Although jan/san distributors across the country will be paying uncommonly high energy bills this summer, those in California have been struggling with power shortages since last March. The crisis is three-fold: sky-high utility costs, the need to conserve energy and the lingering possibility of more blackouts.

“Because a large part of our business is retail, lighting is a very important issue,” says Adam Heller, president of Gibson Discount Janitorial Supply in San Bernardino, Calif. “We have eliminated half of the lights in our showroom.”

Rationing lighting has not only negatively affected sales, but is also consuming important work time — time that could be spent selling and marketing products, according to Heller.

Californian distributors are also feeling pressure from local and government authorities to conserve energy.

In September 1996, a new law was passed that reconstructed California’s electricity market, following the work the California Public Utilities Commission (CPUC) had begun three years earlier. Under the new system, customers of California’s three investor-owned ultilites were allowed to shop for alternative sources of power. The expectation was that competition would drive down the cost of electricity, leading to lower rates, according to Pacific Gas & Electric Co. (PG&E).

According to the National Energy Information Center’s (NEIC) website: “California was one of the first states to restructure its retail electricity power markets. The new program worked fairly well for about a year and a half. In the summer of 2000 electricity prices in southern California reached all-time highs and generator capacity shortages caused temporary power outages in northern California.”

Heller foresees Gibson Supply as having to “tighten their belt in the future,” but for now they are doing all they can not to pass price increases on to their customers, even though utility bills have more than doubled since last year.

“I see it all around us — fuel surcharges and things like that. We have just been really aggressive about conservation and haven’t had to pass on increases.”

Gibson Supply has made a lot of operational changes in recent months to lessen the sting of the crisis. “There is no secret, you just have to conserve and cut back,” says Heller.

“It’s about 100 degrees here, but we have the air conditioning running on and off all day. We also keep our warehouse lights off and use sunshine through the windows for light,” he adds. “Other than that, all we can do is brace ourselves for the inconceivably high utility bills.”

In 1999, California industrial customers paid an average 7.16 cents per kilowatt-hour (kWh), while residential customers paid 10.71 cents per kWh. Compared to most other states and to national averages, these prices were exceptionally high. The 1999 national average retail prices were 4.43 cents per kWh; 8.16 cents per kWh for residential customers.

Besides in-house changes, Gibson Supply is also implementing ways to save costs outside the warehouse. “We are much more careful how we route delivery,” he says. This has affected delivery times slightly and has wasted a lot of time because of having to travel in different directions, he explains.

As a result of California’s booming economy, demand has grown far faster than expected, significantly outstripping supply. And because of the uncertainty surrounding how the energy markets would work, no major new plants have been constructed in California in the past decade, says PG&E.

In late March, CPUC approved electricty rate increases of up to 46 percent for the state’s two largest electric companies. The two facilities, which serve approximately 68 percent of California’s electricity customers, had been prohibited from passing high power costs to retail customers because of a price freeze, says NEIC.

Forecasts and predictions are all over the board, making it hard for distributors to see an end in sight. Still, Heller’s positive outlook helps the crisis seem a little less dreary. “In the long run everything will be fine. We’ve just got a rough 12 to 18 months ahead of us,” he says.

— Kari Strobel

Mergers and Acquisitions

DCI Marketing, Milwaukee, has announced its acquisition of CSL Inc., Destin, Fla., an international company specializing in the development and marketing of environmentally friendly receptacles for cigarette butts and litter disposal.

San Jamar Inc., Elkhorn, Wis., a manufacturer of dispensers for the foodservice, paper, janitorial and bottled water industries, has merged with KatchAll, Cincinnati. KatchAll will move its order processing operations to the Elkhorn facility. KTG Inc. (KatchAll Technologies Group) is not a part of the merger and will remain a separate entity based in Cincinnati.

