The expansion in chemicals manufacturing and trade is leading to increased demand for chemicals storage, packing, drumming and transportation throughout Asia. US-based BDP, a specialist in chemical logistics, has experienced rapid growth since it started its Asian operations in 1993. Unlike its competitors, the company does not own any storage, drumming or transportation assets. Based in Singapore, Peter M. Huels, BDP Asia Pacific managing director, explains the company’s unique business model to Energy Asia

If there was an award for a model for New Economy success, BDP would be a prime candidate. The 35-year-old company operates with few hard assets, relying on the specialist skills and talents of its staff, and its customized global information technology infrastructure to move, pact and store chemicals worldwide.

Unlike the more recent flimsy dot-com versions, BDP’s New Economy model (last year’s revenue: US$950 million) is said to be solidly profitable as most of its clients are leading multinational corporations which outsource their chemical logistics on long-term contracts. Philadelphia-based BDP, privately held by the Bolte Family does not report its profits.

Peter Huels, the company’s Asia Pacific managing director, proudly cites some of its long-term major clients: DuPont, Dow Chemical, Eastman, Ethyl, Witco, Sartomer, and more recently in Asia, BP and Kaneka. He said:

“DuPont is one of our largest customers; in fact, it is our largest in the US. DuPont is also the largest volume exporter our of the US: 100,000 TEU (twenty-foot-equivalent) containers a year. We move all their chemicals out of the US and the equipment that they use for plant construction. We move some of their stuff around Asia as well.

“If we don’t deliver value for customers such as DuPont, we won’t have their business for long. And we certainly can’t be profitable. We make our profit by ensuring that we manage the whole logistics process for our customers in the safest, most efficient and cost-effective way.”

Chemicals provide 65% of its business, with electronics, consumer goods and general cargo the rest. In fact, BDP claims to provide extensive logistic services to almost half of the world’s top 25 chemical companies including surface, air, and ocean transportation, export freight forwarding, import customs brokerage and regulatory compliance, project services, warehousing, consolidation, and distribution, and logistics process analysis and design.

The company’s competitive strength lies in its staff’s intimate knowledge of the chemical logistics chain across countries, and its heavy investment in IT to help staff and customers manage product flows.

It hires people who know the regulations of each country governing the movements of chemicals including warehousing, storage, handling and transportation. This is increasingly crucial as more chemicals are being produced and moved across national borders and regions.

Its staff is in contact not only with local regulators and enforcers, but also logistics providers who own the assets such as storage tanks, trucks and vessels needed to store and deliver the chemicals. This year, the IT-intensive company is launching web-based tracing, data warehousing and customers’ corrective action. Furthermore, BDP allows for its system to interface with the enterprise resource planning systems of its customers such as SAP or JD Edwards.

“We see ourselves as process managers. Our people know the conditions in the country that they operate in and have contacts in the government and private companies who are relevant to the process. We don’t own the assets, but we know how to deploy the assets available to us and the contacts to manage the whole process. That is the difficult part not many companies know how to do,” said Mr. Huels, who used to run his own logistics business in South Africa and the US before joining BDP in 1997.

As an example of “managing the process”, BDP could lease the chemical vessels of Stolt Nielsen for a shipment from the US, store the products at Vopak in Singapore and engage Poh Tiong Choon to pack and warehouse the chemicals on Jurong Island.

BDP’s began its Asian operations in HongKong in 1993, and moved the head office to Singapore two years later. Today, the company also has offices in Kuala Lumpur and Kuantan in Malaysia, and Beijing, Shanghai, Guangzhou and Dalian in China. By the end of the third quarter, it will have operations in Bangkok in Thailand, Mumbai in India and Jakarta in Indonesia. Australia and Korea are on the list for next year.

Despite its huge market, Japan is not on the cards yet as the company is still working on a strategy to break into the closed nature of the domestic chemical logistics industry. (see www.EnergyAsia.com ).