A forward-looking approach - INTERNATI NAL - Outsourcing as a strategy for success in the specialty chemicals industry - CABB Chemicals
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I N T E R N AT I NAL
June 2019, Wiley-VCH, Weinheim, www.chemanager-online.com/en
A forward-looking approach
Outsourcing as a strategy for success in the specialty chemicals industry
A forward-looking approach
Outsourcing as a strategy for success in the specialty chemicals industry
T
he specialty chemicals industry is currently facing a range of challenges. Firstly, increas Interestingly, similar trends have been
observable in the agrochemicals industry
ing competition, in particular from Asia, is putting pressure on margins. Secondly,
for some time. Numerous innovators in
new technological trends such as electromobility and society‘s demand for innovative this sector have in recent years begun to
solutions, for instance in relation to sustainability, frequently require very complex molecules. reassess their core skills. As a result, they
are increasingly concentrating their own
resources on research & development at
Against this background, BDU e.V., the Outsourcing as a strategy for success the start of the value chain and on mar-
German Association of Management Con- in agrochemicals keting the products at the end.
sultants, last year organized a German Consequently, the production of individ-
specialty chemicals industry think-tank A central challenge facing specialty chem- ual active ingredients and intermediates
under the banner “Fit for the Future?!” icals companies is thus how to combine and occasionally also the development of
which identified ”novel, customized the highest possible innovation with the suitable production processes are increas-
products” combined with ”initiatives to greatest cost-efficiency. The BDU study ingly being entrusted to strategic partners
boost efficiency” as the foundation for suggests that one potential solution is to who have specialized technological and
future profitable growth. In addition, turn away from the familiar approach of processing skills and the corresponding
IHS Markit‘s ”Overview of the Specialty operating in ”closed organizational units” manufacturing assets.
Chemicals Industry” published in August and to pivot to ”flexible, rapid, custom-
2018 considers a company‘s capacity for er-focused value creation structures”. Promising opportunities for the
innovation to be ”one of the few remain- specialty chemicals industry too
ing sources” of competitive advantage in
a context of increased competition and A key challenge Given the need to boost the rate of innova-
commoditization of mature products.
for specialty chemical tion and simultaneously increase internal
companies is to achieve
maximum innovative
development at maximum
cost efficiency.
The selected outsourcing partner must have
the right analytical laboratory resources.
efficiency, strategic outsourcing can be an oped by the innovator into production? managing a complex project and reliably
extremely promising, forward-looking ap- Does the partner have complete mastery protecting the customer‘s IP?
proach for specialty chemicals companies of the necessary technologies and synthe-
too. sis methods? Are sufficient specialized Costs: Does the potential partner‘s exper-
Experience from the agrochemicals staff available? Are ongoing increases in tise and experience mean it can estimate
industry has shown that involving exter- efficiency guaranteed over the course of costs reliably? Has the partner demon-
nal partners in the manufacturing chain the contract? strated an ability to stay within an agreed
frequently allows more focused use of budget elsewhere?
in-house resources. Such partnerships
also help to keep the costs of meeting the If all these conditions are met, outsourcing
many requirements in terms of efficiency, The integration synthesis processes can be a strategy for
sustainability, safety etc. which are typical of external partners success in the specialty chemicals indus-
of innovation projects within reasonable
bounds.
into the production try as well. Outsourcing accelerates the
time to market for new products and op-
Particularly in those cases in which chain often enables timizes the use of financial and personnel
production depends on processes which a more focused use resources.
fall outside in-house technological capa- This brings the outsourcer closer to
bilities, it makes good sense to outsource of own resources. the central strategic goal of combining a
manufacturing steps. Ultimately, the out- high level of innovation with maximum
sourcer not only gains direct access to efficiency.
suitable processes and skilled staff, but is Process development/scale-up: Can the
also for example relieved of the need to potential partner take the process, possi-
build or extend in-house assets and estab- bly on the basis of the laboratory proce-
lish dedicated supply chains. dure, from the laboratory scale through
Taken together, these effects can make pilot production and onward to commer-
a significant contribution to getting a new cial production? Are the necessary re-
product on the market more quickly, flex- sources and skills in process development
ibly and at lower cost. and laboratory analysis available?
