UK chemical supply chain stays under pressure

The Chemical Business Association (CBA; Crewe, UK), which represents mainly distributors, has released results from its supply-chain survey for the second quarter, which shows that the sector remains under pressure, as per Chemweek.

The survey includes responses from chemical manufacturers, as well as transport and logistics companies from across the UK’s chemical supply chain, and distributors.

The second-quarter results indicate “cautious optimism” in some areas, with 31% of respondents specifying that their order books are improving, better than the figure of about 23% in the first quarter, the CBA said.

About 29% of respondents reported improved sales over the previous three months, a slight downturn from 32% in the first quarter. About 26% of companies predict increased sales in the coming months – 1 percentage point higher than in the first quarter – “suggesting relatively flat forward momentum,” the CBA said.

Margins remain under pressure, with 9% of respondents reporting improvements, and 60% indicating no change. Future margin expectations also show signs of decline, with almost 37% of respondents expecting profitability to worsen in the next three months, the CBA said. This is up 10% versus the same period last year.

Survey responses reaffirmed employment concerns. About 14% of respondents expect employment levels to increase over the coming months, up from 11% in the first quarter, and 20% expect employment levels to decline, “reflecting the pressures businesses are currently facing,” the CBA said.

In terms of logistics, 77% of companies reported an escalation in shipping costs. Disruption linked to the Red Sea/Suez shipping routes also continues to affect operations, now impacting 57% of respondents, up from 36% in the first quarter, the CBA said. However, UK road haulage issues appear to be easing, with 8% reporting difficulties versus 16% earlier in the year, it said.

Ongoing geopolitical uncertainty – including US/China trade tensions – adds to the list of headwinds, the CBA said. Brexit-related regulatory issues, particularly UK REACH, remain “the most persistent and disruptive concern,” it said.

“This quarter’s data reflects a sector showing resilience, but which is increasingly being worn down by policy delays and global instability,” said Tim Doggett, CEO of the CBA. “The growing number of businesses expecting to reduce staff is also troubling. Without strategic support, there is a real risk of losing the skilled workforce essential for the sector’s future. What is most striking, however, is the resounding message from our members about the impact of UK REACH. The proposed further extension of the UK REACH registration deadlines is deeply frustrating for our members and for the wider sector as these delays prolong uncertainty, hinder investment and continue to place unnecessary financial and operational burdens on businesses.”

The CBA said it is working to make the UK government aware of the impact of UK REACH, including on downstream users that were previously not in scope of the regulation. “The association has persistently lobbied the government on UK REACH’s operability and practicality, and the impact of duplicate testing and costs,” it said.
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Bayer AG said in a statement Aug. 18 that Monsanto has now reached agreements in principle to resolve all Sky Valley Education Center (SVEC) cases, representing more than 200 plaintiffs overall, except for the prior adverse verdicts that remain on appeal, as per Chemweek.

Bayer acquired Monsanto in 2018. The SVEC cases involve allegations of injuries due to exposure to polychlorinated biphenyls (PCBs) at the school campus in the state of Washington, the company said.

The terms of the agreements in principle are confidential and subject to approval of final settlement agreements by the parties, Bayer said, adding that the cost of the additional settlements is covered by the PCB litigation provision of €530 million taken in the second quarter.

This provision also covers the previously announced settlement of the Burke case as well as other PCB-related litigation costs, the company said.

“While the company remains confident in its legal strategy and defenses, and is fully prepared to defend cases at trial, it has maintained it will consider resolving cases on appropriate terms when it is strategically advantageous to help mitigate the risks and uncertainties of this litigation,” Bayer noted.

The company added that it continues to pursue a multi-pronged strategy to significantly contain the risks of this litigation by the end of 2026.

The adverse jury decisions in nine prior cases (49 plaintiffs) remain under appeal and are not included in the settlement agreements, Bayer said. “Each of these cases has its own unique factual and legal record, and all of these appeals raise additional questions of law that are not before the Washington State Supreme Court in Erickson, a case that is still pending,” Bayer added.

