Context
A Romanian manufacturer of dietary supplements and nutraceutical products operating from a facility in the Bucharest metropolitan area, producing vitamin, mineral, and botanical formulations in capsule and tablet formats and selling through pharmacy chains, parapharmacies, and online retail across Romania and neighbouring CEE markets. Annual volume exceeded 15 million capsule units, spanning gelatin and — increasingly — HPMC formats for its growing vegan and Halal-positioned lines. The company had been buying empty hard capsules through a Western European distributor whose pricing reflected the full margin of a multi-tier chain (Chinese manufacturer → European importer → national distributor → end customer). As volumes grew, the capsule line item — a meaningful share of goods cost in a margin-pressured category — was running 30 to 40% above what a well-managed direct-import relationship could achieve. The challenge was not identifying the gap but crossing it safely: preserving a tested quality profile (dimensional tolerance, moisture content, disintegration time, shell-thickness consistency) and regulatory standing (EU food-grade GMP, third-party certification, recognised Halal certification for gelatin grades) with an internal procurement team that had no direct-China-sourcing experience.
Our Mission
Identify and qualify one or two Chinese capsule manufacturers capable of supplying both gelatin and HPMC hard capsule shells to EU food-supplement standards at volumes appropriate for a mid-size nutraceutical producer, and establish a logistics arrangement delivering reliably to Bucharest without the complexity and cost of the existing distributor structure. The work was scoped across four workstreams: supplier identification and screening; technical qualification and sample management; commercial negotiation and contract structure; and logistics and import documentation.
Our Approach
Using active market intelligence on the Chinese capsule sector held by its Hong Kong sourcing team, MAXAM screened against non-negotiable criteria — ISO 22000, an operating HACCP system, Halal certification from a body with European market recognition for gelatin grades, and the ability to supply both gelatin and HPMC in the client's standard sizes (predominantly size 0 and size 1) — narrowing a longlist to three candidates whose scale was large enough to take the business seriously yet small enough that the client's orders would not be an afterthought. MAXAM then coordinated a structured sample programme: gelatin and HPMC shells in the client's sizes were shipped to Bucharest under controlled conditions and put through the client's lab protocol (dimensional compliance, moisture content, disintegration time, visual inspection, and fill-weight verification against existing formulations). Two manufacturers passed without significant qualification; the third was eliminated for HPMC dimensional inconsistency the client's filling machines could not accommodate. One passing supplier was selected as primary and one retained as approved secondary — a deliberate dual-qualification decision addressing supply resilience. MAXAM negotiated directly with both on the client's behalf, using Chinese capsule-market pricing benchmarks and the competitive dynamic between them to secure a twelve-month framework agreement with defined volume tiers, price-adjustment mechanisms linked to published gelatin and HPMC input-cost indices, and a minimum-order-quantity structure balancing the manufacturer's production economics against the client's carrying cost. The logistics structure uses consolidated sea freight from Guangdong to the Port of Constanța with onward road transport (28–35 days order-to-warehouse, managed against an eight-week safety stock); all import documentation — commercial invoice, packing list, certificate of origin, certificates of conformity, Halal certificates, and the EU food-contact-materials declaration — is prepared by the manufacturer to a MAXAM-reviewed template, checked by MAXAM before shipment, with Romanian customs clearance handled by a licensed broker engaged on MAXAM's recommendation.
Before & After Results
| Metric | Before | After |
|---|---|---|
| Capsule unit cost (landed Bucharest) | Distributor baseline | -38% |
| Sourcing model | 4-tier distributor chain | Direct qualified import |
| Supply structure | Single EU distributor | Dual-source qualified (China) |
| Specification deviations (12 months) | Not tracked | 0 |
"In practical terms the quality and compliance profile of the Chinese supply is indistinguishable from what we previously sourced through the European distributor — at a cost that has improved the economics of our entire capsule-format range and funded our HPMC line extension."
Technical Director
Technical Director — Romanian Nutraceutical Manufacturer