Chem321:Acme sales report

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Chemistry 321 Acme Scenario
Acme Chemical Company | Employees
EPA inspection - Sales - Waste
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This is the sales report for Acme for last year:

2-Thiopheneacetyl chloride (TAC)

There are currently four other manufacturers for this compound: Two are in China, one in the UK, one in Japan. There are three customers: (1) Hensai in Japan, who buy 20 tonnes/month, of which 12 tonnes/year comes from us. The remainder is believed to come from Japan. (2) AstraZeneca in the UK, who buy 40 tonnes/month, believed to be from the UK & China (3) Shanghai Soda, who buy around 40 tonnes/month from two suppliers within China. All of these customers are locked into certain suppliers for the next 12 months through contracts and FDA filings. The quality of our product is believed to be higher than that needed by AstraZeneca or Shanghai Soda; Hensai’s drug requires a 99.7% purity from us which gets us a higher price. Our process gives us typically a 99.8% purity; we would not save much cost if we dropped this to make the 99% pure product that the other customers need. The price we would get for the 99% product would give us much lower profits – only about $1000/tonne – unless we did some R&D on the process. Some good news, though: AstraZeneca are likely to institute a policy requiring all products be sourced from other ISO 14001 and ISO 9001 companies. Their Chinese supplier has only ISO 9001 like us; if we get ISO 14001 ahead of them, we could perhaps become the second supplier for that product. We have done business for AstraZeneca in the past, and we have a decent record with them.

5-Methoxybenzothiophene (5-MBT)

We have one customer, Merck in the US, and they have two suppliers locked in for the next two years. We are the major supplier; the second one is a Chinese toll manufacturer. We’re unlikely to get more of the Merck business unless the Chinese company has a major problem. There are no other potential customers that we know of, except for one in Argentina that makes illegal generics; we don’t want to risk our contract with Merck over that!

2-Methylthiazoline (2-MTZ)

We have known for a long time about two customers, as we have long been the major supplier for both. However, a recent sales trip uncovered interest from a Russian drug company – it’s a reputable company with ISO 9001 certification, albeit run by some of Putin’s friends –and they are interested in around 10 tonnes/month, probably growing to 20 tonnes/month if their product takes off. However, we have two competitors – one in Germany, and one in Japan – and we’ll need to beat at least one of them on cost, quality & reliability.

2-Chloro-4-aminothiazole (CAT)

There is only one customer we know of, Mitsubishi in Japan, and we are currently the minor supplier. Their major supplier is a subsidiary of Mitsubishi, so we’re unlikely to make inroads in market share unless they have a production problem. However, the final drug is selling very well in Asia and Europe, and so Mitsubishi is talking about us supplying them with larger amounts – perhaps 12 tonnes/month – starting next year.

Other custom products

We have now made a couple of batches of 4-aminobenzyl alcohol for GlaxoSmithKline. This goes into a drug product that is currently in Phase III clinical trials. If it is approved by the US FDA and European regulators, it could become a major product, with possible production in the range of 20 tonnes/month initially. The waste costs are fairly small – around $5000/month – but the product is cheap and would only net us around $80,000/month profit despite using our largest reactors. However, if the drug takes off, the production could rise to as much as 100 tonnes/month, justifying us possibly installing a couple of larger (3000 gallon) reactors to handle the business if we got the contract.