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The chemical distribution market is estimated to grow by USD 77.43 billion at a CAGR of 5.2% between 2022 and 2027. A significant factor propelling the market forward is the escalating emphasis on sustainability and waste management. With mounting environmental apprehensions worldwide, there's a growing need for eco-conscious solutions across diverse sectors, including oil, gas, construction, electronics, pharmaceuticals, and agrochemicals. Chemical distributors are pivotal in enabling the dissemination of environmentally friendly chemicals, waste disposal options, and sustainable packaging materials.
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The market share growth by the commodity chemicals segment will be significant during the forecast period. Commodity chemicals are bulk chemicals used to manufacture an extensive range of end-user products, such as construction materials, adhesives, plastics, apparel, and tires. These chemicals include polymers, petrochemicals, and basic inorganic chemicals and fertilizers. They are generally manufactured at a lower price than other chemicals. They are mainly used in personal care products, aerospace, and other industrial applications.
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The commodity chemicals segment was valued at USD 166.80 billion in 2017 and continued to grow until 2021. Innovative service delivery methods, along with rising demand for the distribution of commodity variants in developing regions, are expected to drive the growth of the segment. For instance, BRENNTAG SE uses a hub-and-spoke model wherein commodity variants are received in bulk quantities at Brenntag hub locations, which have large tank farms, warehouses, and mixing and blending facilities. From the company's hub, these commodity variants are supplied to the company spoke facilities, which accommodate smaller tank farms and warehouses that are located near the customers to ensure prompt and smooth delivery. APAC is one of the major consumers of commodity chemicals due to the presence of a large number of manufacturing facilities in the region, which is driving the growth of the segment.
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APAC is estimated to contribute 50% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The market in APAC is expected to grow at a significant rate during the forecast period. The rising demand for the distribution and delivery of specialty as well as commodity chemicals in various emerging economies in the region are fueling the growth of the market in the region. Countries such as China, Japan, South Korea, India, and Australia are the major contributors to the growth of the market in the region. Increased market potential due to the rising spending power of the middle-class population has attracted increased investments in the region by chemical distributors. These factors will drive market growth in the region during the forecast period.
The market is experiencing growth driven by multiple factors. One key driver is the heightened focus on waste removal and environmental sustainability, prompting increased demand for chemicals used in waste treatment across industries. Chemical distributors play a pivotal role in supplying these chemicals, such as formaldehyde and salicylic acid, to facilitate efficient waste management practices. Additionally, the expansion of industries like oil, gas, and petroleum, construction, electronics, and pharmaceuticals fuels demand for a diverse range of chemicals. Chemical distributors act as intermediaries, connecting manufacturers with end-users, thus contributing to the smooth functioning and growth of these industries.
A prominent trend in the chemical distribution market is the rising prominence of e-commerce platforms for chemical procurement. With digital transformation reshaping the industry, online platforms provide a convenient and efficient way for companies to purchase. This trend not only enhances accessibility for buyers but also allows chemical distributors to reach a broader customer base globally. Furthermore, there's a growing demand for personal care products and cosmetics, driving the need for raw materials like lanolin, ammonium lauryl sulfate, and lactic acid. Chemical distributors play a vital role in supplying these materials to manufacturers, contributing to the market's growth in the personal care segment.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, market trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
One of the key drivers for the market is the growing focus on sustainability and waste removal. As environmental concerns continue to rise globally, there is an increasing demand for sustainable solutions in various industries, such as oil, gas, petroleum, construction, electronics, pharmaceuticals, and agrochemicals. Chemical distributors play a crucial role in facilitating the distribution of eco-friendly chemicals, waste removal solutions, and sustainable packaging materials. Additionally, the shift towards circular economy practices, where waste is minimized, reused, or recycled, further drives the demand for chemicals and services offered by distributors specializing in waste removal and sustainable solutions. This growing emphasis on sustainability not only aligns with regulatory requirements but also meets the evolving preferences of environmentally-conscious consumers and businesses. As a result, chemical distributors are expected to witness increased demand for their products and services related to waste removal and sustainability initiatives in the coming years.
