Specialist
Former Director at Barentz International BV
Agenda
- Barentz's competitive positioning in speciality chemicals distribution vs larger players including Azelis and IMCD (AMS: IMCD)
- Sales structure comparison vs majors, including advantages and disadvantages
- Growth potential – value-added services penetration growth and acquisition options
- Ability to retain and risks of losing suppliers
Questions
1.
How would you compare Barentz to IMCD and Azelis? What are the core metrics you would be using?
2.
How do you compare the breadth of IMCD and Barentz’s portfolios, the size of the businesses and the quality of their suppliers?
3.
Could you outline the differences between core distribution and what add-ons can you offer clients to win the sale? How does that help you win sales and how does it not impact margin or growth necessarily?
4.
How frequently might you not have a service or something available? Can you give some examples of what you don’t have? Is it a particular chemical, or a particular route that you don’t have?
5.
How do you think about the range of chemicals, if this is the key reason to lose sales? How do you think about the range of suppliers and chemicals at Barentz vs competitors?
6.
Do you expect IMCD and Barentz to grow quicker than the market due to the nature of their supplier breadth that enables them to be able to offer clients a solution more frequently than the average market participant?
7.
Who are Barentz and IMCD typically competing with locally and what would you expect their local market share to be?
8.
Do you think IMCD and Barentz will continue to outgrow the smaller players and take share from them? What happens when those players get to a certain size? Do you end up acquiring them if they’re losing share, or do you end up taking all their share?
9.
We’ve touched on the sales team structure and how it might have an impact on margin but seemingly not having too much of an impact on growth, relative of IMCD to Barentz. Do you think, long term, one strategy will win out over the other? Would you expect the level of growth to remain quite equal across both those businesses with different strategies?
10.
How unique is Barentz’s supplier base? Are there significantly important exclusivities or will it partner with people that are partnered with a number of other distributors?
11.
Which are the most important pharmaceutical suppliers to be working with as a distributor? Is Roquette is a mid-size player?
12.
How important are some of the more well-known players such as BASF, Chr Hansen and Novozyme in the health markets? Are they important suppliers, or are we primarily only assessing the ingredients players?
13.
What are the trends in suppliers outsourcing? Do you expect Barentz to get more involved in some of the larger players that sit further down the value chain, given is more involved in the low-level ingredients players? Could you expect it to get involved there, and is there an opportunity to broaden its supplier base?
14.
Do you expect Barentz to grow its supplier base significantly given these trends we have discussed? Would those suppliers consider Barentz, or IMCD or another player with more broad international coverage?
15.
How do you expect the rates charged by the suppliers to develop over time? I imagine, like any distributor, you capture a margin on top of the price for the supplier, and I imagine there are also some rebates with normal distributors, typically. Do you expect those distributor margins to develop over time? We’ve got the consolidating distributor base and the larger players getting even larger. Is there more competition for suppliers, and does that turn into decreasing margins over time, or is the competition for suppliers quite mature and limited?
16.
How strategically important do you think own production assets are for Barentz, for example Vitablend, NKC, AmTech and some parts of Maroon?
17.
How well has Barentz handled the acquisition of production assets, and the management of both distribution and its own production assets? Could the core competencies be challenged as the movement towards more production assets occurs?
18.
Would it make more sense to acquire more distribution assets or more production assets? If Barentz or IMCD can procure good suppliers, why do they need to have more production assets? Couldn’t they just get more suppliers?
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