The role of chemical distribution is often reduced to sourcing, storing, repackaging and supplying chemicals. However, many chemical distributors - such as Brenntag - offer much more to both, their principals and their customers. Linking chemical manufacturers and chemical users, the Mülheim, Germany-based group provides business-to-business distribution solutions and value-added services for industrial and specialty chemicals globally. Michael Reubold asked Karsten Beckmann, CEO Brenntag Europe, Middle East and Africa, about the importance of value-added services within the growth strategy of Brenntag.

CHEManager International: How has the supplier-distributor-customer relationship changed over the past decade or two?

K. Beckmann: Over the past years and decades, the way in which business is conducted has changed significantly. Today, the world is a kind of global market place, providing excellent opportunities for agile and flexible companies. There are distinctive trends that affect the core of each business. Meeting today's requirements of our customers and suppliers, who demand a clear industry focus with dedication, market know-how and technical expertise is key for Brenntag. We take our partners very serious and have set up our new commercial organization accordingly in every country in Europe.

How are you viewing the role of Brenntag in this supply chain and how can you achieve to become a more integral part?

K. Beckmann: Today's highly competitive and increasingly complex markets require that you listen precisely to the needs of your customers and suppliers. Customers' and suppliers' expectations have become more sophisticated. Therefore, they require a strong partner who is able to manage complexity and enable them to focus on their core business. Both call for an integrated approach to chemical distribution with services that create true value, launch new opportunities, offer competitive advantage and promote growth.

The new Brenntag organization in Europe has a dedicated customer-facing approach with a coherent and consistent structure across all European markets with each country structured in the three segments Material Science, Life Science and Environmental. On the supplier side, we mirror these three segments with an industry-focused product management, ensuring strong industry expertise.

What kind of value-added services are newly required by your principals and by your customers, particularly in the field of specialty chemicals?

K. Beckmann: Let us take for example food & nutrition. Experts at Brenntag test ingredients and additives and develop formulations at our own in house application facilities. They can support customers and suppliers with formulation guidance, which can be targeted to achieve cost optimization and flexibility with alternative ingredients.

When it comes to cosmetics, Brenntag conducts its formulation development in state-of-the-art facilities. Brenntag's laboratories support in any need like tailor-made formulations and concepts. With regard to Pharma, we are the partner in terms of sourcing of products in the pharmaceutical, veterinary and healthcare industries. Our supply chain is reliable, transparent and compliant with industry regulations.

What are the drivers for these increasing requirements on both sides - suppliers and customers?

K. Beckmann: Basically, it requires greater effort to be successful. Global trade and capital flows, the increased digital communication, mobility of people and faster traffic and transportation affect all of us. These drivers require that you become more flexible as a chemical distributor. Suppliers and customers request individual solutions matching specific needs, they want easier access to products and services and wish to procure local, regional and across Europe. A good distributor must provide direct responsiveness and react quickly to any short-term market challenges.

Which investments and organizational changes have you recently made to react to customer requirements?

K. Beckmann: At Brenntag in Europe we asked ourselves: "how can we serve customers even better against the background of the changing market realities?". Today, and after a comprehensive transformation process, we have - as explained before - a dedicated customer-facing approach and consistent organization throughout Europe. We provide a single point of contact, technical sales and sales representatives visiting in person, technical service know-how, support capability, industry and market knowledge, speed of response to quotation requests and to offers, and flexibility regarding order modifications. Also total cost of ownership - TC - initiatives have been launched with major key accounts.

Particularly in mature markets like Europe, chemical companies need to focus on innovation in order to stay competitive and profitable. In the past, chemical distribution and innovation were hardly mentioned in the same breath. Is this about to change?

K. Beckmann: On the part of Brenntag, this already changed years ago. Today innovation is one of the key drivers for growth. As example: Suppliers have invited us to support product introductions simultaneously. Here we also provide expertise in developing marketing and business plans. In the past suppliers did this all by themselves, and the product became available for distribution at a later stage. Nowadays we develop applications with our customers whereby we inform our supplier when we see that this can be successful or where slight modifications at the production stage are needed.

What do you see as the most important differentiating factors for Brenntag in order to stay ahead of your competitors?

K. Beckmann: We bring consistency in a broad spectrum seen from a European coverage towards quality & compliance perspective, technical skills and know-how, embedded in our industry segment organization. It is also important to make the most of economy-of-scale effects in benefit of the supply chain. It doesn't matter where you are located in Europe as customer and where you want to have your product sold as supplier: Being serviced by Brenntag with its global network, market intelligence and knowledge means that you are within the reach of these capabilities.

From market intelligence to laboratories and application centers to just-in-time supply - are these services fully rewarded or remunerated by your industry partners?

K. Beckmann: Yes, as otherwise we would not have seen and see the growth we experience. We are continuously in contact with our partners to discuss all issues and we are working constantly on improving our quality and services. As we do this successfully, we are convinced that our partners will appreciate and remunerate our consistent services also in the future.