Philosophy and Policies

Manufacture

Aim:

To manufacture our products to the standards required by the market, within the time stipulated and at the lowest possible cost.


a) We basically manufacture our products in our own factories. The Group Management determines which factories will produce which products for which Subsidiary Companies considering entrepreneurial, economic and trade factors. It also establishes the guidelines for intercompany-pricing.


b) Backward integration (the manufacture of basic materials) is carried out (or, conversely, cancelled) if specified qualities or purchasing costs result in an improved competitive position.

c) Products or semi-finished products which incorporate a production know-how requiring special protection or which demand a high investment or a costly quality-procedure in comparison to local needs, are generally manufactured only in one or a few regional plants.


d) Every Subsidiary Company involved in manufacturing is responsible for safeguarding the quality of its products. The guidelines and standards required are established by the Group Management.


e) Investments in fixed assets will be assessed and monitored by the Group Management, with regard to strategic, practical and financial considerations.


f) The procurement of raw materials, semi-finished products and any finished products which are not produced by the Group is to be carried out locally by the Subsidiary Company. The Group Management can co-ordinate the purchase of important raw materials, semi-finished products and finished products. If necessary, it may conclude contracts on behalf of several Subsidiary Companies.


g) The Group Management determines the viability of joint-ventures and production licenses to third parties. These are considered only if Sika achieves competitive advantages, or if a considerable profit could result from a market which is otherwise inaccessible.