Future of chemical distribution lies in scale, innovation, digitalisation, and sustainability: Narendra Varde, Managing Director, IMCD India & Bangladesh

Larger players are acquiring regional distributors to strengthen their market position, improve efficiencies, and offer a broader range of solutions

Emerging trends in the chemical distribution segment?  

The chemical distribution industry is evolving along two major trends. First, we see a shift from commodity-based sales to high-value specialities. The market is moving away from low-margin commodity sales towards high-value, specialised products. Customers today expect more than just a supplier. They seek partners who can provide quality, service, digitalisation, and value-added solutions. Distributors are no longer just intermediaries; they play a vital role in helping customers scale, innovate, and improve efficiency. 

Principals are also raising their expectations, selecting distribution partners who can support innovation through product development and co-creation. Sustainability is another decisive factor, with principals looking for distributors who align with their ESG goals and drive sustainable growth across the supply chain. 

The second key trend is consolidation. Larger players are acquiring regional distributors to strengthen their market position, improve efficiencies, and offer a broader range of solutions. This consolidation helps address the challenges of shifting from commodity sales to high-value specialities, ensuring distributors can meet increasing customer and principal expectations. 

In this evolving landscape, distributors must go beyond transactions and become value chain enablers. The future of chemical distribution lies in scale, innovation, digitalisation, and sustainability - ensuring long-term success for both customers and principals. 

The company has been on acquisition spree in FY 2024-25. How are these acquisitions benefiting IMCD India?  

At IMCD, our acquisitions are driven by a strategic intent: to continuously review our portfolio and identify gaps that, when addressed, enable us to offer a more complete and differentiated value proposition to our customers. We proactively scout for acquisition targets that align with our priorities, both directly and in collaboration with trusted M&A partners.

Over the last few years, we acquired five entities in India: Parkash Dyechem that increased our presence in the construction and ink segments; Tradeimpex Polymers that enhanced our presence in the automotive sector; two business lines from CJ Shah for bolstering our coatings and adhesives segment; Valuetree Ingredients for strengthening our Beauty & Personal Care business, and Signet Excipients for augmenting the Pharmaceuticals business.  

We are delighted that the talent acquired through these acquisitions plays a crucial role with IMCD and in some cases have joined the leadership team within our organisation.  

Key factors that have contributed to IMCD India's growth? 

The chemical industry has experienced a challenging period over the past couple of years, marked by market volatility, supply chain disruptions, and a shift in customer expectations. Despite this backdrop, IMCD India has delivered performance that has outpaced the broader market, reflecting our strategic focus, operational agility, and customer-centric approach. We have garnered market leadership in several key industry sectors, reinforcing our reputation as a preferred distribution partner for both customers and suppliers. 

As a company without manufacturing assets, our people and talent drive our growth. We focus on attracting and nurturing the right talent. To support this, we have launched leadership development programs in partnership with top B-schools and introduced recognition programs for high performers. Our entrepreneurial culture fosters empowerment and accountability, ensuring sustained and consistent growth. 

To support our expansion in India, we have taken measures to strengthen our supply chain. We have consolidated sampling operations into a centralised fulfilment centre that caters to all our businesses. The third party-managed facility underscores our commitment to customer-centric solutions and strengthens partnerships by ensuring quicker access to product samples. In addition, the Authorised Economic Operator (AEO) T2 accreditation strengthens our supply chain resilience and ensures greater efficiency in logistics and trade operations. 

What's your strategy to maintain/grow your market share in the India region?  

Continuous improvement, the new IMCD corporate value, is the cornerstone of all our efforts. Portfolio expansion remains a key strategic focus, achieved both organically by onboarding new principals and inorganically through mergers and acquisitions. Additionally, we emphasize operational excellence, positioning ourselves not just as a distributor but as a formulation development expert. 

