The chemical industry has widely used surfactants as a wetting agent, emulsifier, dispersant, foaming, and an anti-foaming agent. They exhibit properties that help reduce the surface tension between two liquids or between a liquid and a solid, which makes them an ideal compound to be used in soaps and detergents. Apart from its use in detergents, surfactants are also used in personal care products, paints and inks, engine lubricants, and agricultural insecticides. The recent procurement market intelligence report from SpendEdge identifies bio-based surfactants market as a high-potential market as buyers are slowly looking to shift from synthetic surfactants to natural and sustainably produced chemicals that are produced from natural alcohols derived from vegetable oils. Additionally, the report also states that the more efficient and mild form of detergents is growing in mature markets such as the US, the UK, and France.
Logistics, Transportation, and Customs Issues
Buyers in the market face lengthy delivery schedules for surfactants due to import and customs issues across international ports. Industry experts state that procurement of certain chemicals across long distances can take anywhere in between 3-6 months due to complexities in obtaining a license and other chemical-specific rules. Additionally, procedures such as export regulations for banned and dangerous chemicals and packaging and labeling requirements also add to the delay. In order to mitigate such risks, buyers usually incorporate risk-sharing agreement in the SLA that covers shipment delays.
Complexity in the Regional Distribution Network
One of the complex decisions procurement professionals dealing in surfactants have to make is whether to procure materials from international suppliers or source from a local distributor instead. High market volatility in synthetic surfactants alongside a relatively new market for bio-based surfactants is creating a high dependency on the distributors of these products to leverage relationships with primary manufacturers. Such innovations give manufacturers an edge to create superior products that will succeed in the market. As a result, it is mostly beneficial to build a strategic relationship directly with suppliers.
High Switching Costs for Buyers
Companies involving in the procurement of surfactants often face high switching costs as they buy a series of tailored products across end-user category. Suppliers of these chemicals sell these products at a relatively higher cost compared to base-chemicals as it involves the formation of unique molecular formulations. To tackle with such issues, buyers should have broad supplier base to ensure that they are not dependent on a single supplier.
Read more about the top challenges in the procurement of surfactants along with competitive landscape analysis, sourcing strategies, pricing strategies, logistics and supply chain issues, and procurement market intelligence in SpendEdge’s upcoming report on the global surfactants market.