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What can Refined Chemical offer?

Refined Chemicals Ltd has been in operation for some three years now and, during this time, has established official distributorship agreements with a number of principal manufacturers, supplying products across a wide spectrum of the food industry.

More and more manufacturers are awakening to the fact that it is operationally difficult and costly to supply the smaller market user. These principals are geared to supplying full pallet loads to minimise their costs. The smaller user, who requires one bag or five drums, is costly to service. Apart from the administration "noise" this small order creates and the resultant higher distribution costs, there is the added operational hassle of breaking down pallets and the financial aspects of credit risk, increased stock levels and general overhead costs.

A dilemma however, that the principal faces is that if he appoints a company (a distributor) to handle this area of the market for him, how can he be sure the same levels of service, market information and quality can be maintained to his existing customers. Afer all, he has probably supplied these customers for a number of years and does not want to give the impression he is throwing them on the scrap heap, nor that service levels to these users will deteriorate.

Refined Chemicals is able to provide a comprehensive marketing, distribution, selling and quality operation, on behalf of principals, to service the smaller end of the marketplace. Without doubt, quality is the most important aspect to get right first time, every time. Changing legislation in the food industry over the last couple of years and the advent of more and more companies demanding excellence to BS 5750, means that even the small user demands the guarantee of consistency in quality, source and specification.

Refined Chemicals believes these demands will eventually push the "trader mentality" from the marketplace. The trader is able to offer various food ingredients and additives but cannot always guarantee the source and quality, since he will simply buy on the open market, usually at the cheapest price versus specification, and then sell on to the user. He cannot always guarantee that the product will be from the same sources. Further, he does not always adopt a responsible attitude to pricing in the marketplace. He is out to make a quick sale, which would suggest the long term interest of the user is not is not this priority.

Because there are only a limited number of principal manufacturers, it is clear that as they establish relationships with quality distribution companies for their range of products, then access for other trading-type operations to purchase and resell will not he possible.

Without doubt, it is the emphasis on quality and source that has attracted principals to Refined Chemical's door. Why else would companies like Roche, Croda, Haarmann & Reimer, Metsa Serla and others associate themselves with "little old" Refined Chemicals?

The main objective and future development of the company is to add on further relationships with principals, to offer a continually expanding range of ingredients and additives to the small end of the market. This provides a supermarket-type approach for the smaller user, where he is able to secure nearly all the necessary ingredients for his production from one source. Not only are Refined Chemicals acting as his stockroom, given their speedy response times, but they also remove the added headache of multiple sourcing from different suppliers that he may currently face and the potential problems he can experience in terms of delivery and service. Furthermore, by sourcing his materials from one point, savings may be possible by negotiating an overall package.

The additional benefits to the principals lie in the fact that Refined Chemicals sell a range of products, not just one, and they can now offer that particular principal's products to existing customers and vice versa. This "cross fertilization" of principals and products is how Refined Chemicals develop their business organically. Their relationship with principals is one of transparency, in terms of customer, markets and information. It is a joint effort of working together to develop the market; a view which is most refreshing to principals. So often the traditional distributor approach is one of secrecy to protect the profit margin they may be generating from the business; this is short-sighted.

Refined Chemicals currently supplies a range of over 50 different ingredients across all areas of the food industry. They also have a BS 5750 registered site based in Gateshead, Newcastle, and this has the facility to repackage food grade products into smaller pack sizes. Again, this is an area of the market which is not always available to the smaller user. Many additives are very expensive, eg, aspartame, ascorbic acid, etc., and the smaller user is usually faced with the option of purchasing a standard 25 kg pack or drum. This may last him a considerable number of months. Refined Chemicals are able to offer anything down to a 1 kg pack, so minimising stock outlay and possible, product deterioration.
COPYRIGHT 1993 Food Trade Press Ltd.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Refined Chemicals Ltd.
Publication:Food Trade Review
Date:Jan 1, 1993
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