Distributor Roundtable: Exploring the Relationship Between Distributors and Adhesives and Sealants Manufacturers
Chemicals/materials distributors and adhesives and sealants manufacturers can forge true partnerships for the benefit of the entire industry.
The relationship between chemicals/materials distributors and adhesives and sealants manufacturers is no longer just about product delivery. To better understand the dynamics of these ever-evolving partnerships, I recently reached out to key industry players and ASI’s extensive online community.
How long has your company been providing chemicals/materials distribution for the adhesives and sealants industry?
Keith Wilkinson, Vice President of Specialty Chemicals, Aceto Corp.: Over 30 years.
Bryan A. Huston, Vice President of Sales and Marketing, Acme-Hardesty Co.: Acme-Hardesty has been serving the adhesives and sealants industry since 1942.
Dan Gruber, President of CASE, KODA Distribution Group: KODA Distribution Group is made of four regional companies (EW Kaufmann, GMZ, Ribelin and PT Hutchins) that have been in the specialty chemicals distribution business for over 70 years. We have been calling on and servicing adhesives and sealants customers during that entire time.
Mark E. Reichard, President and CEO, Maroon Inc.: Maroon Inc. has been supplying specialty additives, resins, pigments and packaging to the adhesives and sealants industry for 37 years, since our inception in 1977. The adhesives and sealants industry has been and continues to be an integral part of our business.
Sandeep Goel, Director of CASE Markets, Nexeo Solutions: Nexeo Solutions has been distributor for the chemicals industry for 50+ years, beginning as Ashland Distribution. In 2011, Nexeo Solutions, LLC was established as an independent distributor and relocated its headquarters to The Woodlands, Texas.
Recently, Nexeo successfully completed the acquisition of Chemical Specialists and Development, Inc. (CSD), also known as Startex Chemical in the marketplace. In addition, Nexeo has acquired Archway Sales Inc. Both of these acquisitions reflect our continued focus and commitment to growth in our dedicated end markets, specifically our expansion in the adhesives and sealants markets. Archway has long been considered a top chemical distributor of specialty adhesives and sealants, and Nexeo’s purchase of Archway has created an even stronger market position through superior service and comprehensive product offerings for our customers.
Andrew Saunders, Technical Director, Nuroz LLC: Nuroz LLC has been servicing the adhesives and sealants industry for eight years.
Sherri B. Thompson, Advertising and Marketing Manager, Paul N. Gardner Co., Inc.: The Paul N. Gardner Co., Inc. (GARDCO) has been providing technical material distribution for the adhesives and sealants industry for 80 years, since our inception in 1935. In our fourth generation, we continue to provide technical expertise, competitive pricing, and a variety of testing equipment that honors the spirit and legacy of our founder, Paul N. Gardner, Sr., together with his father, chemist Henry Alfred Gardner, Sr., Ph.D., director of the Institute of Paint and Research in Washington, D.C.
Paul Hughes, Managing Director, Techsil Ltd.: Techsil supplies sealants and adhesives to a diverse range of industries worldwide. We are celebrating our 25-year anniversary this year.
How has the distributor/manufacturer relationship evolved over time?
Wilkinson: In the past, Aceto mostly dealt with European suppliers. Today, Aceto’s supplier base is predominantly Asian, particularly Indian and Chinese. The relationship with European suppliers was always exclusive for North America. Our Asian suppliers lean more toward protecting their distributors through registering accounts.
Huston: Manufacturers need distributors more than before because they have reduced their sales force to focus on their key customers. Distributors can cover the Tier 1, 2 and 3 customers with our extensive sales teams. Distributors will warehouse and sell LTL quantities and manage the sampling duties.
Gruber: The evolution of the distributor/manufacturer relationship is changing the distribution business completely. It is the new model for sustainability and growth; in order to do so, you must meet the manufacturer's standard, performance and expectations. Basically, the relationship has evolved into a true partnership. In essence, we are an extension of their direct selling effort, technical support team and market intelligence arm.
Reichard: Our relationship with manufacturers has evolved in many ways over the past three decades. One of the most significant evolutions has been the globalization of our business. This change is attributed to a predominate increase of raw materials being manufactured overseas. Today, we represent many companies throughout the world and are able to import logistics, maintain local inventory and offer just-in-time (JIT) shipping, which helps our customers reduce working capital. We offer our customers the advantages of global sourcing while drastically reducing their risks.
Goel:The historical distribution model was one focused on network optimization, inventory management and providing a single contact for sourcing to move material from one location to another. Distribution has evolved and grown over the years into a more service-oriented value proposition for both suppliers and customers alike. Using the historical models as a foundation, distributors now focus on providing unique solutions to customer needs through in-depth product knowledge, problem solving and technical services. The new paradigm engages distributors as something of an extension of the supplier sales force as well, reaching customers on a more personal level to build relationships and strategic partnerships.
Distributors today play a significant role in the supplier innovation process through testing, benchmarking, formulation development and application. Many provide pre-blending to aid in the customer’s manufacturing process, and can offer enhancements in supply chain (operational) efficiency through network planning (S&OP process) and backward/forward integration for improved just-in-time capabilities.
Saunders: Nuroz supplies to the U.S. market mostly under our own brand names from selected manufacturers in Asia and Europe.
Thompson: The relationship has significantly improved over time. The advent of technology and the global marketplace has only improved the quality, reliability, customization and efficiency in which we are able to meet our customers’ broad and varied needs. GARDCO has several longstanding relationships with our manufacturers. We have positioned and aligned ourselves to expand into new markets and manufacturing relationships to ensure the quality, craftsmanship, and durability our current customers have come to expect.
