GGG Graco Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM SD

Specialized Disclosure Report

Graco Inc.

(Exact name of registrant as specified in its charter)

 

Minnesota		001-09249		41-0285640
(State or other Jurisdiction of Incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

 

88 – 11th Avenue Northeast                  Minneapolis, Minnesota		55413
(Address of principal executive offices)		(Zip Code)

 

Karen Park Gallivan, (612) 623-6000

(Name and telephone number, including area code, of the person to contact in connection with this report.)

Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:

x Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2014.

 

 

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Section 1 – Conflict Minerals Disclosure

Item 1.01 Conflict Minerals Disclosure and Report

Conflict Minerals Disclosure

This Form SD of Graco Inc. (the “Company”) is filed pursuant to Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period of January 1 to December 31, 2014.

A copy of the Company’s Conflict Minerals Report is filed as Exhibit 1.01 to this Form SD and is publicly available at www.graco.com.

Item 1.02 Exhibit

As specified in Section 2, Item 2.01 of this Form SD, the Company is hereby filing its Conflict Minerals Report as Exhibit 1.01 to this report.

Section 2 – Exhibits

Item 2.01 Exhibits

The following exhibit is filed as part of this report.

 

Exhibit No.		Description
1.01		Conflict Minerals Report of Graco Inc.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				GRACO INC.
Date:     June 1, 2015				By:		/s/ Karen Park Gallivan
						Karen Park Gallivan
						Vice President, General Counsel and Secretary

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EXHIBIT INDEX

 

Exhibit		Description		Method of Filing
1.01		Conflict Minerals Report of Graco Inc.		Filed Electronically

Exhibit 1.01

GRACO INC.

Conflict Minerals Report

For the reporting period from January 1, 2014 to December 31, 2014.

This is the Conflict Minerals Report (“Report”) of Graco Inc. (“Graco,” “we,” “our” or “us”) for the 2014 calendar year, pursuant to Rule 13p-1 of the Securities Exchange Act of 1934 (the “Rule”). Certain capitalized terms used but not defined herein have the meanings assigned to them in the Rule. This Report includes the activities of all subsidiaries of Graco that were required to be consolidated during the reporting period.

The Rule requires certain SEC reporting companies that manufacture or contract to be manufactured products for which tantalum, tin, tungsten or gold (“3TG”) are necessary to the functionality or production of such products to disclose annually whether any of the 3TG in such products originated in the Democratic Republic of the Congo or one of its adjoining countries (collectively, the “Covered Countries”). If the company knows that its necessary 3TG originated in the Covered Countries, or has reason to believe that its 3TG may have originated in the Covered Countries and did not or may not have come from scrap or recycled sources, the company must exercise due diligence on the source and chain of custody of its 3TG and prepare and file a Report describing its due diligence measures.

Graco Overview

Graco is a multi-national manufacturer of equipment that pumps, meters, mixes and dispenses a wide variety of fluids and coatings. Our equipment is used in the construction, automotive, industrial, mining, oil and natural gas, process, public works and other industries. Our primary products include air, electric, gas and hydraulic pumps and sprayers; electronic and mechanical controls and sensors; and automatic and manual dispense valves, meters and spray guns. Our products that contain control boards, certain other electronic components, motors, engines, batteries, spray tips, and certain pumps and valves contain 3TG.

We have established management systems to support the execution of our Conflict Minerals program and to ensure it operates effectively and is sustainable into the future. We have adopted a policy affirming our commitment to conducting business fairly and ethically with respect for human rights and in compliance with all applicable laws and regulations, including the Rule. Our policy also affirms our support for the responsible sourcing of 3TG through our global supply chain, and states that we are actively and diligently working with our global supply chain partners to determine the origin of any 3TG they may supply to us, and that we will continue to work with them towards the goal of providing greater supply chain transparency and responsible sourcing. In addition to establishing a policy on Conflict Minerals, we have assembled a cross-functional team with executive-level sponsorship and support to implement and oversee our Conflict Minerals compliance program. We have a process in place to engage relevant first-tier suppliers to educate them about the Rule and request information from them regarding 3TG, and to collect, analyze and retain any such information received from them. We also have a process in

 

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place to improve the number and quality of supplier responses year over year, and have an established grievance mechanism through which concerned parties may communicate their concerns to us. We also participate in Conflict Minerals working groups, and report annually on our supply chain due diligence by filing a Form SD and Conflict Minerals Report with the Securities Exchange Commission.

