March 2008 - Page 2 of 5 - Modern Distribution Management

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March 2008

Cooper Industries Acquires Filtronic

Houston, TX-based Cooper Industries has acquired Swedish manufacturer Filtronic AB, which is now part of the Cooper Tools Division.
Filtronic manufactures mobile filter systems to protect workers from toxic gases, smoke and dust. Filtronic has distributors in Europe, North America, Australia and Asia.
Cooper has $5.9 million in annual ...

Cooper Industries Acquires Filtronic Read More »

Canadian Wholesale Revenues Up in January

Wholesalers shook off a disappointing December to start the New Year strong, helped in part by a price driven surge in the sale of agricultural chemicals, according to Statistics Canada.

Sales by Canadian wholesalers rose a healthy 2.6% in January to $44.1 billion, effectively offsetting the 2.6% drop recorded in December.

In January, six of the seven wholesale sectors reported higher sales, led by very strong growth in the other products" sector (+11.4%). The growth in this sector was driven by higher sales of agricultural chemicals, which also benefited from sharply higher prices during the month.

Wholesalers of machinery and electronic equipment (+2.2%), food, beverage and tobacco products (+2.1%) and building materials (+1.7%) were ...

Canadian Wholesale Revenues Up in January Read More »

Industrial Production Falls 0.5% in February

U.S. industrial production fell 0.5 percent in February after having increased 0.1 percent in January. Much of the decrease in February resulted from a weather-related drop of 3.7 percent in the output of utilities. In the manufacturing sector, output decreased 0.2 percent in February, and declines were fairly widespread across industries. The output of mines moved up 0.4 percent.

At 113.7 percent of its 2002 average, total industrial production was 1.0 percent above its year-earlier level. The capacity utilization rate for total industry in February fell 0.6 percentage point, to 80.9 percent, the lowest rate since November 2005.

More details ...

Industrial Production Falls 0.5% in February Read More »

Helping Customers Go Green

In addition to saving money by energy-efficient improvements to their own facilities, some distributors are helping customers go green by promoting products that lessen their impact on the environment, including energy-efficient motors, drives and lighting, windows, fittings, cleaners and finishers, and water-saving products.

Not only does the eco-friendly product trend help the environment, if done right, distributors can take advantage of this to become the source of green expertise for their customers; in turn, distributors can become the source for eco-friendly products in their markets.

Portland, OR-based Eoff Electric Supply, a subsidiary of Sonepar USA, has done just that. For the past 12 years, it has worked to help customers cash in on energy ...

Helping Customers Go Green Read More »

Home Depot’s New DC Strategy

The Home Depot, Atlanta, GA, which sold off its wholesale operations mid-2007 but continues to target professionals with its Own the Pro initiative, needed a more effective way to manage inventory for its lower-volume stores and seasonal and promotional products.

The existing Home Depot supply chain worked great for high-volume stores, which had no trouble making frequent orders to vendors for direct store delivery to allow them good in-stocks and inventory turnover,"Mark Holifield, Home Depot's Senior Vice President-Supply Chain, told analysts in HD's recent annual earnings results call with analysts.

"But in lower-volume stores, without an effective central distribution network, our store associates are forced every day to make the tough choice of being ...

Home Depot’s New DC Strategy Read More »

Survey: Wholesalers Have Low Expectations for 2008

Concerns about the economy and a steep drop in plans for hiring led to a steep decline in the confidence of distribution and wholesale companies during the fourth quarter of 2007, according to the latest Small Business Research Board report.

The study indicated that the Distribution &Wholesale Small Business Confidence Index dropped to 31 during the fourth quarter or 10 points (nearly 25%) from the 41 recorded during the prior quarter.

The third quarter 2007 report was the first wholesale and distribution industry confidence index issued by the Small Business Research Board.

Declines in two of the three major categories comprising the confidence index contributed to the lower fourth quarter results.

Of the respondents, 24% said they believed the ...

