June 2008 - Page 2 of 5 - Modern Distribution Management

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June 2008

MDM News Digest 3812

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Plumbing &HVAC distributor Ferguson, Newport News, VA, has opened a new clearance center in Pomona, CA. The 7,600-square-foot retail space, in an existing warehouse, offers excess inventory and discontinued material from Ferguson warehouses and showrooms in the Southern California area. Ferguson is a Wolseley plc company, a UK-based distributor of plumbing, HVAC and building materials. More
 
Chicago-based Grainger, facilities maintenance distributor, will open four new facilities, relocate one other, and expand and enhance three existing facilities throughout the U.S. Gulf region. The move is part of the company's market expansion initiative.

MDM News Digest 3812 Read More »

Staples and Corporate Express Deal Changes Retailer’s Focus

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Ending speculation about the possibility of a hostile takeover, Staples reached a friendly agreement to buy Dutch office supplies distributor Corporate Express NV in a deal valued at €3.1 billion (US$4.8 billion at the current exchange rate). The deal will shift Staples' market focus to 60 percent contract and delivery. 

The decision to change the business focus of Staples followed the numbers: delivery in North America for Staples grew 14 percent in 2007, making it the fastest growing and most profitable of the company's offerings. Retail, which currently makes up 60 percent of Staples' business, has been struggling in the current economy.

In addition to the dramatic growth of delivery and contract services, the acquisition provides opportunity to expand ...

Staples and Corporate Express Deal Changes Retailer’s Focus Read More »

U.S. Market Analysis: Industrial Paints MRO

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The industrial product group listed here - Industrial Paints MRO - represented a market in 2007 of $4.3 billion, according to estimates by Industrial Market Information, Minneapolis. 
 
These charts show the top ten industries, by SIC code, consuming these products; and the 2007 end-user consumption of these groups sorted by the nine government market ...

U.S. Market Analysis: Industrial Paints MRO Read More »

Industrial Production Falls 0.2% in May

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Industrial production declined 0.2% in May after having fallen 0.7% in April.
 
Manufacturing output was unchanged in May, the output of utilities shrank 1.8%, and the output at mines rose 0.1%. Factory output was boosted by a small pickup in the index for motor vehicles and parts.
 
The end in late May of the strike at a parts producer had little effect on vehicle output for the month; the output of motor vehicles and parts remained about 10% below its February level. Excluding motor vehicles and parts, manufacturing production edged down 0.1% after having decreased 0.5% in April.
 
At 110.9% of its 2002 average, overall industrial production was 0.1% below its year-earlier level. The rate of capacity utilization for total industry declined 0.2 ...

Industrial Production Falls 0.2% in May Read More »

Potential Settlement in Next Month in Grainger Lawsuit

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We could be seeing a settlement in the next month between the U.S. government and Chicago, IL-based facilities maintenance distributor Grainger, who was accused in the whistleblower case of overcharging the government and illegally relabeling products manufactured in non-trade agreement countries so they could be sold to the U.S. government.
 
According to recent court documents, the U.S. and Grainger have been in settlement discussions; a proposed agreement is prepared to be authorized by government officials. In the documents, filed May 28, 2008, attorneys ask for 60 days to finalize the terms of the proposed settlement and finalize an amended complaint. The court approved.

Here's MDM's original report ...

Potential Settlement in Next Month in Grainger Lawsuit Read More »

As Oil Skyrockets, Green Grows More Affordable

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Green may finally be bringing in the green.
 
Businesses focusing on green products and production are starting to reach broader audiences as prices of traditional products keep going up due to their reliance on fossil-fuel related materials and energy, according to a recent article in The Wall Street Journal. (Click here for full article. Subscription required.)
 
The fact that many of the companies focusing on environmentally friendly products also focus on environmentally friendly production has helped maintain prices that aren't driven by volatile energy prices. New Leaf Paper LLC, San Francisco, CA, works with mills to develop more ...

As Oil Skyrockets, Green Grows More Affordable Read More »

Watsco Launches ACDoctor.com

Leave a Comment / Technology, Plumbing Products & PVF Distribution, Free, Companies, Top Distributor Sectors, HVACR, News, Subscriber Only /

Watsco, Inc., Coconut Grove, FL, has launched ACDoctor.com, a consumer Web site that offers educational tools to help homeowners identify energy efficient cooling systems to help save money and reduce negative impacts of global warming.
 
