Chemical Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,500 chemical distributors in the US resell chemicals; plastic materials, forms, and shapes; and related products. Firms may perform custom blending or packaging services. Some distributors may manufacture chemical products. Large downstream industries include consumer products, rubber and plastic products, health care, agriculture, semiconductors and electronics, construction, paper products, motor vehicles and parts, mining, fabricated metal products, textiles and fabrics, and food products.
Competition from Manufacturers
Chemical distributors compete with both domestic and foreign manufacturers, which typically have direct relationships with large customers.
Regulation of Hazardous Materials
Many chemicals are considered toxic or hazardous and are subject to regulations that govern storage, handling, and transportation.
Industry size & Structure
The average chemical distributor operates out of a single location, employs 21 workers, and generates about $23 million annually.
- The chemical distribution industry consists of about 7,500 firms that employ about 150,500 workers and generate about $173 billion annually.
- The chemical distribution industry is somewhat fragmented; the top 50 companies account for about 58% of industry revenue.
- Large multinational companies include Univar, Brenntag, Prinova, and Tricon Energy.
- The chemical industry is global - large manufacturers, distributors, and customers often have international operations. Some large chemical manufacturers are vertically integrated.
Industry Forecast
Chemical Distributors Industry Growth
Recent Developments
Nov 20, 2024 - Rising Sales and Prices
- Producer prices for chemicals and allied products merchant wholesalers rose by 1.3% in September compared to a year ago after falling 6% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Total sales for chemical distributors increased 3.6% year over year in July and were up 3.1% from the previous month, while inventories declined 8.8% YoY, according to the Census Bureau. Employment by chemical distributors grew 1.7% year over year in September, while average industry wages were relatively unchanged over the same period at $33.95 per hour, BLS data show.
- In October, the EPA announced the cancellation of all products containing the pesticide dimethyl tetrachloroterephthalate (DCPA or Dacthal) under the Federal Insecticide, Fungicide and Rodenticide Act. In August, the agency had issued an emergency order suspending all registrations of the pesticide due to serious health risks – the first time in almost 40 years EPA took this type of emergency action. The pesticide is registered to control weeds in both agricultural and nonagricultural settings, but DCPA is primarily used on crops such as broccoli, Brussels sprouts, cabbage, and onions. The final cancellation prohibits anyone from distributing, selling or carrying out other similar activities for the remaining pesticide products containing DCPA as well as prohibiting using existing stocks of those products. In August, American Vanguard Corp., the only manufacturer of Dacthal, said it was working to remove it from distribution.
- Legislation introduced in Congress in July would enhance safety requirements for trains transporting hazardous materials, according to a press release from the Alliance for Chemical Distribution (ACD), which supports the bill. HR 8996 would incorporate aspects of freight-rail safety legislation introduced in the Senate last year and set federal limits on freight train lengths. The proposed legislation also would raise standards on tank cars carrying hazardous materials, mandate two-person train crews, and set standards for rail-car maintenance, track maintenance, and wayside defect detectors. Freight railroads moved 2.3 million carloads of plastics, fertilizers, and other chemicals in 2022, or about 20% of chemicals used in the US. The 2023 derailment of a Norfolk Southern Railway train in East Palestine, Ohio, carrying several types of chemicals that caught fire, spotlighted rail safety.
- Chemical distributors looking to electrify their fleets will want to take note of an analysis from Ryder showing that operating expenses of low-emissions rigs are far higher than those for diesel trucks, The Wall Street Journal reports. The truck leasing company found that as trucks get heavier, the difference in operating costs between battery-electric vehicles and diesel trucks grows more pronounced, with annual costs of operating battery-electric big rigs about twice as expensive as diesel trucks, per Ryder’s analysis. Because battery-electric trucks are heavier than diesel trucks and require several hours to recharge, companies need more vehicles and drivers to haul the same freight volume as a diesel truck. The Ryder analysis estimated that a company would need nearly two battery-electric big rigs and more than two drivers to equal the output of a single heavy-duty diesel truck, WSJ reports.
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