Expert Statement: Robert Späth, Managing Partner, CSC Jäklechemie
Prospects for the Chemical Distribution Industry
The chemical distribution business is a diverse industry that provides customized solutions for important sectors such as pharmaceuticals, paints & coatings, agriculture, cosmetics, food & feed, and automotive. At the center of the supply chains of these sectors, distributors are critical partners for global corporations as well as for SMEs. This role has become particularly obvious and relevant during the corona crisis. But distributors also face many challenges in the aftermath of the pandemic and the current political and economic environment.
CHEManager asked executives and industry experts to share their views on the prospects for the chemical distribution sector. We proposed to discuss the following aspects:
- What, in your opinion, are the most important lessons learned after two years of operating in a pandemic environment?
- What will be the most important short- and long-term challenges facing the sector?
- How do chemical distributors support the chemical industry on its path toward carbon neutrality?
Robert Späth: The pandemic has shown how the global economy has become interdependent over the last decade. Lock downs of harbors in China or elsewhere had severe consequences for the supply of Germany, for example. For the chemical distributors, this brought the chance to emphasize their importance for the stabilization of the supply chains. That was a big challenge not only for purchasing and sales but also for our own pandemic precautions at our sites. New supply routes, flexibility and digitalization brought us forward and finally the recognition as supply-critical infrastructure also helped. I think we learned a lot from the Corona crisis.
“In such uncertain times, chemical distribution will
play an increasing role in supplying our industry.”
Just when the pandemic appeared to be largely over, the Ukraine crisis caught us off guard. A new iron curtain is now cutting through supply chains to the east. The associated energy crisis with unprecedented price increases is forcing some sectors into struggle for existence. Therefore, we might soon experience disruptive structural changes and a lot will depend on whether an accelerated energy transition in Germany succeeds. The priorities however shift the longer the conflict progresses and yet the challenges of the Green Deal remain in place too. In such uncertain times, chemical distribution will play an increasing role in supplying our industry. The challenges for the sector are manifold. Making us attractive to good junior staff, strengthening our networks with customers and suppliers, expanding our own logistic capacities are obvious. In addition, we face new risks like cybercrime and, finally increasing legal requirements remain our constant companions. Additionally, we work hard to meet the sustainability requirements of most of our business partners, for example by participating in initiatives like TfS. Sustainability will also play an important role in the further development of the Responsible Care program. We definitely won’t run out of work.