The growing focus on the development and distribution of sustainable and eco-friendly chemicals is a key trend in the market. Factors such as the increase in environmental pollution across different regions and the increasing stringency of guidelines and regulations are making chemical manufacturers shift toward the development of eco-friendly options. The key raw materials and energy resources that are used in the manufacturing of chemicals are subject to stringent environmental regulations. Therefore, it is crucial to identify products that are sustainable and economical. As a result, chemical manufacturers are focusing on substituting sustainable raw materials to develop chemicals that maximize the use of renewables and allow energy recovery.
Bio-based plastics are not compostable or biodegradable. However, they can be recycled and reused easily without compromising their quality and increasing the cost of the recycled stream. As a result, many chemical distribution companies are focusing on providing additional value-added services to chemical manufacturers with respect to the collection, disposal, and recycling of chemical waste. Hence, the growing emphasis on the development and distribution of sustainable and eco-friendly chemicals will support market growth and trends during the forecast period.
Stringent regulations on chemical distribution activities are challenging market growth. Various regulations across the world are directed at the specialty segment. For instance, under the safety information requirements exhibit of the OSHA Hazard Communication Standard (HCS) (29 CFR 1910.1200), chemical distributors should maintain Material Safety Datasheets (MSDs) for all regulated chemical substances.
Some of the responsibilities that should be undertaken by chemical distributors include passing on vital health and safety information, publishing hazards-related information in the national language of the country, providing sufficient information in case of the use of chemicals that contain 0.1% or more of a substance of very serious concern, and European Union (EU) supplier contact details on packing. Therefore, the extensive and extremely stringent regulations associated with the distribution, especially hazardous ones, can impede the growth of the global market during the forecast period.
The market growth analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Azelis SA - The company offers chemical distribution services under the brands Glenn, Construction Solutions, and DeWolf chemical.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.
The market growth and forecasting report forecasts market growth by revenue at global, regional, & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The market encompasses a broad spectrum of industries, including manufacturing, logistics, and inventory management, among others. With a focus on transporting and storing chemicals, this sector caters to various industries such as the oil and petroleum, cosmetics, food, textile, and paint industries. Chemicals are distributed in packaged forms like sacks, barrels, and containers, or through pipelines. Producers and outside distributors play key roles in supplying both specialty and common chemicals to developed and developing markets worldwide. This market thrives on strategic partnerships and collaborations between small and large manufacturing companies, as well as international players. Moreover, product innovation, online promotional activities, and high market penetration contribute to the visibility of chemical products, especially in the personal care industry, catering to consumer demands and ensuring safety and environmental impact considerations are met.
Also, the market plays a vital role in various sectors including manufacturing, industrial, and cosmetics industries. It involves technical training for transporting both bulk and packaged chemicals, catering to developed and less developed areas worldwide. This market ensures the supply of high-quality products such as polymers, resins, and specialty chemicals like diethylene glycol and malic acid. With globalization, chemical distributors focus on employee safety and environmental impact while utilizing sophisticated technologies for product visibility. From soaps to fragrances and cosmetics, this market meets the demands of diverse consumer segments, including the younger generation and teenagers, offering a wide range of products for skin and hair health. Sweepstakes and innovative marketing strategies enhance product visibility and market penetration.
Chemical Distribution Market Scope |
|
Report Coverage |
Details |
Page number |
158 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.2% |
Market growth 2023-2027 |
USD 77.43 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
5.0 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 50% |
Key countries |
US, China, India, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ashland Inc., Azelis SA, Barentz International BV, Biesterfeld AG, BRENNTAG SE, Caldic BV, HELM AG, ICC Industries Inc., IMCD NV, Jebsen and Jessen Pte Ltd., Manuchar NV, Omya International AG, Quimidroga S A, REDA Chemicals, Safic Alcan, Sojitz Corp., Stockmeier Holding GmbH, Ter Group, Univar Solutions Inc., and Wilbur Ellis Holdings Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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