Third Party/Contract Manufacturing

THIRD PARTY / CONTRACT MANUFACTURING PROCESS

If you have a Good customer base for Health Care & Personal Care Products and do not want the hassle to set up a plant and manufacture the products for sale to your Customers, then you are at the right page. We have complete Manufacturing Setup and provide Contract Manufacturing Services to Client’s who wish to get their products manufactured by us.

Once you have decided on outsourcing the manufacturing work to us, then we require approved brand names and formulas from you in writing along with other documents listed below for third-party manufacturing.

After finalisation of the agreement, there are Six phases of starting a “marketed by” set up:

Phase 1

Formulation approval from DRUG department which takes about 20-25 days or you may use our approved formulae.

Phase 2

Approval of Packaging Material by the Client. Samples of the same will be provided within 7 to 10 days of the signing of the agreement.

Phase 3

Procurement of Raw Material, Packaging Material, etc. This process will take up to 20 to 25 days depending upon availability of the same with our vendors.

Phase 4

Approval of Product samples for appearance, viscosity, colour and effectiveness and results.

Phase 5

Manufacturing of Products after written approval of samples from the Client. Actual production and packaging can take up to 25 to 30 days

Phase 6

Transportation of Finished Product may take up to 3 to 7 days depending upon the location of Client.

Total time taken for whole process is 50 to 60 days approximately. For repeat orders 30-40 days shall be required.

Along with the Finished Products, we will supply Certificate of Analysis for each product manufactured.

Product List

COSTING

General Policy of working out cost of the product is given below:

  1. Cost of Raw-Materials– Active and excipients.

  2. Cost of Packaging Material

  • PRIMARY (Printed Packaging Material- Bottles, tubes, caps, pumps and measuring cups, Cartons, and Labels)

  • SECONDARY (PVC, Shippers, tape, packing slips, strips etc)

  1. Batch Charges– which covers cost of consumables, Quality control Costs & Local transportation.

  2. In Process loss for RM & PM

  3. Manufacturing Charges

TAXATION AND OUTWARD TRANSPORT

  1. GST @ 18% is charged as per latest Govt Notification.

  2. OUTWARD TRANSPORTATION: Outward Transport is payable by the Party, the rates quoted by us are Ex-factory. We have tied up with transporters for the shipment of the manufactured goods either to different places in the country and also outside country. Greater Noida is a well-developed Transport hub supplying all over India.

  3. TRANSIT INSURANCE: All our supplies shall be covered under Transit Insurance from A reputed insurance company and nominal transit insurance is charged against this in the Bill/Invoice.

BATCH SIZES AND MINIMUM ORDERED QUANTITY

Minimum Batch size is 330 kg for creams and 800 litres for soap based products, we take orders of not less 2000 kg of cream items, 5000 litres of soap items and 20000 litres of Fibrous Aloe Vera Juice.

MINIMUM BUSINESS VOLUME

The marketing company shall give a minimum business assurance of minimum Rs. 25 lacs per annum ON NETT RATES.

ORDER AND SUPPLIES

Written order preferable in format given below is accepted by us, orders through authenticated e-mails are also acceptable, 1st time supply is executed in 50-60 days and repeat supplies are executed within 30-40 days, occasional URGENT orders are despatched within 20 days.

PAYMENTS

We need an advance payment of 70% along with order as a confirmation of order and balance at time of despatch or on raising the Performa invoice. Payment terms for old parties may vary as per their dealing and performance, we raise credit limits for old parties as per their transactions against security instruments for smoother commercial transactions. Once the Goods leave our Factory, we are not responsible for their delivery or damage during transit. The Client is welcome to inspect the finished material before the same leaves our Manufacturing Facility. No goods shall leave the Factory premises without realisation of 100% of Invoice Amount.

PRINTED PACKAGING MATERIAL

The inventory of the Printed packaging materials viz Cartons, labels etc is principally borne by you, we offer our customers a simple solution for this typical issue of taking care of the procurement of packaging materials on your behalf, thereby providing you big savings on TIME and MONEY, we charge one time PM inventory deposit, details about this are given below in our write up for PM Inventory Charges.

PACKING MATERIAL INVENTORY CHARGES

Minimum procurement quantities of various packing materials is often higher than the Minimum Order Quantity (MOQ) therefore in manufacturing orders of small quantities there is a leftover printed packing material. These are as under:

  • Bottles/ tubes/ jars
  • Shrink wraps
  • Seals
  • Cartons
  • Labels for bottles and jars

These materials are printed and have the name of the “Marketed by” company and have no other use, hence the cost of residual inventory of these printed packaging materials has to be borne by the company who will have Market the products.

The net rate cost of product covers the cost of packing material. The cost of packing material which is consumed in production, but does not cover the residual packing material inventory,

For the first time procurement of labels, and cartons, cost of design, die and one-time expenses will be charged which will not be applicable in the next round of order.

SAMPLE AGREEMENT

This Agreement is made on this ____ Day of _________ 20__  By & Between

M/s Sarv Tech Private Limited, a company incorporated under the companies act of 1956, having its registered address at __________________________________, corporate address at __________________________________________ and Manufacturing Unit at _______________________, hereafter referred to as “Party No. 1 to this Agreement.
AND
M/s _____________________________________, a company incorporated under the companies act of 1956, having its registered address at __________________________________, corporate address at __________________________________________ and Manufacturing Unit at _______________________, hereafter referred to as “Party No. 2 to this Agreement.

