WP_Post Object ( [ID] => 30777 [post_author] => 34 [post_date] => 2020-11-20 08:33:50 [post_date_gmt] => 2020-11-20 08:33:50 [post_content] =>

Brenntag and CheMondis, the leading B2B online marketplace for chemicals in Europe, have embarked on a cooperation to jointly accelerate digital sales and marketing for the chemical industry. Both companies recognise the increasing importance of online sales channels for the chemical industry and agreed to collaborate, beginning with Brenntag’s paints and coatings, and adhesives and sealants portfolios.

“Over the last two years Brenntag has steadily built our Brenntag Connect e-commerce platform,” says Maarten Stramrood, CDO of Brenntag. “The platform is now live in most of our mature markets. We see a strong upward trend in online business and with this complementary cooperation we extend our digital channels further. Our collaboration with CheMondis will provide our current and potential customers an even broader choice.”

“At CheMondis we are excited to welcome the world’s leading distributor Brenntag as a new partner. It is a strong sign that online sales are becoming an increasingly important strategic component in the chemical industry,” says Sebastian Brenner, managing director of CheMondis. “Customers in our industry are demanding an online buying experience and CheMondis provides for that need.”

CheMondis was founded in 2018 as an independent startup out of Lanxess and has since then established the leading open B2B marketplace for chemicals in Europe with more than 3,200 active companies and some 50,000 products listed. CheMondis offers sellers of chemical products (manufacturers and distributors) a state-of-the-art online sales channel, offering a full digital customer journey, professional online marketing support and data-driven analytics. Buyers have used CheMondis for several thousand digital transactions already.

PLANNING FOR THE FUTURE

The cooperation with CheMondis can be seen as part of Project Brenntag, the company’s transformation programme, which has already seen plans to restructure the organisation into two more tightly focused divisions (HCB November 2020, page 48). Since then, Brenntag’s management board and supervisory board have clarified the next steps in that transformation and the new operating model that will be crucial in coping with future requirements.

“The implementation of the various measures of Project Brenntag will also include an adjustment of our global workforce,” says CEO Christian Kohlpaintner. “This step will be anything but easy for us, but it is necessary to ensure Brenntag’s success in the long term. We intend to perform any planned reductions in a socially responsible manner and strive to avoid compulsory redundancies.”

Brenntag now says it expects to reduce its global workforce by some 1,300 jobs out of a current total of 17,500 over the next two years. At the same time, it plans to invest significantly in its network, although again this will involve some site closures. “While maintaining its global reach, with the optimised network Brenntag will improve efficiency, leverage scale benefits across divisions and products, and increase proximity to business partners,” the company says. “The optimisation envisions closing sites to consolidate the site network in geographies and improve the utilisation of existing sites.”

Brenntag plans to close about 100 sites across all regions, half of which are third-party logistics sites. At the same time, it will invest in existing and new sites, create regional hubs, and close white spots in the network.

LATEST RESULTS

Meanwhile, Brenntag has reported third-quarter sales of €2.88bn, down 11.6 per cent year-on-year, with operating EBITDA up 0.6 per cent at €264.4m. “Brenntag achieved strong results in the third quarter of 2020,” Kohlpaintner says. “The Covid-19 pandemic has been with us - as with many other companies - throughout the year and has significantly impacted the overall economic environment. Nevertheless, we once again show a positive business development and our operations remained with limited effect by the Covid-19 crisis in the reporting period.”

The North America region aside, all regions contributed to this positive earnings performance. Europe, Middle East & Africa (EMEA), Asia Pacific and Latin America reported very good results. “In EMEA, the positive trend that we have been seeing since the beginning of the year continued,” Kohlpaintner says. “In this very difficult environment shaped by the pandemic, we managed to further maintain our delivery capability and provide our customers with the usual reliable service. The strong customer industries once again included Nutrition, Personal Care/HI&I and Pharma.

“Our Asia Pacific and Latin America regions also posted outstanding earnings growth. In both regions, demand recovered and our strict cost-control measures also yielded results. In North America, the weakness of the past few quarters persisted. Earnings here were impacted by the difficult situation both in the oil and gas industry and in many other customer industries,” Kohlpaintner adds. “Overall, we are satisfied with this earnings performance, especially in light of the generally challenging macroeconomic environment.”

AROUND THE WORLD

The decline in sales in the North America segment amounted to 17.1 per cent compared to the third quarter 2019, due to a fall in volumes and slightly lower average sales per unit. This reflects in particular a decline in business with customers in the oil and gas industry, where low commodity prices have held back activity, as well as the impact of the Covid-19 pandemic on the regional economy. The impact on gross profit was ameliorated to some extent by a fall of 12.6 per cent in operating expenses as a result of systematic cost control and a reduction in travel expenses.

In the EMEA region, external sales also fell, with revenues down 6.6 per cent at €1.20bn, largely as a result of the impact of the Covid-19 crisis on the European economy. This was more than offset by higher operating profit per unit, which helped operating gross profit increase by 3.3 per cent over the 2019 level to €294.8m.

Sales also declined in the Latin America segment, falling 4.1 per cent to €208.2m, although this was largely the result of currency exchange movements. On a constant currency basis, external sales grew by 10.1 per cent, largely as a result of higher volumes following a recent acquisition in Brazil.

External sales in the Asia Pacific segment fell by 8.4 per cent year-on-year to €363.0m, reflecting the impact of the Covid-19 crisis on regional economies. Operating gross profit rose by 6.5 per cent to €72.5m, helped by higher margins and a sharp drop in travel expenses. Operating EBITDA grew by more than 30 per cent to €33.0m, mainly as a result of organic growth. Brenntag singles out the markets in China and India, which were severely impacted by the pandemic during the second quarter but had largely recovered by the third quarter and made a positive contribution.

This past April, Brenntag suspended its forecast for the current financial year, due to the considerable uncertainty posed by the emerging pandemic. More recently it has reinstated its forecast, which now sees operating EBITDA of between €1.00bn and €1.04bn, assuming no further significant government measures to contain the pandemic or significant changes in current exchange rates. However, it concludes, “As the Covid-19 pandemic will most likely impact the economy for the rest of the year and also in 2021, the presumed business environment continues to be volatile.”

www.brenntag.com

chemondis.com

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