- Supply chain structure varies by product segment and raw material streams
- Sika also applies social and environmental criteria to the management of its supplier base
Sika’s supply chain varies depending on the business segment. The local Sika companies source raw materials both locally and internationally. Some materials are only available from international suppliers and must be imported into the country of production. Sand and cement for mortars are mainly sourced in the producing country, additives are usually sourced from multinational companies. Admixture raw materials are sourced either locally or from multinational companies. Proprietary admixture ingredients are produced in specialized factories and distributed to other Sika production sites. Raw materials for adhesives and sealants are sourced from multinational companies. Polymeric plastic raw materials are sourced from multinational companies or large local vendors.
In Sika factories, the raw materials are converted into higher-value goods, usually through mixing, blending, compounding, and suitable form-giving. From Sika’s finished goods warehouses, products are distributed within the respective country and partly exported. Sika today collaborates with around 12,000 direct material suppliers from around 16,000 supply locations, for both local and global sourcing. The company strives to work with local suppliers wherever possible, in order to reduce lead time, risk, and transport, and to increase availability and control quality. Sika’s purchasing spend for direct materials corresponds to approx. 45% of total net sales. The total global spend for direct materials and trading goods amounts just over CHF 2,700 million at average exchange rates for the year 2019. The regional split for direct materials is as follows: EMEA 47%, Americas 26%, Asia/Pacific 19%, and Automotive 8%.
Sika’s diverse customer base includes local construction craftspersons, larger construction companies and very large multinationals, e.g. cement companies, as well as mainly large automotive, transportation and appliance manufacturing companies.
Sika employs a risk management approach for suppliers and the raw material supply chain. This approach is described in this report under 102-11.