The ICIS Top 100


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The ICIS Top 100

  1. 1. TOP 100 chemical disTribuTOrs Gareth JJ Burgess We unveil the much- 33 CommeNtAries NACD celebrates milestones NACD oN soliD grouND 46 The NACD enters its fifth decade with a anticipated listing of the 35 FECC: Bright future for the supply chain growing member base, international influence 37 ASSOCIQUIM members gain share and a program of assertive advocacy founded world’s top chemical 39 CACD operate lean and safe on Responsible Distribution distributors – a critical link m&A goes up A geAr Nexeo Ceo iNterview in the supply chain. Plus, 41 Asia remains a key focus for future deals 49 David Bradley, CEO of the former Ashland Distribution business, outlines plans to see commentaries from the among the global giants, but one company is already moving in focus on fundamentals versus M&A major association heads, a perspective from Asia, and AsiA sees slowDowN iCis top 100 Distributors 45 Asia’s chemical distributors see a 50 The global listing of the ICIS Top 100 the latest news in M&A. slowdown in demand but are optimistic on Chemical Distributors, including tables with sales by geography long-term opportunities in the region July 18-31, 2011 | ICIS Chemical Business | 31ICB_180711_031 31 13/7/11 18:28:50
  2. 2. CMYCMMYCYMYK ICB_180711_032 32 13/07/2011 09:51:17
  3. 3. TOP 100 chemical disTribuTOrs nacD hits milestones The National Association of Chemical Distributors celebrates its 40th anniversary – and the 20th anniversary of Responsible Distribution chRis jahn pResiDeNt, NACD Responsible Distribution sets NACD mem- T bers apart because of independent third-party his is a momentous year for the Na- verification. We know Responsible Distribu- tional Association of Chemical Dis- tion works – we see it every day. NACD’s most tributors (NACD) and its nearly 400 recent Membership & Safety Report illustrates member companies and affiliates. We the positive impact that Responsible Distribu- are celebrating the 40th anniversary of NACD tion has for the supply chain. and the 20th anniversary of our premier In 2010, our members collectively drove health, safety, security and environmental more than 154m miles – equivalent to driving program, Responsible Distribution. to the moon and back every day. Our safety Through NACD, chemical distributors have rating is twice as good as that of all industries learned much from each other and have dedi- combined. Our members continue to improve cated themselves to continuously improve year after year. Responsible Distribution has their operations. Congratulations to all of our members and been the cornerstone of the Responsible Distribution has been the cor- affiliates on 20 years of advancing steward- industry’s progress for 20 nerstone of the industry’s progress over the ship through Responsible Distribution and 40 past 20 years. These members should be rec- years of creating value for the industry. ■ years. Members should be ognized for performance improvement in For more information about the NACD and recognized for performance every phase of chemical storage, handling, transportation and disposal. Responsible Distribution, visit the associa- tion’s website improvement in every phase July 18-31, 2011 | ICIS Chemical Business | 33ICB_180711_033 33 13/7/11 16:22:16
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  5. 5. TOP 100 chemical disTribuTOrs Bright future for tors. We expect this to lead to an increase of the total market. The EU’s Reach and CLP regulations will maintain a starring role, making them a top pri- the supply chain ority for FECC. Our efforts remain to ensure that our members have all the necessary informa- tion available and to constantly improve the communication flow with leading institutions. FECC and its members are already preparing to The steady worldwide recovery in the chemical meet the 2013 registration deadline. We encour- age the industry to start working now. To sup- industry is testimony to the importance of distributors port our members in this process, we are under- taking various communication actions, as well Uta Jensen-Korte FECC trends such as consolidation as working closely with other associations for D and distributors providing the benefit of the complete supply chain. istribution plays a crucial part in the more value-added services FECC and its members work closely togeth- chemical supply chain. As an or- to continue. This is a result er with evolution and innovation in mind. We ganization committed to promote of the sustained preference continue to align our efforts to offer tailored the chemical distribution industry of producers to outsource, solutions for the chemical distribution indus- and foster cooperation within the sector, the and therefore demand, new try, like the Responsible Care Programme, our European Association of Chemical Distribu- services from the distribu- flagship on safety and sustainability. We be- tors (FECC) strives to become the opinion lieve that this subject will become increasing- maker of our industry. “We expect… consolidation ly important for the whole chemical industry, The chemical distribution industry has which is why its promotion remains one of seen a steady recovery from the worldwide and… providing more value- our main priorities. ■ economic downturn, and we expect it to con- added services to continue” We are proud to have a large portion of our tinue – a testimony to the importance of dis- Uta Jensen-Korte members in this year’s list. To learn more tributors within the supply chain. We expect Director general, FECC about our association, visit We’ve Got Great Chemistry… Established in 2000, the Chemical Distribution Network (CDN) Member Benefits • Lower chemical costs through CDN purchase programs is a $1.2 Billion U.S. chemical distributor network consortium • Access to new global chemical suppliers and product lines Our goal is to reduce the cost of doing business for our • Competitive advantage in the global chemical marketplace • Leveraged and shared operations and logistics capabilities members while at the same time driving value and efficiency • Shared best practices in Ops, EH & S, Admin and IT for our strategic and preferred global supply partners. • Low cost global supply channel for your customers • Collaborative global network of chemical distributors and suppliers • Supportive organizational culture comprised of distributors like you Supplier Benefits • Access into $1.2 Billion of U.S. market share and customer base • Efficient single point of contact into $1.0 Billion of chemical spend • Alternate supply chain model providing a collaborative environment with distributors and end customers Great • • Preferred status over competing suppliers Shared and leveraged assets reduce our supplier’s Chemistry for logistics cost to market For more information on becoming a CDN member or Commerce preferred supplier contact Chris Coates at 630.778.2073 or e-mail: pur0811_ChemDistNet_2.indd 1 July 18-31, 2011 | ICIS Chemical Business |AM 10/22/2008 9:43:37 35ICB_180711_035 35 13/7/11 16:34:21
