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The chemical distribution market is estimated to grow at a CAGR of 5.2% between 2022 and 2027. The market size is forecasted to increase by USD 77.43 billion. The growth of the market depends on several factors, including the growing focus on the distribution of commodity and specialty chemicals, the growth of the global chemical industry, and the rising consumption of chemicals across various end-user industries.
This chemical distribution market report extensively covers market segmentation by product (commodity chemicals and specialty chemicals), application (textiles, automotive and transportation, agriculture, pharmaceuticals, and industrial), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The growing focus on the distribution of commodity and specialty chemicals is notably driving the market growth, although factors such as stringent regulations on chemical distribution activities may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing focus on the distribution of commodity and specialty chemicals is notably driving the market growth. The demand for digitalization of the overall chemical distribution supply chain is a result of the advent of modern technologies in the global chemicals industry. Business requirements have changed due to evolving customer expectations, which is increasing the adoption of digital technologies by chemical manufacturers and distributors. The adoption of digital technologies such as IoT and analytics enables chemical manufacturers and distributors to analyze large data volumes, automate different processes, and empower the workforce.
Companies such as Univar Solutions are investing in the digitization of supply chains. Various initiatives aim to digitize the supply chain, which is expected to drive the digitization process in the market. Chemical distributors are embracing digitization to achieve operational excellence by creating better efficiencies in the supply chain. As a result, chemical distributors are opting for digital enterprise business management solutions to achieve their goals, optimize inventory, and control cash flows. The increasing availability of various digitization solutions and digitization initiatives are expected to drive the adoption of digital solutions during the forecast period.
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 chemicals. 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 during the forecast period.
Stringent regulations on chemical distribution activities are challenging market growth. Various regulations across the world are directed at the specialty chemicals market 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 of chemicals, especially hazardous ones, can impede the growth of the global chemical distribution market during the forecast period.
The market 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Chemical Distribution Market Customer Landscape
Vendors 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. Under the application laboratories segment, the company offers custom formulations, product testing, regulatory compliance, and sales support for chemical distribution.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
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 chemicals in developing regions, are expected to drive the growth of the segment. For instance, BRENNTAG SE uses a hub-and-spoke model wherein commodity chemicals 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 chemicals 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 chemical distribution 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 chemicals 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 outbreak of COVID-19 in 2020 adversely affected overall economic growth in APAC. However, lockdown restrictions were lifted in the second half of 2020 owing to the implementation of large-scale vaccination drives across APAC. This led to the resumption of chemical production activities in manufacturing units in the first half of 2021. This is expected to increase the demand for chemicals for various applications in end-user industries, which will drive the demand for chemical distribution services during the forecast period. Hence, the chemical distribution market in APAC is expected to grow substantially during the forecast period.
The chemical distribution market 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.
Technavio categorizes the chemical distribution market as a part of the global oil and gas storage and transportation market within the global oil and gas market. The global oil and gas storage and transportation market covers companies engaged in the transportation and/or storage of gas, oil, and/or refined products. Technavio calculates the global oil and gas storage and transportation market size based on the combined revenues generated by manufacturers/providers of equipment, supplies, and services. Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Chemical Distribution Market Scope |
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Report Coverage |
Details |
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Page number |
158 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.2% |
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Market growth 2023-2027 |
USD 77.43 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
5.0 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 50% |
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Key countries |
US, China, India, Germany, and UK |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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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. |
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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 |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
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
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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