This is a part of the 2016 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2016 Distribution Trends Special Issue
North American sales in 2015 by semi-finished plastics shapes distributors and manufacturers rose 8 percent to $4.4 billion – a good rebound year by any measure. It's a strong sector with healthy balance sheets – with one major exception, SABIC, notes Mel Ettenson, editor of Global Plastics Letter.
As predicted last year at this time, the plastics sector is attracting private equity investors, with solid EBITA and visible ROIC.
In 2015, PE companies purchased Plaskolite, a major sheet manufacturer, and Total, a top 10 distributor, from A.M. Castle, a leading metals distributor. Ettenson expects SABIC Polymershapes (No. 2 on the Top Plastics Distributors list) to also attract a PE suitor, since parent company SABIC (Saudi Arabian Basic Industries Corporation) has indicated intent to divest distribution.
Raw materials prices are stable to trending lower. Lower oil prices are, of course, contributory.
The impact of competition from Amazon Business and Alibaba have grown but are still unclear for the long-term. "We expect to be talking about this in the years to come," Ettenson says.