Continental scores via chemcentral
By Bill Atkinson -- Purchasing, 3/7/2002 2:00:00 AM
It's no secret that, despite their best intentions and efforts, many companies, especially large ones, have difficulties locating minority-owned suppliers that have the capabilities (capacity and financial stability) to meet their needs.
One such supplier, though, has found a way to expand from a regional to a national presence to serve the needs of its Fortune 500 customers. Dennis Lowery, a Native American and CEO of Continental Chemicals, Charlotte, N.C., has been in the industry for 35 years, running both a formulation company and a distribution company (known together as the Continental Group). The company serves about 1,700 customers in six southeastern states. "At one time, we were the largest Native American-owned company in the nation," says Lowery.
As the industry changed, though, Lowery found that his larger customers began looking for chemical suppliers that could serve them on a national basis. "In fact, some of our customers were ready to leave us because we were regional," he admits.
To prevent the exodus and to create appeal among new business prospects, Lowery entered an arrangement two years ago with Chicago-based CHEMCENTRAL, the world's largest independent chemical distributor, which, at the time, did not have a presence in the Southeast. Under the arrangement, Lowery sold CHEMCENTRAL some of Continental's distribution operations and then began to lease facilities from CHEMCENTRAL across the U.S. "We lease CHEMCENTRALS space and trucking services, but we do our own purchasing, and have our own relationships with manufacturers," he explains.
National presence
The arrangement has given Continental a national presence as a minority-owned chemical distributor. "We have always been competitive in our region because of our size, but now we can be competitive throughout the whole U.S.," he says. "In fact, we are now the second-largest minority-owned chemical distributor in the U.S. We even do some activity outside of the country."
The arrangement has been working well for Continental. "I think this is a concept that will continue to gain popularity in the future," he observes. "As minority-owned companies, especially smaller ones, realize the importance of being able to compete better in the marketplace, they will find these arrangements much more attractive."
Lowery himself is looking toward the future. One result is a new cost-saving concept he is exploring with some of his largest customers. Under the arrangements, Continental will build storage facilities near customers' plants to stock the inventories they need—both Continental's as well as other suppliers' inventory. "A lot of companies use the consignment inventory concept, but this requires them to provide their own space and people to manage the inventory," he explains. "Under the new arrangement, we will be able to manage the inventories for them."
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