Global third-party chemical distribution market: Projected increase in M&As and collaborations by 2020

Renewable energy

Third-party chemical distribution: Key market research findings

  • APAC dominates the market geographically
  • Commodity chemicals account for a majority of the market’s revenue
  • Key vendors – Brenntag, Univar, HELM, Nexeo Solutions, and IMCD

Technavio’s market research analysts expect the global third-party chemical distribution market to grow at a CAGR of around 6% between 2016 and 2020. The market is driven primarily by the changing business models. Vendors are opting to source chemical products from the developing markets such as India, Brazil, Nigeria, and China due to environmental constraints, environmental regulations in various countries, and the slowing European economy. During 2015, APAC dominated the global third-party chemical distribution market by accounting for more than 57% of the overall market share. The increase in the dynamic trade balance of chemicals from European countries, economic growth, and globalization are factors that will reflect positively on the third-party chemical distribution market in APAC during the forecast period.

Third-Party Chemical Distribution Market Size

The new market research report from Technavio presents a breakdown and analysis of the third-party chemical distribution segments based on the type.

“An increase in the number of partnerships between vendors in the market is an ongoing trend in the market. Vendors are pushed toward the organic growth strategies of M&A and joint ventures to consolidate the third-party chemical distribution market. Also, key global vendors are acquiring small distributors in China, India, and Brazil to reach economies of scale and using their customer base to strengthen their position in the emerging markets,” says Chandrakumar Badala Jaganathan, Lead Analyst, Chemicals & Materials, Technavio Research.

The commodity chemical segment accounted for more than 73% of the total market space to dominate the global third-party chemical distribution market in 2013. Commodity or bulk chemicals are a group of chemicals that are manufactured in a large quantity and are produced with minimum variations in product from one producer to another. Commodity chemicals are used as building blocks for other chemicals.

The key vendors in the global third-party chemical distribution market include Brenntag, Univar, HELM, Nexeo Solutions, and IMCD. The market is highly fragmented and includes well diversified local, regional, and global vendors who provide services to the chemical manufacturers to supply and store their chemicals. These vendors also act as a bridge between the manufacturers and end customers. Third-party chemical distributors have a very strong logistics network and can reach far off geographic locations through their well-connected network of roadways, seaways, railways, and airways. In this market, the regional distributors are posing a tough challenge for the global players, especially in terms of product offerings, local expertise, and long-term relationships with the manufacturers of their respective regions.

A more detailed analysis is available in the Technavio report, Global Third-Party Chemical Distribution Market

We can customize reports by other regions and specific segments upon request.