Reasonable Country of Origin Inquiry

We do not directly source 3TG. Instead, we purchase components and raw materials from third party suppliers that are multiple layers removed from the smelters and refiners of the 3TG that are in the components and raw materials ultimately supplied to us.

We evaluated our products and determined that certain products manufactured during calendar year 2014 were manufactured with components and raw materials that contain or likely contain 3TG that are necessary to the functionality or production of those products. We then identified the first-tier suppliers of those components and raw materials, and surveyed them using the EICC-GeSI Conflict Minerals Reporting Template developed by the Electronic Industry Citizenship Coalition ^® (EICC ^®) and the Global Sustainability Initiative (GeSI). We also provided these suppliers with background information on the Rule, a FAQ and a decision-tree to help educate them on the Rule and to aid them in responding to the survey. We requested that these suppliers make similar inquiries of their suppliers and sub-suppliers until the smelters and refiners of any 3TG in the components and raw materials supplied to us could be identified and compared to the conflict-free smelter and refiner lists developed and maintained by the Conflict-Free Sourcing Initiative (CFSI).

We followed up with suppliers who did not provide us with a timely response, or who provided incomplete or inconsistent responses. We reviewed supplier responses and then summarized and categorized the responses based on several factors. We also compiled a list of entities identified as smelters and refiners by our suppliers.

Design of Due Diligence Measures

Our due diligence measures have been designed to be in conformity, in all material respects, with the applicable provisions of the internationally recognized framework in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, and the related supplements on 3TG.

Due Diligence Measures Performed

The due diligence measures we performed include defining roles and responsibilities for our cross-functional Conflict Minerals team and designated members of senior management; reporting our Conflict Minerals findings to our cross-functional Conflict Minerals team and designated members of senior management; and comparing the smelter and refiner information received from our suppliers against the CFSI list of conflict-free smelters and refiners and against the CFSI list of smelters and refiners that have committed to undergo a Conflict-Free Smelter

 

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Program (CFSP) audit.

Due Diligence Results

A majority of suppliers surveyed responded to the survey. The majority of those who responded provided data at a company-wide level rather than at a product level, and reported that their products do not contain 3TG or, if they do, the 3TG in their products does not come from the Covered Countries. A number of suppliers reported that they do not know whether the 3TG in their products comes from the Covered Countries or from scrap or recycled sources.

A small number of suppliers identified over 700 entities in their supply chains as part of their smelter and refiner lists. However, not all of the entities identified by these suppliers appear to be actual smelters or refiners as the total number of entities identified exceeds the number of entities on the CFSI lists of known smelters and refiners.

Of the entities identified as smelters and refiners by our suppliers, as of May 21, 2015, 81 have received a “conflict-free” designation from an independent third party audit program according to the CFSI list of conflict-free smelters, while 27 have not yet received a “conflict-free” designation but have begun participating in an independent third party audit program according to the CFSI list of smelters and refiners who have committed to undergo a CFSP audit. The remaining smelters and refiners either appear on the CFSI list of known smelters and refiners but have not begun participating in an independent third party audit program, or do not appear on the CFSI list of known smelters and refiners at all.

Given that the majority of suppliers who responded to the survey provided their responses at a company-wide level rather than at a level specific to the materials and components they supplied to us, we were unable to determine which, if any, of the smelters and refiners listed in their responses were the actual source of 3TG they supplied.

A small number of suppliers responded at a supplier part or supplier-defined level. Following is a list of smelters and refiners identified by these suppliers, and whose materials and components may or may not be in our products, including the status of each smelter and refiner as of May 21, 2015:

 

Metal		Standard Smelter or Refiner Name		Facility Location (Country)		Smelter or Refiner Status*
Tin		Alpha		United States		Conflict-Free
Tin		China Tin Group Co., Ltd.		China		Active
Tin		CNMC (Guangxi) PGMA Co. Ltd.		China		On Standard List
Tin		Cooper Santa		Brazil		On Standard List
Tin		CV Serumpun Sebalai		Indonesia		On Standard List
Tin		CV United Smelting		Indonesia		Conflict-Free
Tin		EM Vinto		Bolivia		Conflict-Free
Tin		Fenix Metals		Poland		Active
Tungsten		Ganzhou Jiangwu Ferrotungsten Co., Ltd.		China		Conflict-Free
Tin		Gejiu Non-Ferrous Metal Processing Co. Ltd.		China		Conflict-Free

 

