Chemical distribution industry

Chemical distributors make sure that producers have the chemical substances they need to manufacture products for everyday use.

Chemical distribution industry

Over 100,000 chemical substances are used to make an almost infinite number of products. Chemical distributors make sure that producers have the chemical substances they need to manufacture anything from cosmetics to cola cans and from paints to cheese. Chemical distributors play an essential role in the world economy by enabling well-functioning supply chains of both bulk and specialty chemicals. By outsourcing to chemical distributors with local expertise, chemical producers can reduce their operational complexity and expand into new markets. These markets may be hard to service for chemical producers for instance because they are far away, fragmented or highly specialized.

  Services by chemical distributors

Chemical distributors can add value by offering the following services:

  1. Connecting supply and demand. for chemical substances, for instance by providing access to local markets or to customers in relatively low tonnage bands. This allows chemical producers to outsource their marketing and sales activities. At the same time it simplifies the sourcing process for customers by providing a one-stop shop for chemicals;
  2. Solving logistical challenges related to transport, storage, customs and tax formalities;
  3. Providing handling services such as re-labelling, re-packaging or formulating;
  4. Assuring the quality of the products delivered at customers;
  5. Improving the safety of the chemical supply chain, for instance when storing explosive substances or when trading drug precursors. Next to their own operations, chemical distributors also work on safety at their suppliers and customers. They may for instance audit the capacity of customers to handle hazardous chemicals safely prior to delivery;
  6. Assisting suppliers and customers with compliance and legal aspects. The production, transport, storage and use of the chemicals is subjected to many different regulations. Chemical distributors may have better knowledge of local laws than chemical producers or downstream users;
  7. Helping customers with financing of the purchase of chemical substances;
  8. Enabling innovation thanks to their technical knowledge, flexibility and role as central player in the supply chain between chemical producers or downstream users.
  Market development

According to the Boston Consulting Group (2017) the chemical distribution industry has grown quickly. Between 2008 and 2015 the global chemical distribution market grew with over 60 % and a similar growth is expected between 2015 and 2022. Increased chemical consumption is a key underlying driver for this growth, but not all growth in the chemical distribution market can be attributed to this. Growth also results from a greater share of outsourced distribution among producers and a broader portfolio of value-added services offered by distributors. As a result the share of the global chemical consumption distributed by chemical distributors is expected to grow from 9,7 % in 2008 to 12,3 % in 2022. The growth is expected to be highest in China and the rest of Asia Pacific. For all regions the compounded annual growth rates for the chemical distribution industry are expected to be higher than the GDP growth.

 
 

Background and added value of ICTA

ICTA was formally established in 2016 to represent the interests of over 1300 chemical distributors world-wide. Among the members of ICTA are formulators, wholesalers, distributors, resellers, importers, exporters, sales offices of the chemical industry and logistics service providers. Today, ICTA national association members have an aggregate direct turnover in excess of 55 billion euros and employ more than 70.000 employees.

ICTA creates a stronger global chemical distribution industry. It fills the need for a world-wide chemical association coordinating work on issues and programmes of international interest to the global chemical trade industry. ICTA provides a platform where chemical distributors can meet and exchange information and best practices. ICTA also advocates for its members on a global scale. It ensures emphasis of the importance and necessity of the chemical distribution industry at global governmental organization. In order to ensure effective international co-operation and sensible policies, ICTA is directly involved with international policy making processes and plays an active role in several global organisations, such as OPCW (here), SAICM (here) and the G7 Chemical Security Working Group.

  ICTA membership

The more associations and companies join forces in ICTA, the better the industry’s voice is heard. ICTA membership is open to all national associations and federations representing the chemical distribution industry. Companies active in the distribution, sales or trade of chemicals may also choose to become a direct member of ICTA.

Benefits of ICTA membership

  1. Better emphasis of the importance and necessity of the chemical distribution industry at global governmental organizations
  2. Increased visibility for the chemical distribution industry and your company
  3. Updates of news and developments in legislation and regulation
  4. Access to global best practices and knowledge of legal and technical issues
  5. Direct link to the global Responsible Care/ Responsible Distribution program
  6. Early updates on intended new policies and the possibility of direct involvement in their development and implementation
  7. A critical discussion partner and sounding board
  8. A stronger global chemical industry
  9. Invitations to events with fellow chemical distributors from around the world