Samsung SDI

Samsung SDI is engaged in activities to assist our suppliers in strengthening their global competitive edge and in establishing fair trade practices. In 2010, led by a mutual cooperation organization, we promoted activities for mutual cooperation which took root in our first group of local and foreign suppliers. The basic idea is to provide training and assess quality and productivity enhancement, nurture experts to implement Low carbon green partnership and S-Partner accreditation system to expand green management and social responsibility throughout the supply chain.

Together with the Ministry of Knowledge Economy, Samsung SDI is carrying out a national project with a vision of building and spreading Low carbon green partnership. The aim is to help our suppliers enhance their response to climate change and reduce GHG. 41 suppliers have been selected to undergo programs for nurturing climate change experts, assist GHG and energy reduction, and implement SME-focused GHG management systems over the course of two years between December 2009 and November 2011. The programs will enable suppliers to build a platform for practical GHG reduction and a supply chain GHG management system.

Revised and updated in 2009, the S-Partner accreditation system is an overall evaluation and approval system intended to spread social responsibility - including labor, ethics, environment, and safety - throughout the supply chain. Through this system, Samsung SDI aims to calculate risks related to social responsibility and seek improvements. Under the program, suppliers, excluding branches and other partners whose contracts with Samsung SDI have expired, conduct a self-check up through check sheets and Samsung SDI follows up by conducting an on-site evaluation. Only suppliers that meet a certain level are given S-Partner accreditation. Suppliers with a low score or which have identified major risks are advised to submit a plan to make improvement within 1 month and then undergo another evaluation in 3 months. In 2010, a total of 75 suppliers received the accreditation, excluding some companies for reasons of contract termination. From 2011, overseas suppliers will be subject to the program as well. We will begin training and on-site evaluation starting with suppliers of our China subsidiaries, which is to be accompanied with nurturing managers of our overseas subsidiaries to help continue our program.

In 2011, under the slogan of mutual growth, Samsung SDI plans to conduct various programs to establish fair trade practices and to hone its suppliers’ competitive edge. First, to establish a platform for fair order among suppliers, Samsung SDI will endorse guidelines related to conclusion of agreements, selection and registration of suppliers, and operation of internal supervisory committees on suppliers. We seek to root out in advance any sources of concern by dealing with any injustice issues that need to be addressed considering company policies. Samsung SDI will communicate difficulties and suggestions faced by suppliers through quarterly visits and on-line (purchase portal) registration. We will also run a center for unfair trade to identify and work on ways to improve the purchasing and procurement process. Moreover, we will assist facility investment and operational funding to help suppliers secure liquidity and financial soundness. We also plan to expand our program to second suppliers such as conducting research for joint technology development to help enhance technology competitiveness, introduce escrow on technology sources to prevent technology leakage as well as legal consultation. Our efforts for mutual growth and performances in 2011 will be briefed on the next year’s Sustainability Report.

Agreement on Fair Trade and Mutual Growth

250 personnel from Samsung SDI, Samsung Electronics, Samsung Mobile Display, Samsung Electro-machenics, Samsung Corning Precision Material and Samsung SDS, representatives of the first and second groups of suppliers and government officials gathered at the ceremony to sign an agreement on fair trade and mutual growth between Samsung Group and suppliers at Samsung Town located at Seocho-dong on April 13, 2011. At the ceremony, 9 Samsung companies and the first suppliers reached 3,021 agreements and the first and second suppliers concluded 2,187 contracts, thus, a total of 5,208 agreements were signed to establish a foundation for mutual growth through out all suppliers. In addition, we take up various measures for continuous practices such as operation of offices in charge of Samsung companies, reflecting mutual growth performance on employee assessment of supplier contacting departments and provision of R&D expense for financial soundness of suppliers.