1. Sustainability of processes and products
The production plants of Iris Ceramica Group have a total production capacity of approximately 25 million square meters per year of ceramic surfaces.
The Group is committed to the sustainability of its products and production processes, paying great attention to the environment and in particular to the supply chain, which the group constantly monitors. Within procurement processes, cost-effectiveness is assessed in the same way as aspects relating to supplier environmental and social sustainability, and local suppliers are preferred, therefor Italian suppliers for Italy, German suppliers for Germany and North American suppliers for the USA. Suppliers are assessed by the Purchasing Office in agreement with the Quality Control function, according to the criteria imposed by the ISO-9001 certification.
2. The logistics chain in the ceramic sector
Raw materials play a fundamental role in the creation of our products and are sourced by extracting them directly from nature (sands, clays and feldspars) or chemical industries (colorants, glazes and additives); they have a considerable environmental impact in all stages of their use. The quality of the end product depends in large part on the quality of the raw materials used. In order to comply with ISO 9001 certification criteria, the materials used are subject to physical and chemical testing in all phases of the process. Transportation is also of great importance throughout the supply chain and is managed carefully as it is primarily carried out by road and sea.
3. Our supply chain
At Iris Ceramica Group the organization of procurement involves a central Purchasing Office based in Castellarano (Reggio Emilia, Italy) responsible for identifying suppliers and conducting negotiations for the most important goods and services at the Group level (Italy, Germany and the USA) and several internal operating points of contact that permit thorough monitoring. Purchases for normal factory operations for the German and US production units are carried out locally, except for raw materials, which are always centrally negotiated. The technical supervisors of the chemical laboratories are the internal operating points of contact for raw materials who test the materials and perform regular production controls. The points of contact for plant systems are the technical plant system managers, whereas the internal contact personnel for other production-related purchasing are the plant managers and department or warehouse managers. Outsourced processing of special ceramics units is managed by specifically engaged personnel. The Energy Manager takes part in negotiations and management of supply for the procurement of energy, an extremely important aspect of the ceramics industry’s financial performance. In Germany and the USA, the managers of the international facilities participate directly, liaising with the Italian Energy Manager, in concert with the Group's management.
The raw materials item is related to consumables for processing ceramic tiles (abrasives) and packaging materials (wood, paper, cardboard, plastic and more). The company primarily does business with suppliers that offer a high level of recycling of their materials. When selecting suppliers, particular care is devoted to the possible use of secondary raw materials, i.e. those obtained by recycling primary raw materials (internally or externally), the use of packaging materials also partially made from recycled materials, suppliers' initiatives relating to efficient energy use, the adoption of best practices for ensuring the safety of those involved in the process and respect for the environment.
The internal operating contact personnel for marketing type expenses are the heads of marketing of the affected sales divisions. Marketing expenses extend to a very large variety of arrangements: from marketing tools to set-up for fairs, the costs of organizing meetings and expositions in showrooms, with all the related services.
The Group makes use of various types of third-party services, such as contract labor, particularly for tasks involving logistics, services and processing of finished products.
Leases and rentals relate primarily to machinery for the internal movement of materials and internal vehicles. Long-term leases provide a certain degree of flexibility and allow for constant access to equipment always offered the latest comfort, safety and consumption.
4. Suppliers questionnaire
The supply chain is one of the fundamental elements of the production process and therefore of the path towards sustainability. Iris Ceramica Group decided to launch a process to analyze the sustainability of its supply chain with a dual purpose. First of all to determine the level of reporting implemented by suppliers, because only a supply chain truly oriented towards sustainability allows all participants to be fully sustainable. The second goal is to have a clear notion of the supplier’s level of knowledge of the sustainability activities promoted by Iris Ceramica Group. This initial analysis provided better knowledge and mutual encouragement to implement sustainability reporting practices which resulted in an in-depth focus group held in the first months of 2021, which will be reported in detail in the next Report. The main results and commentary regarding this survey of ICG suppliers can be found here.
Downloadable PDF: Survey of supplier sustainability
More than 50 suppliers participated in a ten-question questionnaire focusing on the topic of mutual knowledge in sustainability reporting terms. The first figure that comes to light is that nearly one-half of suppliers have already implemented sustainability reporting: environmental certifications, a sustainability report or other social certifications. In addition, half of those who answered that they had not implemented ESG (Environment, Social and Governance) reporting systems indicated that they intended to do so in the coming months. In addition, 60% of interviewees stated that they had a code of ethics or conduct that is updated every two or three years on average: a positive sign from a Corporate Social Responsibility standpoint.
