How can I start a chemical trading and marketing company?

by Jessica Jackson on Nov 17, 2020 Finance 412 Views

I've been in the chemicals business for about 10 years. I export commodity mining chemicals from China,India, Philippines, S.Korea etc. Most multi-national companies have withdrawn from offering these commodities chemicals and as a result Chinese chemicals have found their way into the overseas market through distributors -from Africa to EU to Americas. Price varies from supplier to supplier. The same can be said of the profit margins. Basically the Chinese make profit margins of 2-8%. In some cases the profit margins are so thin- that its just enough to cover the DHL fee for sending commercial documents to the customer.

The chemical market is very large and segmented. Geographically and product application wise. At the same time the market can feel like it is a mess. There are so many companies and most of them are inter-linked and in joint ventures, sales agreements and making it hard for customers to understand the price dynamics and costs -that also makes it hard for new entrants. Chances are that multinational companies are already represented in most major markets Or are selling directly to End Users.

Here's are some things to consider:

Tough Competition: Multinational are known to be heavily engaged in price fixing- either towards their customers or set low prices to discourage new entrants. Price-Fixing Investigations Sweep Chemical Industry
Profit Margins Around 5-8% . These are the most commonly traded chemicals.
Most "manufacturing End users" already have their supply chain figured out-or are locked in long term contracts with raw material producers- to replace an incumbent supplier you need to do more than just offer a lower price.
Technical service - You can differentiate yourself by offering technical service in the case of speciality chemicals.
Consider importing chemicals from China. China is now among the top 3 producers of base chemicals, in fact production of some chemicals is now exclusive to China only. That means many companies now depend on China. If you are not buying chemicals in China, you will, at some point in the future to stay competitive. I have written extensively about How To Import Chemicals From China and the challenges. To find out who's buying chemicals from China use panjiva or similar services. Here's an example of US importers of Caustic soda.

Article source: https://article-realm.com/article/Finance/8481-How-can-I-start-a-chemical-trading-and-marketing-company.html

Reviews

Guest

Overall Rating:

Comments

No comments have been left here yet. Be the first who will do it.
Safety

captchaPlease input letters you see on the image.
Click on image to redraw.

Most Viewed Articles

Statistics

Members
Members: 16307
Publishing
Articles: 66,152
Categories: 202
Online
Active Users: 902
Members: 4
Guests: 898
Bots: 5483
Visits last 24h (live): 2886
Visits last 24h (bots): 16503

Latest Comments

Good work! we can apply all the major keypoints for our business. Kindly share some more about trendy distribution points for the business holders. Will back soon on ur work page after wind up my...
For more information on how to download and use the Chinese version of Telegram, please visit our external blog link: Telegram下載   
FNF is an entertaining rhythm game that tests players' musical skills with catchy tracks that appeal to the gaming audience.
Companies that aspire to adapt and succeed in the business are leveraging the benefits of emerging trends.
Designer handbags have long been synonymous with sophistication, status, and impeccable craftsmanship. These fashion staples are more than just accessories; they are investments in artistry,...