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With the exception of a few strategic acquirers, it's pretty rare these days that we hear about a distributor actually expanding in the U.S. But one metals distributor is doing just that.
Chicago-based metals distributor and processor Ryerson Inc. announced recently it will open two new service centers in Utah and Texas by the end of the first quarter 2009. What's more, the Platinum Equity-owned distributor doubled its stake in Chinese venture VSC-Ryerson China Ltd from 40% to 80%. VSC-Ryerson had $160 million in 2008 sales.
It's one piece of not-so-bad news after a slew of falling fourth-quarter and year-end results.
At the National Association of Wholesaler-Distributors annual meeting this week in Washington, D.C., I heard negative feedback on end-of-year results. While much of 2008 was relatively strong for many distributors, the final two months dropped off considerably. This was the case across most sectors of distribution, with only a couple sectors staying flat or slightly up. Some still report profitability, but maintaining that profitability was a top concern. The distributors I spoke with were looking at making cuts across the board: less travel, delayed capital expenditures, and the toughest for most - layoffs or the reduction or freezing of salary and benefits.
On the bright side, attendance at the NAW event was stronger than expected, close to numbers from two years ago.