Cost Sharing Programs for Fine Chemical Custom Manufacturing

April 12, 2019by Jayhawk0
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When it comes to finding the right outsourcing partner for a fine chemical custom manufacturing project, many factors must be considered. The primary objective is to correctly match the needs of the customer with the core competencies and track record of the prospective service provider. Getting the right fit is critical to success and long-term security of supply in every project, including Suzuki coupling for agrochemical active intermediates, complex chemical synthesis for pharmaceutical intermediates, or hazardous materials handling for chemical custom manufacturing.

Beyond technical competencies, the ability of a custom chemical manufacturer to offer solutions for managing assets and reducing costs can make the difference between a marginal project and an extremely successful one. Cost-sharing programs have emerged as a powerful tool for achieving these goals, and are an ideal opportunity for both customer and service provider to reap benefits.

Low-Cost Asset Additions for Chemical Custom Manufacturing

Imagine successfully hitting all targets on an introductory product launch. Initial volume requirements were small, but yield, quality, and costs met specification and confidence is suddenly high. Growing demand for the product means scaling up and production expansion is imminent. Continuing with the same custom manufacturer requires more assets on site. A simple solution may be to add a holding vessel, or a storage tank to maintain bulk inventory.

Unfortunately, costs may exceed budget, but the assets could be equally valuable to the chemical custom manufacturing partner. Sharing the cost of this asset addition, or any similar investments, would benefit both parties and minimize their individual contributions.

Fine Chemical Custom Manufacturing of Co-Products

A superior custom chemical manufacturing partner will always be looking for ways to improve efficiency in the manufacturing and disposal process. One avenue for this is co-product streams. These could be either for current customers or those in totally unrelated markets. However, developing these streams could take significant investment.

The easy solution would focus on the narrow needs of the project, which would mean lost cost recovery. A better approach is to collaborate with the chemical custom manufacturer to examine how to share costs and lower the barriers to tapping this new opportunity.

Sharing the Cost of Waste Streams

Creative outlets for waste streams add value and reduce environmental impacts. Consider the customer who could utilize repurposed waste streams as products in their own manufacturing process at a lower cost than their own sourcing of virgin materials. This could be a huge benefit as it opens a new income stream while reducing waste disposal costs. The easy answer is to do nothing and continue the project as originally negotiated. But creative thinking and collaboration always produce the best results.

Fine Chemical Custom Manufacturing with Jayhawk

Being resourceful and having a partner who is willing to think beyond the basics will enable maximum leverage from custom chemical manufacturing projects and provide a competitive advantage.

The Jayhawk-CABB partnership is one of the world leaders in fine chemical custom manufacturing. We are intuitively aware of the benefits of cost-sharing programs. If you have specific sourcing needs or are facing challenges in the chemical custom manufacturing or specialty chemicals marketplace, we would be interested to hear your thoughts. Feel free to contact a member of our team today.


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