Hughes: Techsil was appointed as a key distributor by Momentive Performance Materials in 1990. Over time, we have become a distributor for six other adhesive/sealant manufacturers in this sector (Panacol, Power Adhesives, BJB Enterprises, ITW Devcon, ThreeBond, and ITW Stokvis Technical Tapes). Because of our proven ability to provide high-quality customer service, a number of our manufacturers have passed over accounts to us to service for them; we now also distribute on their behalf to other resellers.
What value-added products and/or services does your company now offer as a result of the evolving distributor/manufacturer relationship?
Wilkinson: Aceto focuses intensely on the health, safety and regulatory challenges that are faced by any company in the chemical industry. We also have expertise and capabilities in the local regulatory environments of the countries in which we operate. One important example is our REACH capabilities in Europe.
Huston: We offer improved channel-to-market service through warehousing and sampling. We also provide a face for selling and problem solving.
Gruber: KODA Distribution Group pioneered the concept and introduction of technical labs by distributors to support both customers and suppliers. We have invested in five dedicated Application Labs across the country that focus on specific market applications and formulating expertise. All of our sales personnel have a technical background, which elevates their interactions with customers and suppliers.
Reichard: We recently conducted an extensive double-blind market study to identify what factors are most important to our customers and prospects when choosing raw material suppliers. Based on this information, we have tailored our service and product offerings to meet the needs of the adhesives and sealants market.
Our customers are interested in three critical things: consistent products, consistent delivery and consistent supply. We manage our business on these factors and thrive on creating success for our customers. In terms of consistent products, for example, we shipped 30.5 million lbs of product in 2013. Less than 0.07% of that amount was returned. In addition, we experienced product-related issues on only 11 of the 10,600 orders we processed in 2013. With the globalization of our business, these attributes will continue to be relevant for our customers.
Goel: Our extensive products and services have evolved to encompass a broad range of needs for our customers. We are close to completing a state-of-the-art formulation and applications lab that will assist manufacturers and customers alike with formulation development and improvement. Once opened, the lab will enable us to further explore optimal product solutions and offerings. Externally, Nexeo has been fostering strong relationships with a multitude of key industry suppliers. We have helped them obtain an extensive amount of intelligence on the needs of the market.
Saunders: Our main benefit to clients is that we have our own QC laboratory to ensure that all supplied raw materials are tested and within specification before shipment.
Thompson: The evolution of our distribution and manufacturing relationships has afforded GARDCO the opportunity to increase value-added services and products, specifically in the area of viscosity and film application, to our current and prospective customers. Our website offers up-to-date and comprehensive products and specifications while enabling customers to place their orders or request more information in real time. We are able to command the pricing, quality, and lead time to meet the testing requirements and specifications of our customers. Many of our products can be special ordered, customized, certified or repaired to meet customer needs.
Hughes: We provide bespoke formulation via access to manufacturers’ laboratories, as well as technical guidance and assistance from concept to production, testing, trials and samples. In addition, our experience and expertise in the sealants and adhesives sector has allowed us to become an authorized re-packer for many of our manufacturers. Modern repacking and material handling capabilities means that we have developed a variety of equipment designed to handle our products so that we can transfer the contents of large primary containers into small packs. This provides the opportunity, in many cases, to supply product in a format to meet customers’ exact dispensing requirements from syringe to cartridge, tub to pail. Techsil can also blend and pigment certain products.
How is your company working to address the specific needs of the adhesives and sealants industry?
Wilkinson: Aceto’s major strength is our ability to source specialty chemicals globally. We help our customers expand their supplier base, advancing two important needs: cost savings and supply security.
Huston: We are addressing the evolving green, renewable and sustainable product requirements of our customers.
Gruber: We focus on building a more technically trained sales force, implementing more efficient inventory systems (i.e., demand planning) and, of course, bringing the latest and most innovative “green” technologies to our customers.
Reichard: Our technical sales team works very closely with our customers to identify their evolving technical and service needs. We are quick to react and flexible in providing solutions. We offer transparency with our suppliers and customers, and work very hard to foster mutually beneficial relationships. We strive to be a trusted resource that our customers can rely on.
Goel: Nexeo has recently restructured its end market focus, which includes the adhesives and sealants industry. In doing so, we have dedicated more resources to ensuring our commitment to customers’ growth and innovation, including enhanced technical skills. Our presence extends to all areas of the industry, including trade associations and expos. We have actively participated in a multitude of trade shows, including the Adhesive and Sealant Council’s (ASC) conventions.
Saunders: Nuroz offers a broad range of resins and polymers for the adhesive and sealant markets. All supplier factories are audited before we consider buying, and materials are tested in our own QC laboratory before shipment.
Thompson: GARDCO is committed to addressing the specific needs of the adhesives and sealants industry through our continual research and development efforts. Our executive management and technical director work directly with our manufacturers to be at the forefront of industry trends. We have researched and developed several proprietary products that were manufactured exclusively for the untapped needs of our customer market. We strive to meet the specific needs of our customers across several industries so we can provide a solutions-oriented approach for all testing needs.
Hughes: Techsil has flourished due to its ethos of a consultative approach to sales. We want to understand our customers’ problems and opportunities so we can offer a product fit for purpose and with a process that matches the client’s needs. This requires a two-way discussion, samples, trials and testing. On the other end of the scale, we recently invested in a new e-commerce webshop that offers our smaller customers a number of advantages if they are prepared to operate on a self-service basis. Techsil will continue to evolve with a focus on delivering an excellent customer experience coupled with a commitment to diversify in a way that adds value to the needs of our customers.