SustainabilityReport 2023 high - Flipbook - Page 8
1.4. Business model and value chain
Terratech’s main business idea is to develop,
manufacture, sell and support products that increase
excavator e昀케ciency. We do much of our marketing
towards end users in social media, at fairs, during
demos or by traditional marketing but our sales go
either through OEDs (Original Equipment Distributors)
or OEMs (Original Equipment Manufacturers).
Our by far largest contribution to a sustainable world is
our ability to signi昀椀cantly increase excavator e昀케ciency
but in addition to that we need to have a sustainable
and e昀케cient value chain. We do this by choosing
reusable materials, by ensuring all of our suppliers
maintain a fair and honest business practice, by
making sure suppliers have relevant ISO certi昀椀cation
and by optimizing transportations just to mention a
few of the areas we work with. We also make sure
we work with local partners in order to provide fast
support in local languages.
Our complete value chain can be described in the
following nine steps:
STEP 1. REFINEMENT OF RAW MATERIAL
The materials used in our products are sourced
either from re昀椀ned raw materials extracted directly
from mines or from recycled materials through
various re昀椀nement processes. We work on being
able to determine proportions of new versus recycled
material.
Our focus on trying to use more recycled material will
be an ongoing development as we map Terratech’s
value chain to Scope 3 of the Science Based Targets
Initiative (SBTI).
STEP 2. SUPPLIERS
When the raw materials used
in our products have been
re昀椀ned our suppliers process
the material and transform
this into for example steel
castings, welded structures,
hydraulic or electric
components.
Our suppliers are mainly
based in Europe of which many
are located in Sweden. As our
business grows in the American
and the Asia Paci昀椀c regions we
will see an increasing number of
suppliers locally in order to minimize the
environmental impact from transportation.
In total we have about 260 production suppliers.
To ensure our suppliers use fair business practice
we regularly follow-up that they follow our code of
conduct as well as other fair business practice policies.
STEP 3. UPSTREAM TRANSPORTATION
From the suppliers, products are shipped mainly
through our logistics partner on trucks, on ships or by
air. As mentioned, we strive to choose local suppliers
to decrease the need for long transportation and we
are also working on coordination deliveries as much
as possible. One signi昀椀cant improvement in our
upstream supply chain is the continued re昀椀nement of
transports from our work tool hub at Sjørring to our
daughter companies around the world.
STEP 4. PRODUCTION
When material and components arrive at our
three productions facilities we assemble electrical
components at SVAB, we do machining and assembly
of electrical, mechanical and hydraulic components at
Steelwrist and we manufacture di昀昀erent type of work
tools at Sjørring.
STEP 5. DOWNSTREAM TRANSPORTATION
When the products are ready to be sent, once again
we mainly use our logistic partners for shipping either
directly to OEM factories, to OED excavator dealers or
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