I understood there was a shift by Western principals to focus more on their core business, increasing outsourcing, especially for smaller clients. They worked with technical distributors with strong reputations and deep customer relationships. Why are they changing this behavior? Why is it more convenient for Western principals not to engage in strategic agreements with specific distributors?

If I work with these customers and their business exceeds certain figures, they could switch from a distribution model to a direct customer model. I remember the exclusivity for CP Kelco in all of the Middle East and Africa; everything was exclusive, and all the customers were exclusive. There was no one else in the field with you. You were like a sales manager for this principal in your countries. But now, with non-exclusive agreements, you need to split the segments.

Traditionally, how much of specialty chemical distributors' revenue comes from products that have passed through their labs or formulation? Does this change significantly depending on the sector served by the distributor?

There are 10,000 distributors worldwide with different strategies. If we focus on the top five, such as Azelis, IMCD, Univar, Brenntag, and so forth, they have certain standards, objectives, and KPIs. These generally come from laboratories, applications, and technical expertise, representing between 15% and 20% of the total turnover, which needs to come from applications. This is why they invest heavily.

It seems there is an overcapacity within the Chinese principals. Due to the lack of demand in domestic markets, they have been exporting significantly more, affecting some markets and sectors. I am curious to hear your thoughts if you agree with this and which regions and sectors have been most affected.

Two or three years ago in Africa, there was still a perception that Chinese products lacked quality. However, with the supply chain disruptions caused by Covid, many customers started to homologate some Chinese products. They began to see that, qualitatively speaking, there wasn't much difference from European products.