Suppliers and Contractors

Our suppliers and contractors are indispensable for the company due to their capacity to generate value and contribute to the development of local communities. That is why, we prefer working with as many local suppliers and contractors as possible in each location. To that end, local suppliers are defined as companies based in the same region as our forestry operations or production facilities that depend on their sustainably sourced raw materials and responsible services for the continuity of their business operations.

Number of total local suppliers and contractors and share of MSMEs among them

	2016	2017	2018	2019
Total number of suppliers and contractors	29,415	30,494	31,428	25,339
Share of local suppliers and contractors	95.4%	95.7%	95.6%	96.5%
Share of MSME suppliers and contractors	–	–	–	26.8%

Yearly spend in million USD

	2016	2017	2018	2019
Suppliers and contractors	4,096	4,213	4,667	4,629
Local suppliers and contractors	85%	86%	85%	82%
MSME suppliers and contractors	–	–	–	18%

Critical Suppliers

Regarding critical suppliers, in Celulosa, Biopackaging and Softys, these are defined according to the following criteria

• High-volume suppliers (or similar)
• Critical component suppliers (or similar)
• Non-substitutable suppliers (or similar)

At the same time, each business unit considers their own additional criteria:

Celulosa	Annual spend iqual to or over USD 1 million Manufacturers of goods: exclusive producers Industrial maintenance: providing services for critical components with an acceptable risk level according to the ‘Strategic Company Qualification SCQ’ matrix Local suppliers: based on the social impact on their surrondings and our operations
Biopackaging	Annual spend over USD 1 million
Softys	Identified as ‘Highly Critical’ within the business area’s matrix Less than 100 suppliers in the database for that product or material

481 critical suppliers were identified with the use of this matrix across all three-business areas out of 17,623 suppliers