Chemicals and Allied Products, NEC

SIC 5169

Companies in this industry

Industry report:

Companies primarily engaged in the wholesale distribution of agricultural chemicals and pesticides are in SIC 5191: Farm Supplies. Companies involved in the wholesale distribution of drugs are in SIC 5122: Drugs, Drug Proprietaries, and Druggists' Sundries. Companies that distribute pigments, paints, and varnishes are in SIC 5198: Paints, Varnishes, and Supplies.

Industry Snapshot

Approximately 9,394 establishments operated in this industry in 2009, according to the U.S. Census Bureau. The industry employed 114,831 people who earned a total payroll of $7.7 billion. About 56 percent of establishments employed fewer than 20 workers, whereas 18 percent employed between 20 and 500 and 26 percent employed more than 500. Analysts subdivide industry products into two categories: industrial gases (except liquefied petroleum) and other chemicals and allied products. Overall, the U.S. chemical industry was worth $720 billion in 2011, according to the American Chemistry Council.

Statistics from Dun and Bradstreet Industry Reports showed that in 2009 California and Texas controlled over 21 percent of the market. Michigan accounted for only 420 establishments but generated the highest annual sales, valued at $21.2 billion--nearly one-third of the entire industry. Other states with high revenues included Kentucky, New Jersey, and Pennsylvania. Average sales per establishment were about $6.9 million.

The trade balance (exports less imports) within the chemical industry shifted in 2002, and the industry held a trade deficit the remainder of the decade. Chemical exports were at $119 billion in 2005, an increase of more than 9 percent from 2004. Meanwhile, imports also grew and were at $112 billion in 2004. However, during the middle and late years of the first decade of the 2000s, sales of chemicals grew rapidly, due primarily to rising energy costs. Both U.S. and global demand was strong, and the chemical trade benefited.

The leading chemical distributors within this classification in 2006 experienced an excellent year overall in terms of sales. Even with higher natural gas and petroleum costs, the top producers in the industry saw an average 15 percent increase in revenues. The positive outcome was mainly due to higher demand for chemicals and better cost management by the chemical distributors. Brenntag North America continued its acquisition streak that began in the early years of the decade with the late 2005 and early 2006 acquisitions of Quadra Chemical and Los Angeles Chemical, respectively.

At the close of 2008, the industry was edging toward a trade surplus for the first time since 2001. Exports were up 15.1 percent to $177.1 billion from the previous year, and imports increased 14.4 percent to $177.4 billion. By 2010, exports were down to $171.2 billion and imports to $166.6 billion, leading to a trade surplus of $4.6 billion.

Some industry experts expressed hope that the roller coaster that the chemical industry had been riding on regarding both supply and price issues would play to the benefit of wholesale chemical distributors. Many chemical industry providers cut back drastically on production as demand declined late in the first decade of the 2000s, and this decrease in production posed an opportunity for wholesalers to step in to balance out supply and demand.

The leading 100 chemical distributors reported an average of $267.4 million in 2008 sales, compared with $236.6 million in 2007. Sales at these top 100 distributors were up 11.5 percent in 2008 from 2007. However, the economic recession of the late 2000s slowed growth, and a recovery in the industry was not apparent until into the early 2010s.

Challenges in the chemical wholesaling industry in the second decade of the twenty-first century included increased government regulation and rising oil prices. However, according to a 2011 report by IBISWorld, "the industry is projected to experience higher demand from the manufacturing and construction sectors, which will drive revenue" into 2016.

The top chemical distributor in the United States in the early 2010s remained Univar, USA, located in Redmond, Washington. A subsidiary of Netherlands-based Univar, the firm garnered $7.9 billion in 2010 sales. Other industry leaders included Ashland Distribution in Dublin, Ohio; Brenntag North America in Reading, Pennsylvania; Helm America in Pascataway, New Jersey; and ICC Chemical Corp. in New York City.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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