packaging and chemicals case study
TRANSCRIPT
Category case study
Woven PP SacksFertilizer and Fertilizer Chemicals
Sugar Processing Chemicals
Dragon Sourcing Your Tailored Approach to Emerging Markets
© 2012 Dragon Sourcing. All rights reserved.2
Agenda
1. Client Overview
2. Transportation & Warehousing Case Study
3. Woven PP Sacks Case Study
4. Fertilizer and Fertilizer Chemicals Case Study
5. Sugar Processing Chemicals Case Study
© 2012 Dragon Sourcing. All rights reserved.3
DS was involved for 2 years in supporting our client for most of the controllable spend categories
Breakdown of Controllable CostsBreakdown of cost of Sales
Categories of Spend that our client is focusing on with the assistance of Dragon Sourcing
© 2012 Dragon Sourcing. All rights reserved.4
Our involvement covered 180 M RMB of spend
Sugar Sacks (BQ) 4,245,000 PiecesSugar Sacks (BH) 1,151,200 PiecesSugar Sacks (BX) 3,380,000 PiecesFertilizer Sacks (BQ) 401,000PiecesFertilizer Sacks (BH) 408,000 Pieces
Transportation 49 Routes N/A 23,980,000 5Warehousing 260 K Tons Capacity N/A 5,180,000 11
Sulfur (BQ)Sulfur (BH)Sulfur (BX)Sulfuric Acid (BQ)Sulfuric Acid (BH)Phosphoric Acid (BQ)Phosphoric Acid (BH)Phosphoric Acid (BX)Lime (BQ) 5,600 TonsLime (BH) 1,734 TonsLime (BX) 3,800 TonsOrganic Fertilizer 15,000 Tons 26,790,000 2Standard Fertilizer 15,000 Tons 27,510,000 2Urea Large (BQ) 3,200 Tons 6,065,000 1Urea Small (BH) 4,200 Tons 7,810,000 2Kalium (BQ) 1,600 TonsKalium (BH) 2,200 TonsCalcium 12% (BQ) 9,400 Tons 6,220,000 2Calcium 15% (BH) 6,500 Tons 5,070,000 2Tung Bran (BH) 5,600 Tons 7,160,000 2
Total= 179,505,660 RMB
Category Subcategory Units Spend (RMB)
Woven PP Sacks 20,486,600 3
Current Supply Base Used
Sugar Processing Chemicals
4,850 Tons 10,670,000 3
1,650 Tons 1,815,000 2
6,569,060 1
Fertilizer & Fertilizer Chemicals
1,100 Tons 6,820,000 2
17,360,000 2
© 2012 Dragon Sourcing. All rights reserved.5
..and resulted in RMB 25 M savings and RMB 90 M in improved cash flow
Negotiation Contractmanagement
Sugar Sacks (BQ) 4,245,000 PiecesSugar Sacks (BH) 1,151,200 PiecesSugar Sacks (BX) 3,380,000 PiecesFertilizer Sacks (BQ) 401,000PiecesFertilizer Sacks (BH) 408,000 Pieces
Transportation 49 Routes N/A 23,980,000 2.18 1.00Warehousing 260 K Tons Capacity N/A 5,180,000 0.14
Sulfur (BQ)Sulfur (BH)Sulfur (BX)Sulfuric Acid (BQ)Sulfuric Acid (BH)Phosphoric Acid (BQ)Phosphoric Acid (BH)Phosphoric Acid (BX)Lime (BQ) 5,600 TonsLime (BH) 1,734 TonsLime (BX) 3,800 TonsOrganic Fertilizer 15,000 Tons 26,790,000 9.66Standard Fertilizer 15,000 Tons 27,510,000 3.30Urea Large (BQ) 3,200 Tons 6,065,000Urea Small (BH) 4,200 Tons 7,810,000Kalium (BQ) 1,600 TonsKalium (BH) 2,200 TonsCalcium 12% (BQ) 9,400 Tons 6,220,000Calcium 15% (BH) 6,500 Tons 5,070,000Tung Bran (BH) 5,600 Tons 7,160,000
