Global Specialty Chemical Distribution Market 2024-2031

Global Specialty Chemical Distribution Market 2024-2031

Specialty Chemical Distribution Market Size, Share & Trends Analysis Report by Type (Drug & Cosmetic Chemicals, Electronic Chemicals, Food Additives, Construction Chemicals, Industrial and Institutional Cleaners, Lubricating & Oil Field Chemicals, Mining Chemicals, Plastics Additives, Rubber-Processing Chemicals, Textile Chemicals, Water Management Chemicals, and Other) Forecast Period (2024-2031)

Specialty chemical distribution market is anticipated to grow at a CAGR of 6.2% during the forecast period (2024-2031). Specialty chemical distribution is a framework that bridges the gap between manufacturers and end-users of specific chemical products. Its growth is primarily driven by the geographical expansion of businesses by manufacturers, rising demand from end-user industries, regulatory requirements based on region, and the growing specialty chemical industry. Further, the market is expected to be influenced by a shift toward sustainable and environmentally friendly products, digitalization of distribution processes, emphasis on R&D for innovative product development, and customization of end-user product delivery.

Market Dynamics

Rising Demand from End-User Industries

The overall growth of specialty chemical distribution is highly dependent on the relative demand for specialty chemicals, which are used as raw materials in end-user industries. Such as sealants & emulsions in the coatings industry, additives in the food and beverage industry, and pigments in the coatings and textile industries, among others. Further, the demand for such chemicals has exponentially increased owing to rising consumption of end-user products and an increase in the availability of specialty chemicals globally. For instance, as per the American Coatings Association 2022 report, the global coatings raw material market is estimated to be valued at approximately $63.5 billion on 34.3 million metric tons of materials. Raw materials used in the manufacturing of paints and coatings represent a relatively small (5.0%), but extremely important component of the $4.5 trillion global chemicals industry. All the world’s leading specialty chemical producers are active in the coatings market, and many coatings raw materials are used in other industries as well, including plastics, synthetic lubricants, adhesives, sealants, household, industrial, and institutional cleaners (HI&I), personal care products, paper, plastics, water treatment, and many others.

Increasing Trend for Optimizing In-House Resources

The B2B industry has recorded a rising trend toward shifting towards an outsourced distributor model owing to its resource optimization feasibility, such as low investment, zero to low manpower planning, less resource allocation, and cost-effectiveness, among others. The model is being highly adopted by companies in the manufacturing of specialty products as it allows for allocating important resources to comparatively significant tasks such as product development and R&D, among others. For instance, in November 2023, Connell Caldic and Stratachem Specialties Pvt. Ltd. announced an agreement, making Connell Caldic the exclusive distribution solutions partner for Stratachem's specialty chemicals in Indian markets. The strategic partnership will benefit both companies by expanding their reach. Gujarat-based Stratachem specializes in producing antifoams, defoamers, wetting agents, pigment dispersants, and other related surfactant chemicals.

Market Segmentation

Based on type, the market is segmented into drug & cosmetic chemicals, electronic chemicals, food additives, construction chemicals, industrial and institutional cleaners, lubricating & oil field chemicals, mining chemicals, plastics additives, rubber-processing chemicals, textile chemicals, water management chemicals, and other (specialty paper chemicals, printing inks).

Industrial and institutional cleaners are projected to emerge as the largest segment.

Post-pandemic, the segment type has recorded exponential demand owing to its high applicability in manufacturing, healthcare, and other sectors to cater to the rising demand for hygiene and sanitizing products. The frequent rise in the consumption rate of the product creates a constant demand for specialty chemicals such as surfactants, bleaches, disinfectants, and solvents for manufacturing and distribution. For instance, in February 2021, Univar Solutions Inc., a global chemical and ingredient distributor and provider of value-added services, announced its agreement with Sasol Chemicals to become its primary national distributor of Sasol's alcohol and surfactant products in the US and Canada. The agreement expands Univar Solutions' offerings to include Sasol's ALFOL alcohols and ALFONIC, NOVEL, and SAFOL surfactants for the homecare and industrial cleaning, personal care, coatings, agriculture, and energy markets.

Regional Outlook

The global specialty chemical distribution market is further segmented based on geography including North America (the US, and Canada), Europe (the UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Asia-Pacific Holds Major Market Share in Specialty Chemical Distribution Market

Asia-Pacific holds a significant share of the market owing to the rising demand for specialty chemicals. The rapid industrial growth, a strong manufacturing base, diverse end-use industries, investment in chemical R&D, and growth of the chemical export industry are other contributors to the high share of the regional market share. For instance, as per the Information Technology and Information Foundation, China is currently the largest chemical market in the world, giving Chinese producers a key advantage in their home market. In 2022, China accounted for 44.0% of global chemical production and 46.0% of capital investment. Also, indicators of chemical innovation, including patents, R&D spending, and the most highly cited scholarly articles, all show rapid progress by Chinese chemical firms.

Market Players Outlook

The major companies serving the global specialty chemical distribution market include Azelis Group, Barentz International BV, Biesterfeld AG, Brenntag SE, and Caldic B.V. among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance, in August 2021, Barentz announced a new distribution relationship with Dixie Chemical, a manufacturer of high-performance anhydrides and smart materials for thermoset composites, coatings, fuel additives, lubricants, and paper sizing. The partnership will ensure Barentz's global distribution and technical expertise.