Defining Toll Blending and Its Importance in Industry

Toll blending is increasingly becoming popular for chemical companies or for industries that use specially customized compounds in their manufacturing processes. This service is also used extensively across industries, from global conglomerates to small-scale or special product manufacturers requiring specific formulae available to them.

To this effect, manufacturers with requisite facility for producing such chemicals accept orders from external sources which require the usage of such facility for producing the required complex chemical compound. Let us now understand the definition and broad types of toll blending process from the service provider’s point of view.

What is Toll Blending?

Toll blending, also known as chemical toll manufacturing, is a specialized, separately chargeable, service provided by chemical manufacturers with requisite facilities, experience and expertise to customers (generally other industries or industry-related parties) requiring mass production of customized chemical mixtures, formulae or preparations.

Many industries which include battery manufacturers, commercial research laboratories, pharmaceutical companies, Chemical Suppliers, oil, natural gas, and their derivatives industries, Plastics manufacturers outsource specific formulae to toll blending units specializing in scalable production of similar compounds.

Types of Toll Blending Services

Toll blending service types mainly depend on the customer requirement along with the capacity of the manufacturer.

• Turnkey

In such orders, the customer only provides the formula or recipe of the specialized compound. He expects the toll blender to work out everything else based upon delivery time and its production capacity. The customer expects the finished product at its premises as per mutually agreed timelines with the toll manufacturer taking care of production, quality control as per standards set, packaging and delivery.

• Service

In this case, the customer only uses the facilities and processes of the toll blending service provider. He decides the raw material pricing and supplier, packaging standards, materials and specifications, even delivery schedule and mode of transport.

• Hybrid

This service is a combination of the above two types – the customer may provide some raw materials and packaging instructions, while the rest is taken care of by the toll blender. Depending upon the actual customer order, multiple ingredients may be required, necessitating the involvement of multiple suppliers, packaging types and materials, even different transportation systems to properly facilitate delivery.

This service type is often chosen by customers who have multiple orders to be fulfilled and require exacting standards for their chemical blending in particular for one formula, while others in the order are more generic in nature with easier availability of the required quality ingredients, which can then be sourced to the toll blender.

Why use Toll Blending Services?

Such specialized services are often outsourced by industries due to various advantages and concerns as discussed below.

• Safety

Many industries such as chemical and plastics manufacturing use a host of different ingredients in their finished products. Many such ingredients require specialized processing of their own, such as liquid chemicals – they require customized handling, or hazardous compounds requiring careful handling with protective gear.

Thus, industries find it much safer to outsource the production and packaging of such chemical compounds to units properly geared to handle them, ensuring the safety of its employees and the premises.

• Cost-Saving

Industries outsourcing the production of its formulae or special chemical blends often do so simply to save manufacturing costs. Because such complex compounds require specialized equipment, expertise, and processes for their production,

they find it convenient to place orders to external units having such systems already in place. This works out to be much more economical than setting up and maintaining an in-house production unit.

• Regulation Compliances

Another reason for the rapid rise in demand for toll blending companies is the requirement of strict adherence to safety and environmental regulations during the manufacturing of complex compounds.

This is especially true for chemical or its allied industries wherein maintaining multiple emission indexes, non-pollution certificates, etc. are mandatory for its continued operation. Thus, toll blending companies with such certificates like ISO 9001, ISO 14001, REACH, etc. are ideally suited for handling such complex or hazardous chemical production on a regular basis.

• Confidentiality Issues

The term “Industrial Espionage” is one of the most dreaded ones in this highly competitive industrial age. Companies are vying with each other continuously to gain even a slight advantage in their field. So, the question of integrity always arise when outsourcing in-house formulae or recipes.

The common practice is to enter into a Non-Disclosure Agreement (NDA) with the toll blending company, who agrees to fully honor the client’s need for secrecy and confidentiality, even while working on multiple customer orders. Their reputation and sustainability are dependent on this issue as non-trustworthy partners can quickly gain negative publicity, thus losing future orders.

Summary

Toll blending is a paid service provided by specialized manufacturing units to industries requiring scalable production of (often complex) chemical compounds or formulae. The companies ordering this service using one of these three types, turn-key (customer only provides the formula or recipe), service (customer provides everything while using blender’s facility) or hybrid (a combination of both).

Demands for toll blending units are steadily rising due to the many advantages of using this outsourced service. Safety of client’s employees and manufacturing premises, significant saving of production costs, strict compliance of regulations related to chemical production and handling, ensuring confidentiality (through NDA) of the formulae to prevent copying and re-selling are some of the advantages and considerations when deciding to outsource production of complex or hazardous chemical compounds, thus the rising importance of professional and trustworthy toll blending companies.