1.90 46.80
6.0021.29
0.11
Units Spend (RMB)SubcategoryCategory
Woven PP Sacks 20,486,600 1.05
Fertilizer & FertilizerChemicals
1,100 Tons 6,820,000
Sugar ProcessingChemicals
4,850 Tons 10,670,000
1,650 Tons 1,815,000
17,360,000
Saving (M RMB) Cash FlowImprovement
6,569,060
22.00
© 2012 Dragon Sourcing. All rights reserved.6
Agenda
1. Client Overview
2. Transportation & Warehousing Case Study
3. Woven PP Sacks Case Study
4. Fertilizer and Fertilizer Chemicals Case Study
5. Sugar Processing Chemicals Case Study
© 2012 Dragon Sourcing. All rights reserved.7
The project scope included 28.2 M RMB, 90% of which on road cargo transportation
Factory Warehouse Port
Warehousing (2.7 M RMB)
Scope included 275 K Ton of warehousing capacity clustered around 4 geographic locations.
Load/unloading (0.2 M RMB)
Price based on Labor cost plus a management fee – service is
provided by warehouse, transportation company or by a
3rd party providing contract labor
Transportation (25.3 M RMB)
Scope included 45 routes, with most of the routes delivering to tone destination and less than
40km
© 2012 Dragon Sourcing. All rights reserved.8
Transportation & Warehousing Supply Base Analysis
Plant 1 & Plant 2 Plant 4Plant 3
# of suppliers 2007/08
10
4 4
6
1 1
3
1 1
0
2
4
6
8
10
12
14
16
18
20
AAA BBB CCCPlant
Num
ber o
f sup
plie
rs
Warehouse Transportation Load & Unload
19
6 6
© 2012 Dragon Sourcing. All rights reserved.9
Transportation & Warehousing Spend Analysis by JV & Supplier
JV #1 (Plant 1 & 2) JV #3 (Plant 4)JV #2 (Plant 3)
2007/08 plant spend vs. supplier
8.8
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
AAA BBB
10.9
5.7
11000
CCC
M R
MB
Supplier 8Supplier 6 Supplier 9Supplier 7
Supplier 1 Supplier 3Supplier 2 Supplier 4 Supplier 5
© 2012 Dragon Sourcing. All rights reserved.10
The No1 destination accounted for 61% of the total spend
Total QTY: 546 k tons Total spend: 25.3M RMB
Destination 1
(12M RMB, 61%)
15%
6%
5%
Destination 1
(12M RMB, 61%)
15%
6%
5%
Destination 1
(224 Ton, 41%)
13%
13%
6%
6%
7%
Destination 1
(224 Ton, 41%)
13%
13%
6%
6%
7%
(17.2 M RMB, 61%)
© 2012 Dragon Sourcing. All rights reserved.11
We found significant price variability for destinations within the same distance range
Price variation analysis
3.0 3.0
8.4
2.2
1.10.9
2.5
0.8 0.8 0.70.9
0.5 0.5 0.5 0.5 0.4 0.5 0.50.3
0.5 0.5 0.5 0.50.9 0.9
0.5 0.5 0.5 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.50.3 0.2
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Pric
e/To
n/K
m
0km-10km 10km-20km 20km-30km 40km-50km 50km-90km 90km-120km 500km-530km
© 2012 Dragon Sourcing. All rights reserved.12
On warehouses, with the exception of short term storage and non-enclosed storage, the current prices paid by client were aligned around RMB 0.2 / day / ton.
