INSIDE VIEW ’09: US chemical distribution remains strong

06 January 2009 00:40  [Source: ICIS news]

By Christopher Jahn
President
National Association of Chemical Distributors (NACD)

Editor’s note: US chemical industry association leaders were given the opportunity to express their views on the challenges and opportunities for 2009.

WASHINGTON
--It has been an interesting year of turbulent times that include credit markets in turmoil, price fluctuations, tightened supplies due to energy demands and weather related disruptions, and a constant stream of legislative and regulatory pressures, but the chemical distribution industry and NACD continue to be strong and vibrant.

The data presented in the most recently-released NACD Membership & Performance Data Report reflects that the chemical distribution industry is healthy with a safety record that is outstanding. Sales revenues were up and the industry reported an increase in operational facilities that are owned or leased.

Many, but not all, member companies report having had a good year in 2008. This year certainly is ending on a down note with much uncertainty ahead, but everyone

I’ve spoken with is optimistic about facing these challenges and ready to take advantage of unexpected opportunities.

NACD’s priority in 2009 will be to make the newly-elected officials in Washington, DC aware of the chemical distribution industry’s positive contribution to our economy, our safety, and to our lives. Name the issue - taxes, environment, security, transportation, labour, etc. - and most businesses, especially chemical distributors, could be in the line of fire.

Combine this scenario with potential action at the state and international levels and an uneven economy, and it is clear that the next few years could be most challenging for the industry.

Challenges aside, NACD is confident that distributors can help drive costs out of the supply chain for both chemical manufacturers and distributors' customers, and predicts that the use of distribution will increase in 2009.

As heard during our annual meeting in early December, there are business strategies companies ought to consider to help during rough times. Take a look back at the past few recessions and ask what you should and could have done, and do those things now. A vitally important factor is leadership within your business - employees need you to set an example and to communicate your business plan clearly. Cut costs, conserve cash, and increase efficiencies.

NACD member companies continue to provide a vital service to US commerce and are conscientious toward their responsibilities concerning stewardship and performance. NACD’s Responsible Distribution ProcessSM (RDP) continues to guide our members in managing risks and ensuring that we protect our employees’ and the public’s health and safety as well as the environment.

We have implemented various security measures to enhance existing safety protocols and are confident that we are vigilant in regards to the protection of our products and facilities.

2008 priority issues will continue to be addressed in 2009

Over the course of 2008, NACD member companies faced several critical issues, including important advocacy and regulatory challenges in areas such as security, transportation, and chemicals management. The Association anticipates that these issues will play a paramount role in 2009 and NACD will respond appropriately to these and any new challenges facing the industry.

Since September 11, 2001, security has been NACD’s top priority. NACD was the first chemical trade association to approve new security measures, as part of its management programme, the Responsible Distribution ProcessSM (RDP). Our members are fully complying with the Department of Homeland Security’s (DHS) Chemical Facility Anti-Terrorism Standards (CFATS), which are intensive and complex. Our highest concern is convincing Congress to allow CFATS to be fully implemented and evaluated before making changes to the law.

While we’re pleased that changes have not been made to the standards to date, DHS’s authority to regulate chemical facilities expires in October 2009, so security remains a top issue for us going forward.

Similarly, with the Hazardous Materials Transportation Act due for reauthorisation in 2009 and more regulatory proposals expected from the Department of Transportation (DOT), NACD has already met with President-Elect Barack Obama’s transportation transition team to advocate for reasonable and uniform regulations, specifically urging the reauthorisation of the Hazardous Materials Transportation Act with continued strong federal pre-emption for national hazardous materials regulations.

In addition, we urged the Obama DOT to coordinate with the Transportation Security Administration and others to agree on one uniform set of regulations to avoid duplicative and overlapping hazardous materials transportation regulations, particularly in the area of security.

Another far-reaching concern to our members in 2008 and going forward is the European Union’s Registration, Evaluation, Authorisation, and Restriction of Chemicals regulation, referred to as Reach. NACD has developed resources to assist member companies with their responsibilities under Reach, including a position paper clarifying the role of US distributors under the regulation.

Closer to home, a major overhaul of U.S. chemical regulations is expected, including reform of the Toxic Substances Control Act (TSCA), beginning in 2009. We are currently working with the EPA and other industry associations on the Chemical Assessment and Management Program – known as ChAMP - as a potential alternative to the Reach approach.

NACD is the voice of chemical distribution in Washington, DC.  As part of NACD’s government affairs program, we launched an on-line voter education and advocacy resource centre prior to the November elections called Chemical (RE) Actions. It’s designed to provide information to all employees of our member companies about the candidates and their issues, and we’ll keep it active as a method of keeping users up to date and involved in Congressional activities.
Educational Efforts

NACD continues to fully support the Chemical Educational Foundation (CEF) and its successful programmes - most notably the You Be The Chemist (YBTC) Challenge programme. The YBTC Challenge is a fun, educational competition for 5th through 8th grade students. The program is expanding so rapidly a new staff member has been added to help companies set up Challenges in several states.

It is hoped the programme will instill an interest in the study of chemistry in young students - students who will one day become part of the dynamic chemical industry - a welcome benefit to distributors and manufacturers alike.

Looking ahead

The year 2009 will present price, product availability and energy pressures, tight credit for chemical distributors and their customers, and a new Congress and heads of many government agencies who will need to learn the value that chemical distribution delivers to our manufacturing economy and our country.

But distributors are ready and up for the tasks at hand.  You will see chemical distributors rise to the top.  They will continue to work with their supply chain partners to manage products safely and deliver them on-time, in a cost-effective manner.  They are entrepreneurial and will enhance current relationships, find new markets and new partners with which to do business, enhancing their suppliers and customers’ reach. 

And finally, they will continue to provide their local communities with jobs, resources and technical expertise.

I believe chemical distribution will come out of 2009 in a strong and solid position even in the face of governmental and economic uncertainty.

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