SABIC Innovative Plastics (Pittsfield, MA) will shift from a direct-distribution model in North America and Central America to one utilizing distributor Ashland Distribution (Covington, KY), mirroring its sales/delivery strategy in the rest of the world. “We currently use distribution as part of our go-to-market strategy in Europe, Asia, and South America,” explained Banu Kukner, marketing communications manager for SABIC’s Global Specialty Film, Sheet, and Automotive unit. “North America is the only market where we had a completely direct model. The agreement with Ashland will result in a strategy … consistent with our strategy in the rest of the world.”
By utilizing Ashland Distribution, part of chemical and polymer supplier, Ashland Inc., SABIC says it can now offer “higher-touch services, improved delivery, and flexibility in order size,” with Ashland also providing technical support, local inventory, and just-in-time delivery.
Ken Gordon, communications and corporate affairs at Ashland Inc., told PlasticsToday the arrangement, which will be finalized in coming weeks and take effect in mid-April, is to include all of SABIC Innovative Plastics’ resins—namely Cycolac (ABS); Geloy (ASA); Noryl (PPE); Cycoloy and Xylex (PC Blends); Lexan (PC); Valox (PBT); Xenoy (PBT Blends); Ultem and Siltem (PEI); Extern (TPI); and LNP Specialty Compounds.
Kukner declined to say if SABIC had requested exclusivity for its products within Ashland’s offerings, saying, “We are focused on working out the details of our agreement with Ashland; we are not in a position to comment on their relationship with other suppliers.” For its part, Ashland said it could only address resin-related questions.
As part of its automotive line card, Ashland currently has distribution agreements with engineering resin suppliers BASF, DuPont, and Bayer MaterialScience, where there is some product overlap with SABIC in resins like PC, ASA, and PBT. Distribution competitor PolyOne (Cleveland, OH) has existing engineering-resin supply agreements with Bayer, Ineos, and DuPont. Commenting on the SABIC announcement, Michael Rademacher, PolyOne senior VP and general manager, distribution, said, “Recognizing that this agreement introduces a shift in the dynamics of distribution, PolyOne continues to focus on strategies that will best serve our customers.” For 2008, Ashland Distributions’s sales and operating revenue was $4.4 billion; Polyone’s distribution arm had total sales of $796.7 million last year.
Ashland’s plastics distribution in the U.S. has 27 offices in 21 states, with eight sites spread among four Canadian provinces. In Mexico, the company operates Ashland Plastics De Mexico S.A. de C.V. out of Mexico City. —[email protected]