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 41% are delivering into EMEA, 5% in Latin America, 13% in North America and 41% in Asia Pacific.
Steel wire rod represents more than half of the total spend of purchases 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)
The total volume of wire rod we purchased in 2019 contained 35% of recycled material.
The percentage of recycled material depends on the product specifications and the access to scrap-based wire rod.
Bekaert purchases from different sources, in line with the product quality requirements and customer expectations.
While the product specifications for tire reinforcement in principle exclude the use of scrap-based raw materials, Bekaert has started, in 2019, a number of projects to develop tire cord constructions and bead wire diameters with wire rod of recycled steel. Further improvement of the steel alloy, our processing performance, and tests by the co-developing customers may help increase the share of recycled material in our raw materials base.
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 2019, this supplier commitment represented 94% of our spend, compared with 91% in 2018, thus 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 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, and we ask our suppliers to verify their REACH compliance in the supply process of raw materials.
Bekaert conducted 49 supplier audits in 2019, up from 39 in 2018 and beating our 2025 target to conduct 45 audits annually.
(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 2019, all suppliers covered by the Responsible Minerals Initiative (RMI), 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), and the Global e-Sustainability Initiative (GeSi), that helps companies from a range of industries to address conflict mineral issues in their supply chain.
100% 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 established 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 §5.1, §5.3, § 5.4, § 5.6, § 6.13.