Our supply chain excellence has been recognised through multiple awards in 2024, including: ‘Value-Added Distribution Service’ by the Institute of Supply Chain Management (ISCM); Recognition at Fi India Awards 2024 for outstanding practices in logistics, supply chain management, and warehousing services; and Winner in the Supply Chain Management category at the Rosefield Conference. 

By continuously optimising our supply chain, enhancing our service portfolio, and leveraging digital tools, we ensure sustained growth and a competitive edge in the Indian market. 

How has IMCD India ensured sustainability in its operations and what new initiatives are planned on the sustainability front?  

Sustainability is embedded in our operations through a multi-faceted approach such as warehouse selection, sourcing vendor screening, formulation development, operational efficiency, community engagement, and regulatory compliance. 

Warehouse selection: We have partnered with a sustainability-focused warehouse that exemplifies our commitment to greener logistics and operations. The facility includes solar power generation, green logistics through electric vehicles, wastewater treatment systems, and eco-board flooring. 

Sourcing vendor screening: Partnering with suppliers who prioritise eco-friendlier chemistry and solutions. 

Formulation development: We help customers develop prototypes using safer and more sustainable ingredients. 

Operational efficiency: We prioritise optimising energy consumption, minimising waste, and reducing our carbon footprint. For instance, we have moved to a paperless transaction system. 

Community engagement: Aligning CSR initiatives with the UN Sustainable Development Goals, particularly in education and gender equality, to create lasting social impact. 

Regulatory compliance: Recently IMCD India renewed its ISO 9001:2015 certification, assuring our customers of our service through continual improvement. Our dedicated teams from the Global Regulatory Questionnaire Center and the newly established Item Creation Centre/Master Data Management function, both of which are based in India, support regulatory standards for IMCD India as well as globally for the IMCD Group. 

In the rapidly changing and competitive market landscape, how does IMCD India stay ahead by anticipating customer needs and market trends?  

In a recently concluded survey, IMCD India achieved outstanding customer satisfaction ratings. Customers rated us with high scores for supply chain performance, reliability and trustworthiness, and ease of doing business.  

IMCD's strength lies in its ability to deliver hyper-local solutions while leveraging its global expertise. Through our application centres, we provide formulation support tailored to local market needs, helping customers innovate and optimise their products. Additionally, by leveraging deep market insights, we differentiate ourselves by offering value-driven solutions that address the specific challenges of our partners and customers. 

We actively track market trends through intelligence studies and analyses, ensuring a proactive approach. Leveraging our global network, we introduce cutting-edge solutions in India ahead of market demand. Regular engagement with customers via technical seminars, collaborative projects, and digital outreach are a few initiatives that have built our relationship with customers. 

What are the major challenges/opportunities facing the specialty chemicals industry? Suggestions to navigate through them? 

The specialty chemicals industry is navigating a complex environment shaped by both pressing challenges and emerging opportunities. Among the most immediate concerns is the Red Sea crisis, which has disrupted one of the world’s key maritime trade routes. This has resulted in longer shipping times, increased freight costs, and unpredictable delivery schedules, creating bottlenecks in the supply of critical raw materials. For a sector that relies heavily on timely imports and exports, such disruptions directly impact manufacturing timelines, working capital cycles, and customer service levels. 

In parallel, shifting global trade policies and tariffs are further complicating the operating environment. As countries reassess their trade dependencies, tariffs and counter-tariffs have introduced cost volatility and altered traditional sourcing patterns. Deglobalisation and shifting trade policies have disrupted traditional supply chains, while geopolitical developments have led to increased volatility in logistics and raw material availability. At the same time, an influx of Chinese imports into India, as manufacturers seek alternate markets, is intensifying competitive pressures and creating pricing challenges. However, domestic consumption and supply chain realignments present significant growth opportunities. The Indian chemical industry has been expanding at a CAGR of 10.5% since 2018, outpacing GDP growth.  

To thrive in this environment, companies must strike a strategic balance between localising their supply chains and leveraging India's growing importance in global value chains. Investing in digitalization, enhancing logistics resilience, co-developing sustainable solutions with partners, and nurturing technically skilled talent will be essential to remaining competitive.  

