March 2009 - Modern Distribution Management

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March 2009

Baird Survey: Outlook More Positive Than Current Trends

Leave a Comment / Economic Trends, Research & Analytics, Free, Top Distributor Sectors, Quarterly MDM-Baird Distribution Survey, News, Subscriber Only /

The first quarter Baird Industrial Distribution Survey, from Robert W. Baird & Co. Inc., indicates revenues were down significantly during the quarter, with both the six-month and full-year forecasts slightly better than current trends.
 
Pricing and gross profit margins appear to be holding relatively steady. The survey also shows 68% of respondents expect some level of benefit to their business as a result of U.S. Government stimulus efforts.
 
Baird's Industrial Distribution Research Team, led by Senior Research Analyst David Manthey, CFA, collected feedback on first quarter results from nearly 300 independent and captive distributors with combined annual revenue in excess of $40 billion. Key survey findings include:
 
·   ...

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Dell Computer Recognizes Value of Selling Through Distributors

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Dell Computer Inc. seems to recognize the value of wholesaler-distributors in expanding its reach in the small and medium-sized business markets. The build-to-order computer giant will be working with Ingram Micro Inc. and Tech Data Corp. to target new customers in those markets, according to this article at itchannelplanet.com.
 
At first, Dell will provide the distributors with desktops and a few notebooks from its Vostro line, as well as some monitors and limited hardware warranties. Down the road, the computer-maker may expand the products offered through distribution.
 
Ingram Micro President Keith Bradley said in

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Valley National Gases Launches Safety Products Catalog

Leave a Comment / Free, Gases & Welding Equipment, Strategy, Management, Top Distributor Sectors, News, Subscriber Only /

Valley National Gases, Independence, OH, has launched a new line of safety products through the VNG Safety Products Catalog.
 
"With 12,000 items available, our customers now have access to a full selection of quality safety items for virtually any safety related need," Jerry McGlumphy, product manager/hardgoods for Valley National Gases said.
 
Valley National Gases is a distributor of industrial gases, safety supplies, first aid supplies, industrial supplies, gloves, safety glasses and medications. The company operates over 96 locations in 18 states, servicing a multitude of industrial segments from fabrication, to health care, energy to university/research servicing customers in the Industrial and Residential ...

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Survey: Two-thirds of Respondents Will Negotiate More SPAs

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A recent industry survey looked at Special Pricing Allowances. According to the survey by Allen Ray Associates and Channel Marketing Group, about a third of distributor respondents have more than 250 individual SPA, customer-defined, agreements. Another 13.6% had more than 100 SPAs.
 
About two-thirds say that the number of SPAs they negotiate will increase. Just 9.1% feel that they will eventually have fewer SPA agreements.
 
Distributors in the survey ranked SPAs as a 7.64 on a scale of 1-10 in importance to their current and future profitability.
 
"SPAs can be a competitive advantage for manufacturers and distributors to take market share when appropriately used," Allen Ray says. "The key is distributors claiming their funds to ensure ...

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Sysco Buys Irish Food Distributor

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

Sysco Corp., Houston, TX, has acquired Irish food distributor Pallas Foods Limited. The acquisition expands Sysco's international presence.
 
Pallas Foods has annual revenues of approximately $200 million and employs about 500 associates. Pallas operates its broadline distribution business from its Newcastle West facility supplemented by eight operating depots throughout Ireland.
 
Sysco sells, markets and distributes food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. The company operates 180 distribution facilities serving more than 400,000 customers. For the fiscal year 2008 that ended June 28, 2008, the company generated more than $37 billion in sales. ...

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Barnes Distribution Increases Steel Fasteners Line by 50%

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Fasteners, Companies /

Barnes Distribution, North America, a business of Barnes Group Inc. is expanding its stainless steel fasteners product line by nearly 50 percent, adding more than 1,200 new items to its stocked inventory.
 
The MRO supplies distributor offers more than 750,000 products, including 2,000 in-line stainless steel fasteners, to its customers ranging from food processors to chemical plants to pharmaceutical markets.
 
New stainless steel items added to the product line include hex head cap screws, socket head cap screws, socket set screws, lock washers and machine screws in standard, fractional and metric sizes. The product expansion also introduces pre-packaged product assortments.
 
The enhancement to the stainless steel fastener line further expands Barnes' ...

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Canada Industrial Product Price Index Up in February

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In February, Canada's Industrial Product Price Index (IPPI) rose 0.4% compared with January, due to both the depreciation of the Canadian dollar against the US dollar and increases in the prices for precious metals and petroleum products, according to Statistics Canada. The Raw Materials Price Index (RMPI) advanced 1.7 % compared with January, pushed up by rising crude oil prices.
 
