China sourcing is part of Anglo American’s procurement strategy. It is driving a comprehensive engagement with China and the company’s management has been clear that it will actively prefer suppliers who are engaged in China sourcing.
We have a China International Procurement Office (IPO) in Beijing to assist our business units with procuring goods from China. Our main objective is to build cost-effective, strategic partnerships in China and ensure quality of goods and services supplied. We have put in place a sourcing strategy to help us build long-term, valuable relationships with Chinese suppliers. This strategy has been developed to ensure sourcing from China becomes an integral and trusted part of our supply chain.
The China sourcing strategy aims to:
- Build relationships, ensure transparency, clearly define responsibilities and improve communication and documentation with our suppliers
- Demonstrate supplier capabilities and bring stakeholders together to ensure quality and ease logistics
Anglo American is also committed to developing our local suppliers’ ability to source from China and China’s access to our markets. Helping local suppliers to source from China allows for the creation of local businesses in increasingly complex categories. A local business may not yet be able to manufacture precision-engineered products, but partnering with Chinese suppliers does create local business and skilled, sustainable jobs to source, operate and maintain those complex products for us.
Our China IPO helps us to map the market in China, identifying suppliers who offer us cost advantages. Sometimes, that may result in a direct relationship between Anglo American and a Chinese supplier. Increasingly, however, we are looking to support local businesses by identifying Chinese suppliers they can source from. More than simply becoming a local logistics company, these businesses receive the training they need to add value to the products they source. It is a dynamic which delivers on our commitments to grow China sourcing and local businesses, and one we are actively encouraging our bigger suppliers to adopt.