Taking Care of Business

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-By John Boley

When we talked to Auckland based Jaychem, high on our agenda was gaining an insight to a relatively modest – albeit thriving – company who is recognised for its manufacture of quality and innovative human and animal health pharmaceuticals.

Jaychem is, among other things, a producer and contract manufacturer of products for a list of top brands that the company keeps to itself for perfectly obvious reasons of client confidentiality. Explaining how the company has survived and flourished to compete in a global market for services were members of the family, Ed, Richard, Katherine and Paul Jancys.

“We know what we are doing because we have been in business for a long time and we can make decisions quickly,” they explained. “We know if something is going to work or not, and we do not have excessive layers of management, which helps us to find out whether things are going to work fairly quickly.” Costings are fast and accurate and because Jaychem carries less ballast than a typical multinational (with all its inevitable incorporated overheads) the company can probably manage on a lower margin than what a multinational might need to make a project workable. “Multinationals have shareholders that demand a certain rate of return. We operate slightly differently. We can take a much longer term view.” The company’s directors “are owner operators and we are probably a little bit hungrier.”

Jaychem started off in cosmetics and toiletries, making personal care products out of what the family calls “our garage at home” more than 30 years ago. Gradually, as the business has grown, the emphasis has shifted somewhat towards other sectors – notably health, hygiene and animal health, although we should stress that the interest in the personal care sector remains substantial. Company policy has always embraced diversification. Arunas, who founded the company with his brother Ed, “was a highly respected chemist and he was able to develop products which customers liked and this is what we have built our business on. The animal health business took off from there.” In the last decade or so, the animal health area has grown the fastest.

Primarily, Jaychem is a manufacturer that develops its own formulations. “That is what we specialise in and that is what people come to us for.” Some customers have stayed for 30 years, pleased with not only the formulations but the production technology and the careful customer handling that Jaychem is smart enough to realise is vital in this business. A careful balance must be struck to ensure customers do not perceive other lines as competitive and they are assured their own formulation is not being used for any other purpose. “We came up with the idea for some of our own products” that can be seen on the company website under the healthE brand, products including over-the-counter therapeutic preparations, antiseptics, dermatologicals, hospital grade skin and surface disinfectants and detergents as well as a wide range of antibacterial hand hygiene sanitisers. These act as “a showcase of products, to show what we are capable of. Customers can come to us and purchase under the healthE brand or they can private-label that range under their own brand. We are a contract manufacturer and that is how we promote ourselves.”

In the past, many prospective clients have asked about what Jaychem can do and the own-brand range is an answer, since obviously the firm cannot show products manufactured for existing clients because of the need for complete discretion and confidentiality. The primary focus is on “anything in a liquid or a semi-solid format, which could be a cream, an ointment, a gel or a paste.” Jaychem has always offered a complete range of services that include product concepts, formulations, manufacturing, filling, packing and full laboratory services.

Business took a sharp upward curve with the opening of the current premises in 2008, a custom-built facility at Manukau, 20km south of central Auckland in East Tamaki. This “is a brilliant location close to the airport and a really good location for doing business.” The plant comprises an area of about 35,000 square feet, completed in May 2008 and “the culmination of about five years of planning and about 12 months of construction. When the plant was built it was almost as if the company was reborn.” The family members built this facility with the idea that they could grow into with plenty of capacity; accordingly, it was planned with the future in mind. “When you look at the plant from a customer’s eye you think ‘wow’! It really sells the business.”

The Jaychem facility at Manukau is built to GMP industry standards. “It is all about Standard Operating Procedures.” As well as this facility, Jaychem has put a lot of effort into the unseen items of the business, such as quality systems and management and production processes. “We have really spent a lot of time on documenting and auditing processes and staff training. It has been a huge focus of ours to bring our staff up to the highest standard.” The plant move encouraged a gearshift upwards in terms of workplace culture. “We had to change the way that all of our team think and operate.” Team members were encouraged to upskill, and staff turnover has been “very, very low. They stay with us and we invest a lot of time and money in training our people.”

Likewise, the company’s suppliers have been loyal and relationships close. “In New Zealand this is not a large industry so there are not that many suppliers and we tend to form long-term relationships. Our suppliers are very willing to go the extra mile to source things or to try something new or to help us out where they see a business opportunity. We have suppliers that we have been working with for many years and it is amazing all the different ways you can do business with them and how flexible they can be and how people are willing to work to get the customer what they want. It is just a case of communication and having a brief and having a goal, and then you will find that a lot of those suppliers really come on board.”

Does Jaychem develop and manufacture products up to a quality level or down to a price? “That depends on which customer you are dealing with, but quality is the top of our values – quality over price.” Of course cost is a factor for everyone who is in business, “but price should not be the primary consideration for our customers. If they want the cheapest of the cheap then there are people who are cheaper than us.” Customers come to Jaychem because of the service that they get and also the quality of the product, and these elements have value. “I think for that they are willing to pay a little bit more. All products are manufactured to a GMP standard and there won’t be too many companies in New Zealand that can do that.” Because of the medical and animal health production, Jaychem cannot in any case compromise on quality or cut corners.

“It is not easy to sell a product that does not have quality built into it, no matter how cheap it is. You really do get what you pay for and I think most people are smart enough to realise that.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

January 18, 2019, 3:29 AM AEDT