The chemical industry produces essential raw materials and supplies for companies in the manufacturing and industrial sectors. Its diverse set of more than 100,000 products includes petrochemicals, polymers, solvents and application-driven and customized specialty chemicals required for the cosmetic or food industry. These chemicals can be distributed by pipelines, containers, barrels, sacks or small packages. Chemical manufacturers either distribute their own products directly or delegate the distribution to third-party distributors based on the feasibility of distribution to various customers. Distributors are a vital link in the supply chain process. Apart from the basic functions of transporting and selling chemicals, distributors also offer additional services such as packaging, blending, managing customer inventories, imparting technical training, waste removal, etc. Additionally distributors also help the suppliers to penetrate into the market, increase their market share and forecast demand. Distributors also give key market intelligence inputs from time to time to the suppliers. Many suppliers specialize in certain type of chemicals. Multiple suppliers exist for almost all chemical products. A large distributor typically buys from several chemical manufacturers. Key end-use industries include oil and petroleum, cosmetics, food, textile, paint, building construction, agriculture, etc.
Increase in demand from the Asia Pacific region is a major growth driver for the chemical distribution market. Supported by strong growth, this region has witnessed a shift in consumer demand for higher quality and wider range of products. Another important driver influencing the growth of this market is the increase in demand for bulk and specialty chemicals for oil, gas and petroleum industries, especially in the Middle East. With growing concerns over safety issues, many chemical distributors are focusing on adopting sustainability practices in their operations in order to maintain credibility among their suppliers. Reduction in carbon emissions is one of the topmost priorities of the distributors. Complex supplier-distributor relationships can hamper the growth of this market. The distributors need to have appropriate policies and procedures to ensure proper management of the suppliers’ products up to the end-use. One of the major challenges in this market is the increasingly stringent health and environmental regulations which translate into increased compliance cost for distributors. Manufacturers who indulge in direct selling via the Internet compete directly with the distributors resulting in conflicts.
Key vendors include Univar Inc., Helm AG, Brenntag AG, Nexeo Solutions Holdings LLC, Barentz B.V., ICC Chemicals Inc., Azelis Holding S.A, Safic-Alcan, Omya AG, IMCD Group and Biesterfeld AG among others.
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