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Value-added logistics for India’s chemicals market

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Trade with hazardous goods is booming

Numerous industrial sectors depend on products from the chemicals industry. The story is no different in India: Chemicals & co. are absolutely indispensable in important sectors in the southern Asian country, e.g. the automobile and pharmaceuticals industries as well as the shoe and textile sectors. The growth rate in this business is therefore very high – and the same is true of the logistics work needed to guarantee the highest safety standards. By providing precise value-added logistics – coupled with extensive specialist knowledge and the correct equipment – logistics specialists support companies operating in the chemicals sector along their supply chains.

The chemicals industry in India is experiencing a boom. More than two million employees – and the ‘Make in India’ campaign not least of all – underline the fact that the sector is one of the country’s most important. The ‘Make in India’ campaign is an initiative launched by the Indian government and is designed to encourage companies to develop, manufacture and process products that have been made domestically. The aim is to create incentives for targeted investments in various sectors, including pharmaceuticals and chemicals. The market size of the chemicals & petrochemical sector is approx. USD 178 billion according to Invest India, and this figure will probably increase to USD 300 billion by 2025. The geographical proximity to the Middle East as a source of petrochemical raw materials also plays a huge role in this growth rate.

Huge diversification in the chemicals industry in India

According to Statista, the segment accounts for more than 80,000 products, making it one of the most diversified sectors in the country. The products can be subdivided into mass chemicals, special chemicals, agrochemicals, petrochemicals, polymers and fertilisers. The sector supplies these raw materials to many industries – including the automobile industry, the health sector, the packaging industry, the shoe industry and the textile industry. One major area of focus is on dyes and intermediate products for dyestuffs; the southern Asian country accounts for about 16 per cent of global production here. India itself consumes approx. 70 per cent of its domestic chemical production, according to the International Trade Administration. Overall, India is the world’s ninth-largest exporter and the sixth-largest importer of chemicals. Special chemicals, particularly agrochemicals, dyestuffs and pigments, account for more than 50 per cent of India’s exports.

The logistics sector is continually growing, too

Appropriate logistics services are needed to manage these volumes and also safeguard domestic and international supply chains. The steady growth in the sector continually requires new capacity in terms of transportation and warehousing. Invest India, for example, expects the demand for chemical products to grow by about 9 per cent every year until 2025. The Indian logistics market is also experiencing an upturn and the growth rate is forecast to be 10.5 per cent between 2019 and 2025, according to a report by the Indian Logistics Industry Outlook. This growth engine, however, also faces certain challenges: These not only include the increase in competitive pressure and very varied procurement and sales markets, but also, most importantly, standards for the handling of chemicals.

Chemicals logistics requires careful handling

The risks related to the environment, health and safety are making the supply chains for chemicals increasingly complex and difficult. Careful handling is therefore the top priority for goods that are being transported as part of any supply chain. Companies in the chemicals industry therefore need warehouse infrastructure that adheres to the applicable regulations. The logistics structures should account for safety and environmental provisions and enable a smooth flow of goods.

Compliance with applicable regulations plays an important role in the safe handling of products. As the substances may be flammable or poisonous, or may be oxidising or pose a risk to water supplies, efficient warehousing services, which comply with the law, are extremely important. Paved areas, access checks, temperature management or specific channel systems provide the appropriate protection – to name just a few of the measures.

The right logistics expert for challenging situations

Safety and expertise in the field of warehousing logistics are issues that play a special role for the chemicals sector. Companies need an appropriate partner to ensure that they can reliably meet all the standards. It is important to be able to depend on experienced, reliable and efficient logistics specialists, ones that have the necessary expertise for storing hazardous goods and handling the corresponding challenges. Because logistics specialists use tried and tested procedures and processes and have extensive quality and certification management procedures, customers benefit from a high and consistent level of service in their supply chains for chemicals.

Best practice example: The distribution centre for chemical goods in Chennai

One of the world’s leading logistics specialists provides logistics solutions at numerous sites in India and these are tailored to the needs of chemicals companies. These sites include Gurugram in the north of India, which stands out thanks to its proximity to automobile clusters and various manufacturers of shoes and textiles in the region. The same is true of Chennai in southern India: The excellent links with major ports and the

most important industrial and automobile centres ensure that a new multi-user warehouse can serve chemicals customers as a pivotal distribution centre for the whole of southern India. The multipurpose unit meets all the HSSEQ (health, safety, security, environment & quality) standards and has modern fire protection equipment. The warehouse is managed by a team of experts, who have been trained to handle materials, guarantee safe operations and comply with the applicable regulations. The value-added services provided there include goods repackaging, kitting, quality assurance, export packaging and real-time transparency from the time that the goods are ordered until they are delivered.

Conclusion: Tailor-made chemicals logistics with benefits

A reliable and experienced logistics specialist is essential given the complexity of chemicals logistics and the potential risks that the substances in storage can pose. This protects employees, customers and the environment to the same degree. Thanks to extensive, sector-specific logistics solutions ranging from warehousing to value-added services, companies operating in the chemicals sector benefit from several effects: They guarantee the safe storage for their products, they remain competitive and they are able to scale their business – keeping pace with the national boom in the entire industry.

Would you like some more information?

Rhenus India has more than seven decades of experience in the field of domestic freight and logistics services. With more than 2,000 specially qualified employees working at 70 business sites in India, Rhenus India offers integrated logistics solutions and services for most individual segments, including chemicals and petrochemicals, industry and engineering, automobiles, electronics, textiles and pharmaceuticals.

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Are you interested in selling chemicals & co. in India? You can discover some interesting facts about important licences and sales channels in our checklist.

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