Emma Verkaik , CEO at the BCMPA , looks at how some of its members are embracing the new ‘ normal ’ in speciality chemicals
The power of agility , resilience & collaboration
Emma Verkaik , CEO at the BCMPA , looks at how some of its members are embracing the new ‘ normal ’ in speciality chemicals
With continued increased demand from sectors such as the automotive , textile , and food and beverage industries , the global speciality chemical sector remains healthy . ResearchandMarkets estimates it to be worth in excess of $ 650 billion / year . Rapid industrialisation , an extension of application bases and an abiding demand for improved crop quality are just some of the factors identified in market growth of over 5 %/ year .
To cope with this demand and to ensure both that existing markets are satisfied , and new markets and sectors are developed , brands , manufacturers and retailers are increasingly seeking the support of CMOs . Events endured since 2019 , including the pandemic , Brexit and geopolitical unrest , have established these alliances as keystones in an ever-growing number of businesses ’ commercial plans .
These relationships provide the ability to explore new sectors or test and develop innovative , niche products without many of the underlying costly outlays in plant , staffing and production resources . This allows for both existing brands and retailers to broaden their offering , and for newcomers to enter the market .
Supply chain challenges
Healthy ongoing growth in collaboration notwithstanding , deep-seated challenges remain for CMOs in the maintenance of a robust and innovative supply chain offering . Many members of the
Figure 1 – Butyl diglycol prices , 2018-2023
BCMPA , the Association for Contract Manufacturing , Packing , Fulfilment & Logistics , are witnessing a reduction in the previous extremities of supply shortages this year , although they still remain in a few specific areas , such as milled silica .
Lead times are still broadly extended across a wide gamut of materials , caused in large part by the reduction on accessible suppliers and extended delivery routes via ‘ third countries ’, but are now stabilising and in some cases improving . However , typical increases from one week to beyond six weeks are still not uncommon .
“ Reviewing our current supply chain , it ’ s fair to say we ’ re not facing any notable scarcities and raw material prices are settling from the alarming peaks observed over the course of 2022 ,” says Paul Twiss , head of marketing at Cleenol Group .
“ That said , the inevitable friction associated with trading with ‘ third
countries ’ means that , in the event of any minor shortage , exporting to the UK is more difficult than trading with a preferred trading partner . Fluctuations in availability will always occur but our third country status will simply exacerbate these when they occur .”
However , there are a number of accompanying factors that are slowing the return to normal timings . As Jon Dutton , commercial director at Libra Speciality Chemicals , notes : “ Some suppliers have been cautious to restock material as pricing falls , for fear of being stuck with overpriced products . On the products with increased lead times , these are sometimes due to increased minimum order quantity ( MOQ ) stipulations from their suppliers . MOQs are continuously being reviewed as manufacturers look for efficiency .” Additional pressures on supply chain efficiency are being caused by the paucity of experienced drivers in
36 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981