A European Pharmaceutical company was in the final stages of developing a product which required High Grade Natural Gum as an ingredient. During research and development small quantities of the ingredient had been sourced from European distributors. To support production, Dragon Sourcing was commissioned to conduct a supply market analysis and propose a sourcing strategy for higher volumes of the ingredient at lower cost and to ensure continuous supply of the seasonal material from South East Asia. The key challenge in conducting the supply market analysis included the limited availability of the information in the public domain.


1. Primary Research: Conducted structured interviews with industry experts including buyers, suppliers and farm experts in South East Asia to

  • Identify and understand the different supply regions of South East Asia
  • Understand the Value Chain of the natural gum in the different regions and the role of different players in the supply chain including farmers, intermediate traders, exporters and Western suppliers
  • Discuss the prevalent best practices followed by various large Western buyers to mitigate the risk of seasonality and bad harvest

2. Secondary Research: Approached global organizations and trade associations like FAO, USDA, CIFOR and different regional government bodies to access information on:

  • Harvest of natural gum, seasonality and farming best practices to maximise yield
  • Estimates of the capacity, production and export capabilities of the natural gum at the different large farms at a regional level
  • Domestic market of the natural gum and trade volumes of the different supply regions
  • Supply Chain of the natural gum and the different regional players in the supply chain and their capacity and bargaining power
  • Government regulations and environmental policies of the different supply regions

3. Supplier Research: Identified suppliers at a regional level and conducted requests for information to validate the data from the other sources.


Dragon Sourcing prepared a sourcing report on the Industry and made recommendations on the sourcing strategy based on the bargaining power of the different players involved and the best practices followed in the industry including:

1. Best sourcing options from the different sourcing regions
2. Sourcing entry at the right level in the supply chain and the merits and demerits at each player level
3. Recommendations on the optimal contract length, structure, price levels and number of suppliers