With regard to Communication, the survey showed that only 30% regularly communicate the results achieved in terms of sustainability to stakeholders; more than half stating that their website and social media are the main communication tools used to disseminate their results.
The survey also aimed to verify the suppliers' knowledge of the Group's sustainability reporting and action activities. It was found that 40% of suppliers were aware of Iris Ceramica Group’s Sustainability Report and 30% were also familiar with the individual projects promoted by the company, with the best known being: Zero emissions, Active Surfaces, the Pollution 2018 event, the financing of the Hybrid Hall project of the Baggiovara Hospital and the synergies with the humanitarian organizations Action Aid, Save The Children and Sea Shepherd.
Particularly flattering was the opinion of the potential improvements planned by the Group to improve its sustainability: almost all the respondents emphasized their high regard for the daily actions taken by the Iris Ceramica Group.
This first survey is a springboard towards an ever greater involvement of stakeholders and dissemination of the activities and results achieved, a commitment that the company will carry forward with ever greater strength in the coming months.
| Categories | ITALY (€) | GERMANY (€) | USA ($) |
|---|---|---|---|
| Finished products | 428,461 | - | 1,605,395 |
| Raw materials | 41,827,623 | 8,057,829 | 12,377,541 |
| Materials and parts | 24,376,557 | 3,902,700 | 11,312,103 |
| Energy | 30,235,904 | 6,971,028 | 5,477,977 |
| Maintenance | 14,006,260 | 3,335,926 | 5,802,642 |
| Leases and rentals | 2,164,674 | 440,699 | 3,666,712 |
| Freight | 10,043,867 | 2,025,134 | 28,744,870 |
| Services | 18,421,755 | 1,224,842 | 14,570,004 |
| Commissions | 8,356,909 | 726,840 | 6,721,797 |
| Marketing costs | 19,792,222 | 2,023,406 | 6,825,293 |
| Other | 22,955,632 | 5,331,823 | 12,734,151 |
| TOTAL | 192,609,862 | 34,040,227 | 109,838,486 |
| No. suppliers | 3,193 | 953 | 1,066 |
| of which, significant* | 300 | 65 | 184 |
| % sales | 84% | 77% | 90% |
| no. approved suppliers** | 96 | 25 | 55 |
| Approved supplier sales | € 59,193,875 | € 4,045,855 | € 25,181,099 |
| % sales | 31% | 12% | 23% |
| Categories | ITALY (€) | GERMANY (€) | USA ($) |
|---|---|---|---|
| Finished products | 317,643 | - | 1,829,920 |
| Raw materials | 44,460,645 | 6,248,064 | 10,414,563 |
| Materials and parts | 27,557,576 | 3,150,316 | 9,654,150 |
| Energy | 24,531,635 | 6,237,428 | 4,679,933 |
| Maintenance | 15,358,605 | 2,812,278 | 4,407,882 |
| Leases and rentals | 2,406,185 | 484,450 | 4,218,118 |
| Freight | 9,862,082 | 1,790,428 | 23,355,791 |
| Services | 17,821,421 | 1,420,424 | 14,603,691 |
| Commissions | 8,831,344 | 721,206 | 5,029,505 |
| Marketing costs | 21,425,073 | 1,695,567 | 7,322,951 |
| Other | 20,786,440 | 5,696,141 | 9,164,722 |
| TOTAL | 193,358,649 | 30,256,302 | 94,681,226 |
| No. suppliers | 3,109 | 867 | 1,066 |
| of which, significant* | 309 | 53 | 166 |
| % sales | 85% | 78% | 87% |
| no. approved suppliers** | 100 | 30 | 47 |
| Approved supplier sales | € 69,426,608 | € 6,245,026 | € 18,209,205 |
| % sales | 36% | 21% | 19% |
| Categories | ITALY (€) | GERMANY (€) | USA ($) |
|---|---|---|---|
| Finished products | 172,172 | - | 879,610 |
| Raw materials | 36,379,141 | 6,173,541 | 8,539,301 |
| Materials and parts | 26,023,109 | 3,077,461 | 8,590,666 |
| Energy | 16,920,626 | 5,687,346 | 4,007,382 |
| Maintenance | 13,624,698 | 3,499,919 | 2,959,860 |
| Leases and rentals | 2,358,024 | 491,310 | 3,976,186 |
| Freight | 7,514,776 | 1,805,651 | 15,211,531 |
| Services | 16,714,324 | 1,222,499 | 13,109,549 |
| Commissions | 7,753,716 | 717,789 | 3,851,480 |
| Marketing costs | 14,693,850 | 1,352,156 | 4,883,787 |
| Other | 15,887,426 | 5,527,108 | 7,738,873 |
| TOTAL | 158,041,863 | 29,554,787 | 73,748,227 |
| No. suppliers | 2,528 | 776 | 908 |
| of which, significant* | 504 | 59 | 126 |
| % sales | 88% | 78% | 87% |
| no. approved suppliers** | 126 | 28 | 42 |
| Approved supplier sales | € 57,489,400 | € 7,707,218 | € 19,149,289 |
| % sales | 36% | 26% | 26% |
*Significant suppliers = suppliers with an annual turnover of >EUR 100,000 and agents with an annual turnover of >EUR 50,000