Warehousing & load/unload & transportation
0.00
0.05
0.10
0.15
0.20
0.25
0.30
AAA(10 suppliers)
BBB(4 suppliers)
CCC(4 suppliers)
Type of supplierWarehousing
Warehousing & load/unload
Warehouse Price RMB/day/Ton
0.130.15
0.20 0.20 0.20 0.20 0.2
0.23 0.23 0.23
0.28
0.2 0.2
0.230.24
0.28
0.2 0.2 0.2
0.23
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10 Supplier 11 Supplier 1 Supplier 2 Supplier 3 Supplier 4i Supplier 5 Supplier 1 Supplier 2 Supplier 3 Supplier 4
© 2012 Dragon Sourcing. All rights reserved.13
Hence, the highest leverage we had was to rationalize the supply base in order to extract better pricing conditions
• Client had 10 warehouse suppliers with a total stock capacity of 670 K Ton
• Client was actually using 25 warehouses with no long term contracts, clustered around 4 geographic locations.
• However, the client’s needs were for 275 K Ton of warehousing capacity
• Hence, we focused our strategy on reducing the supplier base in order to achieve better price points and ensure higher quality and consistency of service
© 2012 Dragon Sourcing. All rights reserved.14
On transportation, DS invited a total of 46 suppliers; negotiated with 6 and finally awarded the business to 3
46 suppliers
RFI/RFQ responded
Long list of suppliers
Research to identify potential suppliers RFI/RFQ process Bidding process
40
6
40
6
12
5
RFI/RFQ sent
51
2
Attended the bidding
Selected1
Many potential suppliers were eliminated because of strong
internal resistance to working with new suppliers
© 2012 Dragon Sourcing. All rights reserved.15
For warehousing services, we negotiated with all current suppliers and finally rationalized the supplier base to 3
10 suppliers
RFI/RFQ responded
Long list of suppliers
9
1
RFI/RFQ sent Attended the bidding
Selected
9
1
9
1
9
1
3
Research to identify potential suppliers RFI/RFQ process Bidding process
© 2012 Dragon Sourcing. All rights reserved.16
At the end of the negotiation, we evaluated 3 different scenarios
Scenarios Pros Cons Benefits $
Choose 3 Suppliers
Consolidated supply base
& large savings
Small risk because of
new supplier
2.18 M RMBSavings
Choose 5 Current Suppliers
Low Risk
No Savings & still
working with some
weak suppliers
540 K RMBSpend
Increase
Stay with Current Situation
No risk No Savings 760 K RMB
Spend Increase
Scenarios Pros Cons Benefits $
Choose 3 Suppliers
Simplified logistics and
inventory management
Small risk to find storage capacity if
production is much higher than forecast
140 K RMBSavings
Choose 5 Current Suppliers
Low Risk
No savings & reduced location choices
53 K RMBSpend
Increase
Stay with Current Situation
No Risk
No Savings & Complex Supplier
Management
270 K RMBSpend
Increase
Transportation Warehousing
© 2012 Dragon Sourcing. All rights reserved.17
Intial Total Spend vs Achieved Total Spend
2.70 2.561.63 1.55
25.3323.15
5.68 4.98
0.03 0.030.20 0.22 0.12 0.13 0.060.05 0.360.380.650.69
10.02
8.77 8.15
10.88
0
5
10
15
20
25
30
Initial Total Spend Achieved Total Spend JV #1(Plant 1&2)Initial Total Spend
JV #1 (Plant 1&2)Achieved Total Spend
JV #2 (Plant 3)Initial Total Spend
