As the sustainability gains traction globally, the distributors are closely watching how their customers are running their business and procuring goods. It is about time that the profitability side of adopting such practices and technologies becomes clear to them. 

The leading industry experts recently discussed the latest trends in distribution business at the thirteenth session, ‘New Age Distribution: Challenges and Opportunities’ of NextGen Chemical and Petrochemical Summit 2023 organized in Mumbai by the Indian Chemical News on July 13-14, 2023.  

The session was moderated by Alok Sharman, Regional Director – South Asia and MD – India, Brenntag Ingredients India.

“Chemical industry is undergoing a huge transformation and from the distribution perspective, one of the buzzwords is sustainability. Because the world chemical itself attracts a lot of negative attention, people are a lot more aware these days and they are trying to be responsible suppliers at all the stages. Distributors are also adopting environmentally friendly packaging, logistics and the products itself. Another major trend being witnessed is the digital transformation. The Indian distributors are trying to adapt to different digital technologies to optimize their processes and increase customer satisfaction. They are also using data analytics and artificial intelligence to get market trends and enhance customer experience,” said Vishal Jawale, Managing Director, DKSH India.

“With digitalization and globalization, the distributor can tap the global market. Also being witnessed in India are the strategic alliances that are changing the entire distribution network. Next is the supply chain risk mitigation especially after Covid-19 wherein people have seen a lot of disruptions because of natural disasters, political instability and maybe due to trade disputes. To ensure that the customers’ production is not affected, the distributors are investing in new technologies and portfolio diversification through new sourcing techniques. Distributors are also investing into the innovation centres and application labs to fulfil the customer demands,” added Jawale.

“In the last five years there have been changes to the extent that the companies are willing to pay on the premium of an ISO tag because that is a far better and safer way of transportation. Similarly, nowadays when we speak to clients, they ask us about the level of cleanliness in the logistic solution being offered to them. There are questions around carbon emissions, greenhouse emissions and sustainability. All these discussions a few years back was never heard about and that I think is the biggest change that we have witnessed. In terms of changes within the maritime industry, let me highlight the fact that shipping is said to be contributing 3% of the CO2 emissions globally. Maritime industry is governed by the International Maritime Organization (IMO), headquartered in London. It has set the target of net zero by 2040 for the shipping industry. It is an uphill task and requires a lot of investment to create the ships that can achieve it,” said Rajnish Khandelwal, President, JM Baxi & Co.

“More than 680 ships in the world are fueled by LNG as compared to zero ships ten years ago. So it is a good progress. Today we have more than 35 places whereLNG bunkering is possible and in three year’s  time, we will have 50 places in the world where ships can fill LNG. Out of these, 9 locations are in Asia and rest across the world. We as maritime industry are pushing very vigorously to make the operations cleaner. JM Baxi operates nine ports as of today and by the end of two years we will be running 15 ports. I am happy to mention that all of our ports will be running on electricity and if things go as per plan, more than half of that electricity will be derived from renewables,” added Khandelwal.

“There is no alternative to safety of cargo and we must shed the casual approach towards the MSDS. The chemist who has prepared and signed it must take the ownership. The proper briefing is required for the various eventualities during the course of transportation. Getting the right documentation and safety aspects are critical and our transportation industry is still fragmented. We need to change the attitude and rest everything will follow. Sustainability means there must be economic development but with long-term targets of greener options. All this depends on four pillars: Development, Investment, Digitalization and Green Energy. Reducing the carbon footprint is about moving towards greener fuels. Haropa Port is committed to achieve net zero by 2030, well ahead of EU’s target of 2050,” said Captain Ram Iyer, India Representative, Haropa Port.

“At Haropa, there is a huge investment into conversion of 80,000 tons of bio waste into biogas, to be supplied to Paris. India needs to learn from it and see how the biowaste can be converted into green energy. Similarly the latest technologies can be utilized to reduce plastics and shift towards bio-plastics. There are many companies that are helping in recycling of plastics including PET in a very efficient manner, reducing their carbon footprint by 95%,” added Captain Iyer.

Providing a peek into the functioning of Port of Antwerp – Bruges, Daljit Singh Kohli, India Representative, Port of Antwerp – Bruges informed: There are six terminals at the port and all are operated by the private players. We are a multimodal port and connected with four types of transportation including railways. At present, the rail holds 7.5% of transportation and we plan to increase it up to 15% as it actually reduces road traffic. One rail can take away the load of 75 trucks and uses 6 times less energy and 9 times less CO2. We also have a target of reducing 50% of our emissions at the port by 2030 and become carbon neutral by 2050. Because we are a chemical cluster, we have a 1000 kilometres of pipeline at the port area for distribution of 57 products that are listed. Out of 1400 companies at the port, a lot of them are into specialization and they can do a lot of compounding. In terms of customs, there is a paperless documentation much before your ship arrives to remove any hassles.”

“At the Port of Antwerp we are looking at capturing a lot of CO2 as we emitted close to 16 million tonnes of CO2 last year and that is a huge problem. We are looking at capturing it and storing it under sea in gas fields. Another way is by using the CO2 and combining it with some green electricity and hydrogen to produce methanol to be used by industry,” added Singh.

“Typically we use digitalization as a very loose word but there are three kinds of digitalization. One is on demand based digitalization based on the requirements of your customers, vendors and government. For example conversion of offline data into data sheets. So it is adhoc digitalization. Second is Programmatic digitalization wherein you digitize everything throughout the value chain and there is no human intervention or anything offline. Third is forensic digitalization which is before the event, during the event and after the event you digitize everything. For example, when we do a transaction, the supplier, buyer, transportation and even transfer of money needs to be digital. Currently the chemical industry is at the on demand  level of digitalization and eventually once the more and more players adopt digitalization in their systems, that’s when systemic digitalization will begin,” said Arun Singhal, CEO, Source.One

“A lot of companies are adopting adhoc digitalization and one example is an offline team that converts the offline data into online and calls it digitalization which is not true. That’s just a tip of the iceberg. Hopefully, we will witness more companies adopting meaningful digitalization in the near future. In terms of why companies are adopting it, in a few instances the product has become commoditized and the margins have come down. Second reason is that there are loopholes in supply that need to be plugged. Third one is that peers are digitizing and others don’t want to lag behind. I believe that we are still far behind in terms of digitalization and hopefully things will get better in terms of meaningful digitalization,” added Singhal.

NextGen Chemical and Petrochemical Summit 2023 themed, ‘Innovation, Self-reliance and Sustainability’ witnessed attendance by a huge number of stakeholders from the chemical and petrochemical industry across India. 

The Summit was supported by the Department of Chemicals and Petrochemicals, Ministry of Chemicals and Fertilizers and co-partnered by DCM Shriram. The Gold Partners of the event were Premier Tech, Ingenero, Rieco, ABB, PIP, Deepak Nitrite, Dassault Systemes, Moglix and Siemens. Associate Partners were Tata Chemicals, Anupam Rasayan India, Sealmatic, Godavari Biorefineries, Huntsman, Tranter, Source.One, IPCO, and Aeroflex. The Lanyard Partner was Jakson Green.

Industry Association Partners were AMAI, Gujarat Chemical Association, CropLife India, Chemicals and Petrochemicals Manufacturers Association, India and, AgroChem Federation of India.