NACD releases Company Productivity Report for 2007.
Press Release Summary:
According to NACD's Company Productivity Report for 2007, member firms continued to achieve profitability, though at slower levels than in past years. Return on investment before tax return on net worth was 23.6%, 20.6%, and 16.8% for LIQ, FPP, and BPM groups, respectively. Sales growth in 2007, when measured by actual physical throughput of pounds of chemicals moving through warehouse, was a flat 1.6% for all NACD CPR respondents overall.
Original Press Release:
Chemical Distribution Industry Profitable during 2007, but Growth Slowed
Recently released results from the National Association of Chemical Distributors' (NACD) Company Productivity Report (CPR) for 2007 show that member firms continued to achieve profitability, though at slower levels than past years.
In particular, the performance ratio "Return on investment before tax return on net worth," (i.e., owner's equity), for the three operating groups in chemical distribution, it was 23.6%, 20.6 %, and 16.8% for the LIQ, FPP, and BPM groups respectively.(LIQ: firms with 75% or more of sales from Liquids [bulk/repackaged]; FPP: firms with 75% or more of sales from Factory Packaged Products [liquid and/or dry]; BPM: Balanced Product Mix [neither LIQ nor FPP].)
These statistics reflect a slowing in sales growth. Sales growth in 2007, when measured by actual physical throughput of pounds of chemicals moving through the warehouse (including 3rd party), was a flat 1.6% for all NACD CPR respondents overall (as compared to 2006). The three industry segments came in at 5.1% lower for the LIQ group, while the FPP and BPM groups showed .02% and 0.6% growth, respectively.
"Although our members reported a slower sales growth during 2007, their return on investment indicates a strong management culture backed up by a commitment to the Responsible Distribution ProcessSM (RDP), NACD's management performance practice," said Chris Jahn, President of NACD. "Our member companies tell us that among the benefits they see in participating in RDP are reductions in insurance claims and costs, assistance with regulatory compliance, conservation of company resources, development of systematic employee training, and better documentation of company policies," Jahn continued. "In RDP, the focus is on continuous improvement, which drives company management to look all aspects of how they run the business."
The NACD Company Productivity Report (CPR) is an annual financial ratio benchmarking analysis tool for member firms to evaluate their company's operating results in order to pinpoint strengths and weaknesses, and improvement opportunities. Participating firms receive an overall 145-page industry-wide report as well as an individual report containing the firm's own ratios calculated alongside the appropriate industry comparatives.
NACD and its nearly 250 members have established themselves as leaders in health, safety, security, and environmental performance through implementation of the Responsible Distribution Process (RDP), established in 1991 as a condition of membership in NACD. Incorporated as a condition of membership in January 1999, NACD members undergo third-party on-site RDPV - RDP Verification. For additional information, visit NACD's Web site - www.nacd.com.
