Benchmarking Specialty Chemical Distributors

Goals

To benchmark the ability to execute/manage transitions during a given year compared to similar distributors in the Specialty Chemical Distributors industry.

Early Findings

  • From 2012 to 2017, the specialty chemical distribution increased by a compound annual growth rate (CAGR) of 5.6% each year, to a global market size of about €97 billion (USD ~$108 B), which was faster than growth in the overall chemical industry (2.9%), and specialty chemical consumption (4.9%) during the same time period.
  • For competitive advantage, experts note that "scale alone is not enough and that specialty distributors need to select specific segments, subsegments, and geographic regions, and then invest in the requisite capabilities that enable them to create value in those segments for both chemical manufacturers and end users."
  • Customers "increasingly expect an integrated online-offline experience, which makes the use of digital technology necessary. Specialty chemical distributors need to invest in digital solutions, both internally and in customer-facing operations, to gain a competitive edge.
  • Distributors also need to balance panregional coverage (for manufacturers) with a regional focus (for customers). "Manufacturers prefer panregional distributors because they offer the widest possible coverage with the smallest number of distributor relationships. But customers are typically small and geographically contained.

Top Distributors

  • Brenntag, Univar, and Nexeo Solutions are the largest players in terms of size, but "they are not automatically leaders in terms of specialty categories."
  • Super-regional players include IMCD and Azelis, who are buying "regional distributors in North America and Europe, to establish a panregional presence."

Geographical Markets

  • In 2017, Asia-Pacific was one of the biggest markets (with about €40 billion; USD $45 billion) in specialty distributor sales), it was also the fastest growing market for specialty chemical distribution, with a CAGR of 6.8% from 2012 through 2017. "Only the Middle East grew faster during that period (7.8%)."
  • North America (€31 billion; USD $35 billion) and Western Europe (€13 billion; USD $15 billion) were also among the top markets in specialty chemical distribution in 2017, with the rest of the remaining markets having less than €5 billion; USD $6 billion).
  • "In contrast, most developed markets showed predictably slower growth rates over the past five years: 4.7% in North America and 3.6% in Western Europe."
  • "Distributors still have a relatively low share of the market with only about 17% for specialty chemicals and only 10% to 12% for the overall chemical industry."

Territory Expansion

  • "Specialty distributors tend to have higher shares in more fragmented chemical categories, where servicing customers entails far more complexity."
  • "Segments with above-average penetration include coatings and adhesives, construction, and cleaning products (home care and industrial alike). In these segments, there are a lot of relatively small manufacturers selling a huge range of products to a wide variety of relatively small customers, which place relatively small orders. The high degree of complexity creates an opportunity for distributors to come in and simplify things for both manufacturers and customers."
  • Segments, such as laboratory chemicals, are extremely small and need a wide variety of chemical products delivered regularly. In these segments, specialty distributors can have a market penetration of up to 80%.

PROPRIETARY RESEARCH AVAILABLE

We found some proprietary research from one of our data partners which may be helpful:
  • Global Third Party Chemical Distribution Market — Analysis By Type (Specialty, Commodity), By Region, By Country (2018 Edition): Forecast to 2023 — By Region (Europe, North America, APAC, Latin America, Middle East and Africa), By Country (Germany, France, Italy, China, Japan, India, US, Canada, Brazil, Mexico) (Azoth Analytics, $ 2,000.00 USD)
Subsections:
  • Specialty Chemical Market to Grow at higher rate than Commodity Chemicals (Azoth Analytics, $ 86.25 USD)
  • Chemical Distribution Market towards Consolidation (Azoth Analytics, $ 86.25 USD)
  • North America Third Party Chemical Distribution Market Analysis (Azoth Analytics, $ 170.43 USD)
If you'd like us to purchase any of these reports on your behalf, just let us know!

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