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STAFDA: Tools for the Trade

BY HBSDEALER Staff

Greg Drouillard knows more than his share about international business. As president of Target Building Materials, his office in Windsor, Ontario, is in the neighborhood of the busiest commercial border crossing in North America—the Windsor-Detroit crossing.

Drouillard is getting even more familiar with globalization and the cross-border shipment of goods in his other role: president of the Specialty Tools & Fasteners Distributors Association (STAFDA), a not-for-profit educational trade association made up of distributors, manufacturers and rep agents of light construction, industrial and related products, STAFDA’s 31st Annual Convention & Trade Show slated for Nov. 4 to 6 in Nashville, Tenn., is expected to have a strong international presence.

“We’ll have more international companies in Nashville than we’ve ever had at the show before,” said Drouillard.

According to STAFDA statistics, the number of international members has grown steadily from 191 in 2004 to 266 last year. So far in 2007, the number has increased to 295. That figure represents roughly 10 percent of the group’s total membership of 2,888. Additionally, show organizers anticipate some 30 percent of the companies coming to the Nashville event will be foreign companies.

There’s more to the upcoming STAFDA event than passports and exchange rates—in fact, executive director Georgia Foley sees year-to-year demand for the trade show as driven by a steady, universal theme. “The rational behind coming to the trade show really hasn’t changed over the last several years,” she said. “It’s always been: what’s new, what’s hot what can I add to my mix that’s going to give me the competitive edge.”

But the global flavor of the Nashville event will be compounded by the ongoing developments of one of the biggest stories in fastener distribution this year—allegations of product dumping and the possibility of expensive tariffs on nail imports from China and the United Arab Emirates.

“It’s one of the real hot topics this year,” said Hal Look, a STAFDA board member and senior vp-marketing and business development for ORCO Construction Supply. “Everybody is trying to figure out what this means.”

The background of the case is clear. Back in May, five U.S. producers of steel nails filed antidumping duty petitions against China and the United Arab Emirates, alleging that unfairly priced imports are damaging domestic producers. The petitioners are Mid Continent Nail, Davis Wire, Gerdau Ameristeel, Maze Nails, and Treasure Coast Fasteners. If the U.S. International Trade Commission agrees with the petitioners, import duties on nails could climb as high as 118 percent.

Lawyers for the petitioners have pointed to “severe financial distress” to the domestic industry,” resulting in reduced production and closed divisions. “Domestic producers need relief from dumped imports to prevent further plant closures,” wrote lead counsel Paul Rosenthal.

Obviously, there are plenty of importers and distributors who see higher prices on imports as objectionable. According to Look, it could be a possible game changer that could lead to shortages, price increases and a scramble to source product in different countries—Malaysia, Korea or Vietnam for instance.

“It’s certainly not going to help the cost of a house,” said Look. “That would be bad for the industry, in my view.”

ORCO has been attending STAFDA since 1977. Its business breaks down to about 70 percent residential construction. The company, like all STAFDA members, has seen numerous new product introductions over the years, and that trend will continue in 2007.

Progress marches on in the area of tool technology, which on one hand generates sales interest, but on the other carries the challenge of rotating out the old merchandise and bringing in the new. “The skus keep growing almost faster than you can keep up with them,” said ORCO’s Look. “But certainly, cordless is a growing phenomenon. It grows every year. Corded tools are going away slowly and cordless seems to be taking over everything. It’s a fact of life, and it’s continuing in that direction.”

According to Look, corrosive resistant fasteners will generate a lot of interest this year, and the continuing trend of fastener compatibility with treated wood and other building materials will be a common topic on the show floor. The new concepts relating to ballistic screws are another anticipated area of innovation.

“The fact of the matter is, companies are always coming out with new technologies, new coatings, new this or that,” he said.

The mix of vendors is expected to break down to about 40 percent power tools and accessories, about 40 percent in the broad category of fasteners, and the remaining 20 percent consisting of miscellaneous building products, from flashing to house wrap to caulk.

There will be plenty at the event for domestic-minded distributors as well—everything from networking opportunities, educational workshops and a major trade show floor.

In keeping with the global trends, one of the educational workshops will examine global sourcing and related issues: “China/India: Friend or Foe?” Other topics involve financial reporting, disaster planning for businesses and time management. Additionally, two “Consultants Workshops” will cover the topics of accounts receivables and business insurance.

Hanging over the entire event—and every similar building material event—is the state of the economy, he said. The housing slump will be a certain topic of discussion. But business is booming for STAFDA’s event. A month before the show began, STAFDA had already surpassed the previous year’s record-breaking booth count. The event had locked in 954 booths in early October, about 20 percent more than the 2006 total.

According to Look: “The economy will be a big topic, and a lot of people will be bring their opinions about it.”

Based on the expected attendance, the overall outlook from this specialized segment of the housing and construction industry might reflect more than their normal share of optimism.

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Third-quarter earnings up at 3M

BY HBSDEALER Staff

St. Paul, Minn.-based 3M had record third-quarter sales and earnings, with earnings growth of 7.4 percent to $960 million compared with $894 million in the same period last year.

The company had net sales of $6.2 billion, up 5.8 percent from $5.86 billion last year.

George Buckley, 3M’s president, chairman and CEO, said the company saw gains across all its business segments. In consumer and office products, 3M saw sales grow 5.9 percent to $898 million compared with $848 million in the same period last year. The company’s safety and security products business saw sales rise 10.9 percent to $766 million from $691 million last year.

“The strength of the 3M portfolio was evident in the third quarter as we again generated record sales,” Buckley said. “Geographic diversity was also an important factor. We continue to accelerate investment in research and development, sales and marketing and in simplification of our supply chains.”

3M has business offices globally, with operations in other industries including industrial and transportation; health care; display and graphics; and electronics and communications.

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Weyerhaeuser to shutter three iLevel plants

BY HBSDEALER Staff

Federal Way, Wash.-based Weyerhaeuser will “indefinitely curtail” operations at three iLevel building products plants because of “slow customer demand.”

The curtailments include an oriented strand board (OSB) plant in Drayton Valley, Alberta; an OSB plant in Wawa, Ontario; and a laminated strand lumber plant in Deerwood, Minn. Work will halt at the plants before the end of the year, the company said.

“The decline in North American housing starts has reduced demand for wood products, requiring us to rationalize our supply of OSB and engineered wood,” said Steven Rogel, chairman, president and CEO of Weyerhaeuser. “We remain committed to these markets. This move enables our remaining plants to better execute our customer strategies.”

The Wawa and Drayton Valley plants are two of nine OSB mills in the Weyerhaeuser system. Wawa has an annual production capacity of 470 million square feet of OSB, while Drayton Valley has a capacity of 415 million square feet annually, the company said.

The Deerwood plant can produce six million cubic feet per year of engineered strand lumber and is one of three such plants owned by Weyerhaeuser.

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