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Consolidation concerns industry

Al Tuttle, Associate Editor -- Industrial Distribution, 9/1/2002

Consolidation has swept through heavyweight industrial belting manufacturers in the last several years, just as it has in many other industries. The cost of maintaining independent organizations proved too great for many companies, and they sold out.

Goodyear Tire & Rubber Co. remains one of two major manufacturers of heavyweight industrial belting. The other is Fenner PLC, a United Kingdom-based company that has bought manufacturers at an unprecedented rate. Fenner purchased Unipoly Enerka/Unipoly SA last year, which includes Georgia Duck, and owns Scandura, Efson, Inc. and TBA Belting.

The situation with lightweight belting makers, while not as active, concerns belting distributors. Jerry Bros. Industries in Richmond, Va., buys lightweight belting from a number of suppliers, including Chemprene, Inc., and Habasit Belting, Inc. Scott Kesner, COO, says lightweight belting makers are looking for ways to gain market share and lower costs. The latest consolidation in the lightweight sector was Gamma Holdings' purchase of Ammeraal, Chemprene and several other makers in the last 12 months, Kesner said.

"Everyone needs to keep their share of the market. That goes particularly for distributors," he said. "I think manufacturers are leaning toward buying distributors so they have a continuous operation to the end use."

Lightweight belting makers have sold direct or through non-fabricators for years, and fabricators like Jerry Brothers lose out in both instances, according to Kesner, a member of NIBA — the Belting Assn.'s marketing committee.

"I think suppliers will buy distributors to buy relationships and experience in the field. This is my opinion, not that of NIBA," Kesner said. "Manufacturers are fabricating complete belts and selling them directly or through non-fabricating distribution." That would be an attempt to get direct business from customers who refuse to go direct, says Kesner. The commitment of belt makers should be to the distribution network that has built the relationships with customers and solved their problems, he said.

According to Dave Jansen, inside sales manager at Rubber & Accessories in Lakeland, Fla., rollups by European-owned companies create a dilemma in the United States.

"In Europe, they don't have the huge distribution networks we have. They do more direct sales. Who's going to give?" Jansen wondered.

He doesn't see a big swing away from traditional distribution, however.

"Belt makers have taken very large customers direct, especially OEM's, for decades," he said. "But I don't see the American market for belting losing its distributors in the near future."

Northeast Coastal (figures in millions)
Paper Mills5.8
Electrical Work3.4
Plumbing, Heating & Air Conditioning3.3
Engineering Services3.1
Machine Tools (Metal)2.3

Mid-Atlantic (figures in millions)
Electrical Work8.6
Construction Machinery7.9
Plumbing, Heating & Air Conditioning7.8
Engineering Services7.7
Paper Mills6.7

South-Atlantic (figures in millions)
Electrical Work14.0
Plumbing, Heating & Air Conditioning13.3
Paper Mills11.3
Engineering Services11.2
Motor Vehicles & Car Bodies8.0

Southeast Central (figures in millions)
Motor Vehicles & Car Bodies11.1
Paper Mills7.1
Refrigeration & Heating Equipment4.1
Plumbing, Heating & Air Conditioning3.9
Electrical Work3.5

Northeast Central (figures in millions)
Motor Vehicles & Car Bodies52.4
Internal Combustion Engines21.8
Construction Machinery21.3
Paper Mills17.5
Motor Vehicle Parts & Accessories16.9

Northwest Central (figures in millions)
Construction Machinery7.4
Farm Machinery & Equipment6.6
Motor Vehicles & Car Bodies5.9
Paper (Coated & Laminated)4.9
Plumbing, Heating & Air Conditioning4.6

Southwest Central (figures in millions)
Electrical Work7.6
Plumbing, Heating & Air Conditioning6.9
Engineering Services6.7
Motor Vehicles & Car Bodies5.6
Refrigeration & Heating Equipment4.3

Mountain States (figures in millions)
Electrical Work4.9
Plumbing, Heating & Air Conditioning4.4
Engineering Services4.3
Construction Machinery3.5
Cooper Ores1.5

Pacific Coast (figures in millions)
Engineering Services9.9
Electrical Work9.0
Plumbing, Heating & Air Conditioning7.7
Motor Vehicles & Car Bodies6.5
Paper Mills5.1

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