Chemical Distribution Market Trends

Growth Drivers

• Increased services offered by distributors - The expansion of services provided by distributors and the outsourcing of work to them are the primary drivers of additional growth. Increased chemical consumption is not the only factor contributing to the expansion of the chemical distribution market but there are few more factors that also drive the market growth.
  
  A bigger proportion of distribution was outsourced among companies between the years 2008 and 2012, which resulted in an annual growth rate of approximately 1.2 percent.
• Shifting Consumer Preferences - Environmentally conscious consumers are attentive to information about the environment and products, processing, and brands that may affect it. Consumers are increasingly environmentally sensitive and prefer organic products and services, favoring businesses that follow environmental policies.
  
  The American Chemical Society (ACS) promotes green and sustainable chemistry and engineering to create cost-effective, healthier, and more sustainable processes and products. Innovations in this sector include biobased chemicals, catalysis, endangered elements, green chemistry metrics, process engineering, rational molecular design for reduced toxicity, pharmaceutical solvents, and chemical waste.
• Increasing Spending Power - The chemical distribution industry has experienced growth over the projection period due to the combination of robust consumer expenditure and the increasing demand for ecologically sustainable infrastructure. The increasing use of large quantities of chemicals, including specialized ones, by the oil, gas, and petroleum sectors is expected to drive the expansion of the chemical distribution industry.
  
  The American Chemistry Council (ACC) has recently reported that investments in the U.S. chemical sector, which are directly related to the abundant and cost-effective availability of domestic natural gas and natural gas liquids (NGLs), have exceeded USD 200 billion.

Challenges

• Increasing Health Concerns - During the "green revolution," farmers adopted technology to boost productivity and meet the expanding food needs of a rapidly growing population. The Green Revolution yielded significant returns by substantially expanding food grain production. This has also increased the use of chemical fertilizers and pesticides, which affect the environment and human health.
• Environmental regulations - Chemical companies are required to adhere to environmental regulations that dictate the production and disposal of their products when they are no longer required. This is true for both manufacturers and consumers. This regulation alone is anticipated to necessitate an expenditure of over USD 300 billion by chemical industries in the coming years for pollution prevention apparatus and compliance costs.