What is Chemical Leasing?

With Chemical Leasing towards a sustainable world

The problem

Too often, the lack of cooperation between suppliers and users of chemicals leads to an unnecessary over-consumption of chemicals and the generation of hazardous waste. It is a problem of profit: Conventional management approaches for the business with chemicals are based on turnover. Producers of chemicals are driven by the assumption that “The more you sell the more you earn”. Unfortunately, this approach often encourages the inefficient use of chemicals and the generation of hazardous waste. It can hinder innovation, and may lead to a dynamic that is linked to the unsustainable management of chemicals.

The solution

Chemical Leasing is based on an alternative approach that turns the business model upside down: profit doesn't depend on more volume, but less. At the heart of the model is the idea that economic success no longer depends on the volume of chemicals sold, but on the service that is linked with the chemicals. Chemical consumption becomes a cost rather than a revenue factor. The business partners and the environment shall benefit from the co-creation of jointly developed resource-efficient and innovative solutions and fair profit-sharing.”

 

The UNIDO definition of Chemical Leasing:

Chemical Leasing is a service-oriented business model that shifts the focus from increasing sales volume of chemicals towards a value-added approach.

The producer mainly sells the functions performed by the chemical and functional units are the main basis for payment.

Within Chemical Leasing business models the responsibility of the producer and service provider is extended and may include management of the entire life cycle.

Chemical Leasing strives for a win-win situation. It aims at increasing the efficient use of chemicals while reducing the risks of chemicals and protecting human health. It improves the economic and environmental performance of participating companies and enhances their access to new markets.

Key elements of successful Chemical Leasing business models are proper benefit sharing, high quality standards and mutual trust between participating companies.

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