Our suppliers provide materials, equipment, production, and services and can be categorized as labor, capital, and technology-intensive types. The main suppliers of materials are based in Taiwan. To ensure that suppliers meet Evergreen Steel's corporate sustainability policy requirements, the Company conducts annual evaluations of main suppliers, the following selection criteria are designated:

1. The quality of raw materials must comply with CNS standards or its equivalents.
2. Suppliers with good reputation and consistent quality.
3. Suppliers who deliver promptly and are cooperative.

In 2024, a total of 81 main suppliers of materials for the Xinying Factory and Hsinchu Factory were all Taiwanese companies. Raw materials necessary for steel structure projects include steel plates, H beams, flat steel, and welding materials, among which steel plates and H beams were the main raw materials for steel structures. In Taiwan, the primary steel plate manufacturer is China Steel, and the largest beam makers are Tung Ho Steel and Dragon Steel. The Company carries out regular steel supplier evaluations as well as annual supplier evaluations of price, quality, delivery and service.

The main materials required by the Kaohsiung Factory include processed steel products such as corrugated sheets, angle irons, channel irons, stainless steel plates, container accessories, and composite floor panels. In 2024, there were a total of 39 main materials suppliers. Domestic suppliers are located across northern, central, and southern Taiwan, while international sourcing is primarily from China and Malaysia. The Company conducts irregular evaluations of suppliers based on factors such as price, quality, specifications, delivery time, and service. Over the past three years, purchases from the Company’s major suppliers of container steel products accounted for 42.74%, 42.4%, and 36.33% of the net procurement amount of container materials, respectively. Purchases from the major suppliers of plywood board accounted for 28.2%, 19.78%, and 22.24% of the net procurement amount of container materials, respectively.

The Company cooperates with suppliers to fulfill corporate social responsibility. We regard our suppliers and contractors as important partners. The Company hopes to establish symbiotic and long-term cooperative relationships with our suppliers. Evergreen Steel values quality, delivery time, and price of the supplied products and established the Supplier Corporate Social Responsibility Management Guidelines for the steel industry, incorporating CSR into supplier and contractor contracts, who are required to sign a Supplier/Contractor's Corporate Sustainability Commitment or issue an ESG report on CSR fulfillment. Through completing Evergreen Steel Supplier/Contractor Self-Evaluation Questionnaires, the Company tracks suppliers' implementation of corporate social responsibility. We hope to jointly fulfill corporate social responsibility with our suppliers targeting the aspects of ethics, labor rights, environment, health and safety, and management system, while also ensuring risk management and business continuity. In 2024, a total of 84 main suppliers signed the "Corporate Sustainability Commitment", at a rate of 100%. And there were no losses resulting from unsound management of suppliers.

Supplier /Contractor Evaluation and Management

Supplier Evaluation and Management

Evergreen Steel's supply chain management is categorized into equipment and material procurement, transportation, security personnel, and providers, which are managed by different responsible units. The screening and selection mechanism of new suppliers are stipulated in the Procurement Management Procedure and Supplier Management Procedure, which also include corresponding review rules. New suppliers passing the evaluation will be registered on the Company's List of Qualified Suppliers. Before any transaction, a new supplier is required to sign the Company's corporate sustainability commitment to facilitate sustainable development of the supply chain.
The Company conducts supplier evaluation with the Procurement Department as the organizer, which is in responsible for the collection, statistical analysis, and compilation and reporting of all evaluation data, and Quality Control Section and Material Management Section as the co-organizers that are in charge of providing records on quality or delivery deficiencies. The Procurement Department analyzes the data and reports on the results. Evaluation is held at least once a year and as needed. Evaluation samples must cover at least three months, and results are rated in 4 levels as follows. Suppliers that fail the evaluation must make improvements and pass re-evaluation before the next transaction. In 2024, 81 material suppliers were evaluated, and the pass rate was 100%.

The Company has established preventive and remedial measures. In case of a major deficiency, the Company will quickly review the situation and decide on the method of correction; conduct supply chain risk assessment and formulate supplier sustainability scoring scheme as a part of supply chain risk assessment along with delivery, quality, financial status, and operations, as important criteria of procurement. When a supplier is found to have environmental or social issues, remedial measures shall be immediately implemented, such as asking the supplier to carry out improvements, etc.
To strengthen supply chain management, the Company requires all material procurement vendors to formulate anti-corruption clauses in the contract, as well as contract termination clauses in contracts and orders: when in case the selling party is found to have violated ethical principles (such as: offering and receiving bribes, offering illegal political contributions, or offering inappropriate charity donations or sponsorships…etc.); or violated social welfare principles (for example: discrimination, violation of gender equality, infringement of the right to work…etc.); or violated corporate social responsibility for developing a sustainable environment and caused impacts on the environment, party A may terminate or suspend the contract and demand compensation for damages. The Company also promotes the signing of the "Corporate Sustainability Commitment" to implement sustainable supply chain management.

Contractor Evaluation and Management

The steel structure industry is labor-intensive. Steel structure production at the Xinying Factory and Hsinchu Factory were mostly contracted out to professional Taiwanese manufacturers.Contractor selection involves evaluation on quality, delivery time, staffing, and manufacturing experience. Qualified contractors are assigned a registration code in our system and will be flagged when eligible for our projects.
For contractors to quickly adapt to Evergreen Steel's occupational safety and health, as well as quality requirements, the Company has formulated Contract Management Procedures and Quality Management Procedures, detailing occupational safety and health and steel structure component quality management requirements and standards. These procedures are part of contractor terms and conditions, and contractors must comply with Evergreen Steel's working guidelines for occupational safety and health. The Company reserves the right to terminate or suspend the contract with the contractor when an event with major environmental and social impacts occur.
The Xinying Factory and Hsinchu Factory perform evaluations every six months per ISO 9001:2015 Contractor Management Procedure. The evaluation scores are divided into three ratings, with the evaluation criteria as follows:

Kaohsiung Factory has Contractor Evaluation Guidelines that stipulate annual contractor evaluation, and its results serve as a key factor in contract renewal to create fair competition. All Five major contractors passed the evaluation in 2024.
To eliminate the use of child labor by contractors, each factory has implemented measures to manage contractors. New employees hired by contractors must apply for a work permit from the Company within one week. They are required to submit a basic information inquiry form, relevant identification documents, and a labor insurance enrollment list. These documents are filed internally for inspection at any time, ensuring that no child labor is employed. In 2024, none of our contractors were found to have employed child labor.