Integrated Latex Supply Chain
DPL follows a model - one more appropriate for a developing country in which suppliers' know-how, quality standards and ability to deliver the goods as contracted cannot always be taken for granted. Our approach to supplier relationships has, perhaps, something in common with the plantation 'agency houses' of yesteryear, such as DPL's Parent Company, Hayleys, used to be. To ensure quality and a steady supply of the commodities (such as rubber) in which they traded, agency houses undertook the transfer of agriculture know-how and technology. Suppliers were not simply contracted; they were taught and nurtured. DPL has found that such an approach still pays well with suppliers of its primary raw material, natural latex. By providing technical knowledge and practical assistance to latex suppliers, particularly those in the smallholder sector, we not only secure our sources of supply but also improve quality and improve reliability of supply.
This tradition of nurturing and developing suppliers finds its fullest expression in Firstlight, a programme that integrates sustainability initiatives and support for smallholder latex suppliers. Among the objectives of the programme are a fair price for labour and the ongoing education and empowerment of suppliers, together with support for the communities to which they belong. The programme has been active since mid 2006 and currently boasts of over four hundred participating farmers. The benefits extended to farmers and their communities via Firstlight are various (see 'Society' section); most recently, in March 2013, we held a series of presentations and workshops on rubber harvest techniques, financial management and microfinance with the help of a leading bank of the country.
Firstlight apart, we are committed to a policy of fair pricing based on current prices at the Colombo rubber auctions. This, together with accurate measurement and quality assessment, prompt payment and technical support, has helped us retain the trust and respect of suppliers for more than thirty years. These policies, and particularly the effects of the Firstlight programme, have also helped increase the number of smallholder rubber growers in recent years.
|Average Length of Relationship|
|Category||No. of Suppliers||Over 20 years||10-20 years||Below 10 years|
Besides latex supplies, DPL also depends on outside suppliers for a number of other inputs, such as liners, packing materials and chemicals.
Packing materials are another area in which domestic suppliers are gradually replacing overseas ones. We have maintained long-standing relationships with more than thirty suppliers; thanks to our assistance, many local suppliers can match the quality of materials formerly imported from China, Malaysia and elsewhere. This was in large measure due to our help and encouragement, particularly in the matter of embracing quality standards, ISO certifications and the like.
Today, almost 75% of our packaging is locally sourced. The limited number of competent local suppliers remains a problem, however.