BASF restructures its distribution network, creating single efficient channel

By Pooja Kondhia

- Last updated on GMT

BASF has restructured its distribution network in North America and entered into agreements with nine distributors for its personal care division, resulting in a single network.

After a thorough selection process, we formed a new distribution network that will enhance our market focus, sales excellence and industry expertise​," said Frank Bergonzi, director of corporate distribution BASF, North America.

In addition he said that this would allow for greater efficiency within the division as there is now one network for the company’s entire personal care portfolio, whereas before different product lines had multiple distributors.

Bergonzi also told CosmeticsDesign USA, “We have restructured our personal care channel to market to a regional distributor model, and those distributors will have full access to our personal care line​.”

Likewise, it has improved BASF’s supply chain as the full portfolio of products is delivered to one distributor per region.

Regional distribution

The following nine companies have entered into the distribution agreement with BASF and will be focusing on a particular region across the United States and Canada.

DeWolf will be focused in the Northeast, McCullough & Assoc. in the Southeast, GMZ in Ohio Valley and Southwest, FitzChem in the Midwest, ChemTec in the West, and Pachem, Brenntag Specialties and US Sealand in the US and US Brenntag Canada will be distributing in Canada.

We value the utilization of the distribution channel in servicing the smaller customer base and we rely on the channel to reach that important sector​”, concluded Bergonzi.

Cognis know-how

According to BASF, its acquisition of Germany-based Cognis at the end of last year led to a wider range of products which has enabled the restructuring of the distribution network.

The acquisition was part of BASF’s aim to strengthen its position in the personal care market.

“Cognis will make an important contribution to the growth strategy of our Performance Products segment. We aim to grow two percentage points above the relevant markets and achieve an EBITDA margin of minimum 20 per cent as of 2013. The businesses acquired from Cognis will help us to achieve these goals,”​ explained the head of the performance products division, Dr John Feldmann.

Sales soar

BASF saw sales soar in the first half of 2011 by 19.4 percent at €37.8bn ($51.3bn) compared to the same period of time the year before.

Within the performance products segment, the acquired Cognis businesses made an important contribution to the significant improvement in sales according to BASF.

Both the sales volumes and sales prices of products increased.

Sales for the first half of the year 2010 for this category totalled €6bn ($8.1bn) which increased to €8.1bn ($11bn) in 2011, a rise of 34 percent in one year.

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