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Gains tempered by steel prices

Even the janitorial market can't escape the influence of steel prices

By Joe Nolan, Associate Editor -- Industrial Distribution, 10/1/2004

The general situation in the janitorial markets and related industries at the moment seems to conjure up the half-empty, half-full glass.

Rusty Duncan, president of Industrial Market Information, looks at the data and says the janitorial supply market "basically is flat. Statistically speaking, we're not showing any increase or decrease. It's just about the same."

The numbers he reads off sustain this opinion: "Last year, total market was $13,221 million. This year, after adjustments, it looks like $13,242 million. So it went up by about 20 million dollars, or about .05 percent overall."

While flat sales are obviously better than declining sales, some feel that certain janitorial segments should be faring better, given the construction boom in some areas of the country.

"Over the past five years," Duncan adds, "janitorial supply overall has gone up by a little over 1 percent."

A more optimistic tone is found at Dirt Killer, based in Owings Mills, Md., a Baltimore suburb. They are U.S. distributors for Krenzle, a German manufacturer of pressure washers and other janitorial-related equipment. The Maryland site also does a certain amount of manufacturing, using Krenzle components for some of the Dirt Killer line.

As national sales manager, Ken Rankin views his industry from a wide perspective. After a few flat years reflective of what Duncan described, Rankin has seen improvement in 2004.

"Our general janitorial business has been very good," he says. "We focus on electric- powered units, and janitorial tends to be a market that uses that a great deal, especially for interior cleaning. So that helps us a lot and has enabled us to carve out a pretty good niche on the industrial and MRO side."

Dirt Killer has benefited from its success with a variety of markets and industries, Rankin explains.

"We're geared toward a couple of markets such as [equipment] rental," he says. "On the industrial side, we do a lot with in-plant maintenance—washing fleets of trucks, for example. There are a number of places using pressure washers."

While he likes what he has seen so far this year, Rankin's experience the past few years is in keeping with much of what Duncan's numbers show.

"Our business was real spiky last year," he admits. "It would go up steeply and then fall off just as dramatically."

He seems optimistic for the rest of '04 and beyond, yet concedes that, like everyone, his is a fingers-crossed, seat belt-fastened outlook—especially when steel is raised as a topic.

"From a components standpoint, that impacts us up and down the chain," he explains. "We use stainless steel for our frames on the Dirt Killer side. Those prices have gone up severely, as has the steel we use for coils in the hot water machines."

Steel aside, the distributor part of him remains pleased and optimistic for the rest of the year.

"We've come off a couple of tough years economically and the sense the economy is revitalizing helps everyone," Rankin says. "So from what I can see, we'll be able to maintain a pretty good glide path the rest of the year. And I think we'll eventually finish with a good increase over last year."

jnowlan@reedbusiness.com

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