April 2008 - Page 4 of 6 - Modern Distribution Management

April 2008

Wholesale Prices Up 1.1% in March

Wholesale prices increased 1.1% in March, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This advance followed a 0.3% rise in February and a 1.0% increase in January. The rise in the index for finished goods less foods and energy (core inflation) slowed to 0.2% from 0.5% in February.
 
For the 12 months ended March 2008, wholesale prices rose 6.9%. Over the same period, the index for finished energy goods increased 20.4%, prices for finished consumer foods moved up 5.8%, and the index for finished goods less foods and energy advanced 2.7%. For the 12 months ended in March, prices received by manufacturers of intermediate goods rose 10.5%, and the crude goods index advanced 31.4%.
 
For the first quarter 2008, wholesale …

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New Report: Distribution Sales Grew by 8.6% in 2007

Revenues of wholesaler-distributors grew by 8.6% in 2007, marking another year of strong overall performance, according to Pembroke Consulting’s The 2008 Wholesale Distribution Economic Factbook,” the third edition of its comprehensive market data reference guide to the $4.2 trillion U.S. wholesale distribution industry.

The new report contains detailed economic statistics on the 112 distinct sub-sectors within the wholesale distribution industry.
 
“The performance of individual sub-sectors varied more than in previous years,” said Pembroke President Adam J. Fein, the study’s author. “The ongoing surge in commodity prices continues to ripple through wholesale distribution. Some sectors actually shrank in 2007 after revenues are adjusted for price …

New Report: Distribution Sales Grew by 8.6% in 2007 Read More »

Grainger Sales Up 7% in First Quarter

Chicago, IL-based Grainger reported sales of $1.7 billion for the quarter ended March 31, 2008, up 7% from the prior-year first quarter. Profit for the quarter was up 12% to $114 million.
 
We are off to a strong start,” said CEO Richard L. Keyser. “We are encouraged by the market share gains achieved in a slowing economy.”
 
Daily sales increased 8% in January, 7% in February and 7% in March. For the quarter, sales were positively affected by foreign exchange, which contributed 1percentage point. Sales were negatively affected by 1percentage point due to the timing of Easter.
 
Grainger Branch-based segment
Sales in this segment, which includes branch-based businesses in the U.S., Mexico and China, increased 6% in the 2008 first quarter. Daily …

Grainger Sales Up 7% in First Quarter Read More »

Eaton Sales Grow 12% in First Quarter

Diversified industrial manufacturer Eaton Corp., Cleveland, OH, reported sales for the first quarter 2008 were $3.5 billion, 12% above the same period in 2007. Profit was $247 million.
 
Sales growth was the results of 2% organic growth, 6% from acquisitions and 4% from higher exchange rates. End markets for Eaton grew 2%.
 
Eaton reported it anticipated growth of 4% in its end markets in 2008, with international markets modestly stronger” than expectations in January and U.S. markets “slightly weaker.”
 
Sales for the Electrical segment were $1.3 billion, up 20% over 2007. This includes 11% growth from acquisitions. Eaton reported end markets in electrical grew 7% in both U.S. and non-U.S. markets.
 
Hydraulics segment sales were $657 million, …

Eaton Sales Grow 12% in First Quarter Read More »

February Machine Tool Consumption Down 4%

February U.S. manufacturing technology consumption totaled $308.50 million, according to the Association For Manufacturing Technology and the American Machine Tool Distributors’Association. This total, as reported by companies participating in the USMTC program, was down 4% from January, but up 4.4% from the total of $295.39 million reported for February 2007. With a year-to-date total of $624.28 million, 2008 is up 1.2% compared with 2007.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

Industry forecasters called for a first-half downturn in manufacturing technology orders,”said John B. Byrd III, AMT president. “The economic stimulus package has kept orders from falling in …

February Machine Tool Consumption Down 4% Read More »

Grainger Starts Meetings With Government Over Allegations

Chicago, IL-based facilities maintenance distributor Grainger has started meeting with the U.S. Department of Justice to discuss alleged contract and Trade Agreement non-compliance claims.
 
Grainger is accused of overcharging the U.S. government as well as illegally relabeling products manufactured in non-trade agreement countries so they could be sold to the U.S. government, a violation of the Trade Agreements Act.
 
