12, June 2024
The chemical distribution market plays a pivotal role in the world economy, ensuring that industries receive the necessary raw materials and chemicals for their operations. As the market continues to evolve, several factors, including technological advancements, strategic initiatives by distribution service providers, and supply chain dynamics, determine its scope. Accordingly, Triton’s research analysis estimated that the Global Chemical Distribution Market is set to rise at a CAGR of 5.91% over the forecast period 2024-2032.
There is also a notable shift towards specialty chemicals, which are high-value and application-specific. Specialty chemicals, including additives, adhesives, and advanced polymers, cater to niche markets such as electronics, pharmaceuticals, and personal care. In fact, our analysis also predicts that specialty chemicals will advance at a CAGR of 6.21% over the given forecast years.
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Sustainable specialty chemicals are products designed and manufactured to have a reduced environmental impact throughout their lifecycle, from production to disposal. These chemicals often use renewable raw materials in energy-efficient processes and generate fewer by-products and waste.
These are derived from renewable biological resources rather than traditional fossil fuels. Green solvents derived from renewable sources, such as limonene from citrus peels or ethyl lactate from corn, are replacing traditional petrochemical solvents in various applications.
Developing pest control and nutrient solutions derived from natural sources, such as plant extracts, beneficial microbes, and organic waste. Similarly, manufacturers also explore creating formulations that facilitate the slow release of active ingredients, reducing the need for frequent applications.
Reducing volatile organic compounds (VOCs) and using water-based formulations are key trends in sustainable specialty chemicals. Additionally, innovations in water-based paints and coatings, along with developing adhesives and sealants, reduce VOC emissions, meet stringent environmental regulations, and improve air quality.
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By converting industrial and agricultural waste back into their monomeric forms, chemical recycling ensures the reuse of the materials. Advancements in chemical recycling technologies, such as pyrolysis, depolymerization, and enzymatic recycling, are making significant strides toward a sustainable future.
These recycling practices will, therefore, lead the chemical distributors to offer more sustainable product lines, meeting the growing demand for eco-friendly solutions from customers and regulatory bodies. For instance, transforming lignin, a by-product of the paper industry, into high-performance adhesives and resins. This approach reduces reliance on fossil fuels, minimizes waste, and helps meet end-use industry demand for chemical distribution.
In this regard, Alterra Energy has signed a licensing agreement with Freepoint Eco-Systems Holdings to establish a large-scale chemical recycling facility with a capacity of 192,000 tons annually. This facility will produce ISCC PLUS-certified outputs, which will be sold to Shell, highlighting the scalability of chemical recycling technologies.
Companies like DePoly are focusing on chemically recycling polyethylene terephthalate (PET) into purified terephthalic acid (PTA) and mono-ethylene glycol (MEG), which can be re-polymerized into high-quality PET. This method reduces the need for pre-sorting and washing, making the process more efficient.
Thus, the high purity and quality of monomers from chemical recycling can lead to innovative applications in various industries, including packaging, textiles, automotive, and electronics. This diversification can expand product portfolios for chemical distributors and open new revenue streams.
Digital transformation in the chemical distribution industry has significantly progressed with the adoption of advanced software solutions. These digital tools streamline operations and enhance supply chain visibility, which is crucial for navigating the industry’s complex and often volatile nature.
Brenntag SE: In April 2024, the leading global distributor of chemicals and ingredients announced a strategic partnership with Knowde, the innovative digital customer experience platform for the ingredients, polymers, and chemical industry.
This collaboration aims to leverage AI in tackling the unique Product Data Management challenges faced by the chemical distribution services. The two companies aim to streamline product onboarding and sales processes and expedite the integration of new acquisitions.VicinityChem: The company specializes in providing solutions tailored to the unique needs of the chemical manufacturing and distribution industries. Its software offers precise formula management and real-time inventory tracking, ensuring consistent product quality to avoid out-of-stock or overstock situations.
Given the high cyber vulnerability in the chemical sector, blockchain technology is being implemented to enhance supply chain traceability and transparency. This adoption improves security and regulatory compliance, which is critical for managing sensitive chemical data. Thus, by leveraging these capabilities, chemical distribution service providers can achieve better business outcomes.
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The chemical distribution market size was $286.61 billion in 2023 and is expected to achieve a revenue of $480.64 billion by 2032.
Q.2) What is a third-party chemical distribution market?The Third-party chemical distribution market involves the transportation, logistics, and storage of a wide array of chemicals, catering to various sectors such as pharmaceuticals, electronics, agriculture, and more.
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