CONTRACT MANUFACTURING

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This is the process of collaboration between a standard factory producing similar product with a factory that is not up to standard/producer that does not have a factory. It is an agreement that will allow the latter to register their product(s) with NAFDAC on agreed terms and conditions.

The cost implication include contract manufacturing agreement (which is duly signed & sealed by a legal luminary) and factory rentage fee.

After the deal had been sealed, then the party that has substandard/no factory can use the standard factory facilities for the registration of their products with NAFDAC and other regulatory agencies.

NB: The standard factory must have been producing and registered similar products with NAFDAC (i.e. obtain NAFDAC registration number for such product) otherwise the factory also have to register such product with NAFDAC at the same time of involving in contract manufacturing.

Contract manufacturing status usually reflects only in documentations/labels for registration purpose and it may or may not reflect on the labels of products intend for the market.

Furthermore, location is not a hindrance or barrier in contract manufacturing, thus the two or more parties involved can be based in different locations (towns, cities or states)

Finally, contract manufacturing affords MSMEs the   opportunity to reduce the cost of setting up factory, until they can scale up.

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