A series of recent moves has roiled the European resin distribution business, spurring changes in several business relationships.
Germany's BASF AG started the ball rolling when it agreed in late September to sell its European small-lot distribution operations to various external sales partners.
As a result, three large distributors will handle BASF resins for small accounts in the following countries: A. Schulman, France and the Benelux countries; Albis Plastic GmbH, most of the central, northern and Eastern European countries, including Germany; and the newly formed Ultrapolymers Group NV, United Kingdom, Ireland, Italy, Spain and Portugal.
Luxembourg compounder and distributor Ravago SA, together with two partners, created Ultrapolymers Group for the purpose of acquiring these distribution assets from BASF. As part of the deal, Ravago, in conjunction with its Spanish subsidiary EP Compounding of Vilallonga, assumed ownership of BASF's styrene copolymer compounding plant in Tarragona, Spain. All employees transferred along with the business, BASF said.
Ravago also owns Resin Express Ltd., a distribution firm in the United Kingdom that handles engineering thermoplastics from producers including Dow Plastics and DuPont Engineering Polymers. Hence, this agreement raised some eyebrows in Europe.
One European distribution executive said of BASF's move: ``This deal makes absolute sense for BASF. But it's a bold move by Ravago, because it puts Dow and BASF under the same umbrella.'' Such coexistence is common in North America, but rare in Europe where distributors typically have had exclusive, long-term relationships with specific resin manufacturers.
Now, the source suggested, some distributors are ``looking the producers in the eye and saying, `What are you going to do about it?' ''
In the same vein, just before the Interplas show began in late September in Birmingham, Ravago also announced that its Resin Express unit will distribute GE Plastics materials in southern England. The move did not sit well with GE rival DuPont, which promptly pulled its business from Resin Express and awarded exclusive U.K. distribution rights for its full range of engineering materials to Chertsey, England-based Distrupol Ltd., now headed by former Omnexus executive David Jukes.
Basell Polyolefins Co. NV, the BASF/Shell joint venture, also implemented changes in its European distribution network as part of the BASF-Ravago deal, with Ultrapolymers assuming responsibility for a number of Basell resins across much of Europe.
What do all the changes mean? They appear to signal that Europe's resin distributors - described by one as traditionally operating as many local fiefdoms with close ties to manufacturers - are beginning to adopt business models more familiar to North Americans.
``This raises the question about the future of distribution in Europe,'' said the official. ``It must get more like it is in the U.S.''