The company filed a complaint in Missouri to enforce its rights under indemnity contracts signed in 1972 by its largest, former electrical manufacturing customers, it said.

These former customers agreed to fully defend and indemnify Monsanto as a condition of continuing to receive bulk PCBs for use in their closed-end finished products, under these agreements, Bayer said.

PCBs are widely recognized as nonflammable safety fluids and were once specified by many electrical and building codes and insurance companies to protect against serious fire risk, Bayer said. In addition, their production was required by the federal government to protect the nation’s electrical grid, it said.

In 1972 the Interdepartmental Task Force on PCBs, comprised of eight federal agencies and sub-agencies, including EPA, found that continued manufacture and sale of PCBs for certain electrical applications was necessary. Monsanto voluntarily ceased all PCB production in 1977, Bayer added.

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Insecticides (India) Ltd. (Delhi) has announced a 5% year-over-year growth in revenue for the fiscal first quarter ended June 30, to 6.9 billion Indian rupees ($78.9 million), as per Chemweek.

The company also reported an 18% year-over-year increase in profit, totaling 581.1 million rupees, attributed to focus on premium product offerings.

The management highlighted that the business environment during the fiscal first quarter remained broadly favorable. The season commenced with an early onset of the Southwest monsoon, which has led to healthy reservoir levels and visible signs of global demand recovery, alongside stable raw material prices. The Kharif season has shown positive signs for certain crops, including rice and maize, although uneven rainfall in some regions has affected the sowing of other crops.

Looking to the future, the companies expressed optimism about the ongoing season, bolstered by favorable conditions such as a strong monsoon, rising reservoir levels and expanded crop sowing. The company remains confident in its growth outlook for premium products.

The company operates across various segments, including insecticides, herbicides, fungicides, and biologicals and plant growth regulators.

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Fuso Chemical Co. (Osaka, Japan) reported a rise of 7% in revenue for the fiscal first quarter ended June 30, to Yen52.4 billion ($125.8 million), as per Chemweek.

Operating profit rose by 20% year over year to ?4.6 billion. Net income stood at Yen3.1 billion, up by 7.6% year over year.

In its life sciences business segment, however, the company faced challenges, with sales declining by 4.6% year over year to Yen8.9 billion. Operating income for this segment was reported at Yen1.2 billion, down 5.8% compared with the previous year. Despite strong domestic demand across various markets, including food applications, the company experienced a dip in overseas sales. The company attributed this decline to a stronger yen affecting exports and lower sales at international subsidiaries, coupled with reduced unit prices due to intensified competition.

Conversely, Fuso Chemical's electronic materials and functional chemicals business showed growth, with sales climbing 20.6% year over year to ?9.7 billion and operating profit rising by 26.6% to Yen4.7 billion. The semiconductor market, particularly for artificial intelligence applications, drove this demand. The company said it ensured a stable supply of its core product, ultra-high-purity colloidal silica, leading to increased sales volumes. Although the stronger yen posed challenges, the overall performance in this segment exceeded the previous consolidated cumulative period. Increased depreciation and startup costs from new manufacturing facilities at the Kyoto plant impacted operating income; however, these costs were offset by the surge in sales.

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Tokai Carbon Co. Ltd. (Tokyo) announced absorption-type merger between its subsidiaries, Tokai Fine Carbon Co., Ltd. and Oriental Sangyo Co., Ltd, as per Chemweek.

The merger is set to take effect on Jan. 1, 2026, with Tokai Fine Carbon designated as the surviving entity and Oriental Sangyo as the disappearing company.

Tokai Fine Carbon specializes in the production of fine carbon products, while Oriental Sangyo manufactures a range of carbon and graphite products, including artificial graphite powder and pencil leads.

Tokai Carbon stated that the primary objective of the merger is to integrate the capabilities of the two subsidiaries, which have been supplying high-value-added special carbon and graphite processed products, as well as silicon carbide (SiC)-related products, mainly for the domestic market.
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