Distribution To Remain On Upswing
With another year on the backburner, industry experts generally believe it is safe to assume 2007 will feature many of the same economic trends as 2006.
According to the 72nd Semiannual Economic Forecast conducted by the Institute for Supply Management, Tempe, Ariz., executives in the nation’s purchasing and supply management field say economic growth in the United States is expected to remain on the upswing in 2007.
According to the forecast, 72 percent of survey respondents expect revenues to be greater in 2007 than in 2006. The panel expects an increase of 6.4 percent in overall revenues for 2007, compared to an increase of 6.2 percent reported for 2006. Manufacturing industries expecting the greatest improvements over 2006 include chemical products, which post the highest number in anticipated revenues of any sector.
According to a recent study by Kline & Co., the U.S. market for janitorial and housekeeping cleaning products has achieved steady growth in revenue since 2002 — approaching $3.2 billion at the close of 2006, even though the floor care market has hit a small bump in the road.
“Recent price increases that were precipitated by a spike in raw material costs have helped the market, but the floor care market, in particular, has slowed during the past four years, as facilities managers have cut costs by reducing the frequency of waxing and stripping floors,” Bruce Boynick, senior associate for Kline's research division, said in a release.
While manufacturers prognosticate larger returns, distributors can continue to expect a slower pace in mergers and acquisitions.
Distributors can also expect to see demand for green products and cost-effective equipment.
Due to boosts in commercial construction, customer need for janitorial supplies will likely remain high.
However, competition for customers is fierce due to a continued influx of non-traditional competition — the Internet, big box stores, catalog houses, direct sales from manufacturers and vendors of lower-cost products from overseas.
Distributors will remain a vital component of the supply-chain, according to R. James Alexy, president and CEO of Network Services Co., Mount Prospect, Ill.
Alexy says distributors will remain the primary source for the jan/san industry in 2007 because of their broad product selection and value-added services such as product training and education, rapid response, and cost management for customers.
Network Services projects that its organization — as well as the majority of the jan/san distribution sector — will continue to prosper in the new year.
“Over the years, we have seen industries decline and others grow, fuel and raw material prices go up and down, and suppliers, customers and competitors consolidate and occasionally disintegrate,” Alexy said in a release. “Our approach is to identify the opportunities that come with change and act on them to help our customers.”
|Duo Forms Largest Group Of Wholesalers In The U.S. |
Redistributors of America (RDA), Fennimore, Wis., and Advantage Marketing Associates (AMA), Ripon, Calif., recently announced that they will merge.
The combined organization represents the largest group of wholesalers across North America, with 18 independent redistributors operating out of 28 distribution centers located throughout the United States and Canada.
RDA and AMA foresee the collaboration providing a variety of welcome opportunities and value to the supply chain.
“This merger delivers a host of benefits to both our distributor customer base and our vendor partners,” Wayne Littlefield, chairman of RDA, said in a release.
Chuck Wuttke, president of AMA added: “We proudly define our compelling working style by … ‘Delivering the Independent Difference’ coupled with our operating pledge … ‘There’s no better way to buy’ in a most dramatic and genuine fashion with this merger. This consolidation of independent redistributors brings a stimulating new dimension to the supply channel. ”
Study Investigates Cleaning Methods’ Effectiveness
Dr. Michael A. Berry, author of “Protecting the Built Environment: Cleaning for Health,” recently completed a study on dust capture cleaning at the University of North Carolina-Chapel Hill comparing two popular cleaning methods.
Assigned to scientifically evaluate the school's own “zone” cleaning and the ManageMen Operating System 1 (OS1) cleaning program, Berry reported that the OS1 system better manages fungal spores and reduces allergic reactions.
Sampling of dusts, fungi, bacteria and aerosols were conducted using the OS1 system in Carroll Hall prior to and during the study. To compare OS1 to zone cleaning, samples were also taken from Dey Hall, a zone-cleaned building adjacent to Carroll Hall.
Measurements of particulate matter emissions were made of the OS1 CRI Green Label backpack vacuums and upright vacuums currently in use as part of the zone cleaning system.
During the OS1 cleaning, a measurement was taken on a Green Label backpack vacuum and an upright vacuum. The results showed virtually no detectable emission from the Green Label vacuum (32 ug/m3) compared to a very high emission (240 ug/m3) from the upright. A level higher than 100 ug/m3 is considered unsanitary and potentially harmful to a large segment of the population.
|Letter To The Editor |
Your November 2006 issue included an article titled, “The Cream of the Carpet Care Crop.” The article highlighted in great detail a number of current carpet care technologies that offer higher-end features, functions and benefits. While the article was expansive in the technologies it noted, I was disheartened that it included no mention of Tennant Co. With recent innovations such as its ReadySpace technology, the industry’s first and only low-moisture carpet care method that uses soil transfer technology to leave carpeted spaces dry and ready for foot traffic in 30 minutes or less, and its dual technology carpet cleaners, like the Tennant 1610 and the Nobles Strive, which offer ReadySpace and deep extraction on one machine, Tennant Co. is clearly an industry leader in the area of carpet care and in offering technologies that provide real value for cleaning professionals. I hope that in the future you will ensure your coverage offers a more complete picture of the relevant technologies available to cleaning professionals.