According to Watsco, the heating and cooling of homes accounts for nearly 56% of residential energy use in the U.S., or $66.5 billion per year.
 
ACDoctor.com features energy saving calculators and tips on keeping energy bills low, energy efficiency high and improving the quality of indoor air. Users can compare HVAC systems, connect with contractors and locate financial incentives.
 
Watsco is an independent distributor of air conditioning, heating and refrigeration equipment and related parts and supplies in the HVAC ...

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Foodservice Supplier Buys Distributor

Leave a Comment / Finance, Mergers & Acquisitions, Free, Grocery & Foodservice Distribution, Top Distributor Sectors, News, Subscriber Only /

Orval Kent Food Company Inc., Wheeling, IL, a portfolio company of Questor Management Company, has acquired Fresh Creative Foods LLC, San Diego, CA.
  
Fresh Creative Foods is a processor and distributor of ready-to-eat refrigerated gourmet meals and side dishes. The company specializes in chicken dishes and its proprietary product line includes salads, dips, spreads and entrees.
 
Orval Kent Food Co. manufactures and sells a wide variety of fresh, refrigerated foods such as deli-style salads, component kit salads, mashed potatoes and side dishes, fresh-cut fruit, dips and salad dressing. Orval Kent operates manufacturing and distribution centers in California, Illinois, Kansas, Ohio, Texas and ...

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Rumors of Wolseley

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Here's our take based on MDM's knowledge of the distribution world on the rumors flying around the Web about UK-based Wolseley plc, global building materials/plumbing/HVAC distributor and parent company to Stock Building Supply and Ferguson in the U.S.
 
According to some reports, Wolseley is at risk of breaching its bank covenants" -here's an article from the Telegraph. The company is significantly exposed to the U.S. residential markets and up until this year has been an aggressive strategic acquirer. To improve its financial situation, the company has been aggressively cutting costs in its U.S.-based businesses, closing branches and reducing staff. In its last ...

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Graybar Opens New DC in Gulfport, MS

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St.Louis, MO-based Graybar, a distributor of electrical and communications products, has opened a 12,000-square-foot distribution facility in Gulfport, MS.
 
The branch holds $1.5 million in inventory. With the addition of the Gulfport facility, the company now has 64 locations throughout the Southeast. ...

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Hisco Acquires B&L Technologies Distribution Division

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Hisco, Houston, TX, has acquired the distribution division of B&L Technologies, a Victor, NY-based capital equipment and materials supplier to the electronics assembly industry. This expansion strengthens Hisco's operations in upstate New York and adds a 6,000-square-foot-facility to Hisco's network.
 
The new location will operate as a satellite division of Hisco's New Jersey branch.
 
Hisco President Bob Dill said there is a strong synergy between the two companies. The parallels between our customer base, core product offering, and value proposition made this a natural fit,"Dill said.
 
Bob Bernatovich, president of B&L said that the company will continue to offer its existing line of capital equipment.
 
Hisco is an employee-owned specialty ...

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Distributors Reach Out in Flood Zones

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Many families are returning home to chaos in places like Cedar Rapids where more than a thousand city blocks were flooded. Distributors -national, regional and local -are stepping up, providing customers with service and inventory when and where it is needed to speed recovery.
 
Crescent Electric Supply Company, East Dubuque, IL, is offering a matching relief fund of up to $85,000. The company sent me an announcement today saying that anyone wishing to have Crescent match their donation to help victims of tornadoes and floods in Iowa, Wisconsin and Indiana should send a check made out to either The United Way Tornado and Flood Relief Response or The American Red Cross Central U.S. Tornado and Flood Relief Response to John Miller at Crescent Electric Supply, 7750 ...

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Survey: Manufacturers Optimistic About Expansion in North America

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A new survey by Deloitte says that North America is the most desirable region for expansion" over the next three years. The survey targeted top-tier executives of manufacturing companies with North American operations.
 
