Managing volatile global market conditions
"As our customers are aware, the market for raw materials continues to show a volatile trend and has, in the past months, resulted in increasing prices worldwide. Whether this pattern will continue is not known; different market watchers have different opinions. Despite this volatility and its impact on us and our customers, Codrico's past and continuing focus on building strong relationships with suppliers leaves us in a secure position to procure the high quality raw materials that our customers require in these uncertain times".
Codrico sources raw materials from all over the world. The main products are maize, wheat, rice and several types of pulses. Our key drivers in our sourcing strategy are quality, traceability (including Identity Preserved programs for core products), securing supplies and long term partnership with all involved suppliers. These key drivers are a result of our customer requirements and our business processes. Furthermore, these drivers enable us to manage and control the full supply chain.
When sourcing raw materials, the main concern for Codrico is how to secure the right quality of material and logistics in such a way that the materials are available at the right time in our factory. In order to manage this, long term planning (at least 18-24 months ahead) is essential.
Our strategy in securing the required raw materials is to spread risks geographically and to develop and maintain long term relationships with suppliers, which has proven to be successful.
Spreading risks geographically
For our main products we have suppliers in several areas in countries and continents. Furthermore, Codrico is continuously looking for new opportunities to source its core products from new parts of the world. We often start pilot projects in which the whole supply chain (from seeds, implementation of the IP program to logistics) is tested in order to gauge the feasibility of sourcing our raw materials.
Long term relationship with suppliers
Quality is based upon having good relations with our suppliers. Our objective is to cultivate long term relationships so that we can secure a reliable physical supply. We achieve this by investing in our core raw material suppliers, by direct contact and providing education and assistance, in such a way that they are able to deliver the right products and continuously improve their performance.