US toll manufacturing hopes to shed uncertainty in 2026
Inquiries are rising, and existing capacity is filling, but tariff upheavals and inflation worries remain as headwinds in custom chemical production. Gregory DL Morris reports
Coming out of what was considered a good year in 2025, US toll and custom chemical manufacturers reckon they have played their hand well so far. After several years of only modest returns, the growing trend towards shorter and more reliable supply chains is manifesting some new business and many more inquires.
That acceleration is also starting to revive consolidation within the sector as operators seek to add both capabilities and capacity. Even as wind fills the sails, however, some longstanding issues as well as a few new concerns drag sector performance. Most notably, the global procurement disruptions caused by the tariff kerfuffles of the current regime in the US are a mixed blessing for US toll and speciality chemical makers.
The long-term effect is positive as buyers shorten their supply chains, but the short-term effects have been just as chaotic as for just about every other sector of the economy. Buyers are holding back, waiting for more economic certainty. The same is said for capital investment.
The industry has yet to solve its chronic shortage of trained workers, and the rush to repatriate manufacturing has exposed some gaps in capabilities. Those are exacerbated by long and complex permitting challenges for initiating new chemical production.
Challenge finding people
“ Business has been good, especially on the toll side, that is really strong,” says Joe Wilson, president and chief executive officer of Toll Solutions.“ We have done quite a bit of debottlenecking.” The company is getting enquiries from both new and existing customers, but noted an important distinction among inquiries.
“ If it is for an existing chemical that has Toxic Substance Control Act regulations, then it can be quick to set up. But if it requires a premanufacturing notice, that is still a very long process that can take months or years. SOCMA is very active in trying to get that process expedited,” Wilson says
Even with such delays possible, Wilson adds that“ our biggest challenge to growth is still finding qualified operators. That has been a challenge across the industry for a while and there has been very little improvement. There is long lead-time for certain types of equipment, but the longest is for talent. We’ re not necessarily seeking experienced workers, we are looking for potential: people with a good work ethic to become part of a family company.” Don Phillips is business leader for oxides at Monument Chemical, a family-owned company with six operating sites, a cluster in east Texas and one in Kentucky, as well as one in Antwerp, divided among four business units. He notes that shortening supply chains had been a strategy for some companies for several years.
“ Whether near-shoring or on-shoring, it has been a consistent model, both economically and to drive growth,” he says. The uncertainty of the tariff upheavals certainly adds urgency to that strategy, but the demand side of the equation cannot be ignored.“ At the moment overall demand is weak.”
“ Traditional tolling customers have been pulling back. To date we have not seen demand that we might otherwise have expected. We probably will start to see that because there have been a lot of inquiries.” That macro-economic situation offsets some of the push to consolidate operations, shorten supply chains, or explore acquisitions.
New leaders, fresh perspectives
“ All of our sites have come through acquisition,” said Sarves Peri, the newly-named president of Monument.
Phillips – Companies have been shortening their supply chains for years
24 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981