What have been the latest developments and milestones at Brenntag in Latin America?

Brenntag has consolidated its position in our two largest geographies in the region, Brazil and Mexico, improving significantly on our operational efficiencies. In Mexico, we captured a larger market share in sectors where we had a small reach, not least thanks to nearshoring. Mexico, as a direct neighbour to the US, but also Colombia and some of the smaller countries in Central America, are poised to benefit most from nearshoring, and we are keen to service those growing industries. Then, if Brazil can stabilize its macroeconomic indicators and demand, we should see a continued rise of the middle-class as well as higher living standards, associated with more consumption, trends which provide a growth outlook.

How is the company’s global “Strategy to Win” program driven in Latam?

In the first phase, Brenntag divided into two business divisions, Essentials and Specialties, each following different growth models and targets. The second phase has been announced under the tagline “Strategy to Win” and has the goal of further independence of the two divisions. Latin America is, by definition, a distribution market. Across the 17 countries, there are markets for both specialties and commodities, with mature economies like Brazil and Mexico providing opportunities across the portfolios; however, I would say that the critical mass in the region is in the Essentials business.

How is the decline in commodity prices reflecting on the distribution sector?

After two years with strong revenue figures and record results at Brenntag, we expected the market to correct itself, though we did think it would be a softer return-to-normal; however, it turned out extremely challenging in the first part of the year, not only in Latam but everywhere in the world. We have also seen some areas of the world with high production rates and weak local demand perceiving Latin America as an opportunistic drop market, sending products to the region with predatory prices.

In general, the distribution sector has battled high inventories and low prices, larger companies being at an advantage over smaller players. At Brenntag, we are taking this moment to optimize our operations and continue building our resilience.

What market segments present the most growth opportunities?

The energy sector in Latin America, including both mining and oil and gas, present a great opportunity for our Energy Services. Also, consolidations in the agrobusiness, where we have a sizeable footprint, continue to drive healthy demand. The personal care market has been very dynamic in recent years, having gone through various consumer trend adaptations. Finally, at Brenntag, we also see an opportunity in offering value-added services like blending, product development, packaging and logistics, making the best use of our capabilities and set-up in the region to support customers with additional steps in the value chain.

How is Brenntag balancing cost management with growth in the current market?

These two imperatives – to control costs and grow – cannot easily coexist in the current environment. To grow, one needs to invest. Cost management in Latin America is particularly difficult due to high inflation and volatility, subjecting distributors to bigger costs when importing products. The key to solve this equation is efficiency and productivity, not only in terms of sales, but general operations too.

How do you navigate the high level of market fragmentation in countries as large and complex as Brazil?

Indeed, chemical distribution in Latin America does not compare to a place like Europe, where you can cross borders unhindered. The last mile is different in every place we operate. We are leveraging our knowledge, particularly the knowledge of our local staff, to optimize that last-mile delivery to the specifics of each place. The know-how acquired in the past seven decades in addition to our strategic geographic presence and global sourcing is the biggest strength we have in this fragmented environment.

Do you have a final message for our international audience and APLA members?

Latin America has its risks, but if you know how to calculate and navigate them and you put resources in the right places, Latin America is a place where one can grow faster. Brenntag Essentials Latin America has the capabilities, market presence and talent to execute on what the market needs as well as to accommodate to the market dynamics in the region.