Chemcentral takes global view with both buyers and suppliers
By Susan Avery -- Purchasing, 9/7/2006 2:00:00 AM
This story is part of an series in which Purchasing takes a closer look at the companies on its Top 100 chemicals distributors list published each May.
Coming off a strong year in 2005 when sales increased by 15% according to results of Purchasing's Top 100 survey, the nation's chemical distributors continue to ride a wave of demand for their products and services in the first six months of 2006.
And, while chemicals purchasers and producers alike say demand through the end of this year won't be as strong, distributors are still optimistic about the third and fourth quarters.
Chemcentral Corp., which is celebrating its 80th anniversary this year, is particularly optimistic about the future of chemical distribution. In fact, John R. Yanney, president and CEO, emphasizes Chemcentral's global expansion, its relationships with buyers and suppliers and some of the challenges of chemicals distribution. With sales of $1.3 billion for 2005, Chemcentral places fourth on Purchasing's list of the Top 100 chemicals distributors.
Bedford Park, Ill.-based Chemcentral distributes a wide range of chemicals and serves a growing number of end markets.
While Chemcentral primarily distributed commodity chemicals for many of its 80 years, the company has shifted its focus somewhat over the past five years or so to more specialty chemicals so that its current product mix now is roughly 50/50. In selling specialty chemicals, distribution helps resolve issues for both buyers and suppliers by providing logistics, warehousing and marketing services.
“Suppliers are looking to become more efficient and to reduce costs and we are able to fill gaps for them,” says Yanney.
Value-added services are also a priority for the distributor, which offers blending, technical and safety training, customer product research and contract packaging.
In two regions especially poised to experience an increase in demand, Chemcentral is involved in two joint ventures: Dovechem in Southeast Asia and Rishichem in India. It also recently opened an office in the United Arab Emirates and has a subsidiary in Australia. The company also has plans to serve central and South America early next year.
At Chemcentral, market specialists provide a value added service for both customers and suppliers. For paints and coatings buyers, for example, the marketing specialists can help resolve a volatile organic compound issue by reviewing product formulations and making suggestions such as changing resins or manipulating solvents.
One of the biggest challenges for the chemicals distribution industry in the next six months, Yanney says, will be managing costs of energy, steel (for storage drums) and health care benefits for employees. Also environmental and regulatory issues continue to be a top priority for all chemicals industry companies.
And, “identifying and developing managers to lead our company is an issue that's always on the front burner for me,” he says.
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