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Surplus Inventory for the Industrial Chemical Community www.magitsurplus.com Best if viewed at 800 x 600 screen resolution |
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Vol 1 No. 3 Online Edition August 20, 1999
Welcome to Volume 1 Number 3 of our World Wide Web based newsletter. Please feel free to e-mail us with your comments, suggestions, submissions for this newsletter, offers of items for sale and requests for items wanted.
ITEMS WANTED
Low Foam surfactants
Alkyl naphthalene sulfonates
Methanol - up to 5% water
Surfactants
THF and NMP - small amounts of water and Gardner 5 color acceptable
CHEMICAL INDUSTRY NEWS
Consolidation again! - Dow and Union Carbide announced a merger, due to close in mid-2000. Union Carbide stock rose almost $20 per share on the announcement. This leaves an opening in the Dow 30 Industrials, and speculation is that Dow will replace Union Carbide on the index. The combined company will be the world's second largest chemical company, surpassing BASF. The "new" Dow will have 17 ethylene plants, eight ethylene oxide plants, a strong position in polyolefins and roughly one-fifth of the North American market for polyethylene. The combined company will have more than $24 billion in annual sales, operating earnings of $3 billion, a market capitalization of $35 billion and assets of over $30 billion. This comes on the heels of other announced mergers in the oil and chemicals sector such as BP Amoco's bid for Atlantic Richfield, Exxon and Mobil, TotalFina and Elf Aquitane, Witco and Crompton & Knowles, Rohm & Haas and Morton, Lyondell and Arco and others. Whew! Chemical & Engineering News, August 9, 1999, pp 4 and Chemical Marketing Reporter, August 9, 1999, pg 1.
Specialty chemical markets are maturing, slowing growth and intensifying competition, putting downward pressure on prices and margins. These markets have become more global and cyclical, which has led to supply chain problems, declining asset turnovers and stagnation of innovation. It is becoming increasingly more difficult to differentiate products in the marketplace and products are becoming commoditized. Chemical Marketing Reporter, August 2, 1999, pg 21.
Fine chemicals however, remain strong, growing at about 10% annually, with the worldwide market estimated at $60 billion annually. This sector includes pharmaceuticals and agricultural chemicals. The US market is estimated at $25 billion annually. Manufacturers keep entering this growth market in an effort to soften the cycles of the commodity chemicals business. Chemical Processing on the Web at http://198.110.248.104/protected/cp799/indtrend.html
E-commerce in the chemicals industry continues to expand - Forrester Research reports that 100% of large companies in the US have Internet connections and reports that US business-to-business trade of hard goods over the Internet hit $43 billion in 1998 and is forecast to reach $1.3 trillion by 2003. That is an annual growth rate of 99%. Most chemical companies sites are often little more than "brochureware" - an amalgam of company and product information somewhere between technical sales literature and an annual report. Chemical Industry Data Exchange reports that most customers want from Corporate Internet sites (in order of preference) Order status, MSDS, Logistics, Certificates of Analysis, Planning/Forecasting, Inventory, Catalogs, Invoicing and last, Payment. We suppose speeding up payment doesn't add as much customer value in the relationship as the other functions. Chemical & Engineering News, July 12, 1999, pgs. 11-14.
Something to think about. - "If your e-commerce strategy does not give your customers anything more than you can give them with a fax machine and an 800 number, you're probably not thinking about it right." Marcus Rabil, Corporate e-commerce manager, DuPont. Chemical & Engineering News, July 12, 1999, p. 14
For the most up to the minute chemical industry financial news - If you're here you are at least able to connect to the Internet, and if you're alive then you have heard of Yahoo!, the Internet business phenom. We'll reserve comment at this time regarding the realism of their stock price in relation to the usual standards of financial analysis. Nonetheless, they have a good thing going, and their chemical industry news page is the best on the 'net right now. You can visit them at http://biz.yahoo.com/news/chemicals.html . Another good Yahoo! site is their Biz page specific for Chemicals. You can visit it at http://dir.yahoo.com/Business_and_Economy/Companies/Chemicals/
COMMENTARY
The US Federal Reserve and chairman Allan Greenspan remain in the news as the tea-leaf diviners continue to speculate on an interest rate move by the Fed. Mr Greenspan's comments at the recent hearings on Capitol Hill were the in usual opaque and hedging vernacular favored by economists, bankers and politicians. To our amusement, he did warn congress and the executive branch by saying the current economic status quo would be disrupted by either tax cuts or new spending programs. Apparently, Mr. Greenspan thinks a portion of the expansion is due to the improving financial condition (lower national deficit and debt) of the Federal Government and thinks spending this "surplus" is not in the national interest. We agree; let's pay down the deficit first. Nonetheless, Mr. Greenspan and the Fed has managed the money supply so that an economic downturn has been avoided, and steady growth has been maintained for a record number of years. Unemployment is still very low and inflation is in check and being watched closely at the Fed.
The stock markets have continued their yawing in the 10,500 to 11,500 range of the Dow 30 industrials, rarely moving more than 1% either way on any given day. Compared to the market's performance over the past three years this amounts to stagnation! We continue to hold our opinion that the market has already discounted for the expected rise in the fed funds rate of another 0.25 a point after the Open Market Committee meeting in the latter half of August. The gyrations are due to rumour that the move will actually be 0.5 a point, which seems unlikely given the most recent CPI report.
What does this mean over the short-term for your business? The recent Fed move of a quarter of a point (and the expected move of another quarter of a point) was, in part, to stem rising inflation early in order to maintain steady growth. Certainly, working capital loan rates must rise due to the Fed rate move. You can reduce your working capital loan costs by reducing your dead inventory, overstock and surplus, turning the inventory into cash. This will reduce your loan requirements and interest burdens and increase cash flow. Remember, that surplus inventory on the floor is consuming your cash flow. Call us or visit our web site at Available and send us a description of your list of dead, surplus or obsolete inventory.
In an environment of soft prices and rising materials costs it is even more important to save money on raw materials. Remember, the most leveraged area to save on costs, and thus increase profit, is on the materials purchased side of operations. Even spot buys of small quantities can add to the bottom line. We have in stock many materials in good to excellent condition, often in sealed drums, ready to ship to meet your requirements. Many of these materials are on-spec, but simply are aged or labeled with the name of a company which has been acquired, was in warehouse stock at the time of the change and/or was packaged with the acquired company's color scheme. Chem-Find can be relied upon to provide quality surplus chemicals priced as low as pennies on a dollar! See our current mailer at Wanted and our current physical inventory list at www.thechemfinder.com to see what we have in our current offerings.
THE LIGHTER SIDE
Customer: My computer isn't working
Computer tech: Yeah
Customer: It's running Windows 95
Computer tech: Yeah, you said that already