Toll manufacturing

We are offering our plant for toll manufacturing for globally reputed companies in nutraceuticals, ingredients, cosmetics and other businesses. We believe that even for world class company having all competences it will be a compelling commercial proposition to use our plant for the following reasons. Our offering will be value additive both for those who do not have in-house capacities and those who have in-house capacity for In-house Co2 extraction

Tolling Outsourcing for those who do not have Co2  facilities 

Based on our understanding until a B2B consumer of Co2 extracts exceeds about 6-10 metric tonnes per annum of Co2 extracts consumption corresponding to raw material processing of about 100-150 metric tonnes per annum it makes no sense for setting up a Co2 extraction facility. If your consumption is lower than this, tolling is the best option even if you have the capital to set up a small Co2 extraction facility.

Why is this so ?

Co2 is a very capital intensive technology. It requires highly trained manpower. The costs of co2 extraction are heavily in nature of fixed costs.The amount of Co2 extracts used in end consumer products is small hence requirements in the initial phase of adoption are likely to be small. But in order to have a long term cost competitive extraction facility one needs set up a big capacity as small facilities with less than 400-500 litres extraction capacity make no financial sense when set up as a stand alone facility. But these big capcities will make huge losses as it will have very low utilisation in the initial phases. It may be advantageous for players to outsource their requirements to a vendor like us with adequate capacities who  can offer scalability and competitive price for tolling. The capital thus saved in setting up Co2 facilities can be invested in product formation, regulatory approvals, R&D, advertising and brand building and entry into new categories of of and new products. If an in-house capacity makes senses the user of tolling services always has an to option to put up capacity at the appropriate time.

Tolling benefits for those who have their own Co2 extraction facilities

Tolling has 4 big benefits even for those who have their own Co2 extraction facilities as explained below

1.Capturing market share without suffering any asset utilisation problems

In-house Capacities go up in step function each time a new line is added whereas the marketing sales goes up in linear way. Adding new capacity additions as soon as you run out of capacity will fulfil all unfulfilled orders but the return on capital of the new asset can be low for some time as its utilisation will be low.

By using an outsourced capacity as a buffer, you can continue to serve your markets and customers even after you have run out of capacity but do not have enough additional sales to justify a good scale plant by outsourcing the incremental requirements.

Co2 extraction is a highly capital-intensive business and having an outsourcing partner can add to the bottom line.

2.Managing seasonal shortfalls in capacities without incurring any financial costs

Sometimes there are demand patterns which vary across seasons and managing capacity and demand becomes difficult. If adequate capacity is added to satisfy  peak season loads, it will lead to low capacity utilization and if lower capacity is maintained it may lead to lost sales or opportunity costs in peak seasons.

Outsourcing can help you manage your capacities and capital costs and inventory costs without having any opportunity costs from lost sales.

3.Higher response time 

Sometimes when in-house capacities are running on campaigns, you may get some urgent  enquiries. Having an outsourcing partner allows you to fulfill such orders without disturbing your production schedule.

4.Flexibility in Capacity configuration 

If you want to have the lowest costs in the world, large capacities will help tremendously but they come with a huge negative. If you put large extractors such as 1000 Litres extraction capacity or multiples then they are not viable for smaller runs. In such a case, you have still go for large in-house capacities and outsource smaller runs to contractors like us. We can use our plant for production runs starting from 5 MT-10 MT.

Again, this can boost financial returns without any opportunity cost in lost sales and can give you world leadership in costs.

Conclusion 

We are well funded company run by professionals and have excellent relationship with banks and have access to capital that can assure continued support to any of our potential customers unlike many who are on the verge of liquidation or NCLT reorganization. Many of the fly by night operators in our industry have dropped out and with passage of time in the post Covid more players are set to die.

Only mature players will be left.  It may time for such players to look at creating a ecosystem like that in Silicon Valley for software, Pune- Manesar for auto industry that will help us be world beaters.  Whole new industries such as IT, CRAMS have come up with increased outsourcing practices and helped large companies focus more on their core business and become even more stronger .

We believe that adapting such practices from other industries may be helpful for our industry also and viewing each other as an ecosystem and partners not as enemies and cut throat competitors

Our business plans do not compete with yours  and hence it can be a win-win for both of our organizations.

We follow all processes in letter and spirit and we are confident that we will be able to get whatever certifications necessary for you to work with us.

We believe that having Satvayur Extracts Ltd as an outsourcing partner will help you boost your operating and financial performance and offer your tremendous flexibility of operations to capture more business without locking up capital in sub-optimal capacities or idling excess capacities.