Distributors weren’t thrilled to hear of Johnson Wax Professional’s (JWP) decision to offer some of its products at the retail level through Lowe’s Home Improvement Warehouse, the second largest home improvement retailer in the United States, but they are resigned to the fact that it happens.

Like other manufacturers that sell to retail, including Rubbermaid, news of the 30-product launch scheduled for June wasn’t welcome, but distributors weren’t exactly surprised, either.

“Any distributor isn’t happy when a manufacturer decides to go out of the distributor network,” says Chuck Fehr, vice president of operations for Penn Valley Chemical in Lansdale, Penn., a Philadelphia suburb. “It doesn’t make me happy, but I can’t stop selling everything.” He’s relieved, though, that the company is marketing the products under a different label.

JWP, a Sturtevant, Wis.-based manufacturer, insists the Lowe’s alliance is in no way a threat to distributors or their businesses.

“Our alliance with Lowe’s is designed to cater to the needs of customers that distributors most likely would not be interested in — businesses that typically buy one or two bottles of any given product at one time,” says a spokesperson from JWP.

“The program is designed to appeal to smaller businesses that cannot buy in bulk volume due to lack of storage space and capital and/or that cannot lock into a long-term contract,” she continues. “Many distributors we’ve spoken to are not interested in selling single units.”

JWP also created a separate product line for retail distribution, she adds. Shoppers would not have access to products like Complete Floor Finish or Glance Window Cleaner. Buyers interested in JWP’s signature product line would still need to go through distributors.

Sales to the very small end user are not a source of concern to his business, says Michael Shaloub, president of Holland Cleaning Solutions Ltd., Holland, Ontario, which carries the JWP line of products. But, he says, there’s always the concern that Lowe’s potential customers could be those he’s already built and developed relationships with. He also feels JWP’s plan and intentions could have been communicated better, and although he feels he has a fairly good relationship with the company, that poor communication breeds a lack of trust that can taint manufacturer/distributor relationships.

Distributors were informed prior to the launch and JWP had representatives available to answer questions, the company says.

Another concern is that distributors would wind up fielding service questions from Lowe’s buyers who have product or usage questions, or need help troubleshooting when problems arise.

This can sometimes become an opportunity, says Fehr. “We can turn it into a selling feature. We ask: ‘How much is it going to cost you to repair this floor now? Is it worth it?’” Fehr also suggests making modifications to the product mix to compensate for competitive products.

JWP says customer questions will be fielded through its toll-free customer service line.

“Our relationship with our distributors is of the utmost importance to us. We discussed this with many of our distributors and sought input from them before we made the decision. We firmly believe that this decision is not a danger to our distributors’ business,” the spokesperson says.

“I think most of those customers that are buying a significant amount of product realize the value of training, delivery and support,” says Shaloub.

“They certainly wouldn’t have the local support that a distributor could provide,” adds Fehr, of Lowe’s customers.

The product line is still in the process of being launched. It includes floor care, carpet care, specialty and restroom cleaners. Customer need and demand would dictate any change to that program, JWP’s spokesperson says.

Lowe’s is headquartered in Wilkesboro, N.C.

— Seiche Sanders

NewsMakers

Kimberly-Clark Corp., Roswell, Ga., has changed the name of its away-from-home sector to Kimberly-Clark Professional. It feels the new name more accurately reflects the core values of the business unit, is more easily understood in the United States and is more translatable abroad.

Minuteman International Inc., Addison, Ill., reported that its operating results for the first quarter of 2001 were slightly affected by the economy. However, sales in the period were only $69,000 lower than those of its record quarter a year ago.

Advantage Marketing Associates Inc., Chicago, an international alliance of wholesalers providing janitorial, food service, safety and industrial maintenance products to distributors, has adopted a new theme, “There’s No Better Way to Buy.”

Kimberly-Clark Corp., Roswell, Ga., announced its plans to purchase an additional 5 percent stake in Kimberly-Clark Australia, its 50/50 joint venture with Amcor Ltd. The joint venture reached $500 million in sales in 2000, an increase of 12 percent over the previous year. The purchase, which is subject to approval by the Australia Foreign Investment Review Board, is expected to close on June 30, 2001.

CPAC Inc., Leicester, N.Y., announced its plans to repurchase up to 266,000 shares, or 5 percent, of its outstanding stock.

Mergers and Acquisitions

Network Services Co., Mount Prospect, Ill., a supplier of sanitary maintenance products, has announced that Piedmont National Corp., Atlanta, has joined its organization. Piedmont’s primary focus is on packaging equipment, service and inventory management.

Pitt Plastics, Pittsburg, Kan., a manufacturer of trash can liners, announced the signing of a definitive agreement for the acquisition of Capital Poly Bag, a Columbus, Ohio-based can liner manufacturer.

Ecolab Inc., St. Paul, Minn., has entered into a long-term agreement with Unisource Worldwide Inc., Norcross, Ga., a subsidiary of Georgia-Pacific Corp., to distribute Ecolab’s branded janitorial supplies.

Quantum Distribution Inc., recently acquired by Norshel Industries Inc., Croydon, Pa., is now a full-service stocking branch. It ships to Maryland, Virginia, West Virginia, Washington D.C., Delaware and Pennsylvania. The acquisition expanded Norshel’s wholesale distribution coverage to the entire mid-Atlantic region.

SYSCO Corp., Houston, a food distributor, has completed the purchase of HRI Supply Ltd., a wholesale foodservice distributor located in Kelowna, British Columbia.

