Global Fastener News

LETTER TO THE EDITOR: Dupont: No European Scheme to Control U.S. Distribution

John Wolz

A distributor�s comment in the End of 1999 FIN Survey drew my attention. This distributor warns that one should �wake up before the Europeans own us all.�
Presumably, this remark was prompted by the wave of distributor acquisitions by European companies, such as W�rth of Germany and Bossard of Switzerland. However, it is no secret that domestic companies have equally participated in the consolidation of the fastener distribution business.
Consolidation has taken place in many industries and not just in the U.S. This trend has been lamented by many smaller, privately owned companies, just as small retailers deplore the onslaught of Wal-Mart and other megastores and their impact on the old-fashioned, independent stores around our country and overseas. There will always be a place for independent distributors, but it cannot be ignored that the combination of technological progress (both in operations and in communications), the ability to deliver very effective logistic services on a large scale and strong financial resources and buying power favor the conglomerates when it comes to earning the business of national or multinational accounts. This is what has given rise to the acquisitions of the last few years.
American fastener manufacturers or distributors who have not been part of this consolidation so far really have three options. They can continue to do what they are good at and stay independent. There is nothing wrong with that. They must, however, make sure that they are doing what their customers want, so that they can count on their continued loyalty.
Alternatively, if they would like to be considered as an acquisition target, they must be aware of what is attractive to the potential acquirer. Among the most important assets of such target companies are a well-established following from multi-location end-users and good management. A good distributor, able to demonstrate that it possesses these assets is of interest to companies that want to increase their holdings of fastener distribution outlets.
Thirdly, U.S. fastener companies are free to explore expansion in Europe, just as European companies have done in the U.S. There are a number of end-users in Europe who have American affiliations and vice-versa, and such users benefit from being served by suppliers that have a foothold on both sides of the Atlantic.
All this being said, I believe that your survey�s respondent can be reassured that there is no grand scheme on the part of European companies to control fastener distribution in the U.S. American companies continue to enjoy the lion�s share of this business, and several have already secured some market share in Europe as well.
Jack Dupont

P.O. Box 130819, The Woodlands, TX 77393-0819

Tel: 281 362-0122Fax 281 367-9649

E-mail: J-Dupont@msn.com
Editor�s Note: Jack Dupont was president of Nedschroef Corporation in Houston � a subsidiary of Nedschroef Group of Holland � for 20 years until retiring at the end of 1999.