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CALDIC DISTRIBUTION PARTNERSHIP
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The concept

• The concept of Caldic Distribution Partnership is
  aimed at
• offering our clients customised solutions
• to optimise the various components of the supply
  chain
• thus effecting

security of supply
economy of costs
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Supply chain components
planning
release
reception
sourcing
shipping
on-site storage
release to production
negotiation
intermediate storage
ordering
processing
removal of packing
(re-) packing
release
invoicing
shipping
payment
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Selection of opportunities (I)
components some of the opportunities
planning
(online) communication of rolling forecast and
on-site inventory
sourcing
new or alternative suppliers - new or alternative
products
negotiation
better pricing - price monitoring - bench marking
ordering
more efficient order processing - online order
entry systems
release
certified or customised products at producer
shipping
transport management - dedicated transport
facilities
intermediate storage
dedicated local stocks - buffer stocks - stock
control
processing
additional processing of products e.g. blending,
grinding, reformulating
(re-) packing
drumming, customised packing, batch quantities
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Selection of opportunities (II)
components some of the opportunities
release
quality control - certified products - batch
supply at distributor
shipping
dedicated and combined transports - emergency
deliveries
reception
entrance quality control - inspection, testing
and registration
vendor managed inventory - consignment stocks -
management and maintenance of warehousing
facilities
on-site storage
release to production
planning - internal transport - batch size
removal of packing
packing waste management - recycling packing -
consignment packing
invoicing
periodical invoicing - compiled invoicing -
online invoicing systems
payment
online payment systems
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The advantages
1. security of supply

• short term deliveries
• at the right and required moment
• in the right and required quantities
• with the right and required (mix of) products
• from always adequate local or in-house stocks

• some of your advantages
• lower site stocks less capital investments
• less site handling through the possibility of
  combined deliveries according to a fixed and
  scheduled timetable
• improved and flexible production planning (peak
  absorption)
• lower transport costs
• shorter access roads (no traffic congestions)
• combined orders reduction in order processing
• emergency deliveries

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The advantages
2. improvement of quality

• the right product
• from the right batch
• in the right packing
• with the right labelling and the right documents
• on the right carrier

• some of your advantages
• more simple and faster entrance quality control
• less chance of production failures and
  disturbancies
• wide choice and flexibility in customised packing
  by type and volume
• returnable packing systems and recycling
  possibilities
• reduced risks and liabilities
• acquaintance of distributor and its carriers with
  site procedures and safety directives
• overall commitment to quality, safety and
  environmental standards
• more accurate and effective complaint management

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The advantages
3. economy of costs costs reduction

• of product prices
• of logistics
• of order processing and administration
• of management and control expenses
• of sourcing and procurements

• some of your advantages
• open-book costing and price transparency
• price linkage to general market levels
• less transport and site handling costs
• less inventory costs
• less packing costs (re-use and transit packing)
• less orders and less invoices
• less manpower involved
• one single contact (no language or distance
  barriers)
• thus faster and more effective communication
• much broader market and product intelligence
• possible participation in product development
• sourcing of new products and new ideas

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Some favourite options
1. single-sourcing

• supply of a substantial volume of selected raw
  material items from dedicated local distribution
  stock

2. consignment stocks

• products needed are collected from nearby or
  on-site consignment stocks of selected raw
  material items in the desired volume and size

3. batch supply

• supply of selected raw materials items in batch
  quantities of a given size and volume for direct
  release into production from either local
  distribution stock or on-site consignment stocks

4. full service

• vendor management of all or of a major part of
  the components of the supply chain, including
  e.g. on-site inventory, reception, sourcing,
  order processing, etc.

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The basic premises
1. the input

• of a relatively broad product package and product
  mix
• in number of items
• in variety of volumes (from small to big volume
  products)
• in diversity of products (from commodities to
  specialties)

2. the ambition
to strive for continuous improvement and
optimisation
3. the commitment
to co-operate and communicate in an open,
transparent and obliging way serving the
interests of both partners involved
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Transparency
The Caldic Distribution Partnership is
conditioned to create a maximum of mutual
transparency in actions and data in order to
provide, maintain and enhance reliability, trust
and loyalty on all levels of the organisations
involved.

• this transparency is shown in
• transparent pricing and price structure
• open-book costings
• clear and plain procedures
• known product sources
• easy access to company knowledge and resources
• open and integer personal contacts
• efficient and accurate complaint management
• ready acceptance of periodical audits
• performance monitoring systems

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The implementation

• the logical first step in implementing Caldic
  Distribution Partnership is to select those
  components of the supply chain, on which partners
  are finally targeting for long term co-operation
• from there it is generally advised to start with
  a rather simple initial structure (e.g. single
  sourcing) and to develop, extend and sophisticate
  the system during the contract period
• the following slides show a possible step by step
  agenda of implementation

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The implementation
1. conditions