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Tin		Gejiu Zi-Li		China		On Standard List
Tantalum		Hi-Temp		United States		Conflict-Free
Tin		Huichang Jinshunda Tin Co. Ltd.		China		On Standard List
Tin		Jiangxi Nanshan		China		On Standard List
Tungsten		Jiangxi Richsea New Materials Co., Ltd.		China		Not on Standard List
Tantalum		Jiujiang Tanbre Co., Ltd.		China		Conflict-Free
Tin		Kai Unita Trade Limited Liability Company		China		On Standard List
Tin		Linwu Xianggui Smelter Co.		China		On Standard List
Tin		Malaysia Smelting Corporation (MSC)		Malaysia		Conflict-Free
Tin		Metallo-Chimique		Belgium		Conflict-Free
Gold		Metalor Technologies		Switzerland		Conflict-Free
Gold		Metalor USA Refining Corporation		United States		Conflict-Free
Tin		Mineração Taboca S.A.		Brazil		Conflict-Free
Tin		Minmetals Ganzhou Tin Co. Ltd.		China		Not on Standard List
Tin		Minsur		Peru		Conflict-Free
Tin		Mitsubishi Materials Corporation		Japan		Conflict-Free
Tin		Novosibirsk Integrated Tin Works		Russian Federation		On Standard List
Tin		OMSA		Bolivia		On Standard List
Tin		PT Artha Cipta Langgeng		Indonesia		Conflict-Free
Tin		PT Babel Inti Perkasa		Indonesia		Conflict-Free
Tin		PT Bangka Putra Karya		Indonesia		Conflict-Free
Tin		PT Bangka Tin Industry		Indonesia		Conflict-Free
Tin		PT Belitung Industri Sejahtera		Indonesia		Conflict-Free
Tin		PT Bukit Timah		Indonesia		Conflict-Free
Tin		PT DS Jaya Abadi		Indonesia		Conflict-Free
Tin		PT Eunindo Usaha Mandiri		Indonesia		Conflict-Free
Tin		PT Inti Stania Prima		Indonesia		Conflict-Free
Tin		PT Karimun Mining		Indonesia		On Standard List
Tin		PT Mitra Stania Prima		Indonesia		Conflict-Free
Tin		PT Prima Timah Utama		Indonesia		Conflict-Free
Tin		PT Refined Bangka Tin		Indonesia		Conflict-Free
Tin		PT Sariwiguna Binasentosa		Indonesia		Conflict-Free
Tin		PT Stanindo Inti Perkasa		Indonesia		Conflict-Free
Tin		PT Tambang Timah		Indonesia		On Standard List
Tin		PT Timah		Indonesia		Conflict-Free
Tin		PT Timah (Persero), Tbk		Indonesia		On Standard List
Tin		PT Tinindo Inter Nusa		Indonesia		Conflict-Free
Tin		Rui Da Hung		Taiwan		Active
Tin		Thaisarco		Thailand		Conflict-Free
Tungsten		Vietnam Youngsun Tungsten Industry Co., Ltd		Vietnam		Conflict-Free
Tin		White Solder Metalurgia e Mineração Ltda.		Brazil		Conflict-Free
Tungsten		Xiamen Tungsten Co., Ltd.		China		Conflict-Free
Tin		Yunnan Chengfeng Non-ferrous Metals Co. Ltd.		China		Active

 

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Tin		Yunnan Tin Company, Ltd.		China		Conflict-Free

*“Conflict-Free” means the smelter or refiner is listed on the CFSI list of conflict-free smelters and refiners; “Active” means the smelter has begun participating in an independent third party audit program according to the CFSI list of smelters who have committed to undergo a CFSP audit; “On Standard List” means the smelter is listed on the smelter reference list of the EICC-GeSI Conflict Minerals Reporting Template; and “Not on Standard List” means the smelter is not listed on the smelter reference list of the EICC-GeSI Conflict Minerals Reporting Template.

Determination

Given that a number of suppliers did not respond to our survey, the majority of responses we received were provided at a company-wide level, and that a number of suppliers do not know the origin of the 3TG in their products, we do not have sufficient information to determine the origin of the 3TG in our products subject to this Report, whether the 3TG came from scrap or recycled sources, the specific facilities used to process the 3TG, or the country of origin or the mine or location of origin of the 3TG.

Steps to be Taken to Mitigate Risk in 2015

We intend to take the following steps to improve the due diligence conducted to further mitigate any risk that the necessary 3TG in our products finance or benefit armed groups in the Covered Countries:

 

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Continue to engage with our direct suppliers to increase the response rate to our survey and improve the content and quality of their responses; and

 

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Continue to engage with our direct suppliers to receive more information farther upstream regarding the source and chain of custody of any 3TG in the components and raw materials they supply to us.

 

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