FECC: Commentary

03 June 2011 18:40  [Source: ICB]

Europe's distributors meet in Austria's capital city Vienna for the Fecc's 47th annual congress at the start of June in a much better frame of mind than just 12 months ago in Barcelona, Spain. Despite the economic problems that persist in several countries in Europe, in the economic heartland, growth is looking strong and recovery more assured.

The improved visibility on the economic outlook and the fact that chemical distributors recovered early from the downturn have meant that companies are able to resume investment and return to active merger and acquisition activity. In addition, leading players are looking to expand operations outside Europe in an attempt to capture growth in places like north Africa, Turkey, the Middle East and Asia.

The current strength of the distribution sector is a testament to the actions comp-anies took immediately after the downturn, but also to the fact that they are responding to today's challenges and successfully turning any opportunities these throw up into increased business and profits.

Distributors are being helped in this by the fact that chemical producers and downstream customers alike are asking for increased service and technical support from their distributors, as they seek to cut costs and understand product and regulatory complexity.

Positioned as they are in the centre of the supply chain, increasingly recognized also as the value chain, distributors may also be able to reap further rewards by embracing business practices such as corporate social responsibility (CSR) and sustainability, both of which are becoming key concerns with large suppliers and retailers, for instance.

The future does indeed look bright for Europe's chemical distributors. But companies must seize the opportunities thrown up by the challenges, which look set to beset the industry for some time yet.

By: John Baker
+44 20 8652 3214

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