Deloitte, Deloitte Canada and Deloitte Mexico, with the cooperation of the National Association of Manufacturers (NAM), The Manufacturing Institute and Canadian Manufacturers &Exporters (CME), surveyed 321 executives of North American manufacturers across product sectors. The majority of companies represented in the survey (45%) are based in the U.S.
 
In terms of plans for expansion, the survey found that sales and services topped the list with 76% planning to expand sales in the U.S., 58% in Canada and 67% in Mexico. Sourcing of raw materials and ...

Survey: Manufacturers Optimistic About Expansion in North America Read More »

Industrial Distribution Group Stockholders Approve Acquisition

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The stockholders of Industrial Distribution Group, Inc., Atlanta, GA, distributor of maintenance, repair, operating and production (MROP) products and integrated supply services, have voted to approve the merger in which the company will be acquired by an affiliate of Luther King Capital Management.
 
The closing of the deal is expected to occur in mid-July 2008.
 
We are pleased to have completed this essential step for the merger with LKCM. We will be working closely with LKCM and its personnel to achieve an expeditious closing and smooth transition," said President and CEO Charles Lingenfelter.
 
"We are delighted that IDG's other shareholders saw the value in this transaction, just as we are excited about our acquisition of IDG," said J. Bryan King, ...

Industrial Distribution Group Stockholders Approve Acquisition Read More »

Retailer Goes Wholesale with Proposed Purchase of Corporate Express

Leave a Comment / Paper Products & Packaging Distribution, Finance, Mergers & Acquisitions, Free, Operations, Strategy, Management, Top Distributor Sectors, Subscriber Only /

After four months and four bids, retailer Staples Inc., Framingham, MA, finally found the formula for reeling in Corporate Express NV. The offer to purchase the international office supplies distributor received the recommendation for approval from Corporate Express's supervisory and executive boards on June 11.
 
The move represents a significant shift in business focus for Staples that until now has centered on the retail market. After this acquisition, 60% of its business will be in the delivery and contract markets.
 
It's a great strategic fit that continues to build the delivery side of our business,"Paul Capelli, Staples vice president for public relations, tells MDM. In North America, delivery has been the fastest growing and most profitable segment for ...

Retailer Goes Wholesale with Proposed Purchase of Corporate Express Read More »

Now Not the Time to Shy Away from Price Increases

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A recent survey by McKinsey Quarterly (found here) says that nearly half of all respondents don't expect their companies to raise prices over the next six months. The manufacturing sector was the one exception. 

On the manufacturing side, nearly 90% have seen an increase in the cost of inputs. And only in the manufacturing sector, McKinsey says, did a majority of respondents say their companies had raised prices and will continue to do so in the next six months.

My takeaway: Now is not the time to shy away from price increases. Suppliers are eager to pass on their rising ...

Now Not the Time to Shy Away from Price Increases Read More »

ProBuild Taps New COO

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ProBuild Holdings Inc., Denver, CO, has appointed Bill Myrick as chief operating officer.
 
Myrick joined ProBuild in February 2007. Before his appointment as CEO, Myrick served as president of the company's Strategic Initiatives group and had responsibility for supply chain, manufacturing, gypsum and market development.
 
ProBuild supplies building materials to professional contractors through more than 550 lumber and building product distribution, manufacturing and assembly centers, serving 42 ...

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Kennametal Agrees to Sell On Time Machining Company

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Latrobe, PA-based Kennametal Inc. has agreed to sell On Time Machining Company to Kyocera Industrial Ceramics Corporation, Vancouver, WA.
 
OTM, based in Wapakoneta, OH, manufactures indexable cutting tools, including drills, aluminum cutting mills and counterbores. The acquisition will increase Kyocera's North American manufacturing capacity.
 
Kyocera Industrial Ceramics Corp., a subsidiary of Kyocera International Inc. of San Diego, CA, manufactures cutting tools and advanced ceramic components.
 
Kennametal supplies tooling, engineered components and advanced materials consumed in the production ...

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Housing Starts Fall 3.3% From April

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Privately-owned housing starts in May were at a seasonally adjusted annual rate of 975,000, 3.3% below April and 32.1% below May 2007, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
 
Single-family housing starts in May were at a rate of 674,000; this is 1% below April. The May rate for units in buildings with five units or more was 280,000.

Housing Starts Fall 3.3% From April Read More »

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