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Chemical Wholesalers
First Research, March 2012, Pages: 10
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Executive Summary
Brief Excerpt from Industry Overview Chapter:
The US chemicals distribution industry includes about 13,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $170 billion. Major companies include Brenntag North America, Nexeo Solutions (formerly Ashland Distribution), and Univar USA. The industry is concentrated: the largest 50 companies generate more than half of revenue.
COMPETITIVE LANDSCAPE
Chemical distribution is a cyclical business dependent on industrial demand. The profitability of individual companies depends on an efficient distribution system. Larger companies can offer more products and services. Local and regional distributors can compete effectively through superior service or geographic focus. The industry is capital-intensive: annual revenue per employee is more than $1 million.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products are plastics materials, alkalis and chlorine, detergents and soaps, adhesives, and industrial gases. Plastics account for about 25 percent of industry revenue.
In addition to selling and transporting chemicals, distributors offer other services including blending, packaging, technical training, and managing customer inventories. Waste removal is a particularly common service to offer. Many suppliers specialize in certain types of chemicals.
Products are bought from manufacturers of industrial chemicals, including petroleum refiners. Multiple suppliers exist for almost all chemical products. A large distributor typically buys from several dozen chemical manufacturers. Distributors may have long-term distribution agreements with suppliers that specify quantities and price formulas.
Large wholesalers have multiple facilities around the country. Facilities include warehouses, tank and rail terminals, and custom blending facilities, and are usually located close to...
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