Georgia-Pacific Corp., Atlanta, has completed a definitive agreement to sell Domtar Inc., a Montreal-based paper manufacturer, a portion of its pulp and paper assets for $1.65 billion in cash. The paper mills involved are located in Ashdown, Ark.; Nekoosa and Port Edwards, Wis.; Woodland, Maine; and associated pulp facilities. The sale is expected to be completed in the third quarter of 2001.

Fisher Mfg. Co., Tulare, Calif., a producer of commercial plumbing products for foodservice and related industries, has recently acquired Los Angeles-based Harden Industries in an asset purchase agreement. Harden will remain in its current facilities and operate as a separate division of Fisher.

Superior Mfg. Group, Chicago, a manufacturer of commercial and industrial floor matting products, recently announced that is has signed an agreement to purchase the Akro Floor Mat subsidiary from Collins & Aikman Corp., Troy, Mich.

Bunzl Distribution Inc., St. Louis, supplier of disposable paper and plastic packaging supplies, recently announced it is expanding its Canadian operations with the acquisition of Godlin, a Quebec-based distributor.

News Makers

Snee Chemical Co., Harahan, La., a manufacturer and distributor of sanitary supplies, has obtained ownership of manufacturing equipment that belonged to Polychem Inc., Harahan, La.

Electrolux, Dallas, and Pro-Team, Boise, Idaho, recently announced a marketing agreement to jointly develop ProLux, a new upright commercial vacuum cleaner product line, which provides cleaning convenience for commercial consumers.

Evergreen and CDI Join Forces

Fourteen independent distributors who are members of the Evergreen Group, Huntington Station, N.Y., became members of Consolidated Distributors Inc. (CDI), Monroe, La.

In addition to the members of the Evergreen Group, nine other distributors have joined CDI as new members.

CDI is a member-owned purchasing and marketing group of wholesale paper and sanitary maintenance distributors nationwide. The group was formed with 10 major distributors in July 1990 and there now are more than 100 locations nationwide with sales of more than $2 billion.

Enviro-Friendly Building Standard Passes

The American Society for Testing and Materials (ASTM) Buildings Performance Committee recently passed a standardized questionnaire on the environmental performance of building materials in October 2000.

For the past two years, the U.S. Environmental Protection Agency’s (EPA) EPP (Environmentally Preferable Purchasing) Program has been working to engage nongovernmental organizations that develop examples in establishing environmental practices for use in federal procurement.

The questionnaire, “Standard Practice for Data Collection for Sustainability of Building Products,” will be available through ASTM’s website in spring 2001.

The document provides 31 questions, including those specific to certain types of products, such as structural steel, wood products, and different types of floor coverings.

Aid in Selling ‘Green’ Products to the Government

Many businesses are often uncertain about how to sell their environmental products to the federal government. However, the U.S. Environmental Protection Agency (EPA) has developed a new document that addresses businesses’ concerns on this topic.

An update to a 1997 brochure, this document provides vendors with specific information about who to contact and the kinds of items these agencies buy. It also provides answers to commonly asked questions and provides helpful hints about selling “green” products to the federal government.

“Selling Environmental Products to the Government: Your Map to the Federal Marketplace,” is available on EPA’s website or a hard copy can be ordered from the Pollution Prevention Information Clearinghouse by calling (202) 260-1023 and referring to document #EPA-742-K-97-002.

Grants Promote Non-Toxic Pesticide Alternatives

New York has issued more than $530,000 in grants to local governments, schools and not-for-profit organizations for 15 projects that promote alternatives to pesticide use in public buildings and schools.

The grant funding is intended to promote non-toxic pest control methods to reduce the amount of pesticides used.

“These grants will help make our schools and public places cleaner and healthier for our children and local government employees by providing communities with resources and options to control pests through integrated pest management,” according to Erin Crotty, Department of Environmental Conservation commissioner.

Most of the grant recipients will conduct training projects, including hands-on training and demonstrations. No local matching funds are required.

Senate Votes to Make School Air Safer

A provision in the education bill, designed to make schools safer for children and teachers, was recently passed in the U.S. Senate. It now needs President Bush’s signature to become law.

The legislation, the School Environment Protection Act (SEPA) of 2001, sponsored by Senator Robert Torricelli (D-NJ), was included in the Senate’s education legislation — adopted by unanimous consent — to protect children from pesticides and promote safer pest management practices in schools.

Currently, 31 states have taken some level of action in protecting children from pesticide use in, around or near their schools. However, current state laws are uneven and inadequate across the country, according to a recent “Beyond Pesticide” report.

Paper Mill To Eliminate Water Pollution Sources

Florida recently announced a cooperative agreement between the International Paper Co., Pensacola, Fla., and the Escambia County Utility Authority (ECUA) that will result in the protection and restoration of Perdido Bay.

The agreement includes a first-of-its-kind commitment by a bleach paper mill in the United States to eliminate direct surface water discharges, recycle treated wastewater and restore wetlands for improved water quality.

Under the plan, treated wastewater will be treated as an alternative water supply for industrial processes at the mill. Reuse of the wastewater will reduce groundwater consumption by up to five million gallons per day.

The total cost of the project is an estimated $92 million. This includes the construction of ECUA’s treatment facility that will be used to test wastewater. ECUA’s share of the project will be funded in part with state grants and loans totaling about $19 million.

The project hopes to restore wetlands for improved water quality.

Economy More Sluggish Than Initial Estimates

The U.S Department of Commerce recently reported that the economy grew far more slowly than previously estimated by the government.

The country’s gross domestic product — the total output of goods and services — grew at a rate of 1.3 percent in the January through March quarter. This reflects a significant drop from the government’s estimate last month of a 2 percent growth rate.

The first quarter growth rate was, however, a slight increase over the 1 percent rate in the fourth quarter. According to economists, the U.S. economy is losing altitude in the current April through June quarter as a result of sluggish consumer spending.

Jan/San Coalition Advocates Tax Cut Package

Many industry groups recently gathered at the White House in Washington, D.C., to witness President Bush sign into law one of the largest tax cut package in two decades.

The National Association of Wholesaler-Distributors (NAW), Washington, joined forces with the National Federation of Independent Business (NFIB), National Association of Manufacturers and the U.S. Chambers of Commerce to create the tax relief coalition — an alliance geared to advocate the passage of President Bush’s tax cut package.

The group, founded in February, has grown to include more than 1,000 members representing 1.7 million businesses.

Letter to the Editor:

I would like to mention that SM’s June Tech Central article, “In the Palm of Your Hand,” struck a note close to home. SM is correct in the statement that those in the jan/san industry are laggards in technology. At my company I do the outside sales, minor systems administration on our server, minor coding on our accounting software platform, technical questions on our product line and (when I have time), I do the website graphic design.

For years I have said to myself, “Wouldn’t it be great if our company could buy computers, too?” Then as time passed the aforementioned statement changed to desktops — again no luck. So this letter is to let all other little companies out there realize it is possible to get into the 21st century.

Out of frustration I purchased a Compaq 3150 pocket PC. I had never used one before and was a little wary of purchasing one. But my thoughts were as follows: I could write the machine off as an expense, if the machine doesn’t do what I want I have 30 days to return it. Also, there is always eBay.

Once I learned how to use it (in a couple of hours), I couldn’t believe I had lived without it for so long. Now when I go on out on the road to see customers I no longer need a bulky price book, customer list, address book and/or calendar. I either write orders in the stylus or voice record them — much faster and more efficient than writing.

Looking back in retrospect, I’m glad that we didn’t get laptops; the pocket PC fits the bill by bringing a sigh of relief to the salesmen who still rely on binders.

—Joe Benedetto
Benman Industries Inc.
Bridgeport, Conn.




POSTED ON: 7/1/2001