— Stan Mierzejewski, Tennant Co.
The U.S. Green Building Council (USGBC) has been accredited as an official Standards Developing Organization by the American National Standards Institute (ANSI).
USGBC began working with ANSI processes through a partnership with the American Society of Heating and Air-Conditioning Engineers (ASHRAE), the Illuminating Engineering Society of North America (IESNA) and the American Institute of Architects (AIA) on the development of Standard 189p.
With a target completion date of late 2007, ANSI Standard 189p will set the baseline for high-performance “green” buildings in the commercial marketplace.
The California Air Resources Board (CARB) recently approved new volatile organic compound (VOC) limits for 16 consumer product categories that are likely to have a significant effect on the formulation of numerous products in the cleaning industry.
Of particular concern is the adopted 1 percent VOC limit for all floor polish and wax products. ISSA is expected to explore the possibility of developing a sub-category for specialized commercial floor polishes that would be subject to a higher VOC limit.
MERGERS & ACQUISITIONS
Walter E. Nelson Co., Portland, Ore., recently acquired Northwest Cleaning Solutions, Tukwila, Wash. -— one of the largest independent jan/san distributors in the Northwest. Terms of the deal were not disclosed. The two operations will move to a new 42,000-square-foot distribution facility in Kent, Wash.
Walter E. Nelson Co. is the largest family owned jan/san distributor in the Pacific Northwest, with 11 locations in Oregon and Washington.
International Paper, Memphis, Tenn., signed a definitive agreement to sell 13 lumber mills to West Fraser Timber Co., Ltd., Vancouver, British Columbia, for $325 million. The transaction is expected to close in the first quarter of 2007. The mills employ 2,200 people and have a combined production capacity of 1.8 billion board feet.
The transaction is part of IP’s previously announced transformation plan — focusing on uncoated papers and industrial and consumer packaging globally, as well as xpedx, its North American distribution segment. Expected proceeds from divestitures announced to date, including the sale of these 13 lumber mills, total $10 billion.
Brynwood Partners V L.P., Greenwich, Conn., recently acquired S. Walter Packaging, Philadelphia, a distributor of distinctive and creative coordinated packaging solutions, for an undisclosed amount.
The purchase expands Brynwood’s presence in the retail packaging products industry as it intends to merge S. Walter Packaging with its existing retail packaging portfolio company, Uniflex Holdings.
Techtronic Industries Co., Ltd., Hong Kong, entered into a purchase agreement to acquire Hoover floor care from Whirlpool Corp., Benton Harbor, Mich., for $107 million and certain assumed obligations. The transaction, which is subject to regulatory and antitrust clearance and customary closing conditions, is expected to close by the third quarter of 2007, but could close as early as the first quarter.
Dri-Eaz Products Inc., Burlington, Wash., recently acquired the patent rights for the AirPath Direct Flow Carpet Dryer from Studebaker Enterprises Inc., Centralia, Wash. Dri-Eaz provides solutions for the drying and restoration of water-damaged buildings.
Dri-Eaz manufactures dehumidifiers, airmovers, structural drying systems and air scrubbers used by water damage restoration professionals and in industrial drying, cleaning and maintenance work.
E-Poll Questions Switch To Green Products
As green cleaning’s popularity continues to rise, a recent poll questions if using environmentally preferable cleaning products is of greater interest to jan/san manufacturers and distributors than facilities.
Building service contractors (BSCs) were questioned as to how many of their customers have asked to switch from conventional to green cleaning products. Sixty percent responded “very few”; 20 percent, “more than half“; and 20 percent, “quarter to about half”.
Conducted by jan/san manufacturer Tornado Industries, Chicago, the company’s e-Poll was distributed to more than 3,000 industry members throughout the United States intending to pinpoint trends and developments in the industry.
Consumers Neutral On Nanotechnology
U.S. consumers have neutral feelings about nanotechnology, but believe it is less risky and more beneficial than several other technologies — including pesticides, chemical disinfectants and human genetic engineering, according to a recent survey administered by Zogby Intl.
The findings — published in the December issue of Nature Nanotechnology — represent the largest study to date on the public’s perceptions and willingness to use commercial nanotechnology products.
SDA Membership Open To Chemical Distributors
Chemical distributors who do business with the cleaning products or oleochemical industries are now eligible to join the Soap and Detergent Association (SDA).
To qualify for membership, companies must have sales in the United States.
Disclaimer: Please note that Facebook comments are posted through Facebook and cannot be approved, edited or declined by CleanLink.com. The opinions expressed in Facebook comments do not necessarily reflect those of CleanLink.com or its staff. To find out more about Facebook commenting please read the Conversation Guidelines.