The third-party chemical distribution market was valued at US$ 270.7 billion in 2022, registering at a CAGR of 4.2% during 2022–2028, according to a new research study conducted by The Insight Partners.
Growing Consumption of Chemicals Across Various End-Use Industries is Boosting Third-Party Chemical Distribution Market Growth
Third-Party Chemical Distribution Market Size and Forecasts (2021 - 2031), Global and Regional Share, Trends, and Growth Opportunity Analysis Report Coverage: by Type [Commodity Chemicals (Coatings, Adhesives, Sealants, and Elastomers; Agrochemicals; Construction Chemicals; Specialty Polymer & Resins; and Others) and Specialty Chemicals (Plastics & Polymers, Synthetic Rubbers, Explosives, Petrochemicals, and Others)], End User (Automotive, Electronics, Construction, Oil & Gas, Pharmaceuticals, and Others), and Geography (North America, Europe, Asia Pacific, and South and Central America)
Third-Party Chemical Distribution Market Size and Forecasts (2021 - 2031), Global and Regional Share, Trends, and Growth Opportunity Analysis
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The chemical distribution process involves logistics, sales, and transportation of chemicals. Chemical distributors offer value-added services, such as blending, packaging, mixing, formulation, inventory management, and waste removal, to customers. They source the products from chemical manufacturers and distribute them to vendors. The chemicals are transported to other third-party chemical distributors or vendors that supply these chemicals to end users.
In recent years, the increasing demand for chemicals from various end-use industries, such as automotive, pharmaceutical, and electronics, is encouraging third-party distributors to adopt growth strategies such as establishing partnerships, joint ventures, and mergers & acquisitions. For instance, Azelis expanded its operations in South America by acquiring ROCSA in Colombia. Brenntag North America, Inc. acquired Matrix Chemical LLC, the North American distributor of acetone and solvents. These acquisitions are helping these organizations to expand their presence in growing markets.
Automotive and pharmaceutical segments are gaining huge traction in the end-use industry due to rapid growth in demand for chemicals. According to the European Automobile Manufacturers' Association, in 2021, 79.1 million motor vehicles were produced worldwide, an increase of 1.3% compared to 2020. Automotive manufacturers use various polymers, including polypropylene (PP), polyurethane (PUR), thermoplastic polyurethane (TPU), polyvinyl chloride (PVC), styrenics, acrylonitrile butadiene styrene (ABS), polycarbonate (PC), ABS/PC blends, polyamide (PA), and polybutylene terephthalate (PBT). Thus, the rising production of automobiles is driving the third-party chemical distribution market.
Based on end-user, the third-party chemical distribution market is segmented into automotive, electronics, construction, oil & gas, pharmaceuticals, and others. The automotive segment is expected to grow at the highest CAGR from 2022 to 2028. Growth in end-use industries, such as automotive, pharmaceutical, and electronics, combined with strong growth in the industrial manufacturing sector, is expected to drive the global demand for chemicals, thus, fueling the global chemical distribution market growth. The third-party distribution market is further expected to benefit from this aspect. Multinational distributors follow differentiated channel strategies, such as product awareness, local experience, and a powerful logistics network, to achieve a competitive advantage in a highly fragmented market. Commodity chemicals use has dominated the market in the downstream business. The downstream business covers the refining, manufacturing, and purifying of crude oil from raw natural gas. Additionally, it involves selling and distributing a range of goods extracted from petroleum.
Further, manufacturers are adopting new technologies and focusing on research and development to improve efficiency to perform in rapidly changing market trends and demands. For instance, in October 2021, Brenntag expanded its innovation and technology center “Household, Industrial & Institutional Cleaning (HI&I)” in Barcelona, offering lab services to Brenntag's business partners in Europe and the Middle East & Africa (EMEA). The lab is equipped with new technology, allowing performance tests of a broad range of products and the formulation development of cleaning products using specific design tools to achieve the best results. Such technological adoptions are expected to gain huge traction among consumers, driving the third-party chemical distribution market.
Azelis Group; Barentz International BV; Brenntag North America, Inc; ICC Chemical Corporation; IMCD NV.; Jebsen & Jessen Pte Ltd.; Petrochem; Protea Chemicals; REDA Chemicals; and Univar Solutions Inc. are among the key players profiled in the study of the third-party chemical distribution market. Several other major companies were analyzed in this research study to get a holistic view of the market and its ecosystem.
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