Ninety-two percent of buyers responding to a recent Purchasing survey find chemical-distributor performance to be good or excellent. What's more, 73% plan to buy more from their distributors in the next three years as their own businesses expand. And, they'll be buying from distributors who perform well for them and meet their specific requirements.

"We use two large distributors for our chemical needs," says one chemical buyer responding to the survey. "One has clearly excelled by consistently providing services. From managing product availability issues during critical shortages, to proactively keeping us informed of supply and pricing dynamics within the marketplace, this distributor has truly become a partner in our business. As a result, as our company has expanded so has their share of our chemical business."

Taking a slightly different tack, but responding similarly, is Tom Christensen, project supervisor at Intrex Corp. in Kingman, Ariz. He too plans to increase spending with chemical distributors and says: "The construction industry is changing. Chemicals provide for much of that. In order to compete effectively we always will try and adapt new processes."

Other respondents beg to differ on reasoning for purchasing more through distribution. Says one respondent from Pennsylvania: "More chemical producers are requiring that buyers must deal with distributors for certain chemical products or order quantities."

The new poll's findings mesh with results of another reader survey conducted by Purchasing earlier this year. Results of the magazine's annual look at performance of all distributors published in the May 3 issue show 96% of purchasers are pleased with the suppliers in general.

More than half of respondents to the new survey on chemical distributor performance already buy more than 70% of the chemicals they purchase through the suppliers. And this figure is up from three years ago, say 83% of purchasers responding to the survey. What's more, buyers seem to be working with an optimal number of chemical distributors: More than 60% of respondents say they have no plans to consolidate the supplier base.

Chemical buyers are particularly picky about price. When asked to list their biggest problems with chemical distributors, the most frequent response is price. When Purchasing surveyed readers earlier this year about performance of their distributors in general, respondents reported that their biggest issue with the suppliers is price. And 51% of chemical distributors contacted for the magazine's Top 100 list of chemical distributors published in the May 3 issue, say price increases/stability is the biggest issue for their customers. Other buyer concerns are: manufacturing going offshore (27%) and product availability/shortages (21%)

Particularly perplexing for a purchasing manager in New Jersey is the pesky habit some chemical distributors have of "raising prices without notice."

Another survey respondent isn't happy with how his company's chemical distributors resolve problems "especially when it comes to figuring out a root cause and how to fix it so it won't happen again."

A third says "product availability is our biggest concern, particularly with molecular sieve and methanol. Availability issues are the result of fewer manufacturers for these products and to a large extent outside the control of distributors," he says.

A close examination of the survey finds 12% of purchasers rate their suppliers as "excellent" on price performance. Sixty-eight percent say chemical distributors do a good job in this area. Nine percent say performance is fair or poor.

Respondents are most satisfied with on-time delivery; 40% say performance in this area deserves an "excellent" grade. They are also pleased with product availability and customer service: twenty-five percent say availability from their distributors is "excellent", while 25% say the same for service.

Other buyers responding to the survey on chemical distributor performance say price is what they like best about the suppliers, followed by availability and delivery.

Purchasers may want to keep a close eye on distributor consolidations: Aside from the ups and downs dictated by fluctuating energy prices and raw materials costs, the supplier base in North America continues to consolidate with several big players acquiring smaller distributors. For buyers, fewer suppliers translates into less leverage on price during negotiations with chemical distributors.

This summer, Univar was acquired by CVC Capital Partners, a move that Gary E. Pruitt, chairman and CEO, says will be good for customers and suppliers and may accelerate the company's plans to expand business in the U.S., Europe, Asia and elsewhere. Earlier this year, Univar, which ranks at the top of Purchasing's Top 100 list of chemical distributors, acquired Chemcentral, another big player in the chemical distribution industry. Univar has $8 billion in annual sales.

Mergers and acquisitions in the chemical industry or a consolidating supply base of chemical distributors is the number-one issue for buyers responding to Purchasing's survey online; they were in unanimous agreement on the issue. The question was asked only of online respondents. A consolidating supply base may not be entirely bad news for purchasing, as one buyer finds a silver lining: "As the major distributors get larger, they can tend to alienate customers for various reasons and this will create opportunities for smaller, service-oriented companies."

Nearly 46% of all survey respondents have a formal process for measuring supplier performance of chemical distributors.

In the survey, Purchasing asked chemical buyers how they buy through distribution. Twenty-one percent of those responding place orders with the suppliers via the Internet. Thirty-three percent use the telephone, while 33% send in orders by fax. Another 8% purchase chemicals through distributors when they meet face to face with supplier salespeople. Chemical buyers could select more than one response to the survey question.

When selecting a supplier, purchasers rank on-time delivery, ready product availability and competitive prices at the top of their lists as qualities they want most in a chemical distributor. On a scale of 1 to 10, with 1 as most important, purchasers rate these criteria a 2.6, 3.0 and 3.2, respectively. Total cost (3.8), service (3.9) and inventory management (5.3) also are important qualities for chemical distributors, say survey respondents. Less important are geographic scope, e-commerce capability and supplier diversity.

Respondents were asked to list the products they source most frequently through chemical distributors. These are: solvents, cleaners, coatings, hydraulic oils and caustic soda.

Readers also responded to a question on value-added services they take advantage of most often from chemical distributors. These are: blending, contract packaging, technical training, customer product research and manufacturing.

These responses dovetail with those of chemical distributors contacted by Purchasing in compiling the magazine's Top 100 chemical distributor list. Chemical distributors say blending, contract packaging, technical training, safety training and customer product research are the value-added services requested most often by customers.