InterviewGrowth, M&A challenge N American distributors in '11 - BASF

01 December 2010 05:34  [Source: ICIS news]

LA QUINTA, California (ICIS)--The greatest challenge to North American chemical distributors in 2011 will be maintaining the growth of 2010, said a BASF executive on Tuesday.

“2010 has been a good year,” said Frank Bergonzi, who oversees chemical distribution for BASF in North America, on the sidelines of the annual meeting of the National Association of Chemical Distributors (NACD).

The challenge for distributors would be “just maintaining that growth,” added Bergonzi.

Some of the pressures distributors might face include suppliers who “want to see more transparency and exclusive relationships,” said Bergonzi, adding distributors would have to differentiate themselves more between specialty and commodity chemicals.

“There are still many distributors,” said Bergonzi.

North America needs more consolidation, especially in certain regions,” he said, adding that mergers and acquisitions (M&A) would continue.

“It slowed for a bit, but has picked up recently,” he said, giving examples such as the recent sale of Ashland Distribution to private equity (PE) firm TPG Capital Partners, the November 22 sale of specialty chemical distributor D.H. Litter to Archway Sales, Univar’s purchase of Basic Chemical Solutions, as well as Brenntag’s initial public offering and four acquisitions in 2010.

“PE firms will continue to have a large role in M&A,” he added.

“Chemical distribution will continue to be attractive to buyers because it is a stable, steady, growing business,” said Bergonzi.

The NACD’s annual meeting is taking place in La Quinta, California, US on 29 Nov-2 Dec.

($1 = €0.76)

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By: Ivan Lerner
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