Special Report

SPECIAL REPORT TOP 100 CHEMICAL DISTRIBUTORS Sonja Ye/RBI In our special ICIS Top 100 VIEWS FROM THE TOP 38 Fecc director general Elisa Setien seeks 26 Brenntag’s Holland shifts China logistics greater collaboration Chemical Distributors issue, 28 Univar’s Jukes sees growth via digitisation 38 Associquim president Rubens Medrano we present the most 30 LBB Specialties’ Hinnant to build on sees Brazil on the right track Charkit and AIC platforms 39 RDC president Cathy Campbell tackles comprehensive listing of 31 GTM’s Berges aims to consolidate in Latin transport challenges America amid recovery 39 CBA president Peter Newport sees Brexit the world’s chemical 33 IMCD’s van der Slikke seeks M&A reaching a tipping point 35 UTS’ Hjorth tailors strategy with Russia’s distributors. Plus, see THE RANKINGS self sufficiency drive interviews with CEOs of FECC 26, NACD 20 ICIS Top 100 main listing COMMENTARIES FECC 30, NACD 23 Asia distribution leaders leading companies on 37 Introducing the ICIS Top 100 Chemical FECC 36, NACD 32 North America leaders strategy, and messages from Distributors FECC 44, NACD 40 Middle East/Africa leaders 37 NACD president Eric Byer highlights FECC 54, NACD 50 Latin America leaders our partner associations transportation and security challenges FECC 60, NACD 58 Europe leaders www.icis.com 1-7 June 2018 | ICIS Chemical Business | 25 Sign up to receive free ICIS updates SPECIAL REPORT by email, tailored to the markets you are SPECIAL REPORT TOP 100 CHEMICAL DISTRIBUTORS interested in. Visit icis.com/keep-in-touch TOP 100 CHEMICAL DISTRIBUTORS from Brenntag not just because it is a UK company but also as a [globally] renowned company so they can rest assured, we will main- tain supplies.” Brenntag in Brenntag allocates around €150-160m/year for capital expenditure on new and existing in- frastructure. Holland says it will be flexible in responding to industry trends such as the US ethane-based start-ups. “We are adept at altering our supply chain to accommodate different China switch sources. New production has to find a home, so if there are new sources, we’d like to take advan- tage of them, though we do have long-standing Distribution company plans to move its warehouses in relationships which we’d continue to support.” Shanghai and Tianjin to chemical parks as it complies INDUSTRY TRENDS with government policy to relocate chemical activities Asked about industry trends, Holland says he expects to see more companies wishing to outsource their supply chain and even minor WILL BEACHAM BARCELONA quisition, particularly in specialty chemicals processing such as mixing and blending. as the company aims to grow this segment Brenntag has seen increasing demand from he world’s largest distributor, Brenn- within its full-line business. In Asia-Pacific, customers wanting a more service-based of- tag, is transferring its China ware- on the other hand, acquisitions are more im- fering to deliver a partly processed product. house operations to two new sites portant than organic growth. following the government’s drive to In early May the company closed the deal STEVE HOLLAND T move chemical-related activities into chemi- announced in December last year to buy a CEO, Brenntag cal parks. 65% stake in Raj Petro Specialties. “We are Existing warehouses in Shanghai and Tian- delighted about this as it will significantly in- “We see a determination jin will move to new locations which will be crease our presence in the Indian market,” by the government to put fully operational by 2020-2021, according to said Holland. most chemical-related CEO Steve Holland. Headquartered in Mumbai and Chennai, it activities into chemical “There is some pressure in China relating to distributes own-blended brands of petroleum- parks” the government’s crackdown on environmen- related products in India, Asia-Pacific plus tally unacceptable behaviour, with a number of Africa and the Middle East. Brenntag will buy Chinese and other companies being closed the remaining 35% after five years. Holland believes the circular economy is down. We see a determination by the govern- Brenntag is sticking to its long-term target Brenntag is sticking to its long-term aim of extremely complimentary to Brenntag’s busi- ment to put most chemical-related activities of €200-300m spend on acquisitions per year. €200-300m spend on acquisitions per year ness model. Its industrial business packs into chemical parks,” said Holland. Closing deals is not always a smooth process GettyImages thousands of tonnes of product into returna- He said the company supports this move and last year the company announced five in ble containers. “So, we offer a large recycling and, following the transfer, all Brenntag facili- just four days during December. As well as the oil price strengthens. As investment in- quite a few years since we had North Ameri- in the same light. It seems to me that the