Hello all,
I am a chemist and have started a variety of companies.
During my last company I developed a relationship with a chinese company who can make anything at crazy low costs. I visited them in China and they
agreed that I can be the exclusive distributor in the UK.
I have a database of hundreds of thousands of chemicals and have set up the company.
Other than organic traffic I wanted to speak with someone about how to find good relationships with companies that need custom synthesis.
Does anyone here run a chemical import/custom synthesis company in the UK?
I would love to speak about it and could make it worth your time.
Thanks!Melgar - 18-9-2017 at 11:59
If you're importing from China, the entire rest of your budget will and should be quality assurance. They will cut corners wherever they can, but
will typically fix any problems that you call them out on. I'm in the US, not the UK, but China is still China. I once had a shipment of a product
that was a snowy white color in the picture, but what I received was BLACK. Actually, more gray. A lot of carbon particulate contamination in any
case. One angry email later, they were sending me a new snowy white shipment free of charge.
edit: the black one was maybe 90% pure, and not extremely difficult to clean up. I got to keep both, in any case.
[Edited on 9/18/17 by Melgar]hexabio - 18-9-2017 at 12:07
Yeah I had this exact same problem before.
Even though analysis showed it was more pure than anything you could get commercially, it had a still unidentified impurity which caused the compound
to wet absolutely everything in solution, which was a major problem for the end application.
Luckily we have a good relationship so they fix things, etc but you are right, QA/QC will be the bulk of my work.MrHomeScientist - 18-9-2017 at 12:17
Which makes you wonder, do you actually save anything buying from China? You may save up front but you spend a lot checking their work and getting
them to fix the inevitable poor quality batches.Melgar - 18-9-2017 at 12:44
Which makes you wonder, do you actually save anything buying from China?
Yes. A lot of times there are no other options. Remember the world acetonitrile shortage? If a chemical is cheaply available as a byproduct of some
process that's only done in China, it'd be bad business not to take advantage of it. And your precursors are inevitably going to come from China
anyway; there just aren't any alternatives for some things.
You may save up front but you spend a lot checking their work and getting them to fix the inevitable poor quality batches.
They tend to test you, to get a sense of what shortcuts they can take that you won't notice. Inevitably, they'll take a bunch that you don't notice,
but those ones are okay because you don't notice them.* It's the ones you DO notice, that you have to put your foot down on. Once they understand
what's important to you, they tend to meet those expectations exactly, and no more. As long as you understand that they will cut every single corner
that it's possible to cut, to save nickels here and there, and that it's now your primary job to check the quality of their work, you can cut
operating costs dramatically. Think of it like, it's their job to lower costs, and your job to raise quality.
Manufacturing in the West is always either highly-automated, low-volume, quick-turnaround, and/or rapid-development. Basically, if you don't want
very much of something that's really complicated to make or requires a lot of innovation, and want it made correctly the first time, go with a Western
company. Since the Chinese model has focused on copying, they'll probably always lag behind with innovation. But they will definitely be cheap, and
better quality than any of the other developing countries if you stay on top of them.
* If you don't notice them because your QA sucks, that's your fault. You had ONE job!hexabio - 18-9-2017 at 12:54
I agree that the Chinese will cut corners but that is not always a bad thing.
We had one compound we need made and instead of coupling two preexisting compounds, they built up the compound from scratch, involving multiple steps
and ring closures, etc. They did this to save costs for themselves but in doing so they created the only cost effective route to that compound.
My experiences with custom synthesis in the West were pretty bad also. Many companies wanted nonrefundable deposits and failed the synthesis, even
when it was well documented and easy to do.
I think the Western companies are squeezed into ineffectiveness by the Eastern companies low prices, having to lay off R+D staff, etc.
But I agree, the Chinese will never be as creative in developing synthetic routes as other countries, but if you do the development work yourself, the
Chinese are excellent at scaling it up fast and cheap.Melgar - 18-9-2017 at 19:28
I think the Western companies are squeezed into ineffectiveness by the Eastern companies low prices, having to lay off R+D staff, etc.
