Univar positioned for Ingredients & Specialties growth after restructuring – president
Joseph Chang
05-Jun-2024
Colorado Springs, COLORADO (ICIS)–Chemicals distributor Univar Solutions is well positioned for higher growth after reorganizing its Ingredients & Specialties (I&S) segment under three business units, said the head of that business.
“We went through some radical changes to set ourselves up very nicely for 2024. We got all those changes done at the back end of last year. So we had in place in January the right plan, the right organization and the right leadership,” said Nick Powell, president of Global Ingredients & Specialties at Univar Solutions.
Powell spoke to ICIS at the American Chemistry Council (ACC) Annual Meeting.
Before the changes in late 2023, Univar’s I&S business was going to market as Industrial Solutions and Life Sciences, each of which had a leader. Under those two umbrellas were its six focus industries, each of which also had a head.
With that extra layer of Industrial Solutions and Life Sciences removed, Univar now goes to market as three business units incorporating the six focus industries – Care (home & industrial cleaning, and beauty & personal care), Performance Materials (CASE, lubricants and metal-working fluids), and Health & Nutrition (food and pharmaceutical ingredients), he explained.
“Leading each of those three business units are our three best commercial leaders. We’ve regionalized our sales structure so we’re closer to our customers and sellers. And I think it’s those changes that have driven the stronger performance in H1,” said Powell.
Although Univar retains its six focus industries, it amalgamated leadership at the business unit level. Essentially, leadership was consolidated from eight positions to three.
“In effect, it’s bringing our leadership closer to our markets, suppliers, customers and sellers,” said Powell.
“A lot our suppliers and customers don’t split beauty care and HIC (home and industrial cleaning). Fundamentally, they have very similar technologies, and one parallel is surfactants. They’ll set themselves up with a Care business unit, and we’ve done exactly the same. It’s been very positively received by our supplier community,” he added.
STRONG H1
PERFORMANCE
After a difficult
stretch of around 18 months through the end of
2023 for the chemical industry, Univar saw a
rebound in Q1 2024 which is running through
much of Q2 thus far.
“Q1 was very good for us. If we were to compare our results against some publicly traded pure play competitors, our results would stack up very favorably. We believe we’re taking share, and volumes are growing nicely,” said Powell.
“That performance has continued into the first couple of months of Q2 and I don’t see why June would be any different. So H1 has been very positive for us,” he added.
The improved performance is due to organizational changes as well as the lack of destocking rather than a robust market upturn, he noted.
“I’m not convinced yet that markets are necessarily bouncing back. I don’t think any of us can declare victory and say we’re back to the boom times of pre-COVID or even just post-COVID,” said Powell.
“I think destocking is over and supply chains are empty. What we see now is customer demand flowing very quickly through to producers or to distributors. That’s the effect we’re seeing year-to-date – an uptick versus where we were 12 months ago,” he added.
H2 OUTLOOK
The executive
is optimistic on the H2 outlook as the company
is better positioned to execute.
“On the back of the changes we made at the latter end of Q4 and because of our performance this year, we’re seeing a lot of recognition from out supplier partners. In essence, they’re wanting to do more business with us,” said Powell.
“A big part of our I&S model is that if we serve a supplier well in one country, we’ve got the infrastructure to do the same in another geography where they may either have a problem or are not growing as fast as they’d like,” he added.
Univar has a healthy pipeline of suppliers interested in expanding into new geographies and is on the verge of announcing a “very large” supply deal which will be a “game changer” for the distributor, he said.
“I believe our I&S business is at an inflection point… You’re never going to cost cut your way to success, so the only way is to start with volume. Our philosophy in 2024 is to get out there and grow volume and we need to do that at a market acceptable price,” said Powell.
“Those two things are playing out very well for us. We’re not having to drastically cut price, and we are able to show volume growth. That then allows us to invest,” he added.
Interview article by Joseph Chang
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