Ergon Environmental Products (EEP), Alpharetta, Ga., and SpillTech Industries Inc., Mobile, Ala., have announced plans to consolidate their businesses and retain the name, SpillTech. Both are industrial distributors and manufacturers of polypropylene sorbent products used for industrial maintenance and environmental spill clean-up applications.

Domtar Inc., Montreal, has signed a letter of intent to acquire a portion of Georgia-Pacific’s pulp and paper business. The paper mills involved are located in Ashdown, Ark.; Nekoosa and Port Edwards, Wis.; Woodland, Maine; and associated pulp facilities.

Georgia-Pacific Elects New Board

Georgia-Pacific, Atlanta, held a recent meeting where shareholders elected six new directors.

In addition, the board of directors declared a regular quarterly dividend on each of the corporation’s two classes of common stock. The board approved dividends of 12.5 cents per share for Georgia-Pacific Group and 25 cents per share for The Timber Co.

Shareholders re-elected to the board: Worley Clark, president of W.H. Clark and Assoc.; Barbara Bowles, chairman and CEO, Kenwood Group; Donald Fites, retired chairman and CEO, Caterpillar Inc.; David Goode, chairman, president and CEO, Norfolk Southern Corp.; and James Williams, chairman of the Executive Committee of SunTrust Banks Inc.

Katy Announces First Quarter Losses; Proposed Purchase Is Reevaluated

Katy Industries, Englewood, Colo., recently reported a net loss for the first quarter of 2001 of $8,372,000, or $1 per share, compared to the net income of $645,000 in the first quarter of 2000.

First quarter results include unusual charges totaling $6,188,000, or 74 cents after-tax per share.

On March 30, 2001, Katy announced it had entered into a definitive agreement with KKTY Holding Co., LLC., for a recapitalization of Katy. Under the agreement, KKTY commenced a tender offer for up to 2,500,000 shares of Katy common stock at $8 per share and also agreed to purchase 400,000 shares of newly issued convertible stock for $100 per share.

However, KKTY has advised Katy that it is reevaluating its tender offer and proposed purchase in light of Katy’s operating results for the first quarter.

Katy also announced that it has completed the sale of its Thorsen Tools business.

Hiring Increases Substantial,
Report Says

The rate of employee hiring has increased 2.4 percent in the United States from 1998 to 1999, according to County Business Patterns, an annual report on business activity recently released by the U.S. Department’s Census Bureau.

Data is divided into separate industries including wholesale trade: durable goods and non-durable goods. Both industries have experienced an increase in the employee hiring rate of about 1 percent from 1998 to 1999.

Employees in the durable goods category increased from 3.4 million to more than 3.5 million; employees in the non-durable goods category increased more than 25,000 persons, resulting in a 1999 total of just over 2.4 million.

Employment Tenure Short,
Increases With Age

According to the Bureau of Labor Statistics, the average tenure of today’s worker (waged and salary) was 3.5 years in 2000, the same average as in 1998.

Median years of tenure tends to increase with age — the tenure for workers age 45 to 54 was more than three times that of workers age 25 to 34.

About one-fourth of all workers will stay with their employer for 12 months or less.

Dow Chemical Cuts Jobs,
Reports First- Quarter Loss

Dow Chemical Co., Midland, Mich., recently announced its plan to cut 4,500 jobs.

The workforce cuts are projected to save the cleaning chemical manufacturer $1.1 billion and accelerate the savings it hopes to gain from its 1999 takeover of Union Carbide.

Although layoffs were anticipated in conjunction with the merger, the announcement comes on the heels of a $685 million first-quarter loss. Dow had previously indicated that the merger would result in the layoff of 2,000 workers and save the company $500 million.

Savings from the job cuts are expected to be tangible by the first quarter of 2003. The layoffs will be made over the next two years.

Handwashing Study Shows Employee Habits

A study published in the March issue of the American Journal of Nursing finds that healthcare workers were more likely to sanitize their hands when an alcohol-based hand sanitizing gel was available as an alternative to soap and water.

The observational study was conducted over a five-month period in two intensive care units at the medical center at the University of California, San Diego.

Data revealed that handwashing rates increased by nearly 44 percent when healthcare workers had access to a hand sanitizer.

Overall, the hand sanitizer was used in approximately 60 percent of the times people washed their hands.

Handwashing has been widely and repeatedly identified as the single most effective means of controlling and preventing hospital acquired infections, according to those who conducted the study.

Letter to the Editor:

The April issue of SM contained an interesting article about carpet and IAQ. This is a topic that we have spent a great deal of time and treasure following and researching. Due to the volatile nature of the IAQ debate, sometimes information is published that hurts rather than helps the cause. This is the case in this article.

On page 46, Stephen Ashkin is quoted as saying, “...as people walk over dirty carpet, they are lifting the dirt into the air, which is then inhaled by the building’s occupants.” This is not supported by research. In an article in which we summarize our work over the last decade, a section subtitled, “Carpet Traps and Filters Air” explains how everything we’ve seen and read recently suggests that carpet traps and holds dirt and keeps it there until it is removed by cleaning, either vacuuming or chemical cleaning. There is no evidence to support the statement that carpet releases dirt into the air as people walk on it. I believe that DuPont has done some preliminary work on this very issue in order to get some scientific data that will support or contradict this. Our own studies involved sampling air above the surface of the carpet in an active classroom and found no evidence that the carpet released anything.




POSTED ON: 6/1/2001