  6. 6. ICB_180711_036 36 13/07/2011 09:52:15
  7. 7. TOP 100 chemical disTribuTOrs ASSoCIQUIm members gain share The Brazilian Association of Chemical and Petrochemical Distributors sees its members increase market share as they invest and commit to quality RUbEnS mEdRAno training, aiming to improve serv- president, associquim ices to their partners. I The resulting improvements n a country of continental di- and better productivity led to an mensions such as Brazil, dis- increase in the demand for distri- tribution is of paramount im- bution services from chemical portance to small and manufacturers in Brazil. medium-sized end-users across Our share in the movement of the country. products traded through distribu- We are recognized and desired tion channels went by supply chain players for from 5–6% in multiple services provided by dis- 2003 to about tributors, such as transportation, 11% in 2010, blending, repacking, storage and with total sales post-sales technical assistance, as in reaching ap- well as moving many products to proximately fragmented markets. $5.5bn (€3.9bn). In 2002, Brazil’s distribution sector offered a demonstration of The resulting commitment, maturity and re- sponsibility in the areas of envi- improvements and ronmental health, safety and se- productivity gains curity performance by joining led to an increase in PRODIR (Responsible Distribu- tion Process) and the TPV (third- the demand for party verification) established distribution services by ASSOCIQUIM (Brazilian Association of Chemical and Petrochemical Distributors.) But when you compare Brazil’s chemical distributor market share HIGH-QUALITY SERVICES to those of its counterparts in the With PRODIR, which complies US and Europe, there is still plen- with social and environmental ty of room to grow. responsibility codes and stand- Our next challenge is industry ards practiced in the US and Ca- consolidation, which has been nadian markets, Brazilian distri- strong in the North American and bution companies are proud to be European markets. In Brazil this is able to offer services which have just starting to take place. We ex- the same internationally recog- pect it will involve the distribution nized, high-quality standards. sector in 2011 and 2012, and in the Chemical distributors have years to follow. ■ also invested in terminals, ex- For more on Brazil’s chemical panded sites and new laborato- distribution association, visit ries. They have also expanded July 18-31, 2011 | ICIS Chemical Business | 37ICB_180711_037 37 13/7/11 17:43:33
  8. 8. An industry leader since 1846. Every day, The Performance Products Group of Church & Dwight upholds a global reputation as the trusted name in bicarbonates. Recognized for its celebrated quality and purity, the renowned Arm & Hammer® brand provides solutions to markets worldwide. Church & Dwight.Trusted brand. Proven performance. www.ahperformance.comICB_180711_038 38 13/07/2011 09:52:44
  9. 9. TOP 100 chemical disTribuTOrs cacD’s members operate lean, safe The Canadian Association of Chemical Distributors sees In these times, more than members rebound with efficient and reliable operations ever, Responsibility matters … in all the activities that chemical distributors perform cathy campbell The CACD has 47 member companies with exeCutive DireCtor, CACD 162 sites across the country and 76 global sup- T plier partners. CACD members do business with he chemical distribution sector is inte- more than 10,000 customers and have been suc- Matters through stewardship, communication, gral to the Canadian chemical industry. cessful in these economic times because they education, partnerships and safety in all the ac- The Canadian Association of Chemical have always run their businesses with a “lean” tivities that chemical distributors perform – Distributors (CACD’s) members repre- mentality. This is evident with employment whether it is on the road, in the community, in sent almost 15% of Canada’s chemical market. numbers at 92% of what they were in 2009. the lab, in the environment or in the business. Through the CACD’s Responsible Distribu- While personnel has been reduced, ship- CACD is proud of the success of its members, tion program, customers and suppliers are ments have increased and sales have remained many of which are highlighted in the ICIS Top given consistent product quality, regulatory at almost the same levels. Distributors are will- 100 Chemical Distributors listing. ■ compliance, risk prevention programs, well- ing to work harder to meet customer and sup- Please contact the CACD office at 905-844- established packaging and logistics standards, plier needs. 9140 for information or visit our emergency awareness and cost savings. In these times, more than ever, Responsibility website at Omya - Your reliable partner for chemical specialties distribution - Worldwide • Among Europe‘s top 10 chemicals distributors committed to growth • Long-term commitment and continuous development • Local understanding, central support • Value-driven technical sales • Financially strong Omya offers versatile solutions beyond calcium carbonate – from raw materials to intermediates and chemical specialties for virtually any application. Our major markets are the paper, plastics, paint/coatings/adhesives indus- tries as well as construction, environment, agriculture, food and pharma. Our global distribution network allows for one-stop-shopping of our products and our partners’ chemicals. Profit from our expertise and our extensive technical support. With our strong focus on innovation, we meet your requirements of today and tomorrow. Omya International AG | P.O. Box 335 | CH-4665 Oftringen | Switzerland | July 18-31, 2011 | ICIS Chemical Business | 39ICB_180711_039 39 13/7/11 17:07:40
