5 min
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Luana Torruella

Interview With Manuchar’s Member of the Executive Committee, Stefan Van Loock

AN EXCLUSIVE INTERVIEW WITH:

Could you elaborate on Manuchar’s role in optimizing the supply chain and go-to-market strategy for businesses operating in the chemical distribution and lithium sectors?

Manuchar has been in the chemical distribution business for more than 30 years in the meantime with a focus on the emerging markets. In 1992 we started our first distribution activities in South America in Brazil and we added Manuchar Chile in 2004 and Manuchar Argentina in 2003 where we have numerous customers in a variety of industries and sizes, SME, local champions and multinational companies. So we do count on the experience in the region to manage logistic, economic and financial challenges and opportunities.

We quickly defined that in order to give recurrent added value to our local customers one of the key factors was to have the necessary logistic assets (such as warehouses, trucks, hoppers, …) and safety inventories in the country of destination or in neighbouring countries to make sure that we keep our customer’s operation running anytime anywhere. In view of the volumes that the lithium business will demand and the location of production, the logistic challenges cannot be underestimated.

Today we manage our customer’s supply chain from origin, which can be anywhere over the world, till their production site. We also differentiate us from traditional 3PL players in a way that we give our customers the option to finance their goods with Manuchar. Furthermore we have inventories in neighbouring countries (Brazil and Peru), which allow us to react to our customer’s needs in the case of an unforeseen event.

With regards to some of the most crucial products that the lithium industry demands, such as soda ash, calcium chloride and caustic soda, we have decades of experience in the sourcing, maritime and local logistics at even the most remote places.

One of the things that the supply chain crisis has taught us the past 3 years is the fact that establishing a robust supply chain and contingency planning is crucial.

Manuchar offers a wide range of services in chemical distribution, including sourcing and maritime logistics. How does Manuchar ensure the reliability and quality of the products it sources and ships, especially in the lithium sector?

We provide our customers complete transparency on the entire supply chain.  This means they will know from whom we are sourcing the product and can rest assured that the suppliers of both product and logistic services have passed our internal assessment, which focusses on financial stability, reliability, consistency, quality, ESG and compliance with US, UK and EU sanctions.  As Manuchar we also look back to decades of relationship with the different players in the sector.

Furthermore we are also investing in digitization and soon we give will be able to give customers visibility on the location of their product through a supply chain control tower (in a couple of months we will be launching our own marine tracking app together with reputable 3rd parties and from there the application will grow further).

Considering Manuchar’s involvement in supplying key raw materials to global and local mining companies, could you provide insights into the key challenges and opportunities in the lithium mining industry, particularly in the Latin American region?

One of the main challenges that the lithium mining industry will face is its own growth or success. The volumes of key raw materials that it will demand and the logistic challenges that it poses cannot be underestimated.

To use soda ash as an example, Chemical Market Analytics expects that the demand for soda ash in the lithium industry in Argentina alone will increase with 781kmt soda ash by 2030 (compared to 2022 figures) with the majority in the years before 2027. Same will bring the total consumption in Argentina to well over 1.100kmt and will pose considerable challenges and opportunities not only for the port infrastructure, but also local logistics and employment.

Next to that soda ash poses certain complexities (it is not a commodity like any other):

  • The product is essential to the lithium industry and needs to be treated properly in order to avoid any contamination. Most will arrive in bulk and will need to properly bagged at destination, after passing quality control and magnetic sieves.
  • Soda ash (like caustic soda) is also a precursor that is controlled by RENPRE in Argentina and SENDA in Chile.
  • Should the supply come from one of the Pacific ports to Argentina, one will still have to cross the Andes, which will put specific requirements on the vehicles.

In view of the location of the lithium triangle Manuchar decided to invest in assets on both the Atlantic (San Nicolas and Del Guazu) and Pacific Coast (Antofagasta and Matarani). This will give our customers flexibility in their desired supply chain and export outlet if desired.

Next to that there are also international challenges and opportunities. When working with lithium, I am convinced that people will look at the cradle to grave supply chain. Were the key chemicals sustainably mined or produced, did the ocean vessels consider sustainable fuels, … ? Also here we will play a role. As Manuchar we are working together with our key shipping partners in trials for alternative fuels.

Manuchar supplies a range of chemicals used in lithium processing, such as caustic soda pearls/flakes and soda ash or sodium carbonate. Could you share some insights into the demand trends for these chemicals?

Our vision is that the global soda ash market, due to a reduced global demand, is balanced at the moment.  Prices have returned to more or less historic levels after adjustment for international inflation and the outlook for 2024 is that it will remain the same.  However, more than ever this balance is fragile and any major geopolitical or economic event will quickly disturb same.  For the coming years, we see a much tighter panorama, once soda ash demand from float/container glass picks up again.

Caustic soda is a completely different market, mainly driven by the demand of caustic soda liquid.  The fact that the lithium industry is often in more remote or inland locations, one easily opts to buy caustic soda in a solid form (pearls or flakes).  In view of this preference and the limited solidification capacity in the world (mainly for pearls), customers will need to be flexible to consume flakes as well.  It will be important for such customers to plan well their purchases in view of availability constraints.

In the context of the lithium mining industry, what sets Manuchar apart from other suppliers, and how do your services and expertise specifically benefit lithium mining companies in terms of efficiency, reliability, and cost-effectiveness?

We differentiate ourselves by being both a global chemical distributor and logistic service provider with financing capabilities allowing our customers to focus on their core business with alleviation of working capital. We do not only offer the lithium industry either a specific product or a specific logistic solution, we offer an entire supply chain universe. We assist our customers with sourcing, a total logistic chain or part of it, financial solutions all supported by a robust Quality, ESG and Compliance program.

With regards to cost-effectiveness, we let the figures speak for themselves. We have considerable synergies by bringing together volumes of similar and other products for other countries in the region and as such we are able to optimize our sourcing and international logistics. At a local level customers can capitalize on the additional volumes we move through our infrastructure and the experience we have in managing chemical products. Furthermore we are well connected in the industry and have commercial relations with all major producers of the most important chemicals used in the lithium industry. In any case we need to offer the best quality/cost combination in order to deserve our position in the market.

What are Manuchar’s expectations and objectives for its participation in the 2nd Argentina & LATAM Lithium Summit, and how does the company plan to contribute to the discussions and developments within the lithium industry during the event?

First of all we believe that the lithium industry is a fantastic industry to be involved in, since it allows us to fully use our capabilities with a project that will lead to a more sustainable and better world for our children tomorrow.

During the conference we hope to find many more similar-minded people and build relationships. Being in the business for almost 30 years now, I have learnt that in the end it remains a people’s business and there is no better way to generate trust, mutual respect and added value than through personal contacts.

As a group we have all the experience, assets and knowledge which allows us to add value in a transparent and compliant way to our customer’s business and ambitions.

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