This platform revolutionizes the purchasing of raw materials for the pharmaceutical, food and feed industries

In the current corona crisis, there are already supply bottlenecks or significant price fluctuations for some pharmaceutical active ingredients such as paracetamol or additives such as vitamins. This is where the raw materials marketplace Kemiex can help: “Our trading platform can sometimes be used to find products that are hardly available by conventional means,” says Marketing Manager Stefan Schmidinger.

Kemiex f.l.t.r.. Pau Franquet, Stefan Schmidinger, Dr. André Rieks, Oriol Saludes

The Swiss startup Kemiex enables companies to negotiate and conclude their commodity transactions via a cloud-based software platform. In an interview with 5-HT, Stefan Schmidinger explains how this makes tactical purchasing more efficient, how the quality of suppliers is ensured and how the members of the platform can also benefit from exclusive access to strategic market and price data.

For which customers is Kemiex relevant?

Our trading and information platform is aimed at professional buyers and sellers of active pharmaceutical ingredients (APIs), vitamins and other additives in the pharmaceutical, food and feed industries. Raw materials for cosmetics, flavours & fragrances or similar technical grades are also represented. This includes manufacturers and processors of these raw materials, but above all retailers and distributors.

What is problematic about the way the purchase and sale of raw materials in the pharmaceutical industry has proceeded so far?

In other industries, such as the automotive, retail and financial sectors, even more complex products have long since been traded efficiently via electronic channels. But in the chemical, pharmaceutical and food industries, much of what is traded still takes place via e-mail, telephone and sometimes even fax. This is very costly and inefficient, especially when dealing with requests for quotations from multiple suppliers. Because all information is stored in the mailbox of a single person, the data is not recorded in a structured way. Furthermore, purchasing is a particularly vulnerable sector when it comes to issues such as compliance. Moreover, many companies today only buy from a few suppliers and dealers they know, which can become a problem in the event of supply bottlenecks.

How can Kemiex as a trading platform improve the buying and selling process?

If the purchase of raw materials is handled via our platform, this saves effort and makes the process more efficient. The platform also enables communication exclusively with existing suppliers, if desired. As a marketplace, Kemiex also opens up the potential to get to know new counterparties that might otherwise not have been noticed. We have already had many situations in which the buyer had not found an active ingredient – such as paracetamol or ibuprofen – anywhere, but with us they had. For sellers, we offer the unique opportunity to place promotional or surplus stocks at the push of a button and with identity protection to sometimes hundreds of relevant buyers.

Kemiex platform

What distinguishes Kemiex from existing online shops or supplier directories?

The combination of tendering software with an electronic marketplace and market information, as offered by Kemiex, does not yet exist in this form for the pharmaceutical, food and feed industries. The existing supplier directories are ultimately no more than search engines, and the world’s largest chemicals marketplace, Alibaba, is not used to handle large professional volumes, partly because many dubious suppliers are active there. What sets us apart is that we are closed as a marketplace and workflow tool. In many cases, buyers and sellers know each other very well but benefit from the uncomplicated and structured processing compared to other communication channels. Based on a quality check and a review of the financial figures, we decide very precisely which providers we accept. This works through strategic cooperations with the merchandise testing company SGS and the credit insurer Atradius. We are not only an independent authority, but also the only online platform in the world that has a good distribution practice certificate and is regularly inspected by the Swiss regulatory authority Swissmedic. In addition, we create price indices for currently 22 vitamins, amino acids and antibiotics, thus providing valuable information for strategic purchasing. The offers and prices are genuine and far more up-to-date than data from export databases or other accessible sources. Through our employees and customers around the world, we are also able to provide highly topical and highly specialized industry news.

How does Kemiex work for buyers?

The buyer places a specific product request in the order book, for example 10 tons of ibuprofen in a specific version and with the appropriate permits. He is then shown a list of possible suppliers and selects which manufacturers, dealers and distributors should see his request for quotation. The potential suppliers selected by the purchaser are then notified and can submit their bids on the platform. The buyer can collect the bids, renegotiate them via structured methods or in a chat and finally conclude a deal. Through our cooperation with Atradius, transactions on the platform can be directly insured against the buyer’s default. Our customers gain access to the platform via a membership fee, no additional fee is charged for individual transactions.

How was Kemiex founded?

Five years ago, I worked with Pau Franquet, our CEO and main founder, at the Swiss bank UBS. There we were particularly involved in electronic trading and commodity exchanges. From the pharmaceutical industry around Zurich and Basel, we noticed that commodities are purchased there mainly through traditional communication channels. As a result, we exchanged views with various players and learned that there is not yet a software-supported solution for commodity trading in the pharmaceutical, food and feed industries. This is how the idea for Kemiex came about. In 2017, Pau Franquet and Oriol Saludes founded our start-up company, and soon after that I joined as a partner. In September 2018 we launched the platform.

Kemiex founders Pau Franquet & Oriol Saludes

How has the current corona crisis affected Kemiex’s business model?

Many of our customers are located in Asia, so we have been noticing the effects of the novel coronavirus for quite some time. In January we asked our customers what consequences they expect for their business. At that time, 85 percent of the participants expected bottlenecks in the first and second quarter of the year. This survey brought us a lot of media attention. Currently we are actually observing that there are already delays in delivery of some products, such as paracetamol, and that panic buying is on the increase. Here, demand on Kemiex exceeds capacity three to four times over in some cases. Even customers who normally use traditional brokerage services are increasingly turning to Kemiex at the moment, because our platform can still be used to find products that are difficult to obtain by conventional means. The fact that more and more people are now working digitally is also in line with our business model. Nevertheless, we feel that the overall market situation is very tense and many market participants are now focusing on their core business.

What are the next steps of Kemiex?

We want to scale up even more, become more professional, enlarge our team and win even more customers. We are also currently preparing for a Series A financing round.

Kemiex Winner CPhI Pharma Award 2019

What do you hope to achieve by being part of our Digital Hub?

Networks are very important for us. We are in direct competition with very few platforms because we occupy a very specific niche. Instead, we share with other start-ups the goal of advancing digitalization. That’s why we have to stick together and exchange ideas to come up with good ideas. Networks are also particularly important for us to get to know potential customers, because personal contacts are essential in B2B business.

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