JV #2 (Plant #3)Achieved Total Spend
JV #3 (Plant 4)Initial Total Spend
JV #3 (Plant 4)Achieved Total Spend
Spe
nd (M
RM
B)
Load/Unload Warehouse Transportation
Savings of each JV Company
AAA
Savings: 930 K RMB / 7.3 %
BBB
Savings: 560 K RMB / 6.8 %
CCC
Savings: 720 M RMB / 11.8 %
Finally, the client opted for the scenario with highest savings (2.3 M RMB or 8.1%)
28.23 25.23
12.63 11.70 9.51 8.86 6.09 5.37
Transportation Saving2.18 M RMB / 8.6%
Warehouse Saving 0.14 M RMB / 5.1%
Clients Total SavingsSavings: 2.3 M RMB / 8.1 %
© 2012 Dragon Sourcing. All rights reserved.18
Agenda
1. Client Overview
2. Transportation & Warehousing Case Study
3. Woven PP Sacks Case Study
4. Fertilizer and Fertilizer Chemicals Case Study
5. Sugar Processing Chemicals Case Study
© 2012 Dragon Sourcing. All rights reserved.19
The project scope included 6 SKUs representing 23.2 M RMB in spend
Fertilizer Sack (1.2 M RMB)Project Scope included 2 SKUs of 50 Kg
woven PP Sacks with the 3 color printing on each sack being the factor differentiating
between the SKUs
Sugar Sack (22.0 M RMB)Project Scope included 4 SKUs of 50 Kg woven PP Sacks with the 3 color printing on each sack
being the factor differentiating between the SKUs
PhotoPhoto
© 2012 Dragon Sourcing. All rights reserved.20
Sugar Sack Spend Analysis by type of Sack
Spend Analysis by Category
21.96
1.150.06
0.00
5.00
10.00
15.00
20.00
25.00
White Sugar Sack Fertilizer Sack Red Sugar SackCategory
Spen
d M
RM
B
Average Sack Price 1.95 RMB
© 2012 Dragon Sourcing. All rights reserved.21
Sugar Sack Spend Analysis by Supplier
12.1
5.5
2.41.6 1.7
0
2
4
6
8
10
12
14
QWE RTY UIO PAS DFG
Spen
d in
Mill
ions
RM
B
Supplier Name
Spend Analysis by Supplier
© 2012 Dragon Sourcing. All rights reserved.22
Sugar Sack Spend Analysis by Factory and Supplier
Number ofSuppliers 5 1 15
BBB Factories7. 2
4.2
6.2
5.5
© 2012 Dragon Sourcing. All rights reserved.23
Key Findings of Data Analysis
• The factories were using 7 different Sack SKU’s, 2 Sack are Fertilizer Sack, other 5 Sugar Sacks are distinguished by printing only, but same in other aspects
• 7 Sacks used in the South China Factories– All the sugar sacks used are Identical, except in the printing on the sacks– Fertilizer sacks used have 2 types, laminated & non-laminated– All Sacks use same 3 color printing technology – BBB has 2 factories and was using 5 different Suppliers– AAA and CCC have only one Suppler– “QWE” does not has a consistent price across all factories for the same type of sack
• Some suppliers where not well qualified and did not have their QS Certification
© 2012 Dragon Sourcing. All rights reserved.24
Project Savings Strategy
• Rationalize Supply Base to reduce from 5 to 3 suppliers– Introduce new suppliers to compete for the Business– Increase the volume for winning suppliers
• Reduce Supplier Risk by having winning Suppliers deliver to all Factories– Factories previously having only 1 supplier will have alternatives if a supplier cannot deliver
© 2012 Dragon Sourcing. All rights reserved.25