The IPPI rose 0.4% in February, a modest upturn following the stability in the index in January and the declines of 2.7% and 2.2% recorded in November and December respectively.
 
Motor vehicles and other transport equipment rose 1.1% as a result of the depreciation of the Canadian dollar in relation to its US counterpart. The prices for primary metal ...

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Responding to Delayed Hospital Spending, Cardinal Health Cuts Costs

Leave a Comment / Top Distributor Sectors, Subscriber Only, Strategy, Pharmaceutical & Health Care, Management, Free /

Drug distributor Cardinal Health, Dublin, OH, says that when it spins off its Clinical and Medical Products businesses later this year it will reduce its global workforce by 800 over six months and eliminate an additional 500 positions through normal attrition and not filling open roles. The distributor also plans to implement cost control measures and reductions in discretionary spending.
 
The actions are in response to a "delay in hospital capital spending" specifically, and the decline in the global economy generally, according a press release.
 
Cardinal said back in January that the spending delay is only a "temporary concern," according to an article at WSJ.com.
 
Cardinal Health, Inc. is a $91 billion global ...

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New-Home Sales Climb: Has the Market Hit Bottom?

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For the first time in seven months, the Commerce Department reported that new-home sales increased 4.7% in February to a seasonally adjusted rate of 337,000 units. It's still a long way from where sales were, but Joe Robson, chairman of the National Association of Home Builders, is taking it as a sign that the market is finally hitting bottom, according to a statement posted to NAHB.org.
 
One possible contributor to the upswing: Prices finally may be low enough to draw buyers back into the marketplace for new homes. According to the S&P/Case-Shiller Home Price Indices released on Tuesday, prices for new homes continued to fall in January to lows not seen since 2003 (based on the composite indexes). The 20-city composite index has fallen 19% since January 2008; it ...

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John Crane Buys Orion Corp.

Leave a Comment / Top Distributor Sectors, Subscriber Only, Power Transmission/Motion Control/Fluid Power, News, Mergers & Acquisitions, Free, Finance /

John Crane, Morton Grove, IL, a division of global technology business Smiths Group, acquired Orion Corporation, a Grafton, WI-based designer and manufacturer of hydrodynamic bearings for energy and general industrial markets.
 
Orion designs and manufactures hydrodynamic bearings for high speed turbine, generator, compressor and gear drive applications for the power generation, oil and gas and general industrial markets. It reported sales of about $50 million for fiscal year 2008. The acquisition complements and extends John Crane Bearing Technology.
 
John Crane designs and manufactures seals and associated products mainly for the oil & gas, chemical, pharmaceutical, pulp & paper and mining sectors. ...

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H.B. Fuller Company Agrees to Buy Nordic Adhesives

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

H.B. Fuller Company, St. Paul, MN, has agreed to acquire Nordic Adhesives, a developer and manufacturer of flexible packaging adhesives based in Buxtehude, Germany. Nordic had sales of US$9 million in 2008.
 
Nordic has a strong product portfolio in the flexible packaging market and a solid presence in northern Europe. This acquisition will complement our existing product line, enhances our applications knowledge, and will enable us to extend our reach in this highly attractive $1 billion segment of the adhesives industry, said Michele Volpi, H.B. Fuller president and CEO.
 
"With Nordic, we can capitalize upon our global footprint and more quickly develop a more meaningful presence in this desirable market."
 
H.B. Fuller ...

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Matheson Tri-Gas Agrees To Buy Valley National Gases

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Mergers & Acquisitions, Gases & Welding Equipment, Free, Finance /

Matheson Tri-Gas, Inc., Basking Ridge, NJ, a manufacturer and supplier of industrial, medical, electronics and specialty gases and welding supplies, has agreed to buy Valley National Gases, Independence, OH, from New York-based private equity firm CI Capital Partners LLC. Matheson is a subsidiary of Taiyo Nippon Sanso Corporation, a producer of industrial, medical, electronics and specialty gases headquartered in Japan.
 
The acquisition of Valley National Gases supports TNSC's global expansion strategy and we are thrilled that our MTG team has successfully finalized the agreement. This acquisition also reinforces our commitment to developing a national presence in the United States, Hirosuke Matsueda, president of TNSC said.
 
Acquiring Valley ...

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Global Report: Mexico Hit by Export Slowdown to U.S.