Western companies have to find a niche that they can excel in, or limp along like the ones you're talking about, towards inevitable obsolescence. In
engineering firms, the main way they're able to stay relevant is by staying on the cutting edge, so that Chinese companies are always a few steps
behind.AvBaeyer - 19-9-2017 at 08:06
What is your target client base? Big Pharma, small biotech/pharma, something else? Are you selling screening compounds or compounds for other
purposes? As I interpret what you are doing is that you want to be a sales/marketing operation with a giant catalog that can hopefully be produced on
demand by your offshore partners. How was your catalog generated- is it a random generic collection? Are there chemical "themes" which exist in the
catalog? By the way, the Chinese are noted for their ability to "suck" millions of structures from various public databases then claim they can make
any compound in the list. Then they tell you that it will take months for various reasons which usually means they do not know what they are doing. I
have bee burned too many times by them.
There are many companies which do what you appear to be proposing already and do it extremely well so you will need to establish what is unique about
what you offer. A simple catalog of possible structures will not cut it unless your customer is quite unsophisticated. (Target biologists in start
ups- they buy almost anything- just a joke.) You will need to go to appropriate meetings, advertise where your target clients get their information,
etc., all the while extolling what makes you different. Cold calling on a few doors may also be useful in a few cases but generally you will need a
lead in of some type.
I do not want to rain on your parade but you are entering a very tough and competitive business. I know several people who are/have been in this
business with varying amounts of success. It truly requires very hard work and incredible focus. Since you claim to have started other companies, I am
sure that you know this.
I do wish you success,
AvBhexabio - 19-9-2017 at 12:19
My client base is startups in biotech/pharma/greenchem/etc because this is what I know and have a network in due to my experience.
I would love to hear about how others have found this type of work and what separates the winners from losers.AvBaeyer - 20-9-2017 at 03:22
First, know who your competitors are and what they offer. The question you must clearly answer: How will you be different or add additional value?
Selling catalog compounds is not going to cut it without some immediate and downstream extra value. There are at least 3 VERY successful Russian based
companies and 1 US based company (but founded by Russian chemists) which already have a large market share in the biotech area. They have massive
catalogs and most of their offerings are in stock and ready for delivery in a variety of formats. I have done business with all of them when I was
working and they are extremely good at what they do and very trustworthy.
Very few biotech companies purchase compounds in vials anymore. They want to have compounds delivered in various plate formats with bar codes, etc.
Most companies who buy compounds for testing also want at least LC/MS data for each compound purchased. If you cannot provide these services you will
be dead in the water. By the way, LC/MS data from China is not considered very reliable. You will need to obtain this information in your own lab and
vouch for its accuracy.
I recently consultated for a start up trying to secure business in the custom synthesis area for biotech startups. There were a lot of company visits,
much promising talk,but little business because no one believed the cost involved. Everyone wanted things on the cheap. This is different from your
proposed venture, but it points out the difficulty and the hard work required to just get in the door.
So, what separates the winners from the loser? The ability to add value and work with your clients demands and needs. You will need to have a large
part of your catalog in stock and ready to be delivered in a variety of formats. The formatting can likely be done offshore so you will not have
significant capital outlays. BUt most important you will need to establish a position that separates you from your extensive existing competition.
Manufacturing in the West is always either highly-automated, low-volume, quick-turnaround, and/or rapid-development. Basically, if you don't want
very much of something that's really complicated to make or requires a lot of innovation, and want it made correctly the first time, go with a Western
company.
Sounds like your experience is limited to small companies, hence the low volume. The company I work for runs scales up to 4000 gallons, produces
metric tons of product on tight timelines with plenty of devo going into some projects. It seems the forte of our site is being able to run anything,
air sensitives, posion, cryo temp reactions, etc. and so there is very little automation.
@hexabio: This thread is a good thought exercise but your needs might be more accurately met by searching for a professional in the field willing to
do consulting work if you are really serious. Chemicals from China can be horrible, but then again I have seen companies lock in Chinese suppliers
for raw chemicals and meet with success time and time again. Maybe you got lucky, maybe you didn't, sometimes it's hard to know. I remember reading
about a shell company in China, an entire building full of pristine labs. For a price they would change the labels and signage to reflect whatever
company you were trying to show off and that would be the touring piece.