To challenge the existing suppliers, we introduced new suppliers into the RFI/RFQ process
RFI/RFQ responded
Long list of suppliers
5
1
RFI/RFQ sent Attended the bidding
Selected
9
3
2
15
6
11 suppliers
5 5
45
3 suppliers
Research to identify potential suppliers RFI/RFQ process Bidding process
© 2012 Dragon Sourcing. All rights reserved.26
Negotiations resulted in savings of 1.5 to 7.6% per plant and a total savings of 1.05M RMB
3.56
1.95
1.79
1.19
0.59
0.84 1.15 1.02
0.78
0.78
0.20
2.95
0.20
2.10
6.21
2.87 5.46
2.53
0.89
0.78
2.97
1.26
1.72
1.52
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
QWE (2006/2007) QWE (2007/2008) RTY (2006/2007) RTY (2007/2008) UIO (2006/2007) UIO (2007/2008) PAS (2006/2007) pas (2007/2008)
Spe
nd (M
RM
B)
Plant & year
Calculations based on 06/07 volumes and negotiated prices vs. 06/07 prices
5.74 5.07
7.22 7.11
4.30 4.20
6.21 5.46
110K RMB Savings (1.5%)
80K RMB Savings (1.9%) 470K RMB Savings (7.6%)
390K RMB Savings (7.2%)
© 2012 Dragon Sourcing. All rights reserved.27
Agenda
1. Client Overview
2. Transportation & Warehousing Case Study
3. Woven PP Sacks Case Study
4. Fertilizer and Fertilizer Chemicals Case Study
5. Sugar Processing Chemicals Case Study
© 2009 Dragon Sourcing. All rights reserved.28
The project scope included 104 M RMB, with nearly an even split between finished fertilizer and Precursor Chemicals needed to produce Fertilizer
Organic Fertilizer (27.5 M RMB)
1 SKU with a
Demand of 15,000 Tons
Fertilizer Chemicals (49.7 M RMB)
6 SKUs with a total
demand of 330 K Tons of Chemicals
Urea: 2 types 7,600 ton/yr
Kalium: 1 type 3,800 ton/yr
Calcium: 2 types 16,000 ton/yr
Tunbran 1 type 5,600 ton/yr
Compound Fertilizer (26.8 M RMB)
1 SKU with a
Demand of 15,000 Tons
Calicium UreaKalium TunbranFertilizer
© 2012 Dragon Sourcing. All rights reserved.29
Supply base was consolidated from 5 to 3 suppliers
5.5
2.41.6
12.1
1.0
4.2
10.4
7.4
0.5
0.5
2006/07 Supply Base volume 23million RMB
4.8
2.41.6
12.10.6
0.50.5
0
2
4
6
8
10
12
14
H C Y B G
Supplier
RM
B(m
illio
n)
White Sugar Sack Red Sugar Sack Fertilizer Sack
2007/08Supply Base on previous year volume 22 million RMB
4.2
10.4
6.3
1.1
0
2
4
6
8
10
12
14
Cg B QSupplier
RM
B(m
illio
n)
White Sugar Sa Red Sugar Sack Fertilizer Sack
© 2012 Dragon Sourcing. All rights reserved.30
Fertilizer & Fertilizer Chemical Spend Analysis by Supplier
Supplier
© 2012 Dragon Sourcing. All rights reserved.31
Fertilizer & Fertilizer Chemical Spend Analysis by Factory and Supplier
104
20
54
30
08/09 client Fertilizer & Fertilizer Chemical Spend
6.65 6.65
7.81
7.81
6.22
6.22
5.07
5.07
17.36
7.31 10.05
7.16
7.16
27.51
27.51
26.79
26.79
0
20
40
60
80
100
120
BS (08/09) BQ (08/09) BX (08/09) BH (08/09)Plant & year
Spe
nd (M
RM
B)
Big Urea Urea 12%calcium
15% calcium
kalium Tung bran Sugarcane fertilizer Organic feitilizer
© 2012 Dragon Sourcing. All rights reserved.32
Project Savings Strategy
• Rationalize Brand and Supplier Requirements– Replace Specs based on required Brand to Spec based on SKUs Chemical Makeup. – Replace Specs based on required Supplier to Spec based on SKUs Chemical Makeup.
