Taking the Risk Out of Asian Sourcing - Purchasing MagazineJuly 07, 2005 The experience of one company, Wego Mineral & Chemical, illustrates how chemical sourcing from China has evolved over the years. A global distributor and manufacturer of a wide range of specialty chemicals, Wego has been sourcing raw materials from China since 1980 and now obtains about 85% of its supplies from that country. Most of its manufacturing is also done in China, with the exception of one U.S. plant. Executives at Wego, which is headquartered in Great Neck, N.Y., report dramatic improvements in quality and reliability of suppliers in China over the past 25 years, and Wego has been the beneficiary of these changes. The strategy of forging ties with individual factories and opening offices in strategic locations around the country is essential to assure continued quality of chemicals sourced in China. In the early 1980s, chemicals sourced from China, typically from Hong Kong traders or Chinese-owned companies, were often inconsistent, with properties varying from shipment to shipment, recalls Bert Eshaghpour, president of Wego. To overcome this problem, he says, "it soon became clear to us that we had to pursue relationships with the factories in China that were actually producing the chemicals." Much of this early interaction with the factories involved upgrading their equipment and processes to produce more uniform materials, recalls Wego principal Edward Khalily. For example, he says Wego supplied some Chinese factories with crystallizers and grinding machines when their equipment was not up to the company's standards. Wego also revamped some producers' citric acid facilities "from soup to nuts," Khalily adds. (Like Wego, many other companies from North America and Europe have cultivated relationships with Chinese plants and helped them, when necessary, to meet their standards.) Today, Wego has offices in four Chinese cities: Beijing, Shanghai, Chongqing and Guangzhou and operates two of its own factories in the country, one in Qingzhou, another in Kunshan. Last year, Wego bought Degussa's thiourea dioxide business and is now making that product in China for international distribution. The strategy of forging ties with individual factories and opening offices in strategic locations around the country is essential to assure continued quality of chemicals sourced in China, Khalily says. "Your presence in a meaningful manner" at the sites of production is also a must, he continues. Khalily says he and some of Wego's product managers from the firm's headquarters visit its manufacturing sites in China four or five times a year.
Posted on October 30, 2015