Fairmont sells half its locations to CamBar & McJunkin

By Staff -- Industrial Distribution, 1/1/2001

PITTSBURGH-Ending months of uncertainty about Fairmont Supply's strategic direction, Cameron & Barkley, McJunkin and McBar will acquire 18 Fairmont facilities.

The move by Fairmont's parent company, CONSOL Energy Inc., was not entirely a surprise (see ID, October 2000, p.19). CONSOL wanted to sell Fairmont's chemical industry operations and return the 79-year-old distributorship to its traditional focus on mining and other energy supplies. During the past three years, Fairmont Supply saw its sales drop from $294 million to $212 million.

The acquisition of assets, inventory and operations at half of Fairmont's facilities and store management sites is a giant opportunity for CamBar, McJunkin and McJunkin-CamBar, their joint venture company.

The move was expected to close in February and involves Fairmont Supply operations in Wilmington, Del.; Niagara Falls, N.Y.; Circleville, Ohio; Charleston and Parkersburg, West Va.; Memphis, Nashville and Chattanooga, Tenn.; Houston, Beaumont and Victoria, Texas; Mobile, Ala.; and LaPlace, La.

The sale affects about 200 Fairmont employees. Financial details of the transaction were not disclosed and CamBar and McBar executives would not say how many employees might be retained. CamBar COO Joel Bateman said more details would become available after the agreement is finalized.

J. Brett Harvey, CONSOL Energy CEO, said Fairmont Supply had determined that those locations no longer supported the company's strategy for its industrial supply distribution business.

"These sites originally were established to serve the industrial supply needs of various DuPont chemical plants at a time when CONSOL Energy was part of DuPont," Harvey said. "Most of these sites still serve only DuPont."

DuPont acquired CONSOL in 1981, and in 1992 established it as a joint venture with Rheinbraun A.G. In 1998, DuPont sold nearly all of its remaining interest in CONSOL.

"When we were part of DuPont those sites were set up and the economics of it was subservient" to the larger corporate relationship, said Thomas Hoffman, vice president of investor relations at CONSOL. "We didn't have much growth in those sites. In some cases they were just in a DuPont plant, in some instances [they] had no sites beyond the DuPont plant, and it didn't make any sense for us.

"We thought it made sense for Fairmont to focus again on its core mining and energy business, and we focused on the profitable side of the business," he said.

A statement on CamBar's Web site said the acquisition would continue to position the three companies "as leaders in providing value-added MRO services and solutions."

McBar is an inventory management company that supplies MRO products and services to industrial customers primarily in the Ohio River Valley and Gulf Coast regions. CamBar is a subsidiary of Hagemeyer P.P.S. North America with more than 100 locations. McJunkin Corp. specializes in pipe, valves and fittings and operates more than 100 locations in the U.S., Mexico, and Venezuela.