  10. 10. IN BRAZIL, ASSOCIQUIM AND ITS MEMBERS DISTRIBUTE MUCH MORE THAN CHEMICALS AND PETROCHEMICALS. More than representing Brazilian chemicals and petrochemicals distributors, Associquim works hard to improve quality and productivity of its members and KPZ[YPI[L ILULÄ[Z MVY [OL ^OVSL ZVJPL[` PU HYLHZ VM LU]PYVUTLU[ OLHS[O HUK safety performances. TURNOVER MARKET OF US$5,5 BILLIONS/YEAR ASSOCIQUIM represents the Brazilian companies that process, formulate, blend, re-package, storage, transport and trade chemical and petrochemical products for industrial consumers. PRODIR - RESPONSIBLE DISTRIBUTION - 10 YEARS OF SUCCESS IN BRAZIL In 2002, ASSOCIQUIM launched PRODIR - RESPONSIBLE DISTRIBUTION on behalf of its members. Brazilian distributors are able to provide to their customers services with responsibility and high quality standards. EBDQUIM – AN EVENT TO PROMOTE THE BRAZILIAN DISTRIBUTION SECTOR It’s a biennial event which gather the most important players from the Brazilian market with participants and speakers from all around the world to create, share and spread knowledge. The EBDQUIM is a unique opportunity to be up-to-date with what’s happening, the trends, forecasts and expectations, get in touch with senior executives in Brazil and DEURDG ðQG VXSSOLHUV DQG FXVWRPHUV JHQHUDWLQJ QHZ EXVLQHVV DQG VWUHQJWKHQ existing relationships. 6th EBDQUIM - March 14th - 16th, 2012 - Praia do Forte - Bahia - Brazil Visit website: 40 13/07/2011 09:53:12
  11. 11. TOP 100 chemical disTribuTOrs brenntag’s fidler on m&a strategy “We have a well-defined M&A strategy that concentrates on the expanding markets of Asia Pacific and latin America but will also include Europe, north America and pos- sibly the Middle East and Africa. We have communicated to the capital markets that our acquisition plan includes a spend of more or less €200m–250m/year [$282m–352m/year] out of free cash flow for the next several years, with a focus on geography, industry expertise, product portfolio and cultural fit. We have a pretty good track record, with 94 acquisitions Rex Features globally since 1991 and 30 since 2007.” m&a goes ranking last year, with over $90m in sales. Head-to-head with Brenntag in the M&A race is US-headquartered Univar, which this year has bought France-based distributor Quaron, as well as a Turkish chemical up a gear distributor. Late last year, it bought US dis- tributor Basic Chemical Solutions, which had sales of almost $900m. Univar has made it clear it is also looking for acquisitions in China. Other global play- ers, such as Europe’s Azelis and IMCD and US group Nexeo Solutions (formerly Ash- Asia remains a key focus for future deals among the land Distribution), are also likely to be look- ing in the nascent Asian distribution market global giants but one company is already moving in for growth opportunities. As Guenther Eberhard, consultant at Swit- zerland-based DistriConsult, points out, will beacham london distributor focused on food ingredients, coat- these companies – with the exception of M ings and personal care. with sales of about Nexeo – are all well established in Europe ergers and acquisitions activity in €220m ($315m). and would find it difficult to make a major chemical distribution is acceler- acquisition at home without running into ating, as the sector recovers well brenntag StrengthenS PreSence competition problems with the authorities. from the downturn and players The move reinforced the Brenntag’s push into European purchases are more likely to be look to expand both geographically and in specialties, and strengthened its presence in small or in market areas where there is still terms of filling in product gaps. the region. little consolidation. In Specialty chemicals, Asia remains a key focus for future growth, “A strong facility presence by Zhong Yung the potential for triggering supplier conflicts although much activity in the first half of the in the key economic regions of Tianjin, could also be a limiting factor. year has still been focused on Europe and Shanghai and Guangzhou and a diversified Nexeo, however, could still do a large North America. customer, product and supplier base, along chemical deal in Europe as its strength there In the race for global growth, one company with last year’s acquisition of EAC, gives our is mainly in polymers, says Eberhard. Also, has been making big inroads into Asia, par- Asia Pacific team a perfect platform for long- the company’s owner, US private equity ticularly China, in the past 12 months. That term sustainable growth in China, as well as group TPG, would have the capacity to carry company is Germany’s Brenntag. all of South and Southeast Asia,” says Bill out such investments. On June 6, the company made its debut Fidler, CEO at Brenntag North America. with a deal to take a 51% stake in Chinese “We will continue to explore additional ac- grOwing rOle fOr mid-Size PlayerS distributor Zhong Yung Chemical. quisition candidates in this high-growth Eberhard expects mid-sized players with sales The deal is due to close during the third area.” Brenntag also continues to expand its of €100m–€600m to play a bigger role in Eu- quarter of 2011, with the remaining 49% core European and North American markets. ropean M&A. “These companies are ‘cash- share to be taken up in 2016. Zhong Yung On May 30, it bought out US distributor rich’ after running a tight ship during the dif- is expected to have sales of around $370m G.S. Robins to boost its presence in the ficult times and a very good 2010,” he says. (€529m) in 2011. food and beverage, and water treatment “They are now looking for ways to foster In July 2010, Brenntag bought EAC Indus- chemicals sectors. G.S. Robins was number growth and enlarging their footprint. I expect trial Ingredients, a major Southeast Asian 70 in our ICIS Top 100 Chemical Distributors them to play a more prominent role in the ❯❯ July 18-31, 2011 | ICIS Chemical Business | 41ICB_180711_041-042 41 13/7/11 16:17:12
