After years of hearing about the need for consolidation in the resin distribution market, James Duffy is doing something about it.
Since mid-2003, Duffy has put together six distribution firms under the umbrella of North America Group Inc. Most recently, Duffy added Pyramid Polymers Inc. of Toronto and Geochem International Corp. of Rowayton, Conn., to the North America family. Combined with his own firm - Goldmark Distribution Inc. of Newton, Mass. - North America Group expects to post sales of between $350 million and $400 million in 2005.
``When you look at the market, you see consolidation at the supply end and the customer end, and you realize that fewer suppliers means fewer distributors,'' Duffy said by phone. ``We're growing in a fragmented industry when we see an opportunity.''
Duffy acquired Goldmark in 2003 from Kenny Gross, who had founded the New Hyde Park, N.Y.-based firm with two partners in 1957. Duffy then relocated Goldmark to Newton and combined it with Pro Resins Inc., an East Kingston, N.H.-based distributor he acquired around the same time. The new Goldmark had sales of about $45 million.
In late 2003, Duffy added two smaller distributors to Goldmark: Parachute Polymers of New York and Material Partnerships of Houston. Those purchases added $8 million to $10 million in annual sales to Goldmark.
Aggressive sales efforts and higher resin prices allowed Goldmark to finish 2004 with sales of about $170 million. At that point, Duffy was able to add Pyramid, a $40 million-a-year firm that distributed primarily in Ontario and Quebec. Then in January, Duffy corralled GeoChem, which was doing about $110 million in annual sales exclusively in Mexico, Central and South America and the Caribbean.
That makes six deals in about 20 months. Duffy, who is North America Group's majority owner, declined to reveal purchase prices for any of the acquisitions. Former Pro Resins owner Joe St. Martin has a minority stake in North America Group, while Larry Mulligan still owns 50 percent of Pyramid.
All the businesses acquired distribute a range of commodity resins, including polyethylene, polypropylene and polystyrene. About 70 percent of resin sold by the combined group is prime material, with the rest coming from off-spec or wide-spec.
Looking at his history, Duffy's recent accomplishments should come as no surprise. His father, Francis, worked in the plastic materials field for resin makers Dow Chemical Co. and Foster Grant, and later at Synthetic Materials Corp. a distributor/compounder that he owned and operated. James Duffy followed his dad's trail by joining Plastic Distribution Corp. of Ayer, Mass., in 1987.
Duffy and four other PDC employees then launched Performance Polymers in Leominster, Mass., in 1988. The group was sold to European distributor Ellis & Everard plc in 1998. Duffy remained with Performance - which now is owned by Royal Vopak NV - until late 2002.
After acquiring Goldmark in 2003, Duffy added about 10 sales reps, but for the most part, he said the sales gain was achieved by putting the right people in the right places.
``We bought good operations with good sales people,'' he said. ``I took a lot of my old customer bases back and rehired some of my people who had gone elsewhere.''