3d May, 2020

Contract Production – Off-The-Shelf Solution for Business

Contract production is a simple and affordable way to produce goods, where the main production processes are performed by another company under the contract. In this case, the product is produced under the customer's own trademark. It is the responsibility of the independent producer to strictly comply with the contract provisions. The independent producer controls:

• quality of raw materials and finished products,

• undertakes to fully comply with the technology,

• use the specified components.


The CP agreement allows you to transfer the entire production cycle, as well as the execution of individual operations, to the contractor. For example, raw material processing can be performed by the contractor, and packaging can be done by the customer. Sometimes the contract production service includes formulation and development of technological documentation by the contractor.

Industrial outsourcing in Ukraine is used in almost all industries.

When you will need contract production

Customers in the contract production of goods are:

• Small companies that do not have their own production facilities.

• Large brand owners, whose production volume is so large that they can not provide it only through the work of their enterprises.

Contract production is used by almost all major global companies: BMW, Philips, Samsung Electronics, BASF. Among the medical concerns that resort to CP, we can name the French Sanofi Pasteur, the American Pfizer, the German Bayer and many others.

How contract production benefits the customer

Reduction of production costs plays the leading role in choosing a contract production method. Working with a suitable contractor is much more profitable than controlling direct costs in your own company. According to experts, the savings can be up to 30%.

• There is no need to purchase and maintain expensive equipment.

• Labor costs are significantly reduced.

At the same time, the customer is able to get a high-quality product by choosing a high-tech enterprise with trained and experienced personnel. For each specific product, you can choose the most appropriate equipment and knowledge of the contractor. And direct your efforts and funds to marketing promotion of your product.

The final cost of the product with the CP is more competitive and the number of buyers increases.

Organization of contract production in Ukraine is especially profitable for foreign customers. This is due to the availability of tax benefits under Article 206 of the Customs Code. At the same time, the cost of labor, as well as production costs are lower than for foreign companies.

Stages of cooperation

The contract production process includes:

• Development of technical specifications for the contractor. They must contain all the main aspects related to the production technology of the product and the requirements to the final result.

• Approval of documentation and conclusion of a contract for CP.

• Production by the contractor of the specified products, according to the customer's requirements.

• Quality control.

• Transfer of the finished product to the customer. This stage may include packaging, storage, and transportation of products.

In each case, the terms are agreed in advance and written in the contract.

Who can qualify for the performer in CP

The companies can be selected as performers under the following conditions:

• If they are equipped with the necessary equipment to complete the order.

• If they have qualified personnel for goods production and control.

• If they are certified according to international requirements and Ukrainian legislation.

• If they are capable of producing batches of the required quantity and volume.

A resident company of Ukraine, as well as foreign companies, can qualify for performers.

Astrafarm is a national concern providing services in contract production for medicines and dietary supplements. The company is licensed, meets the GMP standard and has the necessary capacity to produce batches of drugs of different volumes. The production process is fully harmonized with European requirements. The plant is ready to accept orders from both Ukrainian and foreign companies.