NACD: Chemical distributors' group has spent 40 years building bridges

11 November 2011 13:12  [Source: ICB]

NACD organized its first Washington Fly-In for members in 1985 Copyright: RexFeatures

Caption: The National Association of Chemical Distributors started as a small group of chemical distributors networking and sharing ideas and has grown into a voice for the chemical industry

What began in 1971 as a small group of chemical distributors looking for an organization to offer networking and sharing ideas, concerns and best practices has grown into a respected association recognized for its commitment to operating responsibly.

The National Association of Chemical Distributors (NACD) has not only successfully built a network within the US chemical distribution industry, but it also works with regulatory agencies and political decision makers, and has established strong connections with other US chemical industry trade associations and international chemical distribution organizations.

Gerald Kraft of Kraft Chemical Company located in Melrose Park, Illinois, was the first chairman of the NACD and a force behind its formation. The initial 20 members realized that chemical distribution plays a unique and integral role in the chemical supply chain and wanted to be recognized for the benefits distributors provide. They also hoped to work as a group to encourage chemical manufacturers to use responsible, ethical and reputable distributors.

"The association, and the National Meeting in particular, provided a great opportunity for networking that didn't really take place otherwise," notes Peter Hess, president of Cranston, Rhode Island-basedJR Hess Co., a past chairman of NACD (2008) and an active participant for more than 35 years.

"Unlike today, travel was limited in the 1970s, and it was unusual to meet other distributors outside of those in your region. So the NACD helped members establish connections with peers. And as a national trade group, it also made it possible for members to present a united front to suppliers."

These benefits attracted many new members, and by the mid-1980s, NACD needed to become a more formalized organization. One of the growing needs of its 277 corporate members was for assistance in compliance with increasing regulatory requirements. The association therefore moved its headquarters to Washington DC in 1984. The first Washington Fly-In was held in 1985, and by 1988, NACD was requested to testify before Congress (on the Chemical Diversion and Trafficking Act of 1988), indicating how the organization had become a recognized and legitimate voice for the chemical distribution industry, according to the NACD.

Environmental, health and safety (EH&S) regulations with significant impacts on the chemical distribution industry also became a prominent issue during this period, and the NACD responded accordingly. "As a trade association, it was (and still is) important for everyone to give the best performance they can when it comes to the management of EH&S issues. NACD therefore invested in the development of programs to help its members, particularly smaller companies that didn't have the resources or know-how to meet regulatory requirements and improve their operations," says Bruce Schechinger, president of Salt Lake City, Utah-based BHS Marketing, a past chairman (2010) and an active participant in NACD since 1991.

To provide this assistance, the staff was increased, government advocacy efforts were increased and product stewardship became a real focus of the organization. In 1989, the NACD Educational Foundation was created to disseminate product stewardship information to members, their customers and their communities. This group eventually became the independently operating Chemical Educational Foundation (CEF) in 1997, and its focus shifted to raising awareness of the importance of science education for students and educators in grades K8.

"NACD had the foresight to realize that chemistry education is a vital part of their members' ability to do business," states John Rice, executive director of Washington, DC-based CEF. "This foresight included the addition of a community outreach component to their Responsible Distribution management practice. Twenty years later, CEF and its 'You Be The Chemist' programs remain a leading resource for NACD members and the chemical industry as a whole. We bring communities together and create a greater understanding of the science and value of chemistry."

Meanwhile, the NACD's commitment to product stewardship and continuous improvement led to the development of Responsible Distribution, which was adopted in 1991 and became a requirement of membership in 1992. Following the events of September 11, 2011, NACD realized the role that security would play in its members' operations and the industry responded by approving new security measures as part of its Responsible Distribution program.

The Chemical Education Foundation promotes chemistry in education, focusing on grades K-8 Copyright:RexFeatures

MEETING NEEDS
Once Responsible Distribution was established, the association began expanding into new areas to meet the evolving needs of its members. "NACD is a member-driven organization so needs to stay abreast of the issues facing chemical distributors and pursue an agenda that is relevant to them," says Hess. "And as a motivated, volunteer-driven organization with very experienced staff for support, NACD has become a relevant voice for the chemical industry," he adds.

In fact, one of the directions for the association over the past decade has been the development of relationships with other US chemical industry trade associations as well as similar international organizations.

The Washington, DC-based Society of Chemical Manufacturers & Affiliates (SOCMA), for example, like NACD, predominantly represents small- and mid-sized chemical companies, which has enabled both groups to share common approaches to legislative priorities, says Bill Allmond, vice president of government relations for SOCMA.

"NACD's reputation as a first-rate organization precedes itself. Pioneering mandatory third-party verification of its Responsible Distribution program was an enormous achievement with industry-wide implications. Verification brings credibility to our efforts to continually improve industry's EHS&S performance," says Allmond.

During Schechinger's chairmanship, NACD signed a memorandum of understanding with the American Chemistry Council (ACC) to cooperate closely in the promotion and performance of their respective Responsible Distribution and Responsible Care programs.

"While large chemical manufacturers will have different needs than chemical distributors, there is still much overlap with regards to government advocacy activities as well. And NACD members have the 'feet on the street' and can get the message out," he explains.

There is a further benefit to NACD members from this growing relationship. "Many of the large suppliers are members of ACC, and through the increasing interactions of the two associations, those suppliers are getting to know NACD members and are also gaining a better understanding of Responsible Distribution and our level of commitment to the program. In the end, that means they are becoming more comfortable with the idea of using NACD members as part of their sales and marketing operations," Schechinger believes.

On the international front, NACD signed a memorandum of understanding with the Brazilian Association of Chemical Distributors and the Canadian Association of Chemical Distributors. Through this agreement, it will be possible for the North American chemical distribution industry to have one voice with regard to EHS&S practices.

NACD is also a member of the International Council of Chemical Trade Associations and participates with the European Association of Chemical Distributors. And these efforts are only the beginning: "We are going to challenge the rest of the world to join us in third-party verification," says NACD president and CEO Chris Jahn.

The association also will continue to work to expand its membership base. It has been successful so far, despite significant consolidation in the industry. "We have 'lost' about 25% of our members as they have been absorbed by other members in various M&A deals," notes Schechinger.

Even so, the number of both full members and affiliates (chemical manufacturers, chemical handlers and non-chemical handlers) has grown. "We continue to seek strong companies that can benefit from becoming members and committing to Responsible Distribution. We need everyone in the industry to be operating responsibly," he asserts.

Today, NACD's over 400 member and affiliate companies represent more than 85% of the chemical distribution capacity in the nation and 90% of the industry's gross revenue, according to the association. Most survived the challenges of the global recession and are doing well today by offering a combination of high-quality products and special technical services and support that help customers remain profitable even in a slower economy.

With chemical manufacturers increasingly relying on distributors to replace the activities of internal sales and marketing teams, the future of chemical distribution and the NACD looks bright. "The need for distributors will grow, not only from domestic suppliers, but from international suppliers looking to enter the US market. NACD and its members are ideally suited to meet their needs," Schechinger states.

"There is no limit to what we can accomplish," adds Jahn. "Over the past 40 years, the NACD has geared up to make the association a national organization representing US distributors. Now we are starting to see more global interest. Many distribution associations around the world, and particularly in emerging economies, are very interested in Responsible Distribution."

"The NACD has come a long way in 40 years," observes Schechinger. "A small group of companies looking to network has grown into a serious organization bringing significant value to its members and stakeholders, and done so by making sure members work to perform to the highest standards and constantly improve," he concludes.

Author: Cynthia Challener

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