Whereas the party of the first part is Manufacturer of Health Care & Personal Care Products, the party of the 2nd part is engaged in marketing and distribution of the Health Care & Personal Care Products.

Now, this agreement witnessed as under:

  1. That it is agreed that the products listed below shall be marketed by the party of 2nd part and manufactured by the party of 1st part. (As per list attached)
  2. That it is agreed that the above trade-marks are property of the party of the 2nd part and do not resemble any existing product/trade name of any other company, and that the 2nd party shall be solely responsible for the non-resemblance of trade name & its designs from the marks & designs of any running brand of any other company. Also, the 2nd party indemnifies the 1st party for any dispute /claim if arisen out of any resemblance of its trade name with any other trade name/design and shall be solely responsible for claims/liabilities if any. Further 1st party and the 2nd party shall not adopt, whether during the term of this agreement, or any time after its expiry/ termination, thereof any symbol which is similar to the registered Trademark/ Applied for that which could draw any reference to the said trademark as to be likely to cause confusion or deception or detract from or adversely affect the rights of proprietor of the said trade-marks.
  3. It is agreed that the 1st party shall manufacture the above products and supply to the 2nd party at Ex-Factory Nett rates mutually worked out.
  4. That the 2nd party shall send 70% advance along with each order and shall make the balance payments at the time of dispatch, or as per any other schedule of payments mutually accepted by both parties. The forwarding charges, transit insurance and outward freight of the finished goods shall be borne by a 2nd party. It is further agreed that in case the ordered goods are not lifted by the 2nd party within 30 days of production, the same shall be liquidated in the open market by the 1st party without any claims from the 2nd party. In such event it is agreed that 2nd party indemnifies the 1st party against all claims, objections what so ever from any source.
  5. The 1st party shall use the materials for the 2nd party which are in regular use with the 1st party in case any new or typical material is required it shall be supplied by the 2nd party or shall bear the inventory cost of that material. Also, the 2nd party shall bear the cost of inventory of all printed packaging materials i.e. Foils, Boxes, labels etc.
  6. It is further agreed that the goods shall be billed at the prevailing Excise and Central Sales Tax rules which offer exemptions.It is further agreed that any liabilities/ Arrears/Claims of any Statutory Government Bodies viz Central Excise Dept. / Sales Tax Depts./ D.P.C.O. or any other Government Department arising out of the transaction between the parties shall be sole responsibility of the 2nd party during or after the expiry of this agreement, since the 1st party is charging only job charges and is not making any profit out of the sale of the products and all the profit is being taken by the 2nd party and the 2nd party indemnifies the 1st party in regard to the above.
  7. It is further agreed that the quality of the product shall be the sole responsibility of the 1st party. The 2nd party shall provide the master formulas and the SOP for all its products duly received by the 1st party. The 1st party shall strictly adhere to the master formulas provided by the 2nd party in observation of the Drugs & Cosmetics Act and rules thereunder. The 1st party shall supply test-reports for the batches manufactured to the 2nd party on demand.
  8. This agreement is initially for three years and can be terminated by either of the parties by giving two months’ notice in writing. However, without any dispute, it is deemed to be renewed even after the end of the third year. During the currency of this agreement, the 2nd party shall not get the products manufactured with the 1st party from any other manufacturer.
  9. Disputes if any shall be adjudicated under the jurisdiction of Court of Uttar Pradesh only.
  10. The Force Majure Clause is applicable to this agreement.

 

DATE & SIGNATURE OF BOTH THE PARTIES:

(Mr. ________________________) (Mr. ______________________)

Director

M/s Sarv Tech Private Limited M/s

Date: Date:

Place:

Witness: 1                                                  Witness: 2 

Documents Required for 3rd Party Manufacturing

Following documents will form the part of the agreement:

  • Brief Profile of the company giving a history of the company, three-year balance sheet, and auditor’s report
  • Copy of PAN Card of the company
  • Copy of Memorandum & Articles of Association in case of Pvt. Ltd or limited Company. Partnership deed/ Affidavit for proprietary in case of Partnership firm or Proprietorship firm.)
  • GST No details
  • Fssai license for storage in case of health care products
  • Name, Address & Telephones with a copy of Aadhar Card and Pan Cards.(Of all Directors, Partners or Proprietor both official and residential).

On Letterhead of Marketing Company

NON RESEMBLANCE CERTIFICATE

We certify that the following trademarks have been originally coined by us and do not resemble any existing trademark of other company, also the designs on the product packing do not resemble any design, colour combination of any existing product of any company and that we shall be solely responsible for the non-resemblance of trade name & its designs.

We shall be solely responsible for any dispute/claims/liabilities if any, arising out of the use of our trademarks and we further indemnify M/s Sarv Tech Private Limited. for any dispute/claim if arising out of any resemblance of its trade name with any other trade name/design and also undertake that we shall withdraw the product from the market and also withdraw the trade name if instructed by the State Drugs Controller-of the state in this regard.

Deponent

Verification:

The facts mentioned above are true to the best of my knowledge and belief and nothing has been concealed thereof.

Deponent

To contact us for outsourcing your production, please use our Enquiry form for the contract or 3rd party manufacturing.

Disclaimer:  Information contained in the portal can be changed without any notice and company shall not be at liberty to change the price and conditions of sale. Acceptance of the order is also at the sole discretion of the company management and there is no fixed rule to accept or reject the request.