UK service as part of our business model. We see ties in China will be in chemical parks. Ware- Raj Petro agreement, it acquired UK food in- creases in that sector, we don’t have that ca and Europe in sync and that bodes well will remain an important destination for most a number of manufacturers questioning why houses are transitioning from existing loca- gredients groups Kluman and Balter and A1 drag, so we see a fairly broad-based organic for organic growth.” major manufacturers in the world.” they should use one-trip containers when tions into the chemical parks as the new Cake Mixes plus Colombia’s Conquimica and growth here.” He says Brenntag will deal with any differ- they could use a distributor which could offer facilities come on line. Portugal’s Quimitécnica.com. Overall industrial demand has also turned PREPARED FOR BREXIT ences in tariffs, duties or regulations follow- them the security of quality, assurance and Brenntag has seen little disruption in China According to Holland: “Acquisitions don’t around from negative territory 12 months ago For Brenntag, the UK is very much part of its ing Brexit as and when they occur. He points safety in refillable containers.” from the environmental shutdowns. Holland always follow in straight lines. December and that is reflected in good organic growth European operation and will remain so irre- out that most manufacturers and distributors Digitisation is a major buzzword for 2018 says suppliers in the lower tiers may find it 2017 demonstrates how there are multiple ne- across almost all customer segments. spective of what form Brexit takes. Holland are already dealing successfully with compa- across the industry. With BASF and Covestro more challenging as the stricter environmen- gotiations going on at any one time, so it may However, steep falls in the value of the US insists the group is fully committed to the UK nies which are outside of the EU. joining others on China’s Alibaba platform, tal laws are implemented, adding: “We be a little lumpy from one year to the next. We dollar brought as reported sales and profits for capital investment or potential acquisi- “We have not had any significant increase there are also significant opportunities for the haven’t had any major issues relating to our have a number of active discussions under down significantly. tions, adding: “The UK is a highly sophisti- in enquiries from customers about how to distribution sector. Brenntag created a digital supply lines or our customers.” way this year and we stick to our guidance Latin American still has its challenges, cated end market and my sense is that the vast deal with any disruptions to supply chains start-up last year which transferred to a digital In 2016 Brenntag took full ownership of range for M&A.” with double-figure drops in sales and profits majority of other businesses see the country post-Brexit. I’d like to think that people buy park in Amsterdam at the end of 2017. It is trial- the Zhong Yung joint venture with the for- made worse by the dollar devaluation. Ac- ling a number of digital options with Brenntag’s mer partner now chairing Brenntag’s entire US TURNAROUND cording to Holland: “Clearly, Latin America BRENNTAG FIRST-QUARTER FINANCIAL RESULTS (€M) customers and the company expects to offer China business. This business is performing The company’s North American business is a more volatile environment. But it has Q1 2018 Q1 2017 ∆ as reported ∆ fx adjusted new digital options towards the end of 2018. strongly. Holland said China has been a took a big hit from the end of 2015 after oil got through a serious period of volatility we Sales 2,975.2 2,973.3 0.1% 7.9% Holland says: “At the moment quite a num- good experience for Brenntag, though he is collapsed to under $30/bbl. This reduced saw towards the start of last year and the Operating gross profit 637.6 647.7 -1.6% 6.6% ber of companies are promoting digital mar- aware this has not always been the case for demand for oil and gas exploration and pro- year before. It is less pronounced now, espe- Operating EBITDA 206.6 201.8 2.4% 10.2% ketplaces and options. But these may just be a other companies. duction-related chemicals. As oil heads cially in Brazil, though overall it is quite a more sophisticated website rather than the Operating EBITDA/Operating gross profit 32.4% 31.2% - - steadily upwards, this business is recover- volatile environment.” full digital service we’d like to see. Millenni- Profit before tax 147 138.3 6.3% - GLOBAL GROWTH STRATEGY ing. “We had a couple of years when we Holland pointed out that for the first time als use digital marketplaces and expect to see Brenntag’s growth strategy is focused on were significantly affected by the oil and gas in a number of years there is a degree of syn- Profit after tax 106 94.7 11.9% - search capabilities plus track and trace.

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