The operating advantage of YFY's full circular economy is circled around the papermaking process. The raw materials used, such as wood pulp and recycled paper, are all renewable materials. We extensive use of eco-fibers from FSC certicated forest to make sure they are from legal and closely planned and controlled forests farms.
After these forest materials are processed by the wood industry into furniture and other products, the leftovers are then recycled by the pulp industry to make wood pulp or paper products. They are further processed, used, and then returned to the manufacturing cycle through the recycling system, so that the life cycle is extended, and the carbon fixation value of paper can be maintained.
YFY has established a "Supplier Code of Conduct and Statement of Commitment" to ensure that YFY's supply chain adheres to environmental sustainability, health and safety, labor rights, ethical standards, and other relevant regulations. As of the end of 2023, including all newly qualified suppliers, 1,056 suppliers have signed commitments to comply with these standards.
Supplier Management Policy
Supply chain overview YFY's largest procurement category is raw materials for production, with wood chips, pulp, and recycled paper being among the primary items, primarily imported from overseas. In 2023, YFY continued its green procurement policy, conducting transactions with nearly 30 major suppliers certified by FSC or PEFC for their raw materials.
Supply Chain Strategy
YFY considers every supplier in its supply chain ecosystem as a partner, and requires each one to provide products or services that are competitive in terms of quality, delivery, and cost. Based on this principle, YFY collaborates closely with suppliers as essential partners in sustainable development, continually enhancing environmental sustainability, social responsibility, and compliance governance within the supply chain. Strategic guidelines include:
Continuously advance supplier ESG assistance initiatives, expand procurement of renewable energy and energy-efficient equipment, explore local sourcing opportunities, and collaborate with the supply chain to bolster the adoption of sustainable business goals focused on Sustainable Circularity, People Orientation, and Accountable Governance.
Increase the digitalization of supply chain management to enhance transparency, responsiveness, and mitigate operational risks, ensuring the protection of customer interests.
Offer suppliers resources and essential support to elevate ESG awareness and operational capabilities throughout the supply chain.
Goals and Progress in Supply Chain Management
In 2024, YFY plans to introduce a more detailed supply chain ESG policy aimed at enhancing the integration of sustainability principles into procurement strategies. This initiative includes establishing sustainability target guidelines for procurement to foster transparent, fair, and ethical practices that support strong business relationships and mutual trust among partners. YFY is committed to ensuring collective compliance with regulations, international codes of conduct, and human rights policies across every link in the supply chain, emphasizing ethical conduct. Simultaneously, YFY encourages suppliers to innovate and adopt sustainable practices, while also providing fair competition opportunities. This approach aims to foster the overall development of the supply chain towards a more sustainable and responsible direction. Supply chain management implementation goals for 2024:
Promote a supply chain digital collaboration system with the objective of enabling over 80% of suppliers to share information directly and conduct online business activities with YFY through a digital platform. This initiative aims to enhance supply chain transparency and ensure effectiveness in fulfilling sustainability and social responsibility commitments.
Increase the proportion of wood chips sourced from near-sea locations to 97%.
Promote the green procurement ratio, including increasing the proportion of wood chips in green procurement from 72% in 2023 to 75% by 2024.
Supply Chain Communication and Training
YFY convenes supplier conferences to exchange ESG practices with suppliers and collaboratively foster sustainable execution capabilities. In June 2023, in response to the global push for net-zero emissions, a supply chain ESG education and training session was conducted, involving 141 supply partners. Together, they explored topics such as carbon management, green energy, and circular economy, aiming to translate concepts into actionable strategies. During the session, several supply chain partners shared successful examples of energy conservation and emission reduction within their organizations, highlighting how operational results and ESG initiatives synergize to reinforce all partners' commitment to enhancing sustainable practices.
Supplier risk assessment and audit
Raw material procurement
In 2023, over 91% of YFY's papermaking raw materials will be recycled. For the Taiwan Containerboard and Packaging Group, 95% of the pulp used will come from recycled paper. The YFY Procurement Department reports that 78% of the raw materials purchased are FSC/PEFC certified, including those from CHP Taiwan. Among the wood chips purchased, 72% have FSC/PEFC certification, and 100% of the imported pulp raw materials are FSC/PEFC certified. Green procurement has reached 9 billion yuan, with the proportion of green procurement targets continuously increasing to support forest ecology sustainability.
*Data scope: All production sites in the "Entities included in the report".
Supply Status of Primary raw Materials
Department
Product(Service)
Key raw Material(s)
Name
Primary market
Distribution method
Name
Main Sources
Paper Making
Paper
Taiwan and Asia
Distributors and direct marketing
Diverse types of paper making fibers
Imported from foreign countries
Supply of key raw materials:
1.The impact of the covid-19 epidemic, factories in various countries are short of workers and reduce production.
2.Shipping shortage of seafarers, port shortage of labors, and shortage of drivers. Also, the shortage of containers and vessel space in the port of Seaport, which we are striving to maintain a stable supply.
The certification of the raw material purchased in 2023
Unit：%
SASB metrics
Category of Certification*
% of Total Raw Material Purchased
Percentage of wood fiber sourced from third-party certified forestlands
FSC CoC Mix
21.4%
PEFC CoC
5.4%
Total
26.8%
Percentage to each standard and meeting other fiber sourcing standards
FSC CW
10.8%
*Category of Certification：FSC CoC Mix： Forest Stewardship Council Chain of Custody Mix PEFC CoC Mix = Programme for the Endorsement of Forest Certification Chain of Custody Mix FSC CW = Forest Stewardship Council Controlled Wood
The health and safety of customers and consumers is our greatest responsibility. All opinions and feedbacks will assist us in formulating product upgrade and development plans. In order to ensure the product experience of customers, YFY has a dedicated Customer Relations and Market Research Department, which collects consumer experience and feedback through different channels such as customer service hotline, online customer service, business visits, or corporate social responsibility questionnaires.
YFYCPG owns product brands such as Mayflower, Deyi, Tenders, Orange House , Fresh Sense and other brands. The product specifications and labeling are in compliance with regulatory standards, so that consumers can fully understand product information and choose products that meet their needs with peace of mind. In the future, we will continue to invest in new product development, grasp the business opportunities of anti-pandemic, LOHAS, aging society and environmental protection, and develop home, personal and commercial series of products for different market segments, and respond to consumer demands for environmental sustainability in the post-pandemic era.