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This is part of an MDM series of articles looking at growth opportunities globally.
 
The remaining optimism at the beginning of the global financial and credit crisis very often came from emerging markets. Though those markets' growth slowed, they still saw growth, contrary to the negative trends seen in the U.S. Growth forecasts for Brazil, for example, were revised downward, but remained positive, and India continued to see investment growth.
 
And another emerging market - Mexico - continued to steadily plod along even as its trading partners suffered from a barrage of bad news. The picture has since darkened for many of these countries.

Until a few months ago, it was believed that the emerging markets, and ...

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MDM Interview: Grainger’s Global View

Leave a Comment / Features, Companies, Top Distributor Sectors, Facilities Maintenance (MRO), Subscriber Only /

Grainger continues to strengthen its global operations; recently it tapped Acklands-Grainger President Court Carruthers to a newly created post, president of international businesses. As part of that, Grainger also recently named D.G. Macpherson to oversee Grainger's global supply chain operations.
 
In this interview with MDM, Carruthers talks about Grainger's plans globally, business improvements at Acklands-Grainger, and how the distributor views talent recruitment and retention. Carruthers has been with Grainger in Canada since the summer of 2002. He has been the president of Acklands-Grainger there since the end of 2006.

MDM: Why did Grainger put this position in place? What are your goals in this new role?
 
Court ...

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Commentary: A Positive Spin on News in a Negative Time

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In a short time, we have grown accustomed to reading (and in my case, writing) articles and headlines filled with words like, decrease, "decline" and "fall." That's why when, as reported this month, housing starts saw a slight increase, and new orders for durable goods went up, the words "unexpectedly" and "surprising" started to appear. Confidence went up, at least a little - badly needed in our battered economy.
 
That said, as soon as the word "increase" and all its synonyms came back, however briefly, there were plenty of economists and analysts ready to moderate our excitement that things might finally be hitting rock bottom. "The modest signs of stability in the U.S. economy are ...

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GDP Shrinks 6.3% in Fourth Quarter 2008

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Real gross domestic product - the output of goods and services produced by labor and property in the U.S. - decreased at an annual rate of 6.3 percent in the fourth quarter of 2008, (from the third quarter to the fourth quarter), according to final estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent.
 
These GDP estimates are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the decrease in real GDP was 6.2 percent.
 
The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment that ...

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DXP Enterprises: Supply Chain Services, Repair Remain Strong

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When sales declined 11 percent in January, industrial distributor DXP Enterprises turned to Plan B: Expand products and services, grab market share and reduce the bets on the table. The plan may not be unique but the fact that it is already working - February and March results improved, according to President and CEO David Little - offers a positive outlook for the distributor for the rest of 2009.

The worst-case scenario presented during its year-end conference call by the distributor of pumping, supply chain management and MROP products and services was for sales to be down 20 percent in 2009. That's based on multiplying January's results by 12 months, Little says.

"There's not a lot of clarity on what's ...

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MDM News Digest 3906

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Graybar, St. Louis, MO, distributor of electrical and communications products and related supply chain management and logistics services, reported sales were $5.4 billion in 2008, an increase of 2.7 percent from 2007. The company also posted profit of $87.4 million, up 4.8 percent. More
Dutch holding company ERIKS group has acquired Arnold Frommeyer GmbH & Co. KG, a German distributor of mechanical engineering components for use primarily in sealing technology, fluid technology, maintenance products and tools. Frommeyer has 15 employees and generates annual sales of €3 million.

MDM News Digest 3906 Read More »

MDM Industrial Inflation Index: February 2009

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Modern Distribution Management's February Inflation Index, which measures a cross-section of industrial supplies, was up 0.31% from the previous month, and up 7.12% from February 2008.
 
Please click below to view a print-ready pdf of the MDM Inflation Index for February 2009, listing the 10 individual product categories that make up the ...

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U.S. Conference Board, Canadian Composite Indexes Decline at Start of Year

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U.S.
Each of the three economic indexes provided by The Conference Board posted declines of 0.4 percent for the month. The Conference Board Leading Economic Index February decline follows a slight increase in January. Between August 2008 and February 2009, the index fell 2.1 percent, faster than the decline of 1.6 percent (a -3.1 percent annual rate) for the previous six months. In addition, the weaknesses among the leading indicators have remained widespread. The Leading Economic Index for the U.S. now stands at 98.5, continuing a downward trend that began in July 2007.

Six of the indicators that make up the LEI increased in February, including the interest rate spread, index of supplier deliveries (vendor performance), building permits, real money supply, ...

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