Family-owned chem distributors hatch Euro plan

23 April 1999 13:21  [Source: ICIS news]

LONDON (CNI)--A group of family-owned specialty chemicals distributors is being gathered to negotiate the joint establishment of a pan-European initiative to defend their interests, CNI learned Friday.

The move caught the European Association of Chemical Distributors (EACD) unawares, and its director general, Hans Out, said he was "surprised" and "puzzled" over the initiative by family-owned businesses. He said EACD members include family-owned and specialty chemical companies, but added "this initiative is totally new to me."

Out said that he understood there were special pressures on smaller businesses as the chemicals distribution industry consolidates. He added: "They should have contacted us but they decided not to, which means they have a particular problem."

The proposed grouping, or network, of family-owned companies could be finalised within three or four months, indicated a source in one Barcelona-based Spanish distributor involved with the plan. The source declined to give further details on the plan, except to add that it is not solely a Spanish initiative.

The plan was launched through a recent advertisement in CNI's sister-publication, European Chemical News (ECN). The advertisement called for owners of medium-sized (minimum turnover Euro15m [$16m]) family distributors to contact the initiative's leaders at a mailbox in Brussels, Belgium. It urged companies keen to create a "forum" and "study possible actions" to defend their interests. Responses are being channelled through a Brussels-based lawyer, the source said.

CNI understands from the source that a larger venture is planned beyond the suggested discussion forum. However, a specialist federation of companies is not planned. The source declined to say whether a specific strategy has already been drawn-up, but indicated that a number of strategic options are to be explored in closed door talks.

It is further understood that these options could range from the group launching distribution initiatives linked to markets beyond Europe, possibly Asia, to formalised tie-ups or mergers between distributors seeking greater critical mass and protection in the consolidating distribution market.

By: Patrick Reynolds
+44 208 652 3214

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