Understanding TiO2 Costing and Profitability Aspects to Enable ?Informed? Procurement Decisions

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By: Vaishnavi Jayaraman -- Senior Research Analyst

25 March, 2014

Understanding TiO2 Costing and Profitability Aspects to Enable ?Informed? Procurement Decisions
WHITEPAPER

Large titanium dioxide volume buyers are often left confused as there is a huge differential between estimated potential cost savings and their actual cost savings. Another prevalent scenario is faced when TiO2 buyers often hear suppliers state ?Production costs, especially raw material costs for titanium dioxide have risen considerably and hence prices need to be revised upwards?. The Major Challenge for Buyers of TiO2: ? Due to buyer?s lack of knowledge on detailed costing aspects, negotiation with TiO2 suppliers during procurement becomes increasingly difficult. ? Low negotiation power and inability to pass on increased costs to their customer results in heightened cost pressure and squeezed profit margins for the TiO2 buyers. General Costing Aspects of TiO2 Currently buyers are aware of ONLY the generalized cost structure and hence it becomes very difficult to negate points such as one stated above, with limited knowledge on the costing aspects.




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