Procurement numbers⁵

Geographic breakdown of procurement in Italy (%)

The numbers relating to relations with suppliers describe the connection between the Company and the economic framework in which it operates. In 2019, 896 procurement contracts were concluded with 600 companies (+11% compared with 2018), 424 belonging to the SME sector (+6% compared with 2018). The total value of contracts stood at €1,550 million (€1,300 million in Italy), up 2% compared with 2018. Of these, 60% involved Small and Medium Enterprises (SMEs), which represent one of the main players of the Italian economy and which, thanks to their capacity to adapt to the needs of customers and their extensive distribution throughout the area, are particularly qualified to collaborate with Snam and to cope with its requirements.

Suppliers are classified into 3 different product categories, namely goods, services and works, which in 2019 represented 34%, 30% and 36%, respectively, of total procurement.

In the product category of goods, steel, by weight, is the most used material at over 86 thousand tonnes. Specifically, steel comes from the purchase of pipes, valves and connectors which are mainly needed for gas transportation activities (activities which, in 2019, covered 74% of total procurement).

The categories of products that are, in turn, broken down into four criticality classes (A, B, C, D), depending on their pertinence to the core business, strategic importance, technological complexity and impact on performance. Classes A and B represent the most critical product categories for Snam’s activities and, in 2019, involved 137 suppliers, equal to 60% of procurement. Suppliers belonging to these criticality classes, once classified, are subject to greater controls and monitoring by Snam.

The numbers of the new business companies

In 2019 as far as IES Biogas, TEP Energy Solutions and CUBOGAS were concerned, a total of 1,012 suppliers were qualified, 918 of which with at least one contract out of a total of 1,031 contracts issued. 891 of total suppliers were classified as small and medium sized enterprises (SMEs).

The social and economic impacts of procurement in Italy in 2019

From a geographical perspective, Snam suppliers are distributed throughout Italy, concentrated in Lombardy (35%) and Emilia-Romagna (17%). Procurement activities therefore constitute an important driving force for activating the domestic economy and employment, setting in motion a series of economic flows that transfer wealth from the economic system of companies in the supply chain to the domestic economic system.

The impact of procurement decisions can be measured in terms of the number of people employed, the value of production and added value, generated by the purchase of goods and services along the first level of the supply chain (direct impacts) and in sectors activated by first level suppliers (indirect impact). In addition, the wealth introduced into the economic system through the final consumption of employees, activated directly and indirectly by acquisitions, generates further employment and added value.

The total value of acquisitions made by Snam nationally in 2019 was equal to around €1,300 million, more than 83% of total procurement. This generated:

• around €3,000 million in value of production, from the sum of the value generated along the supply chain to create the goods and services and the value created in an induced manner, namely the wealth produced by the final consumption of employees along the entire supply chain;
• around €1,300 million of added value (contribution to the Gross Domestic Product of Italy);
• more than 20 thousand full time external jobs for a year (employment impact).