What are the perfect chemical suppliers?

 In the eyes of buyers, what is the perfect chemical suppliers like?

In recent years, the UK's railway, public utilities and construction industries have become stronger and stronger. The launch of major projects such as HS2 and the world's largest offshore wind farm have created opportunities for suppliers.

It can be said that the perfect chemical suppliers is able to meet the needs of buyers, but this is not the case.

Here, let's take a look at the five qualities that we think buyers want from the perfect chemical suppliers.

1. Keep up with the industry standard

Ultimately, buyers need to know that suppliers do not add additional risk to their organization's risk profile. The main way to ensure this is to ensure that the supplier runs in a compatible way. In Achilles, each of our communities works on relevant industry standards, but they tend to center around the same area, such as ensuring suppliers comply with modern slavery laws, having a good health and safety record and a clear position on corporate social responsibility.

In fact, a study commissioned by Achilles found that when dealing with SME suppliers, buyers are most concerned about ensuring that they comply with the latest procurement standards and regulations.

Buyers tend to be particularly wary of small contractors' ability to comply with the latest laws, so it is crucial for suppliers to prove that they are doing well in this area.

2. Keep up-to-date information

Secondly, in the buyer's view, a perfect supplier should always ensure that its records are up to date.

Whether it's about insurance certificates, financial performance, health and safety, environmental policies or completed training courses, enterprises need to ensure that all information is relevant and updated regularly.

This not only makes it easier for suppliers to master their policies and documents, but also helps buyers make better decisions.

Achilles collects information about relevant industries in various fields during the prequalification questionnaire survey stage, which is a prerequisite for joining our community and requiring suppliers to update regularly, at least every year, to further ensure that these data are up-to-date and that buyers like things very much.

3. Strive for continuous improvement

For those suppliers who have been audited by Achilles, the score (which can be in the form of pass / fail or digital depending on the community) will show their performance and show it to the buyer together with the audit report.

Prove to the buyer that your organization is committed to continuous improvement through learning from the audit results and achieving better audit scores than last year, and show the buyer that your organization is constantly meeting the rising buyer standards. You may not always be perfect, but the action plan to make sure you have where you need it will go a long way.

4. Show innovation

Innovation is a key trend in the current supply chain, and buyers want to see signs of this from the suppliers they work with, as it may give your customers an advantage.

The Achilles prequalification questionnaire includes a special "supplier profile" section where companies can show their qualifications, give them the opportunity to show off their achievements and anything unusual, and they may work in internal or external organizations.

Buyers want their suppliers to be ahead of the game, always looking for a better self, while maintaining compliance. Therefore, for contractors, it is important to remember that buyers will look for signs of innovation, but they will also look for compliant suppliers, so these two factors need to exist at the same time.

5. Proactive attitude

Last but not least, a perfect supplier should have a positive attitude.

Join the Achilles community to show buyers that suppliers are serious to meet the requirements of buyers and the industry.

However, just joining is not enough. Remember to keep in touch with customers outside the Achilles platform, and your own marketing team or person in charge of marketing drives your organization to success. You can do these things on their company websites, social media, exhibitions and email signatures - let your creativity go.

Identify problems for China's specialty chemical companies

Although the size of China's specialty chemicals market has almost doubled in the past decade, few international specialty chemical companies have been able to achieve growth and profitability in this market. Foreign companies in the industry are facing major setbacks in China's growth and market share. Our market research experts believe that the profit structure of MNCs in China's specialty chemicals market is lower than that in other regions, which also shows the huge difference between leaders and laggards. The highly dispersed specialty chemicals market in the region is dominated by overcapacity and fierce competition. While some argue that falling margins are part of their global strategy to seize growth opportunities in China and build long-term business in China, there are clear signs that international companies are failing to keep pace with market growth.

In view of the steady growth of China's specialty chemical market, the international specialty chemical companies operating in China must rethink their existing operation modes and strategies to avoid backwardness.

The poor performance of international specialty chemical companies in China is caused by many factors. These include:

Not enough adjustments have been made to the Chinese market and products provided by Chinese competitors

Western companies have limited access to key potential customers (state-owned enterprises in second and third tier cities and fast-growing private institutions).

Lack of in-depth market insight, lack of relationship building ability, lack of entrepreneurial Chinese top talents in key positions of the company

More and more Chinese local competitors can provide products and participate in the competition of high-end market segments

The low capital expenditure rate of private entrepreneurs shows their ability to make aggressive investments

Chinese competitors quickly adopt Western technology - expertise and technology - to make it easier for them to offer highly competitive products

The role of specialty chemical products distributors

In the past few years, the role of special chemical products distributors has changed, which mainly affects the whole value chain of chemical products. In the past, chemical manufacturers used to see professional distributors as a necessary evil - a means to reach small customers or customers who were difficult to serve economically. Today, distributors are becoming an important part of the channel. The best dealers have deep market insight and the ability to create real value for manufacturers and customers. No wonder the market for specialty chemicals continues to grow faster than the industry as a whole.

We have recently conducted a comprehensive analysis of the sales market of specialty chemicals to identify promising markets and market segments, and to determine the development trend of the industry in the near future. (for similar analysis, see BCG report, distribution of specialty chemicals in North America, March 2016; market dynamics of specialty chemicals distribution, Boston Consulting Report, April 2014. ）The central conclusion of our analysis is that although the market is still very attractive, the threshold for the success of professional dealers is constantly increasing.

From 2012 to 2017, the distribution of specialty chemical products grew at a compound annual growth rate (CAGR) of 5.6%, with a global market size of about 97 billion euros. This is faster than GDP (2.7%), chemical industry (2.9%) and special chemicals consumption (4.9%) in the same period. However, to develop competitive advantage, scale itself can not solve the problem. Instead, professional distributors need to select specific market segments and geographic regions and then invest in the capabilities necessary to enable them to create value for chemical manufacturers and end users in these segments.

Moreover, digital technology is becoming crucial. Due to the high complexity of technology and logistics requirements, it is less destructive than other industries, but customers increasingly expect a complete online and offline experience. As a result, professional chemical products distributors must begin to invest in digital solutions, both in-house and customer-oriented operations, to expand their competitive advantage.

As of 2017, the largest markets were the Asia Pacific region (sales of professional distributors were around 40 billion euros), North America (31 billion euros) and Western Europe (13 billion euros). The rest of the market is less than 5 billion euros. The Asia Pacific region is not only the world's largest distribution market for specialty chemicals, but also one of the fastest growing regions, with a CAGR of 6.8% from 2012 to 2017. During this period, only the Middle East grew faster (7.8%). In contrast, growth in most developed markets has slowed, as expected, over the past five years: 4.7% in North America and 3.6% in Western Europe.

We expect sales growth of specialty chemicals to slow slightly to 5% by 2022, due to slower consumption of chemicals (for the industry as a whole and a subset of specialty chemicals), reduced demand in mature Western markets, and short-term setbacks in the Chinese economy. However, it will still outpace overall global GDP growth and specialty chemicals sales in major markets. (see Table 1. ）In absolute terms, most of the growth in third-party distribution of specialty chemicals will come from major markets in Asia Pacific and North America by 2022.