Chemagility present an analysis of the €35Bn European chemical distribution industry at the FECC Congress Paris, France – June 2007
June 2007 – Chemagility Ltd presented an analysis of the €35Bn European chemical distribution industry at the FECC Congress in Paris. The paper examined the structure of the industry as it currently stands as well as exploring the factors shaping the industry to 2012 and beyond.
Chemagility revealed that the total number of distributors worldwide is around 6000 and the global chemical distribution market to be worth around €89Bn +/-7% - with Europe accounting for around €35Bn of the total, North America €30Bn and the Rest of the World €24Bn. In terms of value Germany is the biggest market in Europe followed by Italy, UK, France and Spain.
The chemical industry in Europe is continuing to be affected by the emerging economies, particularly China and India, the migration of manufacturing assets from west to east and the consolidation taking place in the industry.
Chemagility also believe what they call the 3e’s will have an increasing impact on chemical distribution companies and their customers over the next 5-10years:
- energy (oil/gas – and for chemical feedstock, transportation)
- environment (REACH, climate change, carbon-foot printing)
- economy
Rising energy, transportation and environmental compliance costs were the main issues highlighted likely to have an adverse affect on the financial performance of the industry.
Chemagility are forecasting a CAGR* of around 5% over the next five years which will see the European Chemical Distribution Industry grow to €44.5Bn by 2012. Growth in key markets serviced by distributors, continued outsourcing trends and above inflation price increases were the main reasons cited for this positive growth outlook.
However the overall market share of mid-size and smaller distributors will fall and there will be around a 10% reduction in the total number of distributors in Europe by 2012.
The consolidation trends in Europe still favour the larger distributor groups and this means they will increase their domination of the distribution market. However, the industry continues to attract entrepreneurs and Chemagility believe a significant number of enterprising small distributors will prevail and prosper.
Chemagility believe some small distributors are increasingly differentiating themselves through the provision of specialist services based on technical knowledge, business development skills and market focus.
The importance of trade association membership as a source of expertise and knowledge with respect to REACH and legislative compliance was also emphasised.
About chemagility.com
Chemagility.com is the Internet’s only chemical distribution focused search directory.
The directory was launched in 18 months ago with the aim of making it easier for chemical manufacturers, suppliers and their customers to find information about chemical distributors on the web. This has brought some welcome ‘transparency’ to a fragmented industry and helped to raise the profile and importance of the chemical distribution sector.
The directory also aims to highlight those distributors who have embraced professional practices through trade association membership and responsible care/responsible distribution.
For further information contact Chemagility.