Global Fastener News

September 21, 2004 FIN – The biggest issue for the European fastener industry is China rather than steel prices, a leader in the British Association of Fastener Distributors said during a North American visit.

Monetary exchange rates have lessened the impact of rising prices for offshore fasteners, Mike Phillpotts told FIN. “In the UK we have been shielded by the decline in the value of the U.S. dollar,”’ he noted. ”If the dollar were to bounce back we would see a further spiral in prices.”’
Phillpotts got his start in the fastener industry in 1969 because he needed a car and GKN Bolts & Nuts provided cars to salesmen. He retired in 2001 following the sale of the company he and two colleagues grew – Barlow Fastener Centres – to competitor Serco Ryan.
The BAFD has conducted two seminars that ”proved absolutely right on forecasting price rises due to ’the China syndrome’,’” Phillpotts pointed out. ”Some people caught a bit of a cold by not attending the seminars and they now have a problem on prices that could have been lessened.’”
China is changing the European market more than steel prices.
Italy, Germany, France, Spain and the UK still have major fastener manufacturers, ”but none can compete with China when it comes to standard product,’” Phillpotts observed. Manufacturing of automotive fasteners is also rapidly going offshore or to Eastern Europe. The closure of the Jaguar plant in Coventry by American parent company Ford Motor Co. ”highlights the relentless decline in UK manufacturing’ even if that particular closing was not simply an ’efficiency’ issue,”’ Phillpotts pointed out. Ford’s decision may have been more due to the market being in U.S. dollars and Ford losing ground in its global plot, Phillpotts speculated.
Whatever the reasons, ”once you lose domestic automotive then in general manufacturing has a pretty tough time,’” he commented.
“I don’t see any UK government being interested in protecting manufacturing. There is barely a standard metric fastener made in the UK now.”
The UK has three major master distributors: Harrison & Clough Ltd., Owlett-Jaton Ltd. and Fastbolt Distributors UK Ltd.
“Interestingly, Owlett-Jaton along with smaller SRB Group is American owned via Marlowe Holdings,”’ Phillpotts noted. Consolidated Electrical Distributors Inc. is the parent of Marlowe.
“There are other smaller specialist master distributors serving so many small distributors supplying the end users,” Phillpotts told FIN. “There may be a thousand small fastener outlets usually owner managed businesses.’”
Major suppliers to end users are Serco Ryan Ltd., Trifast Plc. and Infast Plc.
In the UK ”even the small guys are jumping in on JIT,”’ Phillpotts found. Unfortunately, some are ”doing it without thinking about the risks. They are signing onerous contracts put on the table by their customers. Small distributors need legal and other experts’ advice here and BAFD is actively working on this one for the membership. Customer contracts don’t protect distributors if a customer goes belly-up,”’ he observed. ”What happens to your stock?”’

UK Market Not the Same
The UK is not a vast market,’ Phillpotts explained. Distributors don’t stock as much as in North America because we have next day delivery on almost anything.’
He predicted UK master distributors will continue to get bigger and gain more expertise.
Phillpotts envisions Europe following the American trend of fewer distributors.
The English Channel slows some European consolidation. Even with todays logistics it is not quite as easy to cross the English Channel as it is to reach Eastern Europe.’
There are two other aspects,’ Phillpotts described the market. “Eastern European countries are growth manufacturing economies whereas the UK is declining  – its a version of the Mexico effect a few years back.”
“Secondly, UK market is idiosyncratic we still have a residual demand for inch fasteners and highly fragmented. Europeans find the UK market difficult to understand,’ Phillpotts explained.
Eastern Europe ”has always been there’ and today is providing more opportunity.’”
On the continent, Würth, Bossard, Rehyer and Borstlap are the biggest names.

Today Phillpotts is active with a few other key players in revitalizing the distributor organization. The BAFD was declining due to member apathy, Phillpotts noted.
The new chairman, Steve Auld is the CEO of Serco Ryan and is reviving interest with plans for more member benefits.
“We are planning a new mission and will present it to members later this year,’ he announced. We are seeking ways of getting that sausage sizzling.’”  ©2004/2015 Fastener Industry News.
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