Good Expectations Paid on China's Chemical Transportation and Storage Business   

By Ma Congyue

Given the increasingly strict work-safety and environmental protection policies in China, it is extremely important for chemical players to complete the transportation and storage system for chemicals and optimize the supply chain management. China's fast developing chemical industry also needs fast, stable, safe and efficient chemical logistics solutions.
    Amid the global financial turmoil and economic recession, it is difficult to keep GDP at double digit growth. After experiencing pollution disasters, the Chinese government is paying more attention to work safety in the chemical industry through instituting special regulations, legislations, standards and guiding proposals particularly for chemicals. As a result, there is a substantial opportunity for the chemical logistics sector, however, this has not yet been fully capitalized on.
    "The current storage facilities and warehouses for dangerous chemicals can not meet the demand in the whole country," said Mr. Chai Baoshen, Secretary General of Division of Dangerous Goods, China Association of Warehouses and Storage on Lnoppen's Chemical Transportation and Storage conference held on October 23rd-24th in Shanghai. "Three factors caused such deficit. Firstly the existing dangerous chemicals warehouses that were built in the places nearby downtown have been closed or have not space to expand. Secondly it is difficult to have a place to build new warehouse. Thirdly some investors who want to build dangerous good warehouse often give up their plan because of the high investment threshold and technological requirement."
   Optimized logistics will help to reduce the final production cost. "Faced with the challenges of increased costs, supply chain management in China will be the main strategic goal in cost reduction," commented Mr. Michael Doell, Vice President, Supply Chain Management, Süd-Chemie AG on the conference. He thinks China has advantages and also faces challenges. "China has 18 000 logistic service companies. But not all offer nationwide distribution services and no one commands more than 2% market share."
    All attendees agreed that China's chemical logistics sector needs additional infrastructure, a stable logistics market and integrated information technology.