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Proposals to Change FMLA Regulations

For some time now, business groups have been calling for a substantial overhaul of FMLA regulations that have proven to be unduly vague, cumbersome, and in some cases, completely out of touch with the realities of today's workplace. It seems that those requests are no longer falling on deaf ears. On Feb. 11, the Department of Labor took a substantial step toward regulatory reform by publishing a Notice of Proposed Rulemaking in the Federal Register.

Once implemented, the final rules will contain regulatory language based upon comments submitted during the review process. Although a final set of new regulations is still months away, a spokesperson for the administration expressed her desire to implement changes by the end of President Bush's term. The proposed rules ...

Proposals to Change FMLA Regulations Read More »

Commentary: Get Out of the Sales Feast-or-Famine Cycle

In the movie Groundhog Day, the main character wakes up each morning doomed to repeat the exact same day, until he realizes he can change his life and do better.

That movie might be a useful management tool as we move through the current downturn in the economic cycle. As noted in an upcoming interview in MDM, Al Bates has been conducting financial performance surveys of distributors for nearly three decades. He has a wealth of data on how distributors have done across multiple business cycles. So is this cycle any different? We are going to come out of this recession the same way we came out of 2001-02, he said. Distributors will give up the same ROA they have in every cycle, then rebuild sales, add too many people and overhead, then cut when the next downturn ...

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MDM News Digest 3806

Weyerhaeuser Company, Federal Way, WA, has sold its Containerboard Packaging and Recycling business to International Paper for $6 billion in cash. The transaction includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations and 19 recycling facilities.

Wolseley revenues for the six months ended Jan. 31, 2008, increased 2% to £8.02 billion (US$16 billion). Profit fell 23.1% for the period primarily due to losses atStockBuilding Supply in the

MDM News Digest 3806 Read More »

Report: Canadian Construction Industry Should Expect Lower Profits

After a 22 percent drop in profits last year, Canada's residential construction industry can expect profitability to decline further in 2008, according to the Conference Board's Canadian Industrial Outlook: Canada's Residential Construction Industry -Winter 2008.

With a growing inventory of new homes, declining housing starts and weaker price growth, builders'profits are expected to shrink over the next two years,"said Valérie Poulin, economist.

Profits are expected to fall slightly from 2007 levels to $3.3 billion in 2008. Profitability is expected to decrease by another four percent in 2009, before improving gradually beginning in 2010.

However, profit margins will remain higher than historical norms, staying above their 17-year average over the ...

Report: Canadian Construction Industry Should Expect Lower Profits Read More »

Monthly Wholesale Trade: January 2008

U.S. wholesale trade revenues in January 2008 sales of merchant wholesalers were $387.7 billion, up 2.7 percent from December and up 15.1 percent from January 2007. The December preliminary estimate was revised upward $0.7 billion or 0.2 percent. January sales of durable goods were up 2.4 percent from last month and were up 5.1 percent from a year ago. Compared to last month, sales of metals and minerals, except petroleum, were up 4.2 percent and sales of furniture and home furnishings were up 3.7 percent. Sales of nondurable goods were up 3.0 percent from last month and were up 24.8 percent from last year. Sales of farm product raw materials were up 16.1 percent from last month and sales of petroleum and petroleum products were up 3.5 percent.

Inventories. Total ...

Monthly Wholesale Trade: January 2008 Read More »

Canadian Manufacturers: Slight Lift in Sales

Source: Statistics Canada,
Canadian manufacturers started 2008 with a modest but positive lift in sales. Manufacturing sales increased by 1.3% in January to $49.3 billion, as the sector struggled to spring back from the three-year low posted in December (-3.7%).
Notwithstanding January's increase, manufacturing sales, which have been trending downward for much of the last year, remained 7.1% below the recent peak reached in March 2007 ($53.1 billion) and with the exception of the previous month, January 2008 marked the lowest sales level since March of 2005.

Much of the weakness continued to come from the motor vehicle and parts ...

