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The global third-party chemical distribution market size is forecast to increase by USD 138 million at a CAGR of 8% between 2023 and 2028. The market's growth depends on various factors, notably the expanding focus on chemical distribution and the growing preference for outsourcing distribution services. Additionally, there's a rising demand for third-party chemical distribution, particularly from the MEA and APAC regions. However, a significant challenge anticipated to hinder market growth is the need for third-party chemical distributors to adhere to stringent regulations. It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The global third-party chemical distribution market serves the chemical industry, manufacturing, and industrial sectors by providing logistics, packaging, blending, waste removal, and inventory management services, along with technical training, to ensure high-quality products while prioritizing employee safety and minimizing environmental impact, offering a diverse range of commodity and specialty chemicals demanded by consumers across various sectors, including pharmaceuticals, personal care products, soaps, toothpaste, fragrances, shampoos, and hair dyes, comprising substances like formaldehyde, lanolin, ammonium lauryl sulfate, diethylene glycol, salicylic acid, malic acid, and lactic acid.
Moreover, the market is expanding with the integration of chemical transportation and e commerce platforms, catering to SMEs, pharmaceutical segment, and laboratories. Enhanced safety training and technical expertise across industry verticals like electronics improve supply chain visibility and traceability. Advances in automation and artificial intelligence streamline operations, ensuring efficient distribution and compliance. This growth underscores the critical role of third-party distributors in the chemical industry.
The global market is witnessing significant growth driven by the rising focus on chemical distribution. The digital transformation within the chemical industry is reshaping operations across manufacturing and industrial sectors. As customer demands evolve, businesses are leveraging digital technologies to optimize logistics, packaging, blending, waste removal, and inventory management. With tools like the Internet of Things (IoT) and analytics, manufacturers and distributors can analyze data, automate processes, and prioritize employee safety while mitigating environmental impact.
The rising consumer demand for commodity and specialty chemicals, pharmaceuticals, and personal care products underscores the significance of efficient market concentration and distribution services, encompassing products such as formaldehyde, lanolin, ammonium lauryl sulfate, diethylene glycol, salicylic acid, malic acid, lactic acid, soaps, toothpaste, fragrances, shampoos, and hair dyes. As a result, digitization initiatives are being implemented to meet these evolving demands, fostering innovation and sustainability in the chemical industry.
The global market is set to benefit from an uptick in Mergers and Acquisitions (M&A). Consolidation resulting from a surge in M&A activity is an ongoing trend in the market, with a growing number of large international Companies acquiring smaller companies to expand their reach into new regions and fill gaps in their portfolios. As a result, chemical distributors are experiencing increased valuations, and manufacturers are able to maintain a direct relationship with their end-users, ensuring proper product usage.
The increase in M&A activity is also being driven by various industry regulations, such as compliance with lab standards and registration, evaluation, authorization, and restriction of chemicals (REACH) and classification, labeling, and packaging (CLP) regulations. These regulations are particularly challenging for small chemical distributors, which has led to an increase in M&A activity. Thus, the rising trend of M&A is expected to continue driving the growth of the global market during the forecast period.
The emergence of innovative distribution channels is a major challenge to global market growth. The advent of modern technologies and the direct sale of chemicals by chemical manufacturers to customers are major factors that will impede the growth of the market. Traditionally, chemical producers distribute their products themselves. Direct supply still accounts for about 90% of the total global distribution of chemicals across various end-user industries. In addition, the advent of modern technologies in the market further caters to the growth of this challenge.
For instance, technologies such as Blockchain enable smart contracts between chemical manufacturers and their end-users and enable auto-execution and validation of contracts, which results in the elimination of third-party intermediaries in the contract. Thus, the emergence of innovative distribution channels can become a major challenge for the growth of the global market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Barentz International BV - The company offers solutions for third-party chemical distribution and also supplies IT solutions to third-party enterprises. Also, they provide solutions for human nutrition, pharmaceuticals, personal care, and animal nutrition.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the commodity chemicals segment will be significant during the forecast period. The commodity chemicals segment is expected to record a steady growth rate during the forecast period. Commodity chemicals are bulk chemicals that are used to manufacture an extensive range of end-user products, such as construction materials, adhesives, plastics, apparel, and tires. Commodity chemicals include polymers, petrochemicals, and basic inorganic chemicals and fertilizers; they generally have a lower manufacturing cost when compared to others. They are mostly used in personal care products, the aerospace industry, and other industrial applications such as the manufacturing of plastics, synthetic fibers, synthetic rubber, fertilizers, pesticides, and others. The commodity chemical segment dominates the market as commodity chemicals are more widely used across all industries.
