This is a part of the 2014 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.
2014 Distribution Trends Report
Consolidation continues to be a top concern for power transmission/bearing distributors. “It's one of the biggest issues in the bearing-PT business,” says James Webster, vice president of the bearings and power transmission division of DXP Enterprises Inc., Houston, TX. But there’s also recognition on the part of the larger companies that those “mom-and-pop shops” provide a lot of value to the local markets that they are in.
Sector convergence between electrical and power transmission builds with the influence of automation. As manufacturers focus on streamlining operations, automation has become more important for distributors to support their customers. Kaman recently acquired B.W. Rogers Company, Akron, OH, in part because B.W. Rogers’ offerings complemented Kaman’s fluid power and automation growth.
It’s getting more and more difficult to determine in some products where the mechanical elements and the electrical components each end, wrote one survey respondent. And there are no signs of that blurring of lines going away.
Automotive sector returns to the positive category for distributors. Auto and light truck sales at the Big 5 U.S. automakers continue to increase year-over-year. As such, distributors who serve the automakers are seeing business pick up, as well. Some uncertainty remains as to how much pent-up demand still really exists in the market, however.
Counterfeit bearings are becoming a bigger concern for distributors. While the Internet can be a great tool for increasing sales and expanding geographic reach, it also makes selling counterfeit products relatively easy. Anyone can set up an official looking storefront and post product for sale at prices that undercut authorized dealers. Organizations, such as the American Bearings Manufacturers Association, are launching campaigns to help combat the problem, but “The more we look for, the more we find,” says ABMA president Scott Lynch. Efforts are also being made to encourage increased enforcement at the federal level.
Acquisitions/Expansion
Kaman expanded its reach in fluid power and automation components with the acquisition of B.W. Rogers. The fluid power company will become the platform for other fluid power acquisitions Kaman has completed or has planned. The acquisition also expanded Kaman’s footprint as an authorized Parker Hannifin distributor, a move it had already been working toward with the earlier acquisition of Northwest Hose & Fittings, Spokane, WA.
Kaman also acquired Ohio Gear & Transmission, Eastlake, OH.
DXP Enterprises targeted oil & gas markets with its acquisitions of B27, Houston, TX; Alaska Pump & Supply, Anchorage, AK; and Tucker Tool, Mechanicsburg, PA.
The Numbers
Average growth for companies on the Power Transmission/Bearing Market Leaders list: 4%