• Rationalize Supply Base to reduce from 8 to 5 suppliers– Change Strategy of buying from Small local traders to buying Directly from Regional Manufactures– Introduce new suppliers to compete for the Business– Increase the volume for wining suppliers
• Reduce Supplier Risk– Qualify new suppliers for single source commodities
© 2012 Dragon Sourcing. All rights reserved.33
SKU Analysis and rationalization of supplier & brand requirements
Urea
Kalium
Calcium 1
Calcium 2
Tunbran
Compound Fertilizer
Organic Fertilizer
Supplier Requirement
Replaced Spec based on Supplier requirement with Spec
based on Chemical Makeup
Brand Requirement
Replaced Spec based on Brand requirement with Spec based on
Chemical Makeup
Increased Competition
Opened Competitive Biding to new suppliers able to produce
Commodity Chemicals to a Chinese Government Standard
driving down the price
Targeted Suppliers that are regional producers instead of
Small traders
Increased Competition
Opened Biding to new suppliers able produce Fertilizer based on Chemical Spec driving down the
price
© 2012 Dragon Sourcing. All rights reserved.34
Here again we introduced new suppliers to challenge the existing ones
RFI/RFQ responded
Long list of suppliers
8
1
RFI/RFQ sent Attended the bidding
Selected
9
3
4
18
11
19 suppliers
8 8
58
5 suppliers
Research to identify potential suppliers RFI/RFQ process Bidding process
© 2012 Dragon Sourcing. All rights reserved.35
Supply Base was consolidated from 8 to 5 with 1 new supplier
New supplier
Suppliers
2007/2008 fertilizer & fertilizer chemical supplier QTY
1.0 1.0 1.0 1.0 1.0
1.0 1.0
1.0
1.0
1.0 1.0 1.0
1.0
1.0 1.0
1.0 1.0
0.0
1.0
2.0
3.0
4.0
LZ XZ LBNZ H LZ WXJL XZChemical
WAXNSuppliers
2008/2009 fertilizer & fertilizer chemical supplier QTY
1.01.0
1.0
1.0
1.0
1.0
1.0 1.0
0.0
1.0
2.0
3.0
4.0
LZ WX GN XZ LNcalcium urea kalium fertilizer Organic fertilizer
© 2012 Dragon Sourcing. All rights reserved.36
Negotiations resulted in savings of 3.4 to 19.1% per plant and a total savings of 12.6 M RMB
104.4
91.8
21.2 20.2
55.7 45.0
27.6 26.7
12.6M RMB Savings (12.1%) 1.0M RMB Savings (4.7%) 10.7M RMB Savings (19.1%) 0.9M RMB Savings (3.4%)
08/09 Spend vs 08/09 Spend On Negotiate Price
6.66 6.66 6.66 6.66
7.81 7.81
7.81 7.81
5.30 5.30
5.30 5.30
4.68 4.68
4.68 4.68
17.94 15.99
9.20 8.20 8.74 7.79
6.40 6.40
6.40 6.40
27.9024.75
27.90 24.75
27.75
20.25
27.75
20.25
0
20
40
60
80
100
120
client (08/09)Spend
client (08/09)Spend on Negotiate
Price
BQ (08/09)Spend
BQ (08/09)Spend on Negotiate
Price
BX (08/09)Spend
BX(08/09)Spend on Negotiate
Price
BH (08/09)Spend
BH (08/09)Spend on Negotiate
PricePlant & year
Spe
nd (M
RM
B)
Big Urea Urea 12%calcium
15% calcium
kalium Tung bran Sugarcane fertilizer Organic feitilizer
© 2012 Dragon Sourcing. All rights reserved.37
Agenda
1. ClientOverview
2. Transportation & Warehousing Case Study
3. Woven PP Sacks Case Study
4. Fertilizer and Fertilizer Chemicals Case Study
5. Sugar Processing Chemicals Case Study
© 2012 Dragon Sourcing. All rights reserved.38
The project scope included 4 categories or 25 M RMB in spend.
