Key Market Overview:
Chemical distribution market size was worth over USD 266.31 Billion in 2022 and is anticipated to reach over USD 411.81 Billion by 2030, growing at a CAGR of 5.6% during the forecast period (2022-2030).
Chemical distribution refers to the process of sourcing, repackaging and supplying chemicals to various businesses in the manufacturing and industrial sectors. Various processes are involved in chemical distribution such as sourcing, packaging, logistics, mixing, blending, and warehousing. Several raw materials including chemicals are produced by the chemical industry that is further supplied to various end-use industries such as pharmaceuticals, cosmetics, crop protection, and other industries. These raw materials are either sold directly by the producers or by third-party to the respective industries. These third parties or global distributors are opting for diversified ways to distribute the chemicals. These chemicals are transported in the form of sacks, barrels, containers, and pipelines. Therefore, these chemical distribution services serve as a link between the producers and the customers who belong to less developed regions.
The demand for chemicals is rising owing to their significant applications in various industries. As a result, the need to supply these chemicals also increase which drives the growth of the global chemical distribution market. Continuous construction activities and strong consumer purchasing power are also expected to further accelerate the growth of the market.
Further, the market of chemical distribution was impacted by the advent of COVID-19 as several distribution channels were blocked due to government restrictions. The market is still expected to rise due to the increasing demand for end products having chemicals as their raw materials.
|Report Attributes||Report Details|
|Market Size in 2030 (USD Billion)||411.81 Billion|
|By Product||Commodity and Specialty Chemicals|
|By Packaging Type||Drums, Bulk Containers, Flexi-tank containers, and Others|
|By Distribution Method||Roadways, Railways, Airways and Shipping Distribution|
|By End-user Industry||Automotive & transport, Agriculture, Construction, Pharmaceuticals, Industrial Manufacturing|
|By Geography||Asia-Pacific [China, Southeast Asia, India, Japan, Korea, Western Asia] Europe [Germany, UK, France, Italy, Russia, Spain, Netherlands, Turkey, Switzerland] North America [United States, Canada, Mexico] Middle East & Africa [GCC, North Africa, South Africa] South America [Brazil, Argentina, Columbia, Chile, Peru]|
|Key Players||Helm AG, Univar Inc., ICC Chemicals, Inc., Brenntag AG, TER Group, Solvadis, Nexeo Solution Holding LLC, Ashland, Caldic B.V.|
As digitalization becomes a reality, many suppliers and end users are interacting with each other more conveniently. As a result, the process of transportation of chemicals has become quite easy which is driving the growth of the chemical distribution market. Moreover, the demand for various industrial products is likely to rise in the forecast period which will boost the growth of the global market. Furthermore, ease in transportation and supply channels has encouraged various end-use industries to manufacture more products for human welfare. Chemical distributors are also reducing the costs of distribution, making it convenient for new and developing markets. Therefore, these factors boost the growth of the global chemical distribution market.
Fluctuating prices of raw materials are the major restraining factor of market growth. Further, the impact of these harmful chemicals on the environment as well as human health due to mismanaged transportation also limits the market growth. Such mismanagement poses risks of chemical exposure which may cause serious health issues including respiratory diseases, cardiovascular diseases, and allergies. Moreover, these chemicals also pose a threat to wildlife and ecosystems as the increased use of chemicals such as pesticides, insecticides, and many more have negative impacts on the environment. Thus, all these factors mainly hamper the growth of the global market.
There has been a positive adaptation in the chemical distribution industry. Businesses are constantly investing in partnerships with other businesses, the creation of new goods and services, research and development, marketing initiatives, and employee training. These factors have opened up new opportunities for the growth of the market in the forecast period. Furthermore, rising investments by chemical manufacturers to expand their units are creating lucrative opportunities for the market\'s expansion.
The global outbreak of COVID-19 has had a significant impact on all businesses, from manufacturing to distribution to end-use industries. All the general business protocols and the emergence of new businesses were stopped as a result of stringent government regulations during the COVID-19 outbreak. Due to the lack of availability of raw materials, many end-products were not manufactured resulting in a slowing down of the global market. For instance, rubber made from large butadiene derivatives is an important component of automobile tires and belts. A decrease in the supply of tires as a result of restrictions on production facilities negatively impacted the growth of the chemical distribution market.
