Chemical Distributors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,000 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 subject to regulations which govern storage, handling, and transportation.

Industry size & Structure

The average chemical distributor operates out of a single location, employs 17-18 workers, and generates about $14 million annually.

    • The chemical distribution industry consists of about 8,000 firms that employ about 140,900 workers and generate about $113 billion annually.
    • The chemical distribution industry is somewhat fragmented; the top 50 companies account for about 58% of industry revenue.
    • Large multi-national companies include Univar, Brenntag, and Prinova.
    • 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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  May 14, 2022 - EU to Ban Dangerous Chemicals
                                  • Distributors of basic chemicals could see some products banned in Europe under new restrictions proposed to ban potentially harmful chemicals. The European Union (EU) in April 2022 proposed “the largest ever ban” on dangerous chemicals, according to The Guardian. The plan focuses on entire classes of chemical substances for the first time as a rule, including all flame retardants, bisphenols, PVC plastics, toxic chemicals in disposable diapers and PFAS, which are also known as “forever chemicals” because of the time they take to naturally degrade. Industry groups say as many as 12,000 substances could ultimately fall within the scope of the new proposal, which would constitute the world’s “largest ever ban of toxic chemicals”, according to the European Environmental Bureau.
                                  • Interest in chemically recycled plastics is growing among packaging companies as they seek to advance their recycled-content goals, according to a May 2022 article from Plastics Recycling Update. Several packaging companies recently announced they will purchase recycled resin produced through ExxonMobil’s chemical recycling technology. The aim is to recycle flexible plastics from the food supply chain into new food-grade packaging, according to the article. The Consumer Goods Forum’s (CGF) Plastic Waste Coalition of Action is pushing for the “credible, safe and environmentally sound” development of plastics recycling technologies that could reduce the climate impact of plastic, when compared to waste-to-energy processes.
                                  • Chemical railcar loadings for the week ending May 7 were down 1.8% year over year and up 7.4% year to date, according to the Association of American Railroads. Chemical loadings increased in 9 of the last 14 weeks. Total volume was 34,241 railcars, down 1,341 from a record high.
                                  • Chemical distributors can continue to supply PIP to the automotive industry, but with a deadline. The EPA recently released a final ruling to extend the compliance data for phase out of the chemical PIP by automotive manufacturers. Phenol, Isopropylate, Phosphate (PIP) is a critical flame retardant, plasticizer, and anti-wear additive used in automotive electronic components, safety systems, and hydraulic fluids. PIP is also classified by the EPA as a Persistent, Bioaccumulative, and Toxic (PBT) chemical, which was scheduled for phase out in early March 2022, but the deadline was pushed to November 2024.
                                  • Employment in the chemical distributor industry fell 1.3% year over year in March 2022 and was down more than 3% from the pre-pandemic month of March 2020.
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