In a press release, Grainger said the timing and outcome of this matter are uncertain and could include a settlement or civil litigation, and while this matter is not expected to have a material adverse effect on Grainger’s financial position, an unfavorable resolution could result in material payments by Grainger.” Grainger said the contract with the …

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MSC: Safety Products Catalog Part of Growth Strategy

MSC Industrial Direct’s latest Safety Products Catalog launch is part of its strategy to further penetrate existing customer accounts, according to Erik Gershwind, MSC’s senior vice president of product management, marketing and strategy.
 
The interest in safety products has been building in our customer base for the past few years,” Gershwind said. “We definitely saw a demarcation point after 9/11. Our customer base has a heightened sense of awareness of keeping the workplace safe and protecting the well-being of their employees.”
 
Gershwind told MDM that penetration of existing accounts was a key growth strategy for the industrial distributor, based in Melville, NY. The company is also planning to grow its business into new customer and product …

MSC: Safety Products Catalog Part of Growth Strategy Read More »

PrimeSource Buys Coast to Coast Building Products

PrimeSource Building Products Inc., Carrollton, TX, will buy Miami, FL-based Coast to Coast Building Products Inc., according to the Dallas Business Journal.
 
The acquisition expands PrimeSource’s network into the Southeast as well as the Caribbean and Central America. Coast to Coast has 75 employees and serves Florida, Georgia, North and South Carolina and Alabama in the U.S.
 
In February, PrimeSource reported it purchased 3-G’s Supply, Strongsville, OH, marking PrimeSource’s entry into the Cleveland, OH, regional market.
 
With 35 distribution centers throughout the U.S. and Canada, PrimeSource is a distributor of building materials serving residential and industrial new-construction and remodeling …

PrimeSource Buys Coast to Coast Building Products Read More »

Fastenal Sales Grow 16% in 1Q

The Fastenal Company, Winona, MN, reported sales in the three-month period ended March 31, 2008, was $566.2 million, an increase of 15.8% over the first quarter last year. Profit was up 26%.
 
During the first quarter, Fastenal opend 53 new stores (compared with 73 in the same period a year ago). The 53 stores represent an increase of 2.5% since Dec. 31, 2007. …

Fastenal Sales Grow 16% in 1Q Read More »

U.S. PT/MC Sales Grow 11.6% in February

While other industries may be experiencing slowdowns leading to recessionary forecasts, sales trends for distributors and manufacturers in the power transmission/motion control industry are still strong, reporting month-to-month sales gains in both U.S. and Canadian markets, according to the February Power Transmission Distributors Association month-end trend data report.
 
Continuing the upward trend of last month, U.S. distributors’sales of PT/MC products were up
11.6 percent in February 2008 compared to January 2008.  When matched up against sales in the same month last year, sales in February 2008 gained 6.7 percent. Accounts receivable collection days were down 5.4 percent from January 2008. The confidence index of U.S. distributors remained flat for the third …

U.S. PT/MC Sales Grow 11.6% in February Read More »

Dover Acquires Neptune Chemical Pump

New York-based Dover Corp. has acquired Neptune Chemical Pump Company, Lansdale, PA. Neptune will become part of Dover’s newly-formed Pump Solutions Group within the Fluid Management segment.
 
Neptune is a manufacturer of chemical metering pumps, chemical feed systems and peripheral products. Neptune’s key product lines are known for their use in metering, dosing and injecting chemicals with emphasis on water and waste water treatment. Other major applications include agricultural, food and beverage, and laboratory use. Neptune’s fast and flexible business model features speed to market delivery and a reasonably priced alternative when compared to its competitive peer group.
 
Dover plans to grow Neptune by leveraging its product offering through PSG’s network of …

Dover Acquires Neptune Chemical Pump Read More »

Honeywell to Buy Norcross Safety for $1.2B

Honeywell, Morris Township, NJ, has agreed to buy Norcross Safety Products L.L.C., Oak Brook, IL, a manufacturer of Personal Protective Equipment (PPE), for $1.2 billion.

Norcross, majority owned by Odyssey Investment Partners, manufactures protective and safety equipment for the fire service, utility and general industrial worker segments.
 
Norcross will be integrated into Honeywell Life Safety, part of Honeywell’s Automation and Control Solutions (ACS) group.  Norcross’s revenue was $609 million in 2007.
 
