Chemical Distribution Industry Profitable But Growth Slowed During 2009

Oct 14, 2010, 14:35 ET from National Association of Chemical Distributors (NACD)

ARLINGTON, Va., Oct. 14 /PRNewswire-USNewswire/ -- Despite our nation's recent economic recession, recently released results from the National Association of Chemical Distributors' (NACD) Company Productivity Report (CPR) showed NACD member companies continued to achieve profitability in 2009, though at lower levels than previous years.

(Logo: http://photos.prnewswire.com/prnh/20100811/NACDLOGO)

(Logo: http://www.newscom.com/cgi-bin/prnh/20100811/NACDLOGO)

The NACD Company Productivity Report (CPR) for 2009 shows that industry firms experienced the sharpest drop in sales in at least a decade.  In particular, nominal dollar sales declined 2.0%, 10.4%, and 14.1% for the LIQ, FPP, and BPM groups* respectively.  When measured by actual physical throughput of pounds of chemicals moving through the warehouse (without 3rd party) sales were 14.3% lower in 2009 (as compared to 2008) for the LIQ group, while the FPP and BPM groups were a down 19.0% and 10.8% respectively.

Meanwhile, overall profitability, as measured by the performance ratio "before tax return on net worth (i.e., owner's equity)" for 2009 was 4.5%, 32.5%, and 23.7% for the LIQ, FPP, and BPM groups respectively.  For every group, this 2009 profitability performance was lower than that which was experienced in 2008.

"Although our members reported slower sales growth during 2009, their return on investment indicates a strong management culture, backed-up by a commitment to Responsible Distribution, NACD's management performance practice," said Chris Jahn, President of NACD.  Our member companies tell us that among the benefits they see in participating in Responsible Distribution are stronger risk management, reductions in insurance claims and costs, assistance with regulatory compliance, conservation of company resources, development of systematic employee training, and better documentation of company policies," Jahn continued. "As our nation comes out of this recession, thanks to their commitment to Responsible Distribution, our member companies will be stronger than ever."

The NACD Company Productivity Report (CPR) is an annual financial ratio benchmarking analysis tool for member firms to evaluate their company's operating results in order to pinpoint strengths and weaknesses, and improvement opportunities. Participating firms receive an overall industry-wide report as well as an individual report containing the firm's own ratios calculated alongside the appropriate industry comparatives.

*LIQ – Firms with 75% or more of sales from Liquids (bulk/repackaged)

FPP - Firms with 75% or more of sales from Factory Packaged Products (liquid and/or dry)

BPM - Balanced Product Mix (neither LIQ or FPP)

NACD and its over 380 member companies are vital to the chemical supply chain providing products to over 750,000 end users. They make a delivery every six seconds while maintaining a safety record that is more than twice as good as the safety standards set by DOT. NACD members are leaders in health, safety, security, and environmental performance through implementation of the Responsible Distribution, established in 1991 as a condition of membership and is a third-party verified management practice. For additional information on our members, their safety record or NACD, visit NACD's website — http://www.nacd.com.

Contact:  Matt Glaser

703/527-NACD(6223)

SOURCE National Association of Chemical Distributors (NACD)



RELATED LINKS

http://www.nacd.com