Like many other sectors, the market for cleaning and disinfection products has suffered greatly since the pandemic and the war. Many companies were forced to operate in survival mode over the past year, relying on very limited financial reserves to cover the high costs. Meanwhile, the pressure on the raw material market has slowly eased in several areas. However, the flag is not yet flying: although some commodity prices are falling, on average they are still significantly higher than two years ago. Moreover, other challenges in the market are still fully present. The sector is undertaking major investments for the foreseeable future due to increasing regulatory pressure.
Personnel, energy and logistics are the biggest challenges
By maintaining reserves, companies, especially SMEs, have managed to keep their heads above water. This has preserved employment and prevented shortages and delivery problems. Unfortunately, the breathing space is very limited, despite the slight stabilization of the commodity market. This is partly due to ongoing challenges in the labor market: the necessary but very strong wage increase and the shortage of personnel. The same challenges also play out in the transportation and logistics sector, where transport costs are still at a historically high level. Additionally, energy costs are for the time being also at a historically high level. No significant improvement in this situation is expected in the near future.
Preparing for the future: regulatory pressure and the vulnerability of the chain
The replenishment of reserves is for producers of cleaning and disinfectants It is of great importance to prepare for the future. Investments must be made to make production more sustainable and future-proof. The pandemic and war show how vulnerable supply chains can be, especially in the field of raw materials. Unproportional regulatory pressure and an outright bad investment climate have driven many producers of raw materials to countries outside the EU. Geopolitical tensions have therefore had a major impact on the supply chains and alternative suppliers are difficult to find.
The high regulatory pressure also creates enormous administrative burdens in our sector. Developments in European and Dutch regulations only bring more uncertainty and high (often unnecessary) administrative burdens in the near future. At the same time, the war and pandemic have shown that sustainable production of essential products within the EU is of great strategic importance.
Despite better prospects compared to the past two years, the sector of detergents, cleaning and disinfection products still faces major challenges. For a healthy market, businesses need breathing space, so that you can continue to rely on Dutch and European production of sustainable, effective products – in good and bad times.
Source: www.nvz.nl