Chemical Distribution Market Segmentation:
Based on the product, the market is bifurcated into commodity and specialty chemicals. The commodity chemicals segment dominated the global market, accounting for the majority of the revenue share. This is mainly due to the extensive usage of commodity chemicals in the food & beverage, agriculture, pharmaceutical, and construction industries. Almost every industry makes use of commodity chemicals such as plastics & polymers, synthetic rubber, explosives, petrochemicals, and others. All these chemicals act as the raw materials for the products manufactured by various end-users. On the other hand, the specialty chemicals segment is also a growing segment in the forecast period. This is because the use of specialty chemicals is only under the government\'s supervision and is used for certain special applications only. Specialty chemicals include coatings, adhesives, sealants, elastomers (CASE), agrochemicals, construction chemicals, and many more. Thus, an increase in the usage of such chemicals is anticipated to support the segment growth during the forecast period.
By Packaging Type
By packaging type, the market is divided into drums, bulk containers, flexitank containers, and many more. Drums are cylinder-shaped vessels to store chemicals. The majority of drums can hold up to 200 liters of such chemicals. They are available in various types such as steel, fiber, and plastic, each with its benefits. These drums are one of the most preferred modes of chemical transportation due to benefits such as leak-proof storage of liquid chemicals, UV-resistance, high insulation, and lightweight options, especially fiber drums. Moreover, bulk container packaging is also anticipated to support market growth in terms of volume. These containers are large-sized containers with a capacity of up to 1,000 liters of liquid. They are more popular because of their environment-friendly nature and high durability. These containers are used along with flexitanks known as ISO tank containers. The ISO tanks are economical and are known to hold chemical and bulk liquids.
By Distribution Method
Based on the distribution method, the market is segmented into roadways, railways, airways, and shipping distribution. The majority of the chemicals are distributed via road transport in case of distributing chemicals to a nearby location. Although, there are certain challenges faced by road transport because the chemicals may exist in solid or liquid form, which needs proper packaging, and needs to be handled with extra care. However, rail transportation is highly preferred for the distribution of chemicals over a long distance. In the context of transportation, the modes of transportation should be chosen after the segregation of hazardous and non-hazardous chemicals. If the chemicals have to be transported to a different country, then the distributors should opt for airways or shipping transport, keeping in mind all the safety measures while handling toxic chemicals.
Based on the end-user, the market is segmented into automotive & transport, agriculture, construction, pharmaceuticals, industrial manufacturing, and others. The industrial manufacturing segment dominated the global market revenue share. This is because chemicals are required as raw materials for the production of adhesives, industrial cleaners, sealants, and many more. Thus, the industrial manufacturing segment is expected to emphasize more on the management of volatile and highly reactive bulk chemicals as compared to other segments. Further, chemical distribution also plays a crucial role in the management of agrochemicals such as fungicides and herbicides, chemical intermediates such as epoxy resins, adhesives, and thermosetting materials used in the automotive industry. In the context of transportation, the need for petrochemicals such as diesel fuel, jet fuel, and gasoline in transportation industries also supports the demand for safe chemical distribution.
The regional segment comprises Asia Pacific, North America, Europe, Latin America, and the Middle East and Africa. Asia-Pacific is expected to contribute the largest revenue share in the regional market growth. The demand for chemicals is anticipated to be driven due to rising manufacturing activities in this region. In developing countries such as China, India, and Malaysia, the construction and automobile sector is rising which increased the need for reliable chemical distributors to support the high need for chemical and their derivatives as raw materials. Besides this, ongoing technological advancements in various industries are making the region dominant in the chemical distribution market. On the other hand, the increasing trend of third-party distributors in North America is driving the expansion of the chemical distribution market.
Moreover, the established road networks for chemical logistics and the large availability of trained professionals for the controlled distribution of chemicals within large areas support the chemical distribution market statistics.
Chemical Distribution Market Competitive Landscape:
The global market status in terms of completion is mainly high due to the presence of extensive numbers of market players. These established industry players have adopted multiple business strategies through product innovations to attract more profits to the market. In the context of chemical distribution, there is a scope of other players are also engaging to form collaborative efforts and joint ventures for the creation of revenue generation opportunities in the coming years. Mentioned are the prominent market players that consist of the latest market concentration–
• Helm AG
• Univar Inc.
• ICC Chemicals, Inc.
• Brenntag AG
• TER Group
• Nexeo Solution Holding LLC
• Caldic B.V.
• In January 2022, HELM and Leverton collaborated to form LevertonHELM to upgrade the manufacturing capacity of lithium batteries in Europe. Thus, the company has plans of adopting reliable and safe chemical distribution services for supporting the high need for lithium chemicals.
• In May 2022, Union Bioscience Ltd. partnered with HELM AG to access alternative crop production products by supplying innovative solutions. Thus, supporting the growing need for chemical products in the market.