Chemical Distribution Dynamics May Drive Consolidation

09 September 2016 16:53 Source:ICIS News


BOSTON (ICIS)--Shifting dynamics in chemical distribution will drive further consolidation in the sector, a senior executive from Brenntag said on Friday.

“It is still a highly fragmented market with huge opportunities for consolidation,” said Robert Moser, senior vice president of global accounts and director of government affairs at Brenntag, the world’s leading chemical distributor.

Moser spoke at the 9th ICIS World Chemical Purchasing Conference in Boston, Massachusetts.

The top 10% of the over 240 chemical distributors listed in the ICIS Top 100 Chemical Distributors ranking represent about $52bn in annual sales, or less than one-third of the global market, he noted.

The emergence of large chemical distributors as publicly traded companies is impacting market behaviour, said Moser.

From zero publicly traded companies five years ago, today Brenntag, Univar, Nexeo Solutions and IMCD are all public, he pointed out.

“One impact of this is that companies are making acquisitions in less volatile markets to broaden their portfolios and take some of the risk out,” said Moser.

On 9 September, Brenntag made its third acquisition of a lubricants distributor in the past year, buying US-based Mayes County Petroleum Products.

The second largest global distributor, Univar, has made a number of acquisitions in waste and environmental services over the past year.

Overall barriers to entry in chemical distribution are increasing with significant demands from regulatory authorities in areas such as new build installations. This will increase capital spending over time and drive consolidation, said Moser.

“Market demands will force further consolidation and specialised services. You can be big or a niche specialised distributor, but it’s challenging to be mid-sized,” he said.

Another advantage of size is the ability to influence suppliers. “Larger distributors can move more volumes so they have leverage with multiple suppliers,” said Moser.

“Many distributors are larger than their producer partners. Thus, pricing management and control is less producer directed and more market relevant,” he added.

Presenting a New Site To Improve Manufacturers' Market Growth

 

We are excited to announce we have launched a new website, http://www.palmerholland.com/work-with-us, dedicated to the implementation of sales and marketing programs for chemical manufacturers.


Now more than ever, manufacturers have an intense need to accelerate sales growth and gain market transparency. We continue to study buyer behaviors and how changes in that behavior have impacted the specialty chemical business in order to help manufacturers improve sales results and expand market visibility.    


“There is no longer one standard approach. Today's buyer interacts with suppliers and prospective suppliers through communication avenues that did not exist a few years ago,” said Mark Riemann, Vice President of Marketing. “Unlike our competition, we combine multiple sales channels with in-depth market intelligence to give clients actionable data on market trends and opportunities.”


The new website illustrates our continuous efforts to offer manufacturers customized solutions to reach new and existing customers. “Our clients report they have twice the speed to prospective customers on new projects and 8-11% faster market growth when Palmer Holland works alongside their sales team,” said Riemann.


Visit our new supplier improvement page for more information on how we can help you achieve your sales goals.

Allnex and Nuplex are Now Officially Combined

 

Brussels, Belgium / September 14 2016 – Allnex, a leading international supplier of resins backed by investor Advent International, today announced that Nuplex Industries, a global manufacturer of resins, and Allnex have now been brought together to form one company. The group, present on four continents and serving customers in over 100 countries, becomes the leading industrial coating resins company globally.


The company will operate under the name of Allnex and is today launching a new logo that is a symbolic representation of the combined strengths of Nuplex and Allnex. It will now draw on the expertise and scope of both Nuplex and Allnex, two companies that both have a history of commitment to innovation and engagement with customers, as well as complementary geographical footprints. They also share similar corporate values and a global outlook.


Miguel Mantas, the new CEO of Allnex, commented, ‘I am delighted that this business combination has taken place. With our comprehensive, state-of-the-art technology portfolio, our ability to provide clients with the right chemistry for their products is even more extensive than before. I am also looking forward to moving our corporate headquarters to Frankfurt. The decision to choose Frankfurt for the future company’s headquarters was taken with the intention of establishing a new location, symbolizing a fresh start for the company. Frankfurt offers excellent flight, rail and car connections. The city is located in the heart of Europe and Germany, the largest European economy and a key market for the company and for the coatings industry in general.’


The Chairman of the Allnex Advisory Committee, Rich Alexander, said, ‘I am particularly enthusiastic about the modernized branding and new logo of our company. It unites the visual identities of both companies and embodies our commitment to taking the best elements from both Allnex and Nuplex.’


Ron Ayles, a Managing Partner at Advent International and head of the firm’s global chemicals practice, said, ‘the combined company will be a strong global leader in industrial coating resins, with over 30 manufacturing sites and about two dozen research and technology support facilities. This puts us in an excellent position to consolidate current markets and develop new ones.’

 

About Allnex
Allnex, formerly Cytec Industries' Coating Resins business and acquired by Advent in 2013, is a leading global producer of coating resins and additives for architectural, industrial, protective, automotive and special purpose coatings and inks. Allnex is recognized as a specialty chemicals pioneer and offers an extensive range of products including innovative liquid resins and additives, radiation cured and powder coating resins & additives and cross linkers for use on wood, metal, plastic, and other surfaces.

 

About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global private equity firms and a leading investor in the global Chemicals industry. Advent's investment philosophy is centred on supporting leading management teams and providing resources for further growth in order to execute on a mutually developed strategy and investment case. To date, Advent has raised cumulative capital of US$53 billion and has executed over 310 transactions including over 30 investments in the Chemicals industry. Advent has a strong track record of making significant and successful investments, with recent chemicals transactions including Allnex (formerly Cytec Industries' Coating Resins business), Oxea, Maxam, Viakem and Grupo Transmerquim. Advent also has extensive experience in conducting Public-to-Private transactions, with recent examples including Douglas, Mediq and Unit 4.

 

Vertellus and Palmer Holland Expand Distribution Relationship

 

CLEVELAND, OH – September 19, 2016 – Vertellus and Palmer Holland have expanded their strategic relationship to better serve the CASE (coatings, adhesives, sealants, elastomers) and lubricant markets.

The agreement, effective October 1, 2016, expands Palmer Holland’s territory to include the eastern states of Maine, Vermont, New Hampshire, Massachusetts, New York, Pennsylvania, Connecticut, Rhode Island, New Jersey, Delaware, Maryland, and Virginia as well as Iowa, Missouri, and Kansas. Palmer Holland currently distributes Vertellus’ castor and castor-based polyols and derivatives throughout the Midwest and Southeast.  


This change will position Vertellus to more effectively and efficiently meet the needs of customers and stakeholders.  Please contact Palmer Holland directly for orders or for more information at 800-635-4822.

 

Request a sample from Vertellus


About Vertellus
Vertellus is a global specialty chemicals company focused on the manufacture of ingredients used in pharmaceuticals, personal care, nutrition, agriculture, and a host of other market areas affected by trends favoring “green” technologies and chemistries. Vertellus is the #1 global producer of pyridine and picolines, specialty pyridine derivatives, DEET, castor oil derivatives and systems, and a world leader in vitamin B3, citrate polymer additives and systems as well as a leader in custom manufacturing of agriculture and pharma intermediates and actives. Vertellus benefits from a technically advanced global manufacturing base and has over 1,000 employees. Vertellus is headquartered in Indianapolis, Indiana. Visit www.vertellus.com for more information.