  12. 12. TOP 100 chemical disTribuTOrs CHeMiCAl DiSTribuTion DeAlS in THe firST HAlf of 2011 Date Acquirer Target Country Sales Seller Status Comments Jan 3, 2011 PVS Nolwood Young Chemical US n/a Owners completed Regional distributor in Winsburg, Chemicals Ohio; size around $30m (est.) Jan 10, 2011 Azelis Finkochem Russia n/d Al Metalchem completed Jan 10, 2011 Brenntag Luwatek Germany n/d Owners completed Asset deal for sales activities and product inventory Jan 10, 2011 Hawkins Vertex Chemical US $39m Owners (Michael announced Asset deal H. Mosio & family) Jan 11, 2011 Kem Quaron France France €110m Bencis completed Kem AG is a 50:50 JV of Overlack (estimated) and Stockmeier Jan 18, 2011 Univar Eral-Protek Turkey n/d Owners completed Jan 21, 2011 Institutional Brenntag Germany €7.47bn Brachem completed 7m shares at €71.50 per share; investors Acquisition free float now 64%; total number of shares outstanding is 51.5m Jan 24, 2011 Hannover Biesterfeld Vermögens- Germany around €800m completed Silent participation (mezzanine Finanz Group verwaltung capital) Feb 6, 2011 quantiQ Unipar Comercial Quimica Brazil n/d completed Feb 16, 2011 Tennants Tessenderlo Fine UK n/d (sale price Tessenderlo completed Acquirer is the parent company of Consolidated Chemicals (Leek/UK) £17m) Tennants Distribution Feb 23, 2011 Azelis S&D Group UK n/d S&D Group announced Mar 7, 2011 Melrob Chemiplus Japan n/d completed Mar 31, Feedway Spin-off from Azelis (MBO) Belgium n/d Azelis completed 2011 Europe Apr 9, 2011 Omya UNASA Spain €35m LyondellBasell completed and Ticona (JV) May 30, Brenntag G.S. Robins US $96m Owners completed Regional distributor with 2011 headquarters in St. Louis Jun 9, 2011 Brenntag Zhong Yung China €225m Owners announced 51% deal closing Q3 2011; (International) Chemical remaining 49% targeted for 2016 Jun 14, 2011 Safic-Alcan Interplast Turkey €12m Management completed Majority share; management to (Owners) remain as minority shareholders SOURCE: DistriConsult Q&A ❯❯ next round of consolidation, when it fi- DKSH on M&A: MArio PreiSSler nally arrives,” he adds. “At the moment, their issue is more the lack of willing sellers.” How much further M&A is How well developed is chemi- Eberhard says some of the recent M&A likely in distribution? cal distribution in Asia and deals clearly carried a premium for the strate- Basically, in all world regions, it Latin America? gic value of their respective transactions. is still very fragmented. Most producers like to com- High earnings before interest, tax, deprecia- Consolidation has been going bine direct market access with tion and amortization (EBITDA) multiples on but there is still a lot of a distribution channel for small of 10 to 11 may not be applicable to smaller room for further M&A activity. and medium-sized customers. deals, he says. This is no different from one Across the world, there is no end in sight to Which regions are particularly region to the other. Asia and the growth possibilites from M&A, says Bren- ripe for further M&A? Preissler is global head, Latin America are still more ntag’s Fidler. Market shares of leading dis- business unit performance fragmented in terms of the “Chemical distribution continues to be tributors are rather small even in materials at DKSH chemical distribution market, highly fragmented, although less so in the US. developed regions like Europe. with only one real regional play- Brenntag is the market leader globally, with a Asia and Europe show now and fair chance in the future. In er in each of the two regions. 7% market share, and the top three have will show increasing M&A activ- order to be successful in the slightly over 15%,” he says. “In the US, the ity as more market participants market, you have to have On your own M&A strategy, top three have more than 43%. With more try to build a regional presence. strong local/regional knowl- where are you looking? than 10,000 distributors globally, there is no edge. On the other hand, a DKSH is combining strong or- limit for consolidation on the horizon.” ■ Is the global model still valid, global presence offers the pos- ganic growth with add-on ac- Additional reporting by Joseph Chang in or is it be better to be a sibility to work closely with glo- quisitions in the regions where New York strong regional player? bal business partners and to we are active. This is today Both business models stand a realize internal synergies. primarily Asia and Europe. ■ Read Paul Hodges’ Chemicals & the Economy blog 42 | ICIS Chemical Business | July 18-31, 2011 www.icis.comICB_180711_041-042 42 13/7/11 17:53:15
  13. 13. 7 6 5 4 3 2 1 Identify  the company that answers these questions: Across: 1) Founded in 1858 2) 158 offices in 79 countries 3) Dedicated customer service staff 4) Long-standing global relationships 5) Global raw material powerhouse Down: 2) Serves broad spectrum of industries including personal care, H I & I, paint & coatings, water treatment 3) Certified: GMP, ISF, FCD, ISO 9001:2008, USP, Kosher, FDA 4) Warehouses located throughout the United States 6) Offers competitive pricing on high quality raw material 7) Sourcing authority for solvents, plastics & specialized ingredients Tampa FL • 813-972-5959 • www.ChemDot.comICB_180711_043 43 13/07/2011 09:53:40Marubeni_Blackboard_Ad.indd 1 6/30/11 10:08 AM
  14. 14. Wherever you need us ... ... we’ll find a way! We cater for your needs: 51 local bases - at home all over the world. Biesterfeld Plastic Europe’s leading distributor for plastics Biesterfeld Spezialchemie Biesterfeld AG Top distributor for specialty chemicals Ferdinandstrasse 41 20095 Hamburg, Germany in Central Europe Tel.: + 49 40 32008 - 0 Fax: + 49 40 32008 - 340 Biesterfeld International Worldwide successful trade in commodities and specialtiesICB_180711_044 44 13/07/2011 09:54:53
