STAFDA brings story lines to Denver

There was a lot to talk about last year at the STAFDA convention—protectionism, steel prices, residential construction, the economy. Sound familiar? In 2008, the volume is turned up on all of those conversations. Throw in a president elect—the Nov. 9 to 11 conference will be the first major gathering of home channel companies after the election—and the performance of the Dow Jones Industrial Average, and a scorecard will be needed to keep track of the themes.

At last year’s STAFDA convention, U.S. nail manufacturers, importers and foreign factories were engaged in early rounds of nail dumping that ultimately led to tariffs on imports from certain Chinese manufacturers. A major mill in Dubai was found innocent of unfair practices.

“Some of the Chinese mills got hammered,” said Hal Look, incoming president of STAFDA and vp-marketing and business development for ORCO Construction Supply. He said tariffs of 21 percent to 118 percent have effectively shut down most of the nail buying out of China, as production is shifting to other Asian countries, such as Malaysia and Vietnam.

Perhaps encouraged by the success of the U.S. nail manufacturers to petition for tariffs against lower-price competition, manufacturers of other building products appear to be marshalling forces for similar petitions, according to Look. “Rod is the latest to be singled out,” he said. Wire mesh products are on the list. “There may be other sorts of products that the American manufacturers are lobbying for protectionism.”

Perhaps no one has had a more nuanced view of the international trade issues in the fastener industry than Greg Drouillard.

The past-president of STAFDA, Drouillard has watched the fastener industry grow and evolve since 1967, when his company—Windsor, Ontario-based Target Building Materials—was founded. From the get-go, he said, Target was immersed in the specialty construction supply business, before dabbling in masonry, concrete and most recently, energy conservation materials.

From a local perspective, international business has always been on the table for Drouillard. “When the currency is weighing in our favor, the opportunity to buy merchandise in the United States is more attractive—when you don’t have the higher cost, the attractive thing is for Americans to import our products,” he said.

Drouillard said that the dumping had put serious strain on the North American nail market.

“With NAFTA, of course, [the United States and Canada] have had a very friendly link. We’re trading partners in a big way. But when you throw in the Chinese nail products, for example, many times the products do not meet the standards required here. But you’ll always have somebody who’s going to risk it,” he said. “It’s a downward spiral, because even if the goods don’t conform to safety standards, people get accustomed to the low price.”

STAFDA president Rick Peterson, who is also president of All-West Fasteners, of Seattle, will deliver the distributor State-of-the-Industry report in Denver. The morning session will also include a keynote address from Fox Business News anchor Stuart Varney, who will speak on the timely topic: “21st Century America: A New Day in Politics, Culture and Business.”

Outside of the lecture hall, the topic will be economic. “Who’s not here? Who’s gone down? Who’s next?” said ORCO’s Look. “These will be some questions. There will also be a lot of benchmarking on a personal level—freight policies, for instance.”

Anticipating the demand for discussion, directors have arranged for extra face time for attendees to huddle with each other and draw up plays during the show’s kickoff party. “I know there’s going to be a lot of discussion, obviously, in regards to the economy,” said Georgia Foley, executive director of STAFDA, speaking of the event.

Asked about STAFDA under his presidency, Look joked that he had previously hoped that his tenure would coincide with an industry recovery, which now looks unlikely. Undaunted, the incoming president pointed to some initiatives on the table to strengthen STAFDA. For instance, STAFDA currently provides benchmarking for the typical two- to four-branch STAFDA house, but fine-tuning that information for larger players is an area of opportunity.

“Carlson, White Cap, ORCO, Southern Fasteners, there’s a whole slew of us where it makes sense to benchmark performance—financially, sales per employee, profit per branch. We’re planning that kind of tool for companies with 10, 20 or 30 branches and multi-geography branches.”

Another project targets showroom best practices. The project would expand on STAFDA’s previous work with Sales Pro and Counter Pro educational materials to help train sales personnel. Look described the new project as “A manual for showroom merchandising—merchandising for dummies,” he said.

Across STAFDA memberships, showroom merchandising is an area where there’s room for improvement, he said.

“Modern showrooms need to be not just more sophisticated, but more integrated,” he said. “We need to have something that shows members the power of an integrated approach. The flyer tied into the endcaps, tied into Yahoo messaging. All of your calendar programs or your vendor of the month program—how can you get the most out of all of it.”

The housing market stands as the biggest hurdle to building professionals.

“It’s as bleak as it’s ever been,” Drouillard said. “We have approximately 65 building permits to date here [in Windsor] for example—we used to get that per month.”

And if there is any upside to the bleak landscape, it comes in the form of renovation business.

“The renovation market is improving. The markets where custom home builders used to operate are not as good, so now [those builders] are looking at the renovation market,” he noted.

The STAFDA event in Denver begins Nov. 9 with a day of education sessions. The trade show takes place Nov. 10 and 11. As of Oct. 1, more than 900 exhibit booths had been sold.

Total attendance was trending to somewhere between 4,500 and 4,800—about the level of the conference’s attendance in Baltimore in 2005, which at the time was a record. The show attracted 6,100 in Las Vegas in 2006. “We’re tracking pretty well, given the challenges to the industry,” said Foley.