More than just a middleman

1-Feb-2007

There is more to being a fine chemicals distributor than merely interfacing between the product manufacturer and the end user, as Hilary Ayshford found out on a visit to Cornelius

There is more to being a fine chemicals distributor than merely interfacing between the product manufacturer and the end user, as Hilary Ayshford found out on a visit to Cornelius

The financial cost of stopping a pharmaceutical production line is significant. Downtime for breakdowns, cleaning and maintenance, as well as product changeover is inevitable, but to stop production because supplies of one of the ingredients have run out is unforgiveable.

This places a heavy responsibility on distributors, such as UK-based Cornelius, to ensure that their customers always have the right materials in the right place at the right time.

As one of the top five UK distributors, the figures are impressive. The company carries out 13,500 deliveries a year, covering 10,000 tonnes of 1,200 different products to 2,300 customers, of which 900 are in the health and personal care sectors. The group turnover is in excess of £19m (Euro 28m), and at any time there will be £1.5m of local stocks in its three warehouses available for next day delivery, and a similar amount of consignment stock held by its principals.

The privately owned company, which operates from a 35,000 sq ft purpose-built facility in Bishops Stortford, has three operating divisions: industrial, which accounts for 52% of its business; health and personal care (38%); and specialities (10%), which consists mainly of pure monomers for use in intraocular devices.

Although its core geographical markets are the UK and Ireland, Cornelius has set up a dedicated European sales department to facilitate easy DDP (delivery duty paid) terms to European countries for specified principals/agreed portfolio. It offers JIT delivery to mainland and Eastern Europe; invoicing in local currency; German VAT registration; local custom clearance and documentation services; and integrated warehousing facilities in Warsaw, Munich and Moscow.

'A number of our customers have put their manufacturing into Eastern Europe and this is one of the reasons why we have established an export sales department,' says ceo Dr Neville Prior. 'We are having to broaden our horizons with regard to what our end markets are geographically.'

Cornelius is also looking at China and India as potential sources of material, seeking out good quality manufacturers. 'They are few and far between but they are growing in number - and they want to learn,' says Prior. 'The Chinese in particular are attuned to the business ethic of the West - we have partnered with a few Chinese companies and it has been successful for us.' But he says that products from China have to meet the same quality standards as those from the other principals to preserve Cornelius's reputation for supplying only good quality, reliable products.

But there is more to the business than the mere mechanics of taking goods in, storing them and then sending them out again. 'Our product is not just the thing we deliver to the customer - it is everything else: service, right product on time, says managing director David Brown.

Besides a sales force with a technical background from the sector in which they are working, Cornelius has a number of other technical advantages that Brown believes give it differentiation in the marketplace.

An adjacent building on the Bishop's Stortford site houses the Group Technical Centre with its team of five people. Its capabilities include: microscopy, GC/IR; titrations; and product testing (stability, organoleptic, etc.). This enables Cornelius to offer functionality and formulation assistance as well as manufacture of finished products.

A password-protected web-based raw materials database is available to customers and holds all the technical information about the products supplied by Cornelius, including shelf-life and storage information, approvals for use, testing protocols etc.

Consultancy is another important element of Cornelius's business, aimed at keeping its customers abreast of changing legislation, in particular EU regulations. The company is a founder and major shareholder of ReFaC, the REACH Facilitation Company for SMEs. Scheduled to will become operational during early 2007, the initial work in the development of ReFaC is being undertaken by the British Chemical Distributors and Traders Association (BCDTA),

ReFaC will be an independent company managed by the industry for the industry and provide members with a full range of cost-effective solutions to REACH compliance. Although it will be based in the UK, ReFaC plans to operate on a pan-European basis across all sectors of the chemical industry.

Far from merely supplying and delivering a range of products, Cornelius aims to add value to the supply chain by establishing a 3-way partnership between the company, its principals and its customers with the ultimate goal of shortening product development cycles.

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