  15. 15. TOP 100 chemical disTribuTOrs “The consumption pattern is slowing – customers do not want to keep stocks and are postponing purchases” m. POnnuSwami Chairman and managing director, Pure Chemicals Pure Chemicals expects to record 35–40% growth in sales and 25–30% growth in vol- umes in its fiscal year ending March 31, 2012. Pure Chemicals plans to add new locations to its distribution infrastructure in India and grow exports to neighboring countries, as well as Africa. It is also working on opening sub- sidiaries in Australia, China and Singapore. “Last year, we added phenol and acetone to our portfolio, and we have started importing Rex Features acetic acid. We are also focusing on specialty chemicals in segments such as coatings and asia distributors inks, plastics, agro chemicals and polyurethane [PU] additives,” Ponnuswami explains. The company is also exploring toll manufacturing of specialty chemicals in India. see slowdown SEEKinG GrEEn ChEmS Thailand-based Union Petrochemical, which distributes products from US-based energy and chemical major ExxonMobil and Thai- land-based energy and chemical group PTT Asia’s chemical sellers see slowing consumption in the Chemical, is looking to move into environ- near term, but express optimism for long-term growth mentally friendly solvents and chemicals. “Our technical team is educating customers [on these products] and creating demand. We are also looking at expanding in other South- malini hariharan MuMbAi China is seeing a similar trend. Chau Tak Vui, east Asian countries such as Vietnam and the C managing director of McKinn International, Philippines,” says Perajed Suwannapasri, as- hina’s battle against inflation has led points out: “China has slowed down in the sec- sistant managing director of Union Petro- the government to progressively ond quarter, which has affected demand for chemical. The company is targeting 15–20% tighten its monetary policy, an ac- chemicals. The second half of this year is not volume growth in 2011. tion mirrored in India. South Korea promising.” McKinn International is a $30m India-based chemical distributor Ram Cha- has lowered its growth forecast, again on infla- chemical distribution company with expertise ran is also focusing on environmentally tion concerns, while the other Asian power- in sourcing specialty chemicals from China. friendly materials, including products such as house – Japan – has yet to recover from a dev- McKinn’s products include acetates, acrylates, recycled rubber. The company is a distributor astating earthquake and tsunami in March. glycols, polymers, solvents and oleochemicals. of synthetic rubber, plastics and specialty The impact has been slowing growth chemicals across the country. throughout the region, according to Asian riSinG COSTS Companies increasingly understand the chemical distributors. Companies are focus- Additionally, Chinese production costs are on value and economics of recycled material, ing on long-term growth opportunities by ex- the rise. “Export competitiveness has been af- Kaushik Palicha, executive partner of the panding into new products and regions. fected in certain products – domestic logistics Rs1.45bn company, points out. Ram Charan “Due to volatility in basic chemicals, cus- costs are increasing and moving product from expects sales to grow by 20% in 2011–2012. tomers do not want to keep stocks and are factory to port can be quite costly. Currency ap- Palicha is optimistic that a slowdown seen in postponing purchases,” says M. Ponnuswami, preciation is also a problem,” Tak Vui added. sectors such as automotive in India will be short- chairman and managing director of Pure Despite these concerns, China remains an im- lived. Manufacturing should pick up in July as Chemicals, an India-based distributor that had portant sourcing point because of its strengths, companies gear up for sales during the festive Indian rupees (Rs) 12.5bn ($281m) in sales in especially in the area of research and develop- season in the fourth quarter, he says, adding that the fiscal year ended March 31, 2011. ment, which enables local companies to con- opportunities to expand will multiply in the Pure Chemicals distributes commodity tinuously launch new products in the fine and coming years as global chemical manufacturers chemicals such as alcohols and ethers, gly- speciality chemical segments. Despite a chal- look to expand their presence in Asia. ■ cols, acrylates, aromatics, amines, solvents lenging 2011, chemical distributors are optimis- Read Malini Hariharan and John Richardson’s and titanium dioxide, as well as a number of tic that the region’s long-term prospects will en- Asian Chemical Connections blog www.icis. specialty chemicals. able them to withstand any economic turmoil. com/blogs/asian-chemical-connections July 18-31, 2011 | ICIS Chemical Business | 45ICB_180711_045 45 13/7/11 16:12:10
  16. 16. TOP 100 chemical disTribuTOrs NACD builds to the industry,” says Jahn. “Our members have done an even better job of educating congress on the importance of dealing with this issue.” Issued in 2006, CFATS would have expired on a solid in 2009, but Congress granted two one-year renewals. NACD is now hoping for a renewal of seven years or more to provide longer- term regulatory certainty. A House Commit- tee approved a seven-year extension (HR-908) foundation in May, but the Senate bill, S.473, which moved out of committee late last month, would provide only a three-year extension. For TSCA, Jahn says, the way forward is unclear. “Senator [Frank] Lautenberg of New Jersey has introduced a bill into Senate, S.847, but NACD enters its fifth decade with a growing we’re opposed to that for a variety of reasons. member base, international influence and a program The bottom line is, we’re still looking for common sense federal reform. We would like of assertive advocacy founded on the credibility of a solid federal standard based on sound sci- ence that weighs both the danger of a chemi- Responsible Distribution cal and the risk of exposure.” The last item, railroad transportation, is a CLAY BOSWELL NEW YORK almost every congressional district, so we sore subject for the chemical industry. N have broad reach, and we’re able to have some “I’ve visited over 100 members in the five ow in its 40th year, the US-based Na- influence with folks when we need to.” years that I’ve been at NACD,” says Jahn, tional Association of Chemical Dis- Most members will have had scant experi- “and exactly one has been satisfied with their tributors (NACD) is stronger than ever ence of the political process, so NACD has rail service.” Two-thirds of the chemical in- and enlisting new members attracted developed tools to help them participate ef- dustry is served by a single carrier, a monopo- by the organization’s energetic representation, fectively. For example, members can down- ly situation that results in poor service and high standards and expanding service offering. load a 20-page advocacy toolkit unreasonable costs, he explains. “We are looking to grow,” says Chris Jahn, that outlines the key issues, ex- “So we’re supporting two bills – one that NACD president. NACD’s membership, whit- plains how to contact Members would repeal the antitrust exemption that tled away in recent years by industry