FECC: Commentary

John Baker

01-May-2015

Chemical distributors appear to be weathering today’s pressures from weak European economic growth, greatly reduced oil prices and the weakening euro pretty well. But it is obviously not an easy period in which to do business.

The distribution sector is nevertheless on a steady keel and many firms are seeking out new opportunities to enhance growth, through M&A activity and expansion into higher growth, emerging markets.

As long as companies are well managed, there is the potential for them to do well. Whether this can be achieved on a sustainable basis is just one of the topics that will be addressed at the Fecc’s Annual Congress this May in Athens.

Speakers and delegates will discuss business developments and strategies as well as the move into new developing markets and sustainability and what it means for the chemical distribution sector.

M&A has certainly been a key factor in the market recently, with activity increasing steadily over the past five years. As Guenther Eberhard, managing director of DistriConsult, argues in this special publication, produced by ICIS in association with Fecc, “To keep momentum, companies will continue to look for acquisitions and thereby drive further consolidation of the chemical distribution industry. The need to either focus on core business activities or to gain scale is more apparent than ever.”

Another strong trend has been the globalisation of the sector. As Fecc president Neville Prior points out: “We have to accept that the distribution sector is becoming more and more global.” This, he argues, “opens up plenty of opportunity for European distributors to expand into new markets and new products as well as presenting competitive challenges.”

Both are taking the industry in the right direction, judging from the steady performance being delivered in difficult circumstances.

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