Logistical Challenges for the Chemical Industry

With more than 80,000 commercial products, the Indian speciality chemical industry contributes to 7% of the country’s GDP. By the year 2050, India is poised to unleash its new wave of growth and emerge as the second-largest market after China, attributing to 20% of the total global chemical sales and accounting for almost USD $3 billion. (1)

However, there are several obstacles that hinder its growth. Some of the possible challenges that the Indian chemical industry is confronted with daily are as follows.

Factors affecting the reliability and profitability of the industry

  • Rampant pilferage – Increase in freight costs, untrained manpower and lack of knowledge about the new trends and technologies, compromise the quality of raw materials during the transportation process
  • Disruption of global supply chains – A recent upheaval within the industry has emerged owing to global supply chains facing the adverse effects of the Covid-19 pandemic. This volatile market condition has resulted in operational difficulties and crippled the logistical stability thanks to shortage of chemical raw material
  • Shortage of raw materials – The organic and inorganic chemical industry uses raw materials that are not easily accessible in the market. They are either highly priced or unavailable in the country, making India uncompetitive in the global chemical market
  • Warehousing issues – Some of the warehouses that are designed to store costly chemicals, invariably have poor infrastructure and insufficient facilities. They often have poor pipeline connectivity, inadequate power supply and lack good quality security systems

To combat these challenging times, chemical companies must continuously upgrade their operations, inventory management and transportation logistics to be abreast with their competitors.

Logistical solutions 

  • Sustainability is the futureThe conscious drive within the industry is generating tremendous improvement and innovation in this domain. Chemical companies are prioritizing environmental sustainability to protect long-term shareholder value, while continuing to adhere to local regulations
  • Supply chain optimisation Better communication with stakeholders, facilitating real-time inventory monitoring and avoiding stock-outs through proper warehouse management are the need of the hour for a well-oiled supply chain
  • Investment in digital technology – Organisations are investing in digital analytics and logistics automated services to reduce risks, streamline processes, improve margins and enhance the timing of deliveries. Digital technology has established itself as a key tool to leverage efficiency and productivity across the industry

Improved protection and security systems – Working with a comprehensive security strategy in supply chain management can be a comprehensive differentiator in the future

Fineotex: Surging ahead

Established in 1979, the Fineotex Chemical Group needs no introduction to this industry. It is one of the leading manufacturers of a broad portfolio of chemicals for textiles, construction, water treatment, fertilizers, leather and the paint industry. The only textile chemicals company to be listed in the Stock Exchange of India, this debt-free company has experienced a robust growth of 211% amidst the pandemic and taken adequate measures to move forward despite all the challenges in the industry.

Economic and social sustainability has always been an integral part of the business strategy of Fineotex. Agility for better delivery patterns, improved change management and measurable productivity has also been the hallmarks of this globally recognized brand. With innovation at its core, Fineotex seeks to explore more greenfield opportunities and partnerships with reputed international organisations looking to establish their footprints in India.

For more information, visit www.fineotex.com


  1. Read more at – https://www.tciscs.com/pdf/media/Chemical%20Industry%20Digest_%2060-62_%20Oct%202014.pdf 
  2. Read more at –  https://xcelpros.com/best-solutions-for-logistics-and-transportation-challenges-in-the-chemical-industry/
  3. Read more at – https://www.slideshare.net/TSMG-Chemicals/chemical-logistics-in-india-challenges-and-opportunities
  4. Read at – https://blog.portalvmi.com.br/en/logistics-challenges-for-the-chemical-industry-what-they-are-and-how-to-solve-them/
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