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
Jan 20, 2025 - Prices Rebounding Amid Falling Sales
- Producer prices for chemicals and allied products merchant wholesalers rose by 2.9% in November compared to a year ago after dipping 0.9% in the previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Sales for chemical distributors fell 10.5% year over year in November and were down 10.9% from the previous month, while inventories declined 0.8% YoY over the same period, according to the Census Bureau. Employment by chemical distributors grew 2.5% YoY in October, while average industry wages declined 0.9% over the same period to $33.87 per hour, BLS data show.
- In a blow to big agricultural chemical manufacturers, US farmers are trading down to generic chemicals to treat their crops, Reuters reports. Falling crop prices and rising input costs are causing US farmers to cut back on their spring planting budgets, sending shocks throughout the US agriculture sector, including the chemical companies that make pesticides and fungicides. “It’s like if you grew up eating Fruity Pebbles and now you go to Dollar General and get Fruity Bites,” Illinois grain grower Jeff O’Connor told Reuters. The pullback in spending is impacting ag chemicals companies including Bayer, Syngenta, Corteva, which are also facing increasing generic competition. The expiration of over two dozen active ingredient patents in recent years is driving a boom in off-patent use, with which now accounts for about 80% of the agrichemical market share, Rabobank agricultural analysts told Reuters.
- 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 pending in Congress 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.
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