Can toll processing improve your bottom line?
Perhaps you've been in a situation where you find that a new product can be made from your existing stock of raw materials, but you don't have the necessary equipment, capital, or manufacturing capacity to do so. Many bulk materials manufacturers in this situation contract a toll processor. A toll processor can perform several manufacturing services for you, allowing you to expand your operations without having to expand your plant. This article discusses several services toll processors offer, including size reduction, blending, classification, compounding, testing services, and others.
Toll processing -- also known as custom processing and contract processing -- is performing a manufacturing service for a manufacturer for a fee. For example, a bulk solids manufacturer wants to blend product A with product B at a 5 percent level by weight but doesn't have the proper equipment in-house to perform the blending operation. The manufacturer then contracts with a toll processor to perform the blending operation. The manufacturer may send the raw materials to the toll processor, or the toll processor may procure them. The toll processor blends the raw materials together to produce the finished product. The toll processor then sends the finished product back to the manufacturer, who prepares it for market distribution.