New report on the UK chemical distribution market sees positive growth despite tough challenges ahead London / UK – March 2008
According to the findings of a new report, the UK chemical distribution sector looks set to see positive growth over the next 4-5 years despite facing some tough challenges ahead, ranging from REACH and sustainable development to rising oil prices.
The report by Chemagility, which maintains the largest database of chemical distributors across the world (www.chemagility.com), forecasts the value of the UK chemical distribution market to grow from £2.7Bn (€3.75Bn) in 2006 to £3.65Bn (€5.1Bn) by the end of 2012. This represents a compound annual growth rate (CAGR) of over six per cent per annum over the next 5 years.
In line with the rest of the EU, the chemical distribution industry in the UK has been growing fast over recent times thanks to a favourable combination of outsourcing trends, restructuring of the chemical industry, increased international trade and the market entry of Asian producers. Overall the UK represents approximately 10% of the total* European chemical distribution market worth around €35bn in value terms. (*including EU-27, Norway, Switzerland, remaining CEE countries, Russia and Ukraine)
In the future, strong sales growth is expected not only as a result of continuing outsourcing trends in favour of distributors but also because of the spectre of chemical price inflation. David Brown, Chemagility director and co-author of UK Chemical Distributor Report 2008, sees rises in the price of chemicals becoming a “significant factor” adding that “REACH and increasing energy and distribution costs won’t always be fully recoverable, so there could well be pressure on margins”.
Industry consolidation trends also look set to continue and the number of distributors in the UK is expected to fall over the coming few years. Although chemical distribution is an entrepreneurial sector new business formations might struggle to outpace the loss of companies through M&A. David Brown, added, “Our analysis confirms that consolidation is leading to an increasing proportion of the market value being held by a small group of companies in the UK even though there has been no real let up in the relatively high number of new business start-ups in the sector.”
Further information on the 430-page report, priced at £895, can be obtained from Chemagility; telephone: +44 1420 520 393 or +44 1420 476 191
About UK Chemical Distributor Report 2008
The research report “UK Chemical Distributor Report 2008 - information, insight and analysis of the UK Chemical Distribution Industry” by Chemagility is a comprehensive evaluation of the present status of the chemical distribution industry in United Kingdom (UK). The report provides the latest information on market size, market structure and consolidation trends and, in addition to market and industry forecasts, also includes ranking tables for the leading companies in the sector. It also features company profiles on around 240 UK distributors detailing ownership, financial performance, business activities and key personnel. UK Chemical Distributor Report 2008 also analyses the key market drivers shaping the chemical distribution industry, highlighting opportunities, threats and factors critical to success in the future together with checklists for distributors to help with marketing planning.
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About Chemagility
A UK-based information and marketing services company specialising in chemical related-markets, Chemagility is responsible for compiling and managing the World Chemical Distributor Directory, an online database of more than 6,000 chemical and raw material distributors from over 120 countries. Besides information on the chemical distribution industry, the company also provides a range of services that encompass consultancy, marketing reports, communications, web site development, search marketing and online promotion.
For further information contact Chemagility.