Chemical Distribution Market Size, Share & Trends Analysis Report By Product (Plastics, Agrochemicals, Specialty Polymers, Specialty, Commodity Chemicals), By End Use, And Segment Forecasts, 2019 - 2025

Industry Insights

The global chemical distribution market size was valued at USD 204.37 billion in 2017 and is projected to expand at a CAGR of 5.7% over the forecast period. The industry is driven by the growing consumer demand for services and reachable supply chain network. Moreover, increasing demand from end-use industries including construction, automotive, infrastructure, electronics, and pharmaceuticals is expected to boost the market growth. The chemical industry produces and supplies essential raw materials to companies in the industrial and manufacturing sectors. These products can be distributed to the users or consumers by containers, barrels, pipelines, sacks, or small packages.

The market is witnessing a significant evolution as a result of vendors consolidating with strategic initiatives, such as M&A, partnership, and joint ventures, to improve supply in developing economies of Asia Pacific and Middle East & Africa. Commodity and specialty chemical distribution by third parties has been significantly growing than the sale of products directly to consumers by suppliers owing to outsourcing of value-added service. Apart from the basic tasks of selling and transporting, distributors also offer value-added services, such as logistics, blending, packaging, inventory management, waste removal, and imparting technical training.

Distributors afford a function to both the manufacturer and the end-user by reducing cost in the supply chain, complexity, and better utilization. Generally, they purchase larger volumes from the producers, which can vary in size from trains, ships, pipeline, and truck deliveries, which is transferred to the warehouses and bulk installations. However, these distributors are playing a dynamic role by expanding their customer base through the introduction of new additional services and by improving the overall efficiency of the supply chain network and logistics.

Producer supplies to distributor, especially in order to reduce complexity in the fragmented market. Commodity and specialty chemical manufacturers face the challenge of supplying a wide range of products in different qualities and sizes to a diverse consumer base. Increasing globalization has led to small- and large-sale companies partnering with international firms, aiming to achieve structural efficient cost, competitive advantage, market share.

End-use Insights

Construction was the largest end-use segment and accounted for USD 30 billion of the overall specialty revenue in 2017. Construction industry is a dominant consumer of plastics, adhesives, sealants, coatings, and various chemicals including waterproofing compounds, mortars, admixtures, and grouts. Recently, the International Finance Corporation (IFC) of the World Bank Group invested over USD 4 billion in the building materials sector that helped boost the availability of affordable local sources.

This is highly critical to flourishing construction sector and is a step towards building the physical infrastructure that countries across the globe require for economic growth. These factors have driven specialty chemicals demand in several building & construction applications, especially in the Asia Pacific and Central & South America regions. Downstream intermediaries were the leading end-use, with a value of USD 56 billion, for commodity segment in 2017.

Specialty polymers, such as thermosets, composites, thermoplastics, and resins are increasingly being utilized in several high-performance applications as they have inherent noise control, tensile strength, viscosity, and waterproofing and are highly shock-absorbent and heat- and chemical-resistant. Exponential growth in the plastics industry across Asia Pacific and the introduction of bio-based polymers have had a positive impact on the specialty chemicals market.

In 2013, bio-based polymers production stood at 2.19 million tons representing a 2% share of overall polymer production. Numerous companies are investing heavily in lightweight and recyclable composites and materials as well, to meet stringent regulatory guidelines regarding growing environmental concerns.

Product Insights

In terms of revenue, specialty chemicals segment was valued at USD 85 billion in 2017. This segment is anticipated to remain the fastest-growing application product segment owing to rising demand for adhesives and sealants in the construction and automotive industries across Asia Pacific region. Lucrative opportunities are also expected to be presented by innovative paints & coatings manufacturing capabilities in the region, leading to the demand for value chain enhancement and extended distribution networks in other emerging economies.

Authorities have formulated several measures, such as Pollutant Release & Transfer Registers (PRTR) system, which calculates the amount of contaminants and disposables being released into the environment while handling substances. This factor is anticipated to hinder growth and challenge industry participants over the forecast period. Commodity segment is anticipated to expand at a steady CAGR of 5.5% over the forecast period.

The segment is relatively mature due to high consumption of these products, especially on account of demand for petrochemicals in several developed economies inclduing Germany, Italy, Canada, and U.S. The revitalization of the automotive industry and renewed construction and housing sector in U.S., along with burgeoning population in emerging economies is expected to remain a key driving factor for the global market.

Regional Insights

In terms of revenue, North America accounted for 12% of the global industry in 2017. The region is anticipated to witness a significant growth in coming years owing to major demand-supply rebalancing and feedstock advantages revitalizing the industry. The market in U.S. has operational cost benefits from shale gas feedstock post economic recovery and thus improves the profitability of chemical companies in the industry, attracting regional firms from other economies.

Economic factors, such as recent collapse in Eurozone, resulted in economic instability and ambiguity creating opportunity for chemical distributors to explore overseas market in recovery phase to boost their growth. The demand in Central & Eastern Europe (CEE) is expected to witness a steady growth from 2018 to 2025. The regional market is anticipated to witness heavy investments in efficient freight channels, such as rail, ports, and inland waterways on account of EUs transport infrastructure development policies.

Expanding manufacturing and infrastructure segments are further expected to boost the industry growth.Asia Pacific is expected to register the fastest CAGR of 6.1% from 2018 to 2025 as a lot of international companies are shifting their focus to potential markets. Increasing share of third-party distributors is a key trend touted to shape industry dynamics in the region over the forecast period.

Chemical Distribution Market Share Insights

Distributors undergo certain processes that include sales, logistics, and transportation of products from the source to the destination. Increasing demand for specialty and bulk products for petroleum, oil & gas, and construction industries are augmenting the demand for distribution in Middle East countries, such as Saudi Arabia, Dubai, and Qatar. Customers normally order products in lesser quantities, usually in less-than-truckload quantities from suppliers.

Structural cost-effectiveness is the main reason for suppliers to use third-party distributors. Servicing small customers with a lower cost is through third-party distributors.

Key industry participants include Univar, Inc.; Helm AG; Brenntag AG; ICC Chemicals, Inc.; Nexeo Solution Holding LLC; Barentz B.V.; Omya AG; Azelis Holding S.A.; TER Group; Jebsen & Jessen Offshore Pte. Ltd.; Solvadis; BASF SE; Ashland, Inc.; REDA; Stockmeier Chemie; Biesterfeld AG; Safic-Alcan; Quimidroga; and IMCD Group.

Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2007 to 2025. For the purpose of this study, Grand View Research has segmented the global chemical distribution market report on the basis of product, end use, and region:

• Product Outlook (Revenue, USD Million, 2007 - 2025)

  • Specialty

    • CASE

    • Agrochemicals

    • Electronic

    • Construction

    • Specialty Polymers & Resins

    • Others

  • Commodity

    • Plastics & Polymers

    • Synthetic Rubber

    • Explosives

    • Petrochemicals

    • Others

• End-use Outlook (Revenue, USD Million, 2007 - 2025)

  • Specialty

    • Automotive & Transportation

    • Construction

    • Agriculture

    • Industrial Manufacturing

    • Consumer Goods

    • Textiles

    • Others

  • Commodity

    • Downstream Chemicals

    • Textiles

    • Automotive & Transportation

    • Electrical & Electronics

    • Industrial Manufacturing

    • Others

• Regional Outlook (Revenue, USD Million, 2007 - 2025)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Central & Eastern Europe

  • Western Europe

    • Germany

    • U.K.

    • France

    • Italy

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia