After three years of economic recession, indicators appear to predict a robust 2004 for manufacturing, according to the National Association of Manufacturing (NAM).

In February, NAM president Jerry Jasinowski said he expects manufacturing production to increase by more than 6 percent this year, with the U.S. gross domestic product up 4.1 percent.

“We are more positive about the outlook for manufacturing and the general economy than we have been over the past two or three years,” said Jasinowski.

NAM chairman Richard Dauch recently stressed the importance of trade legislation that will continue to encourage U.S. manufacturing while speaking to the National Governors Association in Washington. “Our policy makers must address the cost drivers that are beyond the control of manufacturers and severely inhibit our ability to compete globally,” he said.

Comparing manufacturing to agriculture, Dauch explained that the United States exports $50 billion in agricultural products each year, while exporting more than that in manufactured goods each month.

Growth for manufacturing, however, does not always translate into growth for distributors, says Randy Ryerson, vice president of Pembroke Consulting, Philadelphia, a national consulting firm that specializes in forecasting national trends for distributors and wholesalers.

“In 1952, manufacturing was 35 percent of the U.S. private industry’s GDP; now it’s below 20 percent,” he said. “In contrast, distribution has remained the same, at slightly less than 10 percent during the same time period, so manufacturing isn’t the only thing to consider.”

Although the U.S. economy has traditionally hinged on the health of manufacturing, the current economy has a much larger base of service industries, he added.

“I know that distributors are glad about possible growth in manufacturing, but I think they’re still going to be very careful about expanding their inventories,” said Ryerson. “Manufacturing might be rebounding, but they’re coming off a very hard bottom, so it’s going to take time.”

In the jan/san industry, manufacturers believe that strong growth in manufacturing will trickle down to distributors, said David Devon, national sales manager for Thorne Electric, a San Antonio-based manufacturer of vacuums and other floor care equipment.

“I think that 2004 looks like it will be a very good year for jan/san equipment manufacturers,” he said. “Distributor inventories are about as lean as they’ve ever been, but they should be ready for significant increases in purchases.”

NEWS MAKERS

K-C Looking to Shed Paper Units
The Milwaukee Journal Sentinel recently reported that Kimberly-Clark, Dallas, “plans to distance itself further from papermaking and focus even more on consumer products.” K-C’s board of directors authorized management to examine the possibility of creating a separate publicly traded paper company as a spinoff of K-C.

Some business analysts have contended that the cause of the spinoff is lost revenue for K-C. However, Pat Schillinger, president of the Wisconsin Paper Council, told the Journal Sentinel that K-C has been gradually been shifting its focus toward the consumer health and hygiene business.

“I don’t see this as necessarily a harbinger of what’s coming,” said Schillinger. “I see it more as just the natural evolution in Kimberly-Clark’s corporate philosophy to move entirely into their health and hygiene products and away from paper.”

G-P Workers Say No to Labor Contract
The Express-Times of New Jersey recently reported that union workers for two Georgia-Pacific Corp. facilities rejected a proposed labor contract. The New Jersey workers voted to allow union leaders to organize a strike, according to the newspaper. The labor contract for the G-P workers technically expired February 9.

SCA Plant Serious About Sustainability
SCA North America recently announced that its tissue division is currently conducting a four-month trial program to utilize reclaimed water in its paper converting process at their Flagstaff, Ariz., plant, according to a company press release. The plant recycles approximately 66,000 tons of waste paper annually to produce bath tissue, towels and napkins.

MERGERS & ACQUISITIONS

Ecolab, St. Paul, Minn., recently announced the acquisition of Daydots International, Fort Worth, Texas, a manufacturer of foodservice solutions and food safety products. Daydots reported $22 million in sales in 2003.

United Solutions Group Inc., Stockbridge, Ga., recently merged with Safety Gear, Hampton, Ga. The name will remain United Solutions Group and the company will add a full line of safety equipment to complement United Solutions’ janitorial, packaging, and food service products.

REGULATORY NEWS

The Occupational Safety & Health Administration (OSHA) recently announced that a Tewksbury, Mass., grocery chain was fined $72,000 by OSHA for “repeated failure to protect its warehouse workers against forklift hazards.”

The chain, DeMoulas Market Inc., has been cited for alleged repeat and serious violations of the Occupational Safety and Health Act at one of its warehouses. OSHA began inspecting the company after learning of a collision between a forklift and a powered construction jack that injured a worker.

New Facilities Sign On For EPA’s Performance Track

The U.S. Environmental Protection Agency (EPA) recently announced that 39 new facilities from 22 states and Puerto Rico have been accepted as members of EPA’s National Environmental Performance Track program.

Performance Track was created by EPA to recognize environmental leaders that invest in sustainable design and practices. Performance Track has 344 members from 43 states and Puerto Rico. Each membership lasts three years, and participants must submit annual performance reports outlining their progress in developing sustainable maintenance programs.

The voluntary environmental improvements include recycling programs, the use of environmentally preferable cleaning chemicals and sustainable dispensers that reduce the waste of paper, water and energy.

In addition to environmental management and sustained compliance, members are also instructed to invest in the health of their surrounding community.

Several new members are part of larger corporate organizations that have previously participated in Performance Track, including International Paper, 3M, Bristol-Myers, Rockwell Collins and Ryder Transportation Services.

CLARIFICATION

The February issue of Sanitary Maintenance, Face of the Industry: Company Notes, described Truvox, Southampton, U.K., as a manufacturer of floor care chemicals. In actuality, Truvox is a manufacturer of carpet care machines.




POSTED ON: 3/1/2004