SUPPLY CHAIN MANAGEMENT assume that this is some sort of norm . We should be looking very seriously at the future after the current crisis . The large distributors do have an influence on the shape of the market in terms of what it might expect in the future , and any small or midsized distributor has to compete with them . Having said that , I think agility and service remain a very strong card to play in all areas of chemical distribution . So , whilst the large players have a certain size and critical mass , I don ’ t think it ’ s at all a situation where small and mid-sized distributors should feel intimidated by that .
So , in other words , it is more a question of making the best of what you have than what size you are ? The big difference between small and mid-sized distributors and the large guys is the latter have a greater bandwidth of management to spend time assessing their position in the market , simply because of scale . It is important , if you are a small to mid-sized regional player , that you concentrate some of your resources on future planning or get help to do that . And if you are going to do that , it is important to find people who can identify with you as a business and not be drawn into the much larger consultants where they are looking at the global super-size businesses .
You have written that small companies still make up 70 % of the businesses , which remains fragmented , even though Brenntag alone acquired 62 companies while you were there . One of the challenges there must be that if small companies are focusing on their particular niches , how do they become part of a larger business like Brenntag and how do you manage that cultural shift ? It ’ s quite a change for businesses when larger groups acquire them . Sometimes it ’ s stressful , particularly from the point of view of integrated systems . But the sector still has some amazing businesses that I don ’ t think will ever be acquired by large distributors , because they are just too strong as regional players . The opportunity to run a successful regional business with proper underlying growth in it to drive the future remains today , as it always has done . Being acquired is not always the natural evolution of small chemical distributors . They still have the opportunity to grow organically and , indeed , to make acquisitions themselves . Many trade on the fact that they are still independent . Naturally I don ’ t agree that big players are ‘ too big to care ’, as is sometimes suggested , but a focus on being the best distributor in a regional market still matters .
Are there any major trends that you have been thinking about , short- or longer-term ? The key point I want to make is that in today ’ s situation , distributors are generally doing well , with positive cashflow and high margins – but at the same time , there is a very high stress load on them because they are trying to juggle with shortages of certain products in the supply chain . In the small and mid-sized businesses , this can sometimes be all-consuming . My message to them is that this will change in the future and you need to
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Left : Holland – Agility and service are strong cards to hold
Right : Dixon – No ‘ onesize-fits-all ’ strategy in chemical distribution