Purchasing marks 20 years of reporting survey results
Susan Avery -- Purchasing, 5/5/2005 2:00:00 AM
Twenty years ago this month, the CPI edition of PURCHASING magazine published its first CPI Purchasing Chemical Distributor Giants list. Then, of the 100 distributors on the list, 50 were chemical distributors; the remaining 50 were distributors of equipment to the CPI. In 1985, chemical distributors had average annual sales of $18.6 million.
Since that time, the CPI edition of PURCHASING magazine has each year consistently published a list of the top chemical distributors.
The top chemical distributor on the list in 1985 was Ashland Chemical of Columbus, Ohio, with annual sales of $770 million. Ashland had 65 branches and a sales territory that encompassed the entire U.S. The biggest chemical distributor planned to add three new stocking locations that year and to place greater emphasis on service to oil and gas production markets and in promoting its chemical waste collection service. Other services it offered were blending and solvent reclamation. Its bulk storage capacity was 26 million gallons and total estimated warehouse space was 1.8 million square feet. Ashland had a rail fleet of 130 cars with a capacity exceeding 2 million gallons. Product lines it added in 1984 included potassium chloride and specialty amines. It added four stocking locations in 1984.
CPI Editor Doug Smock decided to devote the May 1985 issue to chemical and equipment distributors in the CPI in recognition of their growing role in the industry, spurred by efforts by purchasing professionals to reduce inventories and by chemical producers to cut their field sales staff and concentrate on larger volume customers.
The initial editorial project took Smock and his staff two years to complete. At the time, he wrote in his editorial in the issue, "We believe it is the most complete directory for its type ever aimed specifically at the CPI...We have endeavored to identify by sales the 100 largest distributors in the CPI. To the best of our knowledge, no one has ever compiled such a sizeable list before...The detailed profiles are intended to serve as a sourcing tool for buyers to use in evaluating potential distributor suppliers."
The CPI Purchasing Chemical Distributor Giants list in 1985 included research results which indicated distributors' plans, defined the nature of their business, and showed services available. The report also contained a substantial directory of distributor locations, organized by state and product lines. Among its findings:
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More than 25% of chemical distributors responding to the survey indicated that they planned to add at least one new stocking location in 1985. Survey results showed that chemical distributors aimed most of their growth at the primary chemical market. Others saw growth coming in less cyclical markets such as food, electronics and pharmaceuticals.
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Chemical distributors changed their lineup of branches in 1984. Of those responding to the survey, 14.2% added branches; 5.4% closed branches.
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On average, chemical distributors had 2.89 stocking locations in 1984. Almost half of those surveyed (48.3%) had only one stocking location; most of the rest had 2-4, while 6.7% had more than six branches. Those with sales above $10 million had 4.5 branches on average, while those with sales under $10 million had 1.73 branches on average.
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Average gross sales volume for chemical distributors in 1984 was $18.6 million. Analyzed by sales ranges, most chemical distributors (73.5%) had sales above $5 million. The biggest chemical distributors (in terms of sales) were concentrated in the adhesives/coatings and paper markets.
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Key markets were primary chemicals, adhesives and coatings, primary metals/automotive, electronics, food, pharmaceuticals, plastics, textiles, cosmetics, and refining.
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Product lines were acids, surfactants, inorganics, glycol ethers, chlorinated solvents, chelating agents, aromatic solvents, amines, alkalies, and ketones.
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Services available through distributors included blending, contract packaging, manufacturing, customer product research, technical training, safety training, hazardous waste removal, solvent reclamation, and others. Waste removal was the fastest growing service offered by chemical distributors. About 40% of survey respondents were also in the manufacturing business.
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Chemical distributors responding to the survey used computers in 1984 for inventory control (68%), direct customer communication (29%), and direct producer communication (16%).
Correction
03/16/2010TOP 100 eye rebound
05/01/2002Chemical buyers measure supplier performance
09/12/2007
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