Chapter 12: Supply Chain

The Billabong International Limited supply chain comprises a group of third party contractors that manufacture product for brands within the Billabong International Limited group. The contractors operate factories in approximately 25 global destinations including Asia, India, the USA, South America and Europe. As of 30 June 2009 the supply chain comprised in excess of 400 individual factories. These factories produce more than 60 million individual product units for the Billabong group in any 12 month period. While the volume of goods that are produced throughout the supply chain sounds impressive, Billabong group product generally makes up a very small percentage of the overall business of the vast majority of the individual suppliers. Moreover, the influence within the global supply chain held to certain social and environmental standards as detailed in the Group's Supplier Agreement. Among these standards is a commitment to meet all applicable laws in their country of operation. Where factories breach these obligations, the Company seeks to engage the supplier to undertake remediation works to lift standards. If the supplier fails to comply with such works within a satisfactory period, the Company may seek to terminate the working relationship. Conversely, factories that commit to responsible work practices are favoured by Billabong International Limited