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The commodity chemicals segment showed a gradual increase in market share from USD 143.80 million in 2018. Innovative service delivery methods, along with rising demand for the distribution of commodity chemicals in developing regions, are other major factors that are expected to drive the growth of this market segment. For instance, Brenntag uses a hub-and-spoke model wherein commodity chemicals are received in bulk quantities at Brenntag's hub locations, which have large tank farms, warehouses, and mixing and blending facilities. From the company hub, these chemicals are supplied to the 'spoke.' which comprises facilities that accommodate smaller tank farms and warehouses that are located near the customers to ensure prompt and smooth delivery. APAC is one of the major consumers of commodity chemicals due to the presence of a large number of manufacturing facilities in the region, which is driving the growth of the segment.
Textile chemicals are widely used in the processing of fabrics. Some main processes include dyeing, bleaching, printing, conditioning, and finishing. Textile finishing uses various finishing agents, such as water and oil repellants, antistatic agents, anti-slipping agents, flame retardants, wrinkle-resistant, antimicrobial agents, soil and dirt release and repellents, self-cleaning agents, and temperature regulation agents. Functional textile finishing agents are used to enhance the properties of fabrics and impart special functions to fabrics. For instance, antimicrobial finishes provide bacterial and fungal resistance to fabrics and kill odor-causing bacteria. The high demand for functional textiles in hospitals, offices, schools, and households is fueling the demand for functional finishing agents. The rising demand for functional textiles is expected to drive the demand for textile chemicals during the forecast period. This is expected to drive the growth of the textiles segment in the global market during the forecast period.
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APAC is estimated to contribute 49% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The third-party chemical distribution market in APAC is expected to grow at a significant rate during the forecast period. The growing demand for the distribution and delivery of specialty chemicals, as well as commodity chemicals from various emerging economies in the region, is one of the major factors that cater to the growth of the market in the region. Countries such as China, Japan, South Korea, India, and Australia are the major contributors to the growth of the market in the region. Increased market potential due to the increased spending power of a rising middle class has been one of the prime factors that have attracted increased investments from third-party chemical distributors in the region.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Chemical Logistics Market: Chemical Logistics Market by Service, End-user, and Geography - Forecast and Analysis
Chemical Warehousing and Storage Market: Chemical Warehousing and Storage Market by Type, Application, and Geography - Forecast and Analysis
Specialty Chemicals Market: Specialty Chemicals Market Analysis APAC, North America, Europe, South America, Middle East and Africa - US, China, Japan, South Korea, Germany - Size and Forecast
The Global Third-Party Chemical Distribution Market plays a crucial role in the chemical industry, serving the manufacturing and industrial sectors by managing logistics, waste removal, and inventory management. It offers technical training to ensure employee safety and minimize the environmental impact of operations. The market caters to diverse segments, including the personal care industry, providing high-quality chemicals for products like soaps, fragrances, shampoos, and lipsticks. Additionally, it serves the transportation and automotive industries with downstream chemicals for sealants, paint, and interior components. With a focus on environmental sustainability and consumer demand, third party chemical distribution ensure the availability of high-performance thermoplastics and finished fuel additive solutions for various applications in refineries, petrochemical facilities, and heavy industrial operations.
Moreover, the market is a critical player in supplying high-quality products to various industries, including the transportation and automotive sectors. This market demonstrates market concentration, particularly in the specialty chemicals market, offering substances like formaldehyde, lanolin, ammonium lauryl sulfate, diethylene glycol, salicylic acid, malic acid, and lactic acid. These chemicals find applications in diverse products such as toothpaste, hair dyes, moisturizing lotions, acne treatment products, sun protection creams, and male grooming personal care products, promoting skin and hair health. Moreover, they contribute to manufacturing components like bumpers, headlights, interior seats, dashboard parts, seatbelts, airbags, and lithium polymer car barriers. Additionally, this market supports water treatment and process treatment for heavy industrial operators seeking industrial manufacturing end-use solutions.
However, the Third-Party Chemical Distribution Market emphasizes environmental responsibility and waste reduction while enhancing efficiency. It handles a wide range of products, including coatings, elastomers, agrochemicals, construction chemicals, Specialty polymer and resins, synthetic rubbers, and explosives. This market plays a vital role in the efficient and responsible distribution of diverse chemicals, supporting various industries.
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Market Scope |
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Report Coverage |
Details |
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Page number |
170 |
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Base year |
2023 |
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Historic period |
2017-2021 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 8% |
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Market growth 2024-2028 |
USD 138 million |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
7.24 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 49% |
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Key countries |
China, US, Germany, UK, and India |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks, Third-Party Chemical Distribution Market Industry Report |
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Key companies profiled |
Barentz International BV, Biesterfeld AG, BRENNTAG SE, HELM AG, ICC Chemical Corp., IMCD NV, Jebsen and Jessen Pte Ltd., Manuchar NV, Obegi Group, Omya International AG, Petrochem, Protea Chemicals, REDA Chemicals, Redox Ltd., Sea Land Chemical Co., Snetor SA, Stockmeier Holding GmbH, Tricon Energy Inc., Univar Solutions Inc., and Wilbur Ellis Holdings Inc. |
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Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period, Third-Party Chemical Distribution Market Growth Analysis |
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Customization purview |
If our third-party chemical distribution market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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