Chem distributor U.S. Chemicals expands during downturn

21 May 2009 23:31  [Source: ICIS news]

By Feliza Mirasol

NEW YORK (ICIS news)--Distributor U.S. Chemicals has expanded its operations to serve a variety of markets, including food and personal care, as a means to survive during the recession, executives said on Thursday.

“We recognised in this business that to be focussed on one industry may not be a good thing in this economy, and, as a distributor, we can work in a multitude of industries. We’ve been able to sell to industries that are doing well or that have anticipated their demand for their products,” said Letty Helgans, director of marketing for U.S. Chemicals.

Petrochemicals and paints and coatings are the industries that U.S. Chemicals has mainly served in the past. Up until about two years ago, they accounted for approximately 80% of the company’s business. Now, they account for about 65%, according to Carol Piccaro, president of U.S. Chemicals.

“We’ve branched out into flame retardants, food, pharmaceuticals, biotech and personal care, and the diversification has definitely helped us at times when some markets are slowing down and others are thriving,” Piccaro said.

The food and personal care industries, which are the fastest-growing markets for U.S. Chemicals, now account for 25% of its business, she said.

Another strategy that has helped U.S. Chemicals thrive is their focus on advertising, Piccaro said.

U.S. Chemicals increased its advertising budget by 34% from a year ago, she said.

“We definitely took a risk by putting more advertising dollars into the budget for 2009, but we think it has really paid off. I set a sales and profit goal for the first six months of this year with our company, and we reached it seven weeks early,” Piccaro said.

Sales jumped 100% in the first quarter from the same period last year. Annual sales for 2009 are expected to be in the $30m-40m (€21.6m-28.8m) range, Piccaro said.

Another core strength that U.S. Chemicals is capitalising on is its customer service. It is the fastest-growing area of the company’s business, Helgans noted.

“Large companies just do not want to get into the painstaking details or special services that some markets require, like small volumes, special packaging or importing/exporting particular chemicals. And that’s where U.S. Chemicals shines," she said.

"If it’s something the big guys don’t want to do, it’s something we embrace because we know how important it is to the customer,” Piccaro said.

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By: Feliza Mirasol
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