Ultimately, companies who, like IMCD, embrace innovation, agility, and collaboration will be best positioned to lead in the next phase of growth for the specialty chemicals sector. 

How is IMCD India planning to leverage digital technologies for optimizing its processes and improving overall operational performance? 

We are advancing digital capabilities through a unified global IT platform, AI-driven tools, integrated ERP, and CRM systems. Our MyIMCD platform enables customers to access technical documentation, track orders, and request samples seamlessly. By integrating supplier, customer, and third-party data, we enhance operational efficiency, reduce manual interventions, and ensure seamless digital interactions across the value chain. 

Our omnichannel distribution model, which includes our 24/7 e-commerce portal MyIMCD and Customer Care 360 support service, ensures we offer a seamless customer experience across all interaction points. These platforms have further enhanced flexibility and accessibility, contributing to high customer satisfaction and loyalty. 

IMCD India has recently inaugurated a new Sample Fulfilment Centre near Mumbai for diverse business segments. How will this Centre help in enhancing efficiency and effectiveness of its operations?   

We indeed recently inaugurated IMCD India’s dedicated Sample Fulfilment Centre near Mumbai, established through a strategic third-party partnership. This initiative underscores our commitment to commercial and operational excellence while significantly elevating the customer experience. Serving across all our business segments, the Centre plays a pivotal role in streamlining our sampling process. By consolidating all sampling operations into a centralised location, we are now equipped to handle large volumes with greater efficiency, improved accuracy, and faster response times. This third-party-managed facility reflects our focus on delivering innovative, customer-centric solutions and reinforces our commitment to strengthening partnerships across the value chain, while maintaining an asset-light model that allows greater flexibility. It is a key enabler of our growth strategy, supporting scale, consistency, and agility in meeting customer needs across India’s dynamic and expanding market landscape. 

Where does India stand in IMCD's global scheme of things? How do you see the growth trends from India? 

As one of the largest and most promising emerging economies, India offers immense opportunities for value creation across a broad spectrum of industries from life sciences to industrial. India presents immense opportunities for growth, driven by industrialisation, regulatory advancements, and evolving customer needs.  

Our mantra for growth in India is centred on combining deep local knowledge with global expertise to deliver tailor-made, technically driven solutions. By leveraging our extensive distribution network, formulation labs, market insights, and highly skilled teams, we are building long-term partnerships that go beyond distribution. With continued investments in talent, digitalisation, supply chain infrastructure, and strategic acquisitions, we are well-positioned to capitalize on India’s momentum and drive sustained, scalable growth in the specialty chemicals space for years to come. Our growth is supported by an expanding customer and principal base.  

IMCD India has received Authorized Economic Operator (AEO) L2 status. How will this status help the company in the long run?                 

IMCD India has received AEO Level 2 status, following a comprehensive evaluation process and thorough inspection of our premises by the authorities. This recognition is a significant milestone in our journey towards operational excellence. The AEO L2 status enables us to serve our customers more efficiently by facilitating expedited customs clearance, reducing physical inspections, ensuring faster release of shipments, and enhancing overall supply chain security. It also strengthens our ability to mitigate risks and respond with greater agility in a dynamic trade environment. This achievement is one of the many steps in our ongoing commitment to customer centricity, enhancing reliability, responsiveness, and resilience across our logistics operations to deliver superior value to our partners. 

Where do you see IMCD India 5 years down the line? 

Five years down the line, we envision IMCD India as a leading force in the specialty chemicals space, recognized not just as a distributor, but as a true value-adding partner for all our stakeholders. Our goal is to deliver meaningful impact across the value chain. Our commitment to sustainability, digital transformation, and operational excellence will continue to shape our long-term success, positioning us at the forefront of India’s dynamic and evolving specialty chemicals market. With a focus on talent, customer-centricity, and strategic expansion, we are building a future-ready organization equipped to lead and grow with confidence.