Products, Inc.
Muriatic acid purchasing case
B2B (Section A)
Group :
(11DM-005) Abhinav
Mishra
(11DM-007) Parvez
Agaskar
(11DM-014) Akhil Gupta
Product
Commodity
chemical,
chemical intermediaries and
specialties
- 700 products
- 40% of sales consists of
commodity chemical
Muriatic Acid
- 20 Baume (31.45% HCL)
- Stringent specification (35
APHA, Fe 1 ppm max, HCL 31.45
32.56%, SO4 50 ppm max, As
0.2 ppm, Pb 1 ppm
- Tulsa plant uses for purification
of
NaCl
solution
fed
to
electrolytic cells
Puritan Chemicals
-
Company Background
Sales revenue US$ 4.5 billion 1974
PAT of US$ 197.5 million
74,000 employees
60 domestic and overseas plants
Case Background
On
Jun
15th,
Puritan
revised price from US$
48.75 to US$ 66.25 per
ton effective from July 1,
1975
Points to be
considered for
sourcing :
- High transportation
cost for Acid
- Nearest supplier quoted
US$
75
which
was
competitive if acid was
transported by Barge
- Charlestown always
looked for long term and
settled relationship
- If Tank Cars are used
for transport then the
modification
required
would cost US$ 2.50 per
ton
plus
switching
problem
required
for
other liquid inputs
- Tank Cars schedule was
inflexible
Case Problem
On Jun 23rd , Mr. Todd raised
quality and consistency concerns
as producer was still unknown and
delivery by tank Car
Counter price of US$ 47.50 per
ton along with problems of terms
Case Argument
Puritan Chemicals
Reliable
supplier
and
always
Charlestown Chemicals first choice
Price rescission to US$ 48.75
Delivery with Tank Trucks
Want to sign contract for 1976
entire requirement basis at US$
48.75 per ton
Increase in dollar volume purchase
by US$ 0.5 million in 1976
Points to be considered
Provision of price revision in
contract
Loose terms about requirement
Need to develop an alternate
source and not just recognize it
Further
negotiation
for
1976
contract
as
Charlestown
has
backup offer for an eligible vendor
Puritan is a customer
Puritan would be first choice if price
and terms are negotiated
Points to be considered
High on price
Must buy conditions dropped
but still doubt about capacity
National Chemicals can be a
prospective vendor
Lee Chemicals can be used to
negotiate very low prices from
Puritan and vice versa
THANK YOU