consoli- of Congress, suggests ways to railroads enjoy, and a second that would re- dation, is on the rise again and at the highest involve employees, and intro- form the way the Surface Transportation level in a decade: 261 distributor members and duces a suite of web-based re- Board regulates the railroads. The goal is to 140 affiliate members, 401 in total, of which 40 sources that NACD members create more competition.” joined in the last year. The two bills – S.49, the Railroad Antitrust Jahn credits the result to NACD’s commit- “We are always looking Enforcement Act of 2011 and S.158, the Sur- ment to advocacy, Responsible Distribution face Transportation Board Reauthorization and membership value. for new opportunities to Act of 2011 – were introduced to the Senate provide additional benefits in January and have moved out of committee, ACTIVATING THE GRASS ROOTS to our members” Jahn says. “But we would really like to see Advocacy has always been fundamental to more momentum in the House,” he adds. CHRIS JAHN NACD’s mission, of course, but the associa- President, NACD tion has multiplied its effectiveness by solicit- A VALUABLE BRAND ing the active participation of members. Responsible Distribution, the NACD’s envi- “NACD members have never been more en- can use to keep informed and respond quickly ronmental, health, safety and security man- gaged and more effective on federal legislation to legislative developments. agement system, contributes heavily to the than at any other time in our history,” Jahn The toolkit also describes an innovative impact of the association’s advocacy efforts. says. “It’s the involvement of our members in Site-Visit Program, through which NACD staff Adopted in 1991 as the Responsible Distribu- the process – grassroots advocacy.” help members arrange, prepare for and con- tion Process, it has been a requirement of The strategy is particularly appropriate for duct facility tours for Members of Congress. NACD membership since 1998. chemical distribution, a fragmented, geo- The payoff for these efforts is a fair hearing Third-party document and site verification graphically diverse industry largely com- when issues affecting chemical distributors maximize Responsible Distribution’s credi- prised of small businesses, none of which, come before the legislature. bility, but industry shorthand for the program alone, could marshall the kind of resources This year, the agenda is topped by has tended conversely to minimize its visibil- like those available to multibillion dollar extension of the Chemical Facility Anti- ity. NACD recently addressed the problem chemical manufacturers. Terrorism Standards (CFATS), reform of the with a rebranding. “Our members are not, on average, big com- Toxic Substances Control Act (TSCA) and re- “Everyone called it RDP, but if you weren’t panies,” Jahn observes. “On the other hand, form of railroad regulation. “We’ve got a lot of a chemical distributor, you didn’t know NACD members have over 1,500 facilities momentum behind moving forward on what that meant,” Jahn explains. across the country. We have a presence in chemical security in a way that will be helpful “To remove that obstacle, particularly for 46 | ICIS Chemical Business | July 18-31, 2011 www.icis.comICB_180711_046-047 46 13/7/11 15:47:09
  17. 17. TOP 100 chemical disTribuTOrs all of our stakeholders in government, both ent laws and different business processes,” as warehousers, recyclers and carriers, and on the Hill and in the agencies, we decided to he explains. “But we are saying that certain even companies that do not handle chemi- call the program what it is – not RDP, not RD, fundamentals should apply, such as third- cals, such as insurers, to engage more closely but Responsible Distribution.” party verification. Third-party verification is with the association and its members. The rebranding was rolled out last August, the linchpin.” While NACD programs such as these along with a new NACD logo and a facelift for NACD aims to extend Responsible create new venues for interaction, others pro- the association’s website and magazine. Distribution’s influence not only around the vide access to expertise that might otherwise “We’ve got brand equity in Responsible Dis- world, but also throughout the chemical be unaffordable. tribution,” Jahn says. “It means something.” supply chain. For example, a program announced in Jahn would like to extend that brand equity March helps members achieve regulatory beyond the shores of the US. “We’ve got brand equity in compliance. A memorandum of understanding signed Based on partnerships with four consult- last December by NACD, the Brazilian Asso- Responsible Distribution. ing firms, it offers members discounted con- ciation of Chemical Distributors (ASSOCIQ- It means something” sultations, detailed compliance information, UIM) and the Canadian Association of Chem- CHRIS JAHN training sessions and webinars, and regular ical Distributors (CACD) is a first step. President, NACD updates on changing requirements. “Our hope is that it will serve as a stepping A program still under consideration would stone for greater international recognition of commission market research to give mem- Responsible Distribution by chemical manu- Last year, for example, the association bers a clearer view of developments in the facturers, customers and governments,” he signed an agreement with the US-based Na- market place. As always, membership value says. “We’re talking to other associations in tional Tank Truck Carriers (NTTC) to solidify will determine whether an initiative leaves the Americas, Europe and Asia about joining and extend the existing relationship, the ulti- the drawing board, Jahn points out. our effort, and I’m cautiously optimistic that mate objective being to improve quality, safe- “We are always looking for new opportuni- we will see progress in that area.” ty and business processes. ties to provide additional benefits to our The objective would not be to export an The association’s affiliate programs fulfill a members,” he says. ■ exact replica of the NACD program, he points similar function by inviting suppliers and Read more industry news and get the latest out. “We won’t be telling other countries how producers not qualified for membership, international chemical prices direct to you. to do things – different countries have differ- service providers that handle chemicals such Visit TRU S T & R ESPEC T OUR RELATIONSHIPS ARE BUILT ON IT. T H E R E I S A R E A S O N we have excellent customer WE STRIVE TO BE YOUR PREFERRED SUPPLIER OF: relationships, and that we’re the preferred choice of our customers and principals. For over 40 years, we’ve > Urethane Chemicals been delivering excellence in our markets with a highly > Specialty Resins qualified technical sales force and superior service to the > Pigments biggest names in chemical manufacturing. Trust and > Fillers respect are earned with our customers and principals, > Specialty Additives creating lasting partnerships with just the right ‘mix.’ > Flame Retardants > Anti-Corrosives > Surfactants Headquarters: 4155 Manchester Avenue, St. Louis, MO 63110 - Tel: 800-272-4929 Offices in: Atlanta, GA; Chicago, IL; Cincinnati, OH; Flemington, NJ; Kansas City, MO; Memphis, TN; St. Louis, MO July 18-31, 2011 | ICIS Chemical Business | 47ICB_180711_046-047 47 13/7/11 15:47:16
  18. 18. ICB_180711_048 48 13/07/2011 09:56:41
  19. 19. TOP 100 chemical disTribuTOrs Nexeo to focus on fundamentals New CEO David Bradley seeks to first enhance the value proposition of the former Ashland Distribution as a stand-alone company jOsEpH CHANg nEw yOrk Partners – both of which have 42.5% stakes, N with the rest owned by management and ewly independent US-based chemi- other investors. cal distributor Nexeo Solutions will first focus on developing its business M&A ON THE BACK BURNER model and proposition, rather than While M&A will initially be on the back burn- on mergers and acquisitions (M&A). er in terms of focus for Nexeo, Bradley did not “We are very excited to be a stand-alone rule out deals altogether. “If we saw an oppor- company focused exclusively on distribution, tunity where we could make a cash-flow ac- and will spend 100% of our time, talent and cretive acquisition that would be a good fit, resources on getting our value proposition we would give it our full consideration,” Bra- right – using service as a differentiator,” says dley says. “The reality is that we have a great CEO David Bradley in an interview with ICIS. core platform we can leverage right now. We “We will first focus on developing this differ- want to leverage our strong supplier relation- entiated model, before undertaking major ships to build up our market presence.” M&A.” However, he calls M&A a “very inefficient, Nexeo Solutions launched on April 1, after low-yield process. Even with all the merger the former Ashland Distribution business was activity in the global chemical distribution acquired by global private equity firm TPG space, the top three distributors only have Capital for $979m (€685m). The company op- about 15% of the market,” he notes. erates in three markets – chemicals, plastics Meanwhile, potential consolidation in the “We will spend 100% of our and composites. petrochemical industry could provide oppor- In 2010, it generated sales of $3.4bn, mak- tunities for chemical distributors. time on getting our value ing it the world’s third-largest chemical dis- “Whenever there is consolidation among proposition right – using tributor. Chemical sales represented 46% of suppliers, distributors can pick up accounts service as a differentiator” total revenue, with the rest in plastics and to service, as companies seek efficiencies in dAvid BRAdlEy composites. All chemical sales were in North service as their customer base widens,” says CEO, Nexeo Solutions America, while plastics and composite sales Bradley. “We see the next five years as an ex- were in North America and Europe. citing time in this business, as we see growth Being an independent company owned by in emerging markets and companies seek the private equity serves as an advantage, notes most efficient channels to market.” Bradley. “Private equity has the appetite to invest in diffERENTiATiON a growing business that generates cash flow. A key element of its business model will be As part of a larger company in the last five differentiating its service offering. “We will years, investment in the business was mini- increase our technical aptitude in key markets mal,” he says. “Building supplier relation- so we can service customers as they grow,” ships, the asset base and service capabilities says Bradley. Nexeo will identify and focus requires significant investment.” on those products where it can differentiate Private equity firms have made their mark itself, he adds. on the chemical distribution sector. The top Another key area will be managing price three companies – Germany’s Brenntag, US- volatility. “In the last three to four years, the based Univar and Nexeo Solutions – all have chemical markets have been characterized by private equity ownership. one thing – volatility,” says Bradley. “We Global private equity firm BC Partners took must manage that volatility to meet our cus- Brenntag public in March 2010 in Germany, tomers’ needs.” ■ and has reduced its ownership to under 50%. For exclusive CEO interviews, sign up for our Univar is owned by global private equity firms free CEO Opinion e-newsletters Clayton, Dubilier & Rice, and CVC Capital July 18-31, 2011 | ICIS Chemical Business | 49ICB_180711_049 49 13/7/11 16:08:50
  20. 20. TOP 100 chemical disTribuTOrs Introducing the IcIs Top 100 chemical Distributors In our annual listing, we rank the leading global chemical distributors by 2010 sales. Plus, this year, we break out sales by geography ered strongly from the financial and economic joseph chang new york Distributors have recovered W crisis, with many companies showing solid e are pleased to once again in- strongly from the crisis, with gains in 2010 sales from 2009 levels. The troduce the ICIS Top 100 Chem- many companies showing ranking is based on calendar 2010 sales. ical Distributors – a global list- Our tables this year rank leaders by geo- ing of companies critical to the solid gains in 2010 sales graphic sales rather than by where companies chemical supply chain. This is our second joseph chang are headquartered. The regions are North Global editor, ICIS Chemical Business year featuring this ranking, and this time, we America, Europe, Latin America, Asia, and also break out sales by geographic region. Middle East and Africa. We give special thanks to the major chemi- ciation of Chemical and Petrochemical Dis- Note that we only included those companies cal distributor associations that made this tributors), and the Canadian Association of that broke out sales by geography, and that worldwide listing possible. We had tremen- Chemical Distributors (CACD) . sales by geography will often differ from total dous support from the US National Associa- We are privileged to welcome a number of company sales in the main Top 100 listing. ■ tion of Chemical Distributors (NACD), the new companies into the listing. We have also European Association of Chemical Distribu- listed companies with sales below the thresh- For the full Top 100 Chemical Distributors tors (FECC), ASSOCIQUIM (Brazilian Asso- old of the Top 100. Distributors have recov- listing online visit 50 | ICIS Chemical Business | July 18-31, 2011 www.icis.comICB_180711_050 50 13/7/11 15:38:02