This acquisition creates an exciting adjacency for Honeywell Life Safety -especially our Fire Systems and Gas Detection businesses, which share common distribution channels with Norcross. We expect strong sales synergies across Honeywell …

Honeywell to Buy Norcross Safety for $1.2B Read More »

Report: Manufacturing Will Rebound in 2009

A worsening housing collapse continues to depress related industries, making for turbulent times in the U.S. manufacturing sector in 2008. Any gloom this year, however, should give way to a rebound in 2009, according to the Manufacturers Alliance/MAPI Quarterly Industrial Outlook, a report that analyzes 27 major industries.

Housing starts were down 26% in the fourth quarter of 2007. They are expected to plummet another 33% in 2008, bottoming out in the second quarter as the U.S. remains in the midst of the most severe housing downturn anyone could have imagined,” according to Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI, and author of the analysis.

Conversely, the longer term outlook looks much brighter, with a 32% increase …

Report: Manufacturing Will Rebound in 2009 Read More »

Dover Corp. Establishes Pump Solutions Group

New York-based Dover Corp. has established a Pump Solutions Group within its Fluid Solutions platform. The Pump Solutions Group joins the major brands, Wilden and Blackmer, with Almatec, Mouvex and Griswold to form a cohesive pump organization with a variety of pump technologies generating more than $300 million in annualized revenue.

PSG’s strategy is to leverage each company’s strong brand recognition while taking advantage of synergies within the group’s distribution, manufacturing footprint and supply chains. It also expects to leverage best practices and streamline back-office support functions. The group will look to improve upon its geographic sales mix, which is now over 50% international.
 
The Pump Solutions Group increases our distributor offerings and …

Dover Corp. Establishes Pump Solutions Group Read More »

MDM Interview: HD Supply After the Deal

HD Supply, Atlanta, GA, now separated from its parent company The Home Depot, is ready to move forward as a focused organization after the ups and downs of 2007. HD Supply’s CEO Joe DeAngelo spoke recently with MDM on the distributor’s plans to stay on the acquisition trail, the company’s strategy for integrating acquired companies, its plans for private label and green, and how he views the current economic situation.


MDM: How did the past year of not knowing the direction of the company in terms of ownership affect HD Supply and its ability to execute its strategy?
 
Joe DeAngelo: The good news is that we got through it all. We woke up the first part of 2007 and find out we’re for sale mid-February, and you go with the flow with that and …

MDM Interview: HD Supply After the Deal Read More »

Ferguson Launches New E-Commerce Site

Ferguson, a Wolseley plc U.S.-based HVAC and plumbing distributor, is launching a free transactional Web site to provide customers with 24/7 access to product information, real-time availability and ordering, as well as accounts information.
 
The formal rollout of Ferguson Online kicked off in January in Southern California.
 
An aggressive schedule has the Ferguson Online sales team targeting 100,000 customers, representing $2.1 billion in annual sales, for sign-up by the end of the current fiscal year. The remaining branches will follow soon afterwards in a full-scale national roll-out.

 
Meeting customer needs was a main driver for developing Ferguson Online,”says Chris Ann Jackson, Manager e-commerce, North America. “Ferguson’s e-business offering …

Ferguson Launches New E-Commerce Site Read More »

U.S. Market Analysis: Wiring Devices

The industrial product group listed here – Wiring Devices – represented a market in 2007 of $6.9 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: Wiring Devices Read More »

MDM News Digest 3807

Paris-based Rexel now owns 98.67 percent of Hagemeyer NV, and shares of Hagemeyer will no longer be publicly traded as of mid-April, the companies announced. In November 2007, Rexel and Hagemeyer reached an agreement for Rexel to buy the Dutch electrical distributor for roughly US$4.5 billion. More

Rexel will complete sales of Hagemeyer NV ‘s North American, Asian-Pacific and some European assets to competitor Sonepar will take place in the next six months, Rexel CEO …

MDM News Digest 3807 Read More »

MDM April 10, 2008

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email info@mdm.com to …

MDM April 10, 2008 Read More »

Commentary: A New Look for Modern Distribution Management

You’ll notice a few minor changes in the print version of MDM this issue, as well as some upcoming changes online, in an effort to make our information services more user-friendly. This column, which has been on the front page of the yellow section for a few years, will now appear on this page.

This Perspective column is often either related to the cover story or about broader distribution-related issues, so page 2 of our print edition is a more logical place for it to live than in the Industrial &Construction Markets Update yellow section. This page also gives us more space to explore issues than the single-column format in place for the past 40 years. More space also gives us some flexibility to address, when warranted, more than one topic.

The Industrial …

Commentary: A New Look for Modern Distribution Management Read More »

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