July 16, 2008

Canadian Manufacturing Sales Rise 2.7% in May

Economic Trends, Free, News, Research & Analytics, Subscriber Only / MDM Staff

Current dollar manufacturing sales rose 2.7% to $51.4 billion in May. This was the largest increase since March 2007 and the fourth increase in five months.

Sales increased for 16 of 21 industries, representing 94% of total manufacturing sales. However, despite these gains, May’s sales remained below year earlier levels and well below the peak of $53.1 billion in March 2007.

Petroleum and coal products (+9.2%) accounted for almost half of the growth in manufacturing sales in May. Sales climbed to $7.7 billion, and have increased by almost 20% since March 2008. Rapidly rising prices accounted for most of this growth, as the price for petroleum and coal products increased by about 17% during the same …

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Will Inflation Bring Offshore Manufacturing Back to U.S.?

Economic Trends, Free, Research & Analytics, Strategy, Subscriber Only / Lindsay Young

The recent cover story of IndustryWeek contends that some offshore manufacturing may return to the U.S. thanks to rising fuel prices and a weakened dollar, not to mention increased labor costs overseas. The magazine however was quick to say that it is too early to say definitively if this could happen on a large scale.

One logistics provider executive tells IndustryWeek that whether the U.S. becomes a “sourcing country” depends on the industry and the cost and bulkiness of the product. One supporting example provided in the feature: One manufacturer, Desa LLC, moved the company’s retail heating unit manufacturing operations back to the U.S. after the cost of shipping them from China to …

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Wolseley Profits Hit Hard in First 11 Months

Companies, Free, News, Subscriber Only / MDM Staff

UK-based Wolseley plc, distributor of plumbing and heating products to professional contractors and supplier of building materials, reported overall revenues were up 1% while profits were down 28% for the first 11 months ended June 30, 2008. Wolseley is the parent company of Ferguson and Stock Building Supply in the U.S.

The deterioration in some of our key markets continues and it is likely that conditions will get tougher still,”CEO Chip Hornsby said. “In these unprecedented circumstances, driving cost reduction, enhancing cash flow and closely managing the balance sheet remain key priorities.”

As a result of difficult market conditions, the distributor’s board recommended no final dividend payment to stockholders for 2008, a move that will result in a cash …

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Louisiana-Pacific Settles in Pricing Case

Building Materials/Construction, Free, Legal Issues in Wholesale Distribution, News, Operations, Subscriber Only, Top Distributor Sectors / MDM Staff

Louisiana-Pacific Corp., Nashville, TN, reached a settlement with building distributors that filed a class-action suit that included the manufacturer. The class-action, filed in 2006, claimed LP and five other manufacturers of Oriented Strand Board kept prices artificially high by conspiring to keep production low in times of high demand.

Under the terms of the agreement, LP will pay $44.5 million into an escrow account for direct buyers of the product. In addition, the company agreed to pay $2.3 million to indirect purchasers of OSB.

LP, which denies any wrongdoing, agreed to the settlement “to limit the risks and costs associated with at least two lengthy jury trials.”

The agreements are subject to court approval.

CEO Rick Frost said: …

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Applied Industrial VP: ‘Fluid Power is Big Growth Area’

Companies, Finance, Free, Mergers & Acquisitions, News, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors / Lindsay Young

Applied Industrial Technologies, Cleveland, OH, this week made one of its largest acquisitions in the U.S. fluid power market with an agreement to buy seven distribution businesses from Fluid Power Resource LLC. The purchase fits with Applied’s strategy to continue building out its fluid power unit, according to Warren E. Bud” Hoffner, who oversees Applied’s fluid power group.

“It’s just a great fit for Applied, and we’ve always thought that,” Hoffner told MDM. “FPR ran these companies as standalone firms in each local or regional market. That fits very well with how we’re structured.”

The last large acquisition Applied made in the U.S. fluid power market was Spencer Industries Inc., Kent, WA, a regional fluid power distributor with about $65 million in sales. …

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