  21. 21. ICB_180711_051 51 13/07/2011 09:57:15
  22. 22. INNOVATION = VALUE TECHNICAL EXPERTISE: Advancements in technology can improve your bottom line. USE TOMORROW’S SOLUTIONS TO SOLVE TODAY’S CHALLENGES. Univar’s partnerships with the world’s premier chemical producers offer us a front row seat to the newest breakthroughs in materials and technology. Our technical professionals specialize in formulation development from concept to application, and they’re here to show you how the latest innovations can provide answers to your most complex process and production issues. Univar delivers much more to you than a comprehensive line of chemical ingredients. Innovation, technical expertise — it all adds up to value. INNOVATION > TECHNICAL EXPERTISE > MARKETING > SALES > LOGISTICS > DISTRIBUTION | www.univar.comICB_180711_052 52 13/07/2011 09:57:47
  23. 23. TOP 100 chemical disTribuTOrs BRENNTAG GRoup Services: International marketing, facilities; 68 third-party warehouses, 1 2010 SAlES: €7.6BN President and CEO: John Zillmer distribution, logistics, production, rail terminals and tank terminals; ($10.1BN) Products: Alcohols, aliphatics, alkalis, scientific and technical services three locations that perform contract Mulheim an der Ruhr, Germany amines, aromatics, ascorbic acid, packaging activities catalysts, caustic potash, caustic NExEo SoluTIoNS CEO: Steven Holland soda, epoxy resins, glycols, mineral 4 2010 SAlES: $3.4BN ICC CHEMICAl Products: Coatings chemicals, food acids, oxidizers, performance poly- Dublin, Ohio, US 5 2010 SAlES: $1.7BN ingredients, oilfield chemicals, phar- mers, phosphates, silicones, sodium New York, New York, US maceutical ingredients, personal hypochlorite, solvents, surfactants, President: David Bradley care chemicals and water treatment sweeteners and texture modifiers Products: Adhesives and sealants, President: Naveen Chandra chemicals catalysts, gelcoats, inks and printing Products: Acrylonitrile, aromatics, Services: Just-in-time delivery, product HElM materials, lubricant additives, metal- glycols, plastics, solvents, specialty mixing, formulation, repackaging, in- 3 2010 SAlES: €4.2BN working chemicals, paints and coat- chemicals, olefins, oxo alcohols, ventory management and drum re- ($5.56BN) ings materials, personal care acrylates and sebacic acid turn handling, and technical support Hamburg, Germany ingredients, pharmaceutical ingredi- Assets: More than 400 sites in over ents, polymers, reinforcements, res- AZElIS 70 countries CEO: Dieter Schnabel ins, solvents, specialty and 6 2010 SAlES: €1.167BN Products: Feedstocks, organic and industrial chemicals and thermo- ($1.55BN) uNIVAR inorganic chemicals, polymers, poly- plastics Antwerp, Belgium 2 2010 SAlES: $7.9BN urethane products and specialty Services: Packaging Redmond, Washington, US chemicals Assets: Sixty-three owned or leased CEO: Joris Coppye NoRTH AMERICAN CHEMICAl DISTRIBuTIoN lEADERS 2010* Company Sales ($m) Company Sales ($m) Company Sales ($m) 1 Univar 5,800 34 Chemsolv 75 67 D.B. Becker 37.1 2 Nexeo Solutions 3,400 35 Industrial Chemicals Inc. 72 68 Miles Chemical 35.7 3 Brenntag 3,230 36 Coyne Chemical 70 69 Buckley Oil 31.3 4 Helm 1,440 37 K-Solv 69 70 Slack Chemical 30 5 Hydrite Chemical 370 38 Lintech International 67 71 Comet Chemical 29.9 6 Quadra Chemicals 303.7 39 Charkit Chemical 62.2 72 Min-Chem/Lawrason’s Group 29.7 7 Canada Colors and Chemicals 267 40 TCR Industries 62 73 Independent Chemical 28.2 8 EMCO Chemical Distributors 257.7 41 The Chemical Company 60 74 Chemical Distributors Inc. 27.9 9 Interstate Chemical 241 42 Walsh & Associates 59.4 75 GJ Chemical 27.5 10 L.V. Lomas 231 43 Tarr 57.2 76 Gulf Coast Chemical 26.8 11 KODA Distribution Group 227.7 44 Chemical Solvents 56.8 77 Industrial Chemicals Corp. 26 12 Archway Sales 210 45 Westco Chemicals 55 78 E.W. Kaufmann 25.11 13 ICC Chemical 205 46 Skyhawk Chemicals 53.2 79 R.E. Carroll 25.1 14 PVS Chemicals 197 47 Cole Chemical & Distributing 53 80 Veckridge Chemical 25 15 E.T. Horn 196 48 McCullough & Associates 52 81 Vivion 24 16 The Plaza Group 193 49 CONCHEMCO 51.9 82 PHT International 23.4 17 M.F. Cachat 187 50 Fitz Chem 51.5 83 Columbus Chemical 22.8 18 Grupo Pochteca 185 51 The DeWolf Companies 49.3 84 Coast Southwest 22.7 19 Superior Solvents & Chemicals 168 52 Ideal Chemical & Supply 49.2 85 Alchem Chemical 22.2 20 Wego Chemical 145 53 Quelaris Internacional 49 86 Schibley Solvents & Chemicals 21 21 Barton Solvents 138.5 54 Hubbard-Hall 46.8 87 APCO Industries 20 22 CSD-Startex 133 55 United Mineral & Chemical 46.6 88 Atlantic Chemicals Trading 16 23 Chemicals Inc. (Chemgroup) 121.1 56 dar-tech 44.6 89 TER GROUP 16 24 SolvChem 112 57 TH Hilson 44.2 90 Boehle Chemicals 14.5 25 AllChem Industries 110 58 BHS Marketing 43 91 Mutchler Pharmaceutical Ingredients 13.8 26 H.M. Royal 109.2 59 Chemisphere 42 92 ECEM European Chemical Marketing 13.3 27 Haviland 101 60 Webb Chemical Service 40.7 93 InterAtlas Chemical 10 28 Tanner Industries 92.3 61 Transchemical 40.5 94 KIC Chemicals 8.7 29 Tilley Chemical 85.8 62 Matteson-Ridolfi 40 95 T.Z. Group 8 30 Maroon 85 63 Ferguson Chemical Innovation 39 96 Arpadis Group 7.4 31 ClearTech Industries 81 64 TRInternational 38.7 97 P A.T. Products . 7 32 HB Chemical 80 65 Chem One 38.6 98 NovaSol Chemicals Group 4.7 33 Durr Marketing Associates 78 66 Connell Brothers 38.5 99 Advanced Chemical Concepts 4.4 *Sales are by region and may differ from the total sales figure in the overall listing. SOURCE: Companies, compiled by ICIS. July 18-31, 2011 | ICIS Chemical Business | 53ICB_180711_053-086 53 1/8/11 12:37:16