Toll Manufacturing

Why Consider Tolling??

■ There are multiple conditions where it is logical and prudent to consider toll manufacturing. Let’s begin with what toll manufacturing is, sometimes referred to as contract manufacturing.

Toll manufacturing is when a content owner enters into a formal agreement with another manufacturing firm for parts, products or components, which the former will set the specifications and have exclusivity to that finished product.

■ The case for using tolling services is the most obvious for the young company that does not have any chemical processing equipment to speak of and likely lacks the experience and expertise to run an efficient and safe chemical operation.

■ An established chemical company could possibly choose to toll in order to have a Business Continuity Plan (a second facility capable of making your critical product), to avoid capital investment, or to be able to respond to spikes in demand. For a new product launch, if your company has equipment to produce large volumes of product, a new product could take time to establish in the market and a toller with smaller equipment might very well be appropriate to work with during the product’s pilot and/or launch phase.

■ Click here to read my paper as published in Chemical Processing Magazine with the details of why and how to consider if tolling is right for your company.