Canadian Manufacturers: Slight Lift in Sales Read More »

ATA Predicts Record-High Diesel Prices in ’08

The American Trucking Association announced it is projecting record-high diesel fuel prices in 2008. The association said the trucking industry will spend $135 billion on fuel, based on current fuel price forecasts. This is $22 billion more than in 2007.
Historically, according to the ATA, fuel represented the second-highest operating expense for motor carriers, accounting for as much as 25% of total operating costs. For some carriers, however, fuel is starting to surpass labor as the largest expense.
The cost to fill the fuel tanks on a typical tractor trailer has increased 116%, or $615, in just five years, according to the ATA. Because trucks haul 70% of all freight tonnage, the ATA says, rising fuel costs have the potential to increase ...

ATA Predicts Record-High Diesel Prices in ’08 Read More »

Actuant Core Sales Growth at 4% in 2Q

Actuant Corp., Milwaukee, WI, reported sales for its second quarter ended Feb. 29, 2008, were up 17% to $400 million, with 4% core sales growth.

Sales for the first half were $815 million, up 19%. Core sales increased 4%. Net earnings for the six months rose 13% to $49.7 million.

Second quarter fiscal 2008 Industrial segment sales increased 36% to $131 million. Industrial segment core sales grew 16% driven by continued strong global demand for joint integrity products and services for the oil &gas and power generation markets, as well as high-force hydraulic tools.
Electrical segment sales increased 6% to $131 million in the quarter. Core sales declined 6% reflecting weaker demand from DIY, marine and transformer customers.
Actuation ...

Actuant Core Sales Growth at 4% in 2Q Read More »

Berkshire Hathaway Completes Purchase of 60% of Marmon

Berkshire Hathaway Inc. has completed its acquisition of 60% of Marmon for $4.5 billion. As previously reported, the remaining 40% of Marmon that is currently owned by trusts for the benefit of members of the Pritzker Family of Chicago will be acquired through staged acquisitions over a five to six year period for consideration to be based on the future earnings of Marmon.

Marmon Group is an international association of more than 125 manufacturing and service businesses that operate independently within diverse business sectors.

These sectors are Wire &Cable, serving energy related markets, residential and non-residential construction and other industries; Transportation Services &Engineered Products, including railroad tank cars and intermodal tank containers; ...

Berkshire Hathaway Completes Purchase of 60% of Marmon Read More »

Housing Starts Fall Slightly in February

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for February 2008:

Building Permits
Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 978,000. This is 7.8 percent below the revised January rate of 1,061,000 and is 36.5 percent below the revised February 2007 estimate of 1,541,000.
Single-family authorizations in February were at a rate of 639,000; this is 6.2 percent below the January figure of 681,000. Authorizations of units in buildings with five units or more were at a rate of 295,000 in February.
Housing Starts
Privately-owned housing starts in February were ...

Housing Starts Fall Slightly in February Read More »

Weyerhaeuser Sells Packaging Business for $6B

Weyerhaeuser Company, Federal Way, WA, has sold its Containerboard Packaging and Recycling business to International Paper for $6 billion in cash. Weyerhaeuser said it expects to use a substantial portion of the after-tax proceeds from the sale to pay down debt.
The transaction includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations and 19 recycling facilities.

Steven R. Rogel, chairman and chief executive officer, said the announcement completes the company's strategic review of the CBPR business.

The transaction is currently expected to close in the second half of 2008. International Paper has committed financing for the entire purchase price.
Weyerhaeuser Company, a ...

Weyerhaeuser Sells Packaging Business for $6B Read More »

Report: Canadian Economy Shows Good Signs in February

According to a recent report by Statistics Canada (, there are several indications that the Canadian economy quickly shrugged off its drop in December and began growing again in the New Year. Housing starts and auto sales posted strong gains. The stock market in February rebounded from its dip in January, reflecting one of the largest jumps in monthly commodity prices during the current boom that began six years ago. Most importantly, firms expanded payrolls in both January and February, consistent with a pickup in investment plans for 2008.

Firms plan to boost nominal business investment about 6% in 2008, according to the annual survey of investment intentions. The increase bettered last year's hike, and was ...

Report: Canadian Economy Shows Good Signs in February Read More »

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