Lime
(6.56 M RMB)
11,134 Tons of demand with poisonous free test
pass requirement
Sulphuric acid
(1.81 M RMB)
1,650Tons of demand with industry grade
requirement
Phosphoric acid
(6.82 M RMB)
1,100 Tons of demand with Food Grade
requirement
Sulphur
(10.67 M RMB)
4,850 Tons of demand with Food Grade
requirement
© 2012 Dragon Sourcing. All rights reserved.39
Project Scope & Key Findings
Sugar Processing Chemicals Project Scope
• DS entered project in a Monitoring role however DS was forced to take a more active roll when it became clear that the central purchasing staff had made agreements with suppliers to fix prices
• Total spend of the project was 25 M RMB• 4 categories (Sulphur, Sulfuric Acid, Phosphoric Acid, & Lime)
Key findings
• DS has a suspicious that client’ central purchasing staff may have organized price fixing in the bidding process • All plants are extremely resistant to work directly with producers that can offer better prices• Local plant managers prefer to buy commodities from local trader at elevated prices• Brand/Supplier requirements for standard industrial commodities increase the cost to client substantially Ex:
Lime 25% Standard Fertilizer 12%, Organic Fertilizer 52%
© 2012 Dragon Sourcing. All rights reserved.40
Project Strategy & Achievements
Strategy
• Provided price index to central purchasing team• Helped to prepare all the bidding and process documents• Monitored the bidding conference to guarantee transparency• Monitored that contracts are signed in a timely manor
Achievements
• Identified a food-grade sulphur supplier & 4 producers of sugar chemicals• Helped client to save 6 M RMB by blocking the purchase of industry grade sulphur that could not be used
under new Government regulations • After market prices changed drastically in client’s favor DS/Central purchasing team renegotiated with sugar
chemical suppliers to lower spend by an extra ~4M RMB• Extend payment term from 10 days to monthly to improve client cash flow
© 2012 Dragon Sourcing. All rights reserved.41
08/09 BS Sugar Process Chemical Spend vs. Plant
6.82
3.30 1.86 1.66
6.54
3.29
2.231.02
1.27
10.62
5.48
1.640.39
0.893.50
0
5
10
15
20
25
30
BS (08/09) BQ (08/09) BX (08/09) BH (08/09)Plant & year
Spen
d (M
RM
B)
Phosphoric acid Lime Sulphuric acid Sulphur
Total spend on 08/09 Sugar Process chemicals reached 25 M RMB
25.25
12.96
7.59
4.70
© 2012 Dragon Sourcing. All rights reserved.42
….split between the following categories
08/09 BS Sugar Process Chemical Spend vs. Category
5.48
3.30 3.29
0.89
1.64
1.661.02
3.50
0.39
2.231.86
0
2
4
6
8
10
12
Sulphur Phosphoric acid Lime Sulphuric acidCategory
Spen
d (M
RM
B)
BQ (08/09) BH (08/09) BX (08/09)
10.62
6.82 6.54
1.27
© 2012 Dragon Sourcing. All rights reserved.43
08/09 Contract Spend vs. 08/09 Negotiated Spend
08/09 Contract Spend vs 08/09 Nego. Spend
6.824.73
3.30 2.29 1.86 1.29 1.66 1.15
6.54
6.31
3.293.18
2.232.15 1.02 0.98
10.62
8.97
5.48
4.63
3.502.96
1.641.39
1.27
1.27
0.89
0.89
0.390.39
0
5
10
15
20
25
30
BS (08/09)Contract spend
BS (08/09)Nego. spend
BQ (08/09)Contract spend
BQ (08/09)Nego. spend
BX(08/09)Contract spend
BX (08/09)Nego. Spend
BH (08/09)Contract spend
BH (08/09)Nego. Spend
Plant& year
Spen
d (M
RM
B)
Phosphoric acid Lime Sulphur Sulphuric acid
25.25
21.29
12.96 10.98
7.59 6.4 4.7 3.9
3.96 M RMB Savings (15.6%) 1.97 M RMB Savings (15.2%) 1.19 M RMB Savings (15.6%) 0.8 M RMB Savings (16.9%)