**Number of qualified suppliers = suppliers included in the list we use for ISO 9001.
These figures do not include energy suppliers, even where including large, structured and certified suppliers.
| 2018 | ITALY | GERMANY | USA |
|---|---|---|---|
| No. new suppliers | 565 | 181 | 198 |
| TOTAL | € 6,833,920 | € 1,226,916 | $ 5,136,920 |
| % of total purchases | 4% | 4% | 5% |
| New suppliers, of which significant * | 10 | 4 | 13 |
| for sales of | € 4,249,689 | € 648,089 | $ 3,994,964 |
| % of new supplier sales | 62% | 53% | 78% |
| Spending on new local suppliers | € 5,572,805 | € 616,725 | $ 3,575,222 |
* spending of more than € 10,000 per year
| 2019 | ITALY | GERMANY | USA |
|---|---|---|---|
| No. new suppliers | 572 | 163 | 241 |
| TOTAL | € 8,803,273 | € 1,392,047 | $ 3,108,739 |
| % of total purchases | 5% | 5% | 3% |
| New suppliers, of which significant * | 13 | 2 | 6 |
| for sales of | € 5,276,188 | € 1,016,800 | $ 1,669,022 |
| % of new supplier sales | 60% | 73% | 54% |
| Spending on new local suppliers | € 6,919,022 | € 277,378 | $ 2,616,184 |
* spending of more than € 10,000 per year
| 2020 | ITALY | GERMANY | USA |
|---|---|---|---|
| No. new suppliers | 310 | 109 | 92 |
| TOTAL | € 5,625,956 | € 606,187 | $ 1,127,872 |
| % of total purchases | 4% | 2% | 2% |
| New suppliers, of which significant * | 11 | 1 | 2 |
| for sales of | € 2,843,509 | € 250,000 | $ 533,313 |
| % of new supplier sales | 51% | 41% | 47% |
| Spending on new local suppliers | € 3,916,062 | € 120,871 | $ 1,067,831 |
* spending of more than € 10,000 per year
Country number ITALY 2533 USA 886 GERMANY 557 FRANCE 209 SWITZERLAND 38 AUSTRIA 37 POLAND 34 SPAIN 29 UNITED KINGDOM 21 NETHERLANDS 19 CZECH REPUBLIC 15 BELGIUM 13 UAE 12 CHINA 11 HONG KONG 10 CROATIA 9 RUSSIAN FEDERATION 9 HUNGARY 9 CANADA 8 CYPRUS 7 IRELAND 7 MEXICO 7 ROMANIA 7 UKRAINE 7 JAPAN 6 ISRAEL 6 TURKEY 6 ESTONIA 5 LEBANON 5 DENMARK 4 SOUTH AFRICA 4 SINGAPORE 4 SWEDEN 4 BRAZIL 3 BULGARIA 3 GREECE 3 INDIA 3 MALTA 3 MOROCCO 3 SERBIA 3 SLOVENIA 3 FINLAND 3 AUSTRALIA 2 IVORY COAST 2 GEORGIA 2 KUWAIT 2 PERU 2 SEYCHELLES 2 NORWAY 2 REUNION 2 PHILIPPINES 2 SAUDI ARABIA 1 AZERBAIJAN 1 CAMEROON 1 SOUTH KOREA 1 LATVIA 1 LUXEMBOURG 1 MALDIVES 1 MONACO 1 MONTENEGRO 1 NEW ZEALAND 1 OMAN 1 FRENCH POLYNESIA 1 PORTUGAL 1 QATAR 1 SAN MARINO 1 SLOVAKIA 1 TAIWAN 1 TUNISIA 1 BAHRAIN 1 MALAYSIA 1 COSTA RICA 1 ARGENTINA 1 MACAO 1
Estimated monetary value of payment to suppliers
total EUR: 247,527,882.77
total USD: 135,337,385.38