Es

competitive
value chain

competitive
value chain

102-9

As part of our commitment to clients and suppliers, we have an integrated value chain based on procurement and quality procedures that have contributed to our current success and scope.

Costa Rica

Costa Rica

COMPETITIVE VALUE CHAIN

COMPETITIVE VALUE CHAIN

Our strategy extends to all company departments. We set common goals such as meeting our sales budget and EBITDA target, based on a Sales & Operation Planning (S&OP) process.

Our process begins with information provided by the sales department, which draws on statistical information to determine our procurement needs.

Material requests take the form of orders for domestic and international suppliers, focused on lead times and any event that might affect product demand. The materials are received in our Distribution Centers for either local sale or distribution to one of our branches in Mexico, Central America or Brazil. If a product requires any special preparation or modification, it is handled in our facilities before the product is delivered to the client. Out of concern for cost control and lowering transport environmental impact, we strive to maximize the efficiency of our logistical network that is used for domestic and international transfers. Each of our distribution zones (North, West, Bajío, and Southeast) has its own distribution center capable of handling any material the branch requires. Final delivery to our customers is directly through our own transport means or that of third parties qualified to meet our Secure Custody Chain commitment.

Every two years RDP audits are conducted at all our sites in Mexico, and are assessed by NACD.

Until 2017, we had audits at nine facilities and our 2019 goal is to have five more.

In 2018, we received SARI certification from the ANIQ based on the verification of five sites in Mexico. For 2019, we will receive such audits at four other branches and one more that has been audited previously just to validate this standard’s monitoring and maintenance.

A key part of our success is to have a secure supply chain and integrated logistics

SECURE
CUSTODY CHAIN

SECURE
CUSTODY CHAIN

BOARD OF DIRECTORS AND Executive team

Definition of the coporate strategy for Pochteca’s growth and profitability

COMMUNITIES

We support the development of neighboring communities

4En M u ch o f o u r s u cc e s s depend s on the c o mm i tm ent, t a l ent an d in t egr i t y o f our em pl o y e e s Our op e r a t ion s and sa l e s depa r t me nt s jointl y anal y z e and d e t e r mi n e p r ocu r em ent ne e d s B ased on our O ne - S t op - Sho p s t r a t eg y , w e h a v e m o r e than 2 0,50 0 cu s t ome r s per y ear i n d i f f e r en t indu s tr i al sec t o r s Th r ough ou r po s t sa le s C us t o me r Re l a t i on s h i p M anag eme nt (C RM ) w e o f f er o ur c l i e n t s t e chnica l su ppo r t , p ro f e s s i ona l and p e r s ona l iz e d at t e nt i o n Al l o f ou r p r od u c ts c o m pl y wi t h t h e c o r r e s ponding s tanda r ds in e v e r y co u nt r y w h e r e w e op e r a t e W e m a i nta i n an o p ti m a l m anage me nt o f i n v e n t or i e s t o s a t i s f y ou r c l i e n t s ne e d s W i th 4 1 b r anch es in M e xi c o , C ent r a l Am e r ica and B r az i l, w e a t t end and p r o vid e p r oduc t s t o ou r cu s t o me r s A n y s p e cia l p r e pa r a t i on o r hand le d in ou r f ac i l i ti e s W e o f f e r high v a l u e -add e d p r od u c t s M a t e r ia ls a r e r e c e i v e d a t ou r dis t r ib u tion c e n t e r s f or l oca l s al e or t r an s po r t t o an o t h er o f our b r anch e s i n M e xi c o , Ce nt r a l Ame r ica and B r az i l F oc use d on c o st c on t r o l an d t h e e n v i o rme nta l i mpac t C he mi ca l , l ub ri cant and pap e r man u f ac tu r e r s . W e h a v e m o r e t han 1 00 w o rl d - c l a s s n a ti ona l and i n t e rn a ti ona l su pp lie r s EMPLOYEES PROCUREMENT CLIENTS POST-SALES SERVICE FILLING AND PACKAGING WAREHOUSING BRANCHES BLENDS BRANCHES DISTRIBUTION SUPPLIERS modification a product requires is profitability, as well as reducing