• basic agreements 1) contract draft
• 2) price formula
• 3) price list structure
• 4) price monitoring
• 5) order processing
• 6) stock management
• 7) services
• 8) complaint management
• 9) auditing
• 10) performance review
• supply conditions 1) delivery times and
• scheduling
• 2) packing 3) documentation
• 4) invoicing and payments

time-scale
2. products

• selection 1) type 4) specifications
• 2) supplier(s) 5) status (codes)
• 3) packing 6) final listing
• arrangements with suppliers

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The implementation
3. people

• selecting and instructing staff of distributor
• set up communication structure
• personal acquaintance with customer site staff

4. stock piling
5. start
time-scale
6. evaluation
7. extension
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Pricing

• within the Caldic Distribution Partnership
  concept the pricing policy will be tailored to
  each individual contract
• usually pricing is defined by means of fixed and
  transparent price formulae, elements of which
  can be easily adapted and checked
• basically a price formula will be composed out of
  the following elements
• - core price - cost of handling - cost of
  packing and re-packing - cost of processing -
  cost of transport - profit margin of distributor
• the core price is normally the Caldic purchasing
  price and the added costs are calculated on a
  real cost basis
• a periodical price monitoring system can be
  adopted to ensure that core prices are kept
  competitive and in line with prevailing market
  conditions and opportunities (see example next
  slide)

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Price monitoring system
1. objective

• systematical and peridodical auditing of market
  price levels, trends and tendencies, arranged in
  concert by both partners

2. sources

• listings (e.g. Icis, CMR, ECN, Internet, etc.)
• self-initiated bench mark offers
• internal corporate pricing (e.g. bulk contracts)
• unsolicited offers and information (received by
  both partners)
• all other generally accessible information about
  market developments, movements and trends

3. market area

• Benelux or any other area, mutually agreed upon

4. procedures

• each product is coded by whether it should be
  audited or not and if so, at which frequency and
  from which source
• pursuant to these codes each product is
  periodically checked and communicated
• if necessary, a new price may be settled for the
  next validity period or any other time partners
  mutually agreed upon depending on suppliers
  acceptance, stock position and possibly other
  parameters
• if opportune, an alternative supplier can be
  sourced or tested

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Performance review
key indicators

• savings
• competitiveness
• security of supply
• quality
• safety
• service
• communication

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Performance review
1. savings

• total purchase sum
• inventory costs (capital absorption)
• logistic costs (transport, handling, packing)
• costs of sourcing
• costs of administration
• management and control costs

• direct savings
• indirect savings

2. competitiveness

• of pricing and costs

• price monitoring system will hand a permanent
  check

3. security of supply

• delivery times
• out of stock situations
• short weight deliveries

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Performance review
4. quality

• product
• packing
• documentation and labelling
• complaint management

5. safety

• all aspects

6. service

• services rendered
• helpfulness

7. communication

• accessibility and performance of (single) contact
  persons
• quickness of response
• compliance
• knowledge

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Why Caldic
because we have

• the experience

over 50 years of activity in marketing, selling
and distributing chemical raw materials and
additives for a wide variety of industrial
applications, built on a thorough technical
expertise

• the infrastructure

a pan-european network with over 15 strategic
locations in all major countries of the European
Union

• the products

representing a vast number of chemical producers
(both commodity and specialty products) from all
over the world

• the knowledge

already many distribution agreements in place
(both on a local and an international basis)
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Why Caldic
because we also have

• the tools

- state of the art storage facilities for both
dry goods and bulk liquids - drumming
installations and blending facilities - transport
services under own supervision - re-packing and
recycling services - quality procedures in
accordance with ISO 9002 - advanced and
integrated ICT and order entry systems

• the creativity

a flexible organisation striving for innovative
and tailor-made solutions
and

• the firm will

to make a success of our partnership
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The Caldic group

• Caldic - with its headquarter at Rotterdam in the
  Netherlands - is a strong and dynamic group,
  having its core business in the international
  trade, distribution and production of industrial
  and speciality chemicals, food ingredients and
  technical products
• With a turnover of about Euro 500 million the
  Caldic Groupis one of the leading
  chemicaldistributors in Europe its
  well-equipped networkcovers all main
  countriesin the European Union

industrial chemicals 50
speciality chemicals 20
technical products 7
production 10
food 13
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The Caldic European network
office warehouse tanks production
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The Caldic suppliers

• the Caldic group is representing - in whole or in
  part - over 300 different manufacturers of
  chemicals or related products from all over the
  world
• some are major chemical multinationals others
  are highly specialised niche producers
• all of them are contributing to the remarkably
  vast range of both industrial chemicals and
  specialty products Caldic can offer in the
  various territories of the European Union

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The Caldic services

• distribution
• marketing
• sourcing
• storage
• drum filling
• re-packing
• returnable consignment packing
• custom formulation
• blending
• distillation
• transport
• production

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The Caldic care

• Caldic consider the care for quality, health,
  safety and environment of paramount importance
  within our sector of business
• therefore it is striving for an optimal and
  overall management and control, which is
  internally programmed and carried out under the
  designation of
• it goes without saying that within this framework
  we are committing ourselves to the
  internationally accepted standards of responsible
  care, good product stewardship and ISO quality
  procedures