Sounding out the situation HSEQ and sustainability: How will safe
and sustainable production of the target
Lack of prior experience sometimes still molecule be ensured? How is consistent
makes it difficult for decision makers in batch-to-batch quality achieved? Are all
the specialty chemicals industry to make regulatory and environmental protection
a realistic assessment of the opportunities requirements met? How are critical sub- Thomas Eizenhöfer,
and risks or costs and resources involved stances, residues and waste handled? Head of Custom Manufacturing
in a specific project and so answer the Business Unit, CABB Group
question as to whether outsourcing makes Supply chains: Can the potential partner
sense. Achieving clarity on the following ensure reliable and cost-effective supply
points can help in creating a solid foun- of the raw materials required for produc-
dation for decision-making. tion, including all logistical aspects?
Production process: Is the potential part- Project management: Are tried and ▪▪ thomas.eizenhoefer@cabb-chemicals.com
ner capable of putting a process devel- trusted processes and tools in place for ▪▪ www.cabb-chemicals.com
KOLUMNE: NACHGEFRAGT
Benefiting from outsourcing
T
he accompanying article “A forward-looking approach” clarifies the opportunities
outsourcing can hold for companies in the specialty chemicals industry. Drawing
on years of custom manufacturing experience in particular for the agricultural
and pharmaceutical industries, CABB has now developed a service for specialty chemicals
companies. Birgit Megges had some questions for the article‘s author, Thomas Eizenhöfer,
who heads the CABB Group’s Custom Manufacturing business unit.
Mr. Eizenhöfer, what conclusions can optimization is simply part of how we
CABB draw from these market trends? work. If required, our ChemCreations
service can also develop a suitable syn-
Thomas Eizenhöfer: For decades, CABB has thesis process including all safety as-
been an integral part of the manufac- pects right up to scale-up.
turing process for major agrochemicals This will provide innovators inter-
manufacturers. We have a close-up view ested in our services with a transparent Thomas Eizenhöfer
of the advantages such a partnership basis for decision-making in terms of
gives these companies, such as greater processes, resources, timeline and costs.
flexibility and agility and clear priorities
in the use of resources. How far does this mean a change in How do you intend to implement your
In the light of current market trends, CABB‘s strategic orientation? goals?
we believe that innovators in the special-
ty chemicals industry could enjoy similar T. Eizenhöfer: First of all, we have brought
benefits from outsourcing. Familiarity together a dedicated team which will
with this concept is, however, not as well On the basis of handle the needs of the specialty che-
established in this sector. As a result, it is micals industry. The team includes mem-
not always straightforward for our cus-
your Tech Pack, bers from our affiliate company Jayhawk
tomers‘ decision makers to identify and we will establish in Kansas, USA, which our investor
evaluate appropriate options. We would safe, efficient and Permira has very recently acquired.
like to simplify such considerations for We have quickly been able to develop
them, which is why we have created a sustainable commercial a strong working relationship with our
package which bundles together our production of the colleagues there who also have conside-
skills in specialty chemistry. rable experience with specialty chemi-
target molecule. cals projects. Moreover, the production
So what can a customer expect? facility in the United States will also be
of interest to our customers with inter-
T. Eizenhöfer: At the start of the project, T. Eizenhöfer: There‘s no change at all in national activities.
a customer will give us their Tech Pack our strategic orientation, quite the oppo- This team is actively approaching
and at the end receive the commercially site: diversifying our customer portfolio innovators in the specialty chemicals
manufactured molecule for further pro- is a cornerstone of our growth strategy. industry with a clear value proposition:
cessing in-house. Working on the basis We have decades of experience in custom „On the basis of your Tech Pack, we will
of a clear specification, we handle the manufacturing, recognized technical skills establish safe, efficient and sustainable
technological implementation of their and the necessary manufacturing assets. commercial production of the target
project in production. This also for ex- This means we are ideally placed to sup- molecule.“ An integrated campaign is
ample includes establishing a stable raw port the specialty chemicals industry as it now communicating this service to the
materials supply. And continuous process goes through its current transformation. market.You can also read