Mexico - Vallejo

POCUREMENT

POCUREMENT

GRI 204, 407, 408, 409, 414: 103-1, 103-2, 103-3

102-9, 204-1, 205-1, 407-1, 408-1, 409-1, 412-3, 414-1

In order to covey Pochteca’s commitment to sustainable supply chain management, we ask our commercial partners to align their practices with our Integrated Management System policy and our Suppliers’ Manual. We require not only familiarity with the contents of those documents, but evidence of abidance in order to assure that this culture is adopted the entire length and breadth of our value chain.

The Suppliers’ Manual includes our Code of Ethics, and upon signing that document our suppliers commit themselves to operate in keeping with Pochteca’s culture and values.

Our Code of Ethics clearly spells out our commitment to the:

• Right to free association

• Non discrimination and equal opportunities

• Ban on forced or child labor

In order to assure compliance in Human Rights, all suppliers who visit our operating centers to provide any service are required to show some form of official ID establishing that they are of legal working age, and proof that they are covered by a social security program.

80% of our suppliers provide materials and services, 100% of which are local

20% of our suppliers correspond to Raw Material suppliers

Our operations in Brazil are audited to guarantee the "Responsible Distribution Process” in accordance with the PRODIR standard, established by Associquim

RAW MATERIALS SUPPLIERS

CHEMICAL
SEGMENT

70% Local

30% International

FOOD
SEGMENT

18% Local

82% International

LUBRICANT
SEGMENT

100% International

PAPER
SEGMENT

30% Local

70% International

supplier ASSESSMENT

supplier ASSESSMENT

GRI 308, 414: 103-1, 103-2, 103-3

308-1, 414-1

Our supplier selection and assessment process includes a pre-evaluation in which we request evidence of compliance with our guidelines on quality, occupational safety, environmental stewardship, food safety, and social responsibility. Our suppliers receive a copy of our manual that has been dedicated specifically to them in the hope of getting them involved in, and familiarized with our culture, Code of Ethics, evaluation criteria and transparency line. In this way, we seek to share our own philosophy so we can establish a long-term relationship.

DISTRIBUTION

DISTRIBUTION

GRI 417: 103-1, 103-2, 103-3

102-9, 102-10, 102-12, 102-13, 413-2, 417-1, 417-2, 417-3

Due to the nature of the products we distribute, a requirement of Mexico’s NOM-018-STPS-2015, is that the products identify any health or environmental hazards. This regulatory change took effect in 2018 and introduced a new Global Harmonization System (GHS).

In addition to the changes to product labeling, the sale of such products requires that GHS safety data sheets be included with deliveries.

We worked jointly with our suppliers to comply with the timing of the new GHS risk communication system

6En GH02: Flammable substances (IN) GHS01: Explosive substances (EX) GHS03: Oxidizing substances (CB) GHS04: Compressed gas (GZ) PHYSICAL RISKS
7En GHS06: Acute toxicity, categories 1, 2, 3 (TO) GHS05: Corrosive substances (CR) GHS07: Acute toxicity category 4 (inhalation hazard) (DA) GHS08: Carcinogenic, mutagen (MU) HEALTH RISKS
8En GHS09: Enviromental hazard harmful to the aquatic enviroment (EN). ENVIROMENTAL RISK

SALES

SALES

GRI 416: 103-1, 103-2, 103-3

102-9, 102-17, 102-21, 416-1

From the start we prioritize the safety of all those involved, sharing with our clients the products safety data sheets, and technical and application forms for our products. Moreover, the same sales team evaluates the handling of the materials we supply, and in the event that a more specialized visit is needed to provide handling, storage and infrastructure recommendations, we schedule visits by our safety personnel.

Our application and post sales service labs provide advice for guaranteeing the safety of all those involved and the products themselves, a well as the most appropriate ways our products can be applied to our clients’ processes.

El Salvador