Opportunities in Chemical Distribution

Opportunities in Chemical Distribution

          
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Opportunities in Chemical Distribution

Industrial Products & Processes, Marketing & Sales
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    In the fourth quarter of 2009, The Boston Consulting Group (BCG) conducted a study of future opportunities in the chemical industry, focusing on the role of the chemical distribution sector and on the “go-to-market” (distribution) approaches of chemical producers. The study involved quantitative research that utilized numerous databases—including BCG’s own proprietary databases—and also the results of more than 150 interviews that BCG conducted with executives at chemical companies, customers of chemical companies, and chemical distributors in all regions of the world.

    In 2008, global consumption of chemical products exceeded €1.9 trillion (roughly 3.5 percent of global economic activity). While chemical manufacturers have traditionally distributed their own products (with around 90 percent of chemical products still directly distributed today), competitive pressures will increasingly require new approaches to distribution to strike the proper balance between providing differentiated offerings and containing the resulting costs of complexity. Our study highlights the opportunities available through closer cooperation and partnerships among chemical producers, third-party distributors, and customers, as well as the importance of taking a strategic rather than an operational approach to chemical products distribution.

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