Beyond the safety zone

U.S. distributors discover a wealth of opportunity in overseas markets

By -- Industrial Distribution, 10/1/2000

As information moves around the world through cyberspace at an ever-increasing pace, a growing number of goods are being sold internationally and even traditional companies like safety distributors are stepping up the pace of global sales.

Safety Equipment Co., Inc., a Tampa-headquartered company which has seven other branches, is a prime example. Richard Crannell, the vice president of energy, says a lot of American manufacturing companies are standardizing the equipment they use at home and overseas.

"Integrated supply has become a big factor," Crannell says. "That forces you into an international role in and of itself."

Crannell believes that distributors who aren't looking beyond the U.S. as a marketplace will get left behind. Safety Equipment Co. began selling products to the Caribbean in the 1970s. The company expanded international sales into other countries in the mid-1980s, Crannell explains, and further ramped up overseas sales during the last five to seven years.

Updates of internal processes and systems to meet the challenges of selling to foreign companies is an instrumental part of the transformation from a local or national to a global company, Crannell observes. Safety Equipment Co., for example, has a bilingual operations staff including French and Portuguese-speaking representatives. With their help, the company is selling products in the Far East, Pacific Rim, Europe, Central and South America.

"The demand comes from the customers we deal with," Crannell says. "The customers we currently have are demanding that we service them [outside the U.S] because they are opening [plants and offices] in other locations."

Industry analysts confirm the trend. Karen Rasmussen, an industry manager for environmental heath and safety at Frost & Sullivan, a marketing consulting and training company headquartered in San Jose, Calif., says a lot of safety distribution companies are selling products in Latin America and China.

"A lot of manufacturing is moving to China, Latin America or other Asian companies," Rasmussen says.

Demand is growing, but cultural issues still affect sales to a large degree, says Daniel Shipp, president of the International Safety Equipment Assn., a trade association for companies that manufacture safety equipment. Shipp views European regulatory structures as similar to those in the U.S.-if not more advanced-and notes that many other parts of the world lag behind.

"For a lot of these products it depends on not just the regulatory climate, but the culture," Shipp says. "The question is, do the supervisors and the people they are hiring, insist that people work safely? In some countries, if you could change that culture it would present a lot of room for market growth."

When U.S. manufacturing companies globalize, Shipp says, they often export their values overseas. This factor creates a world of opportunities for distributors. Challenges include sporadic compliance-even on individual job sites-because subcontractors bring in workers and expose them to unsafe conditions without the proper protective gear.

"Where U.S. companies are operating outside the borders of the U.S., many, many of these [companies] are trying to export their own safety culture to where they're doing business."

Importing products is a game that everyone can play and distributors are also contending with an influx of inexpensive, commodity-type safety products, particularly from Asia. Rasmussen says this has created price pressure for U.S. distributors in the past couple of years. In some cases, she adds, a split market of standard, low-end "compliance" lines and high-end products has developed.

Besides imported products, safety distributors also battle general line distributors who are expanding their product lines. Going global may be the best way for some to keep and expand their customer base.

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