2.3 Supplier Management

All suppliers must adopt CT’s Quality Assurance Manual as the execution standard, and their upstream suppliers must also follow it to ensure consistency across the entire production process. At the same time, the Company is committed to fulfilling corporate social responsibility, promoting environmental sustainability, and upholding human rights. We also expect our key suppliers to adopt the same standards and to implement them in accordance with the 'Supplier Management Procedure" established by the Company. Suppliers must cooperate with CT or the third party audit agencies in conducting audits. If any nonconformities with the Company’s quality control standards are found, we have the right to require corrective actions and to offer the supplier guidance and assistance.

New Supplier Evaluation Mechanism

For new raw material suppliers, the “Qualified Supplier Evaluation Process” is established. Suppliers may be recommended by the procurement or requisition unit or may apply on their own. They must complete basic information and submit related documents according to each business category, and then be evaluated based on one of the following criteria:

(1) Sample Evaluation

(2) On-site Evaluation

(3) Exempt from Evaluation

(Well known manufacturers or international quality assurance certification)

2.3.1 Regular Supplier Evaluation

Most of CT’s main material suppliers are from Taiwan, and the primary raw materials include steel plates, steel sections, welding materials, and iron materials. In 2024, there were 10 main domestic and international material suppliers: 7 domestic and 3 overseas, all of which are agents. Among these main material suppliers, procurement expenditure was 80% domestic and 20% overseas. Raw materials are procured as needed rather than held in inventory.

In 2024, there were a total of 37 raw material suppliers worldwide, and all 37 (100 %) achieved Grade A in the annual supplier evaluation. Domestic and international economic conditions were still affected by the ongoing wars, frequent natural disasters, and inflation. The domestic economy performed acceptably in the first two quarters, but after the third quarter, due to significant international changes, market conditions were influenced by the broader environment.

When placing an order, the delivery date, quality, and lead time are coordinated with suppliers, and we maintain open and clear communication channels o reinforce our requirements. Therefore, supplier cooperation was good, and all met the Grade A evaluation standards.

Domestic suppliers are divided into four major categories: material supply (73 %), coating treatment (3 %), welding materials (6 %), and assembly materials (18 %), with material supply accounting for the largest proportion. Every December, main raw material suppliers are evaluated based on four aspects: quality, delivery, coordination, and environmental safety and health requirements, and reward or penalty measures are determined according to the supplier reward and penalty standards.

n   Domestic Supplier Categories

n  Supplier Policy Survey

In 2024, 5 new suppliers were added, environmental and social standards were incorporated into the selection criteria, and to understand suppliers’ sustainability risks, a “Supplier Survey” was provided to the new suppliers and the major domestic suppliers. The survey asks suppliers to report the implementation status of five sustainability aspects (occupational safety and health, environmental protection, GHG emissions, human rights and labor protection, and sustainability reporting). In 2024, 13 questionnaires were issued and 11 were returned, for a return rate of 85 %. Suppliers are required to address the five sustainability aspects and to comply with the “Supplier Management Policy” and the “Human Rights Policy” established by CT to ensure they respect human rights, comply with relevant laws and regulations, and fulfill social responsibilities.

2.3.2 Cooperating Vendors

Due to the nature of the industry, many of CT’s projects require a large workforce within a short period. To accommodate the time constraints of equipment maintenance during production operations, the Company often collaborates with contractors located in nearby areas.

Personnel of cooperating vendors working within the CT plant area must follow the “Quality Assurance Manual" and the “Environmental Safety and Health Management Manual” as stipulated by CT. When collaborating with new vendors, the Company must obtain from them the relevant licenses and certificates, factory registration documents, business licenses, registered business items, proof of tax payment and insurance enrollment, and truthful information on whether they have had any major environmental or safety incidents in recent years. This enables the responsible units to classify and assess them and to arrange on‑site plant inspections. Based on the contractors’ registered business items, the relevant departments conduct evaluations of their capabilities and then decide whether they can become partners of CT.

In 2024, subcontractors complied with occupational safety and health requirements and implemented them rigorously, actively addressing any necessary corrections, and their work attitudes and financial conditions were generally good. However, some subcontractors need to further enhance their autonomous inspection capabilities and consistently strengthen their execution, technical skills, and professionalism.