Supply chain

Interaction with suppliers is based on the principles of full transparency of decisions, market and formula pricing, long-term relationships under framework contracts.

The Company purchases and sells a significant amount of products and services. The selection of suppliers of the Company is carried out according to uniform rules on the basis of open electronic tender procedure only. Each potential supplier has the opportunity to participate in the tender procedure with the obligatory confirmation of compliance with the established criteria.

For potential suppliers, a comprehensive assessment of compliance with corporate requirements is carried out (the checklist has been approved and is applied).

Following the principles of corporate responsibility, the Company considers potential suppliers for compliance of their activities with environmental and social responsibility. If the tender subject provides for the need to check the state of the HSE system of the potential supplier, the Company’s specialists conduct an appropriate expert assessment, which may include a request for confirmation of the presence of the required production facilities and technologies, relevant qualifications of specialists, licenses, certificates, including in the field of ISO, technical audit opinions. In addition, within the framework of tender procedures, the Company provides for the request of information related to the social aspects of the potential supplier’s activities, including respect for human rights, observance of working hours and social guarantees of employees.

If bidders do not conform to the established criteria they will be disqualified. According to the Company’s industrial safety Policy, labor protection and the environment, all suppliers and contractors must follow the principles of the Company in this area, as well as comply with legislative and corporate standards in the implementation of contractual obligations to the Company. The Company monitors the activities of its contractors to comply with these requirements.

Trade and procurement platform

39 thousand active suppliers are registered in the trading and procurement platform, of which 6 thousand suppliers were registered and 9.4 thousand suppliers participated in tenders for the supply of goods in 2018.

As part of the improvement of the procurement system, the Company introduces mechanisms for categorizing procurement, delegation of authority, and personalization of responsibility; the Company has created and published a library of technical requirements and conditions for the goods, and a parametric classifier has been developed to systematize the selection of similar goods from the stocks in the E-store.

In 2018, about 8 thousand contracts were concluded with 1,000 suppliers for 32 billion rubles (without VAT). 50% of all orders were placed with the enterprises of the Republic of Tatarstan, import contracts amounted to 0.2%. The low share of import contracts indicates a steady decrease in the import dependence of the Company.

The principal share in the procurement structure accounts for the supply under the price books: framework and long-term contracts for an open amount, which allows for procurement without loss of time and resources as well as improves the efficiency of estimating the cost of facilities under construction and budget planning. As of this date, there are over 600 price books covering about 150 thousand stock-list items, which accounted for 78% of the total procurement in 2018 (79% in 2017).

Procurement structure by categories, %

In 2019, the Company plans to increase the supply chain potential taking into account aspects of sustainable development and to improve internal regulations in this regard. Particular importance is given to joint training programs for the Company’s employees and suppliers, as well as planning activities in the field of industrial safety, labor and health protection, reducing negative environmental impacts taking into account climate change, rational nature management, responsible production and consumption, energy efficiency and resource conservation.

We will also develop monitoring of the main suppliers of the Company for compliance with labor rights and standards.

In terms of ensuring the reliability of deliveries, we will develop the application of international standards and labeling in the production and procurement of products and services throughout the supply chain.

Currently, the bulk of the supply chain is domestic producers of goods and services. One of our priorities is working with local suppliers.