The National Association of Chemical Distributors’ (NACD) Company Productivity Report for 2006 indicates that member firms achieved their highest overall profitability in at least five years.
The performance ratio before tax return on net worth (owner’s equity) for 2006 was 26.8 overall, according to the NACD information.
Not only was this the highest overall industry profitability in recent years, but this represented the highest performance for each of the three industry segments as well. Industry segments include firms with 75 percent or more of sales from liquids (bulk/repackaged); firms with 75 percent or more of sales from factory packaged products (liquid and/or dry); and balanced product mix.
“Our members reported a strong 2006 and this data certainly backs that up,” said NACD President Chris Jahn. “The economy had a lot to do with the industry’s profitability last year, but we also like to think that our members’ commitment to the Responsible Distribution Process (RDP), NACD’s management performance practice, contributes significantly to their good business results.
The report is an annual financial ratio benchmarking analysis tool for member firms to evaluate their company’s operating results in order to pinpoint strengths and weaknesses, and improvement opportunities. Participating firms receive an overall 150-page industry-wide report as well as an individual report containing the firm’s own ratios calculated alongside the appropriate industry comparatives, NACD said.
See other coverage on NACD in Bulk Transporter online.