Reply on Submission of Conversion Cost to a Toll Manufacturing Company

Thanks for sharing the operating costs/COC (Cost of conversion). It would have been better if bases line assumptions and costs sheets were there along with this, however to optimize the time I am putting some assumptions / queries behind this indicative costs , please help me to revalidate my understanding.

01. USD 0.75/sachet of 5 g is a COC including your company’s margin etc and it is a delivered price at Factory gate

02. The price includes all kind of taxes and to be deductable as per applicable laws

03. Understanding the site’s different facilities to be shared for GENO along with other products, hence costs is also proportionate and there would be improvement in costs also

04. We have shared 5 Years volume , technical details, equipment requirements( certain equipments are our company Specific), process flows with project team and assuming all have been taken into consideration while crafting the costs

05. Any CAPEX requirement and related to that any costs are not in scope of this costs

06. Clarity on Payment term – we prefer 60 days credit term. Trust this offer covers this.

In our earlier discussion I have cleared the costs model is P2P (Procure to Pay) - that means your company will procure all materials, maintain inventory and will sale FG (Finished Goods) as per purchase order. In short “ RM and PM costs + COC/Operating costs = P2P Costs at Factory gate”.

I am sure you have the volume, however as reference sharing the projected volume with you might help as reference.

Yr 1 -36 MT ,

Yr2 -57 MT,

Yr 3-62MT,

Yr 4-95MT and

Yr 5-111MT

Kindly revert if I am in the same page or any difference or any queries you have.
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