What is a toll manufacturing company?
What is a toll manufacturing company? A toll manufacturing company, often referred to as a toller or toll processor, is a business that provides manufacturing services on behalf of another company. In toll manufacturing
A toll manufacturing company, often referred to as a toller or toll processor, is a business that provides manufacturing services on behalf of another company. In toll manufacturing, the client (often called the "principal" or "hirer") provides the raw materials and/or formula, and the toll manufacturer processes, produces, or packages the product according to the client's specifications. The toller charges a fee for the manufacturing service, usually based on the volume or quantity of the product produced.
Key features of a toll manufacturing arrangement include:
Client-Supplied Materials: The client supplies the raw materials or ingredients necessary for the production of the final product.
Client-Specified Formulas: The client typically provides the specific formulation or recipe that the toller follows during the manufacturing process.
Processing and Manufacturing Services: The toll manufacturing company handles the production steps, which may include mixing, blending, chemical reactions, packaging, and labeling, among others.
Fee Structure: The toller charges a fee for its services, which is negotiated and agreed upon between the client and the toll manufacturing company.
Confidentiality and Non-Compete Agreements: Due to the nature of the relationship, there are often agreements in place to protect the client's proprietary information and to prevent the toller from competing with the client using the knowledge gained during the manufacturing process.
Toll manufacturing is commonly used in various industries, including chemicals, pharmaceuticals, food and beverages, and cosmetics. It allows companies to leverage the expertise and facilities of specialized manufacturers without having to invest in and operate their own production facilities. This arrangement can be particularly beneficial for companies that want to focus on product development, marketing, and sales while outsourcing the manufacturing aspect to experts.
Watertest Systems is based in South West Sydeny, Australia
If you are looking for bulk reagents or bulk chemicals please contact us on (02) 8488 7306 or click here for our chemical manufacturing page
Alos see Toll Chemical Manufacturing in Australia: Innovations and Trends