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The Alliance for Chemical Distribution Executive Director Eric Byer. | PHOTO COURTESY OF THE ACD[/caption]
WILMINGTON — Delaware has a strong history with chemical manufacturing, including chief products such as pigments, nylon, petrochemicals and pharmaceuticals. The chemical sector is responsible for 292 jobs that pay $27.7 million in wages and generate $38.5 million in taxes in the First State.
The Alliance for Chemical Distribution is a trade group that represents more than 400 chemical manufacturers and the logistics companies that move products to their end points. Roughly 61% of its members sell or distribute paint and coatings, 56% of its members move cleaning components and soaps and 55% sell or move personal care or cosmetics materials. The average company in the ACD brings in $26 million in sales and has roughly 25 employees.
In early April, ACD Executive Director Eric Byer came to Delaware to visit the Royale Pigments & Chemicals plant and see their operations. Byer took the time to sit down with the Delaware Business Times for a one-on-one interview about the chemical sector and immediate issues it faces, from regulations to international trade. His comments are lightly edited for clarity and concision.
When you think about your organization’s role when it comes to helping these companies succeed in the challenging economic development landscape?
It’s twofold. We work with our companies on growth, whether it’s financial or economic or hiring more employees. It's also finding ways for our companies to succeed and make sure they do things the right way, when it comes to safety, security or regulatory compliance. We do that through various educational platforms, whether it’s in-person workshops or training. The chemical industry spends a lot of time on compliance, and when you look at the complexity of what our guys are doing, whether it’s moving product from rail to truck to storing it to warehouses, there are many protocols to do it well.
Here in Delaware, chemicals can be linked with DuPont and the economic development that brought. When you think about the network of chemical companies, what do you think are the misconceptions when it comes to this industry?
Our companies could be moving hazardous materials and highly toxic materials, or they could be moving things like salt and sugar products, or things that go into paints. A lot of our members work with companies like Sherwin Williams on the pigments in pinks. Most of our companies are small and employ an average of 25 people. They handle and store products, like a normal business. You have to dispel the myths that it’s like driving through a chemical plant in a Batman movie. I do enjoy talking about our work, because it helps hammer home that from the computer screen, your clothing to the paint on the walls is all from chemistry.
When COVID-19 hit, chemical distributors were considered critical infrastructure because we handled materials that were important to Americans, from hand sanitizer to vaccine ingredients. We’re logistics gurus, and our guys are really good at turning a bad situation around.
When the COVID-19 pandemic first started, it emphasized the need for stable supply chains and local sourcing. We’re seeing that again stressed with the temporary closure of the Port of Baltimore. What have you been hearing from your members about how supply chain needs have been shaped by the last four years?
If nothing else, I think COVID definitely put everybody on alert and it hasn't changed much since then. What you saw was a ramp up of hoarding products, causing prices to rise. Deliveries took forever and there was a backlog from hundreds of ships outside the Port of Los Angeles and there weren't enough trucks. The fact is, it’ll always be changing and everyone has to be on their toes. Whether it’s the Red Sea [shipping crisis where Houti rebels are attacking container vessels] to the drought in the Panama Canal lowering the water levels, there’s many factors that our companies will have to adapt for. The answer is our members will have to be on their toes to meet the ever-changing landscape.
What do you consider the most pressing issues facing the chemical distribution sector right now?
I’m most concerned about fraud and technology. It’s one of those areas that because of artificial intelligence and cyber attacks, you have to be diligent on what the bad guys are doing. We put a lot of time with the Department of Homeland Security and the FBI to educate our members on what they can do. AI can be great in efficiency but it also brings security concerns, since there’s tools that can generate invoices that are identical to what some of our members produce. We have to be at our absolute best when we consider cyber security.
Long-term, our members are going to have to utilize e-commerce more to be more efficient and productive. But the problem I think we will face on that front is regulatory overreach. There’s one rule that comes from the U.S. Environmental Protection Agency that gives anyone the opportunity to identify products housed in facilities around the country. I understand the need for transparency, but I don’t think it’s a good idea for the federal government to be telling the public what is housed there, especially if it can be used for nefarious purposes.
When it comes to international trade, what tools are most beneficial for chemical distributors?
There’s a program called the Generalized System of Preferences (GSP) where companies that import materials from countries that are struggling for a tariff rebate. The program has been offline for close to four years, and we’re working to get Congress to authorize it. In our industry, it’s worth tens, if not hundreds of millions of dollars. Not everything can be made in the United States. Consider citric acid. It’s in almost everything from Gatorade to cleaning solution. But it’s made exclusively in China. You have other companies that engage in illegal trade practices of buying the product and relabeling it, undercutting our small companies that want to do the right thing.
We’ve been hearing a lot about workforce struggles in recent years. In particular, what are chemical distributors face when they are looking for workers?
One of the biggest areas our companies are confronted with, every time, is they want to grow but can’t find the right people. They can find the sales staff, but finding someone who’s a chemist or someone in that space that understands the regulatory nature of this is difficult. But it’s also about keeping the staff happy and reinvesting in them to make sure they stay for five, 10 years. Our members do have a good track record, but there’s a renewed emphasis on it because you want to find someone to keep because the effort to recruit new talent is very difficult right now.
You know, being a truck driver used to be unappealing but now you’re seeing kids that get a CDL and specialized hazmat training and they’re thriving. They can get paid $125,000 per year.
One of the things we started was the emerging leaders program to get younger people that are up and coming groomed for leadership and operations. It's been very successful. There’s another program called the Future of Stem Scholars Initiative that raises funds to put students at Historically Black Colleges and Universities through school and hopefully interested in chemistry. We, at ACD, are sponsoring a Spelman College student who is wicked smart and will probably take my job when they graduate. It’s just one of the ways we’re working to find talent who may not be aware of what we have to offer as an industry.
