Taisun, significantly impacting product reputation and company image. They must follow Taisun’s operational standards for product manufacturing. Taisun also hopes to exchange and learn from OEMs to create a mutually beneficial food industry environment and jointly build a good food safety environment in Taiwan. Taisun selects excellent OEMs based on the “Outsourced OEM Factory Evaluation and Guidance Implementation Standard.” They evaluate suitable OEM factories based on product characteristics, with specific conditions required to be included in the inquiry list (must have obtained HACCP certification, have legal factory registration and business registration certificates, beverage products must have qualified water rights usage certificates, and no illegal incident records). Taisun encourages OEMs to improve factory management to meet international standards and ensure production quality meets regulatory requirements.

All cooperating OEM must undergo factory visit evaluations of their operating environment, production quality testing, and product verification. Verification items include: sampling for headquarters inspection for each batch, routine production checks (graded management), GHP audits (graded management), quality meeting communication reviews (graded management), and annual evaluations (graded management). Taisun periodically arranges quality assurance personnel to conduct quality monitoring at OEM factories. In addition to the OEM’s own inspections, samples are also sent back to Taisun for inspection, ensuring double-checking to ensure products meet Taisun’s requirements and prevent substandard products from entering the market and affecting the company’s reputation.

In 2023, there are 10 contracted OEM manufacturers and 90% acquire Food Safety Related Certification.  A total of 6 OEM manufacturers conducted on-site evaluated in 2023, accounting for 66% of the total.