docGary Ittner - Valve Manufacturers Association of America
download 
Report Transcription
Gary Ittner - Valve Manufacturers Association of America
Valve Manufacturers Association // MRC Global Supplier of Choice® MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 2 Our Mission is to be the Global Supplier of Choice ® MRC is the largest global distributor of pipe, valves and fittings (PVF) and related products and services to the energy industry. We operate over 400 service locations globally, including key locations in the most active oil and natural gas regions of North America. We offer a wide array of PVF and oilfield supplies. MRC is diversified, both by geography and end market. Our Vision Be the world’s premier distribution company of PVF products and services to the energy and industrial markets. Our Mission Statement We will be the global supplier of choice® in the markets we serve by building strong relationships with our customers and suppliers. We create superior value for our stakeholders by working as a team to efficiently buy, sell, and deliver PVF products to the energy and industrial markets. MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 3 McJunkin Red Man (MRC) Overview 2010 Revenues by End Market 2010 Revenues by Geography1 • 90% of MRC’s 2010 revenue was generated from the energy industry • MRC is the largest global distributor of PVF • Leading full service PVF (pipe, valves & fittings) distributor • Products used in extreme, high stress operating environments leading to the need for regular replacement cycles 2010 Revenues by Product • MRC distributes a range of products including carbon steel pipe, valves and specialty products, carbon fittings, oilfield supplies, stainless steel pipe and fittings and gas products with an inventory of over 250,000 unique items • PVF products are typically a fraction of the total cost of a project, thus a premium is placed on services given the high cost to customers of maintenance or project delays 1 Includes MRC Midfield, MRC Transmark and MRC SPF MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 4 Global Supplier of Choice ® MRC is the Largest Distributor of PVF Products Globally • Over 400 MRC Global Service Locations Branches Distribution Centers * North America International +180 +30 6 = U.S. 1 = Canada 1 = U.K. 1 = Singapore 1 = Australia • 2010 Sales = $3.96 Billion (Global Sales) • Approx $850 Million Inventory Value • 3,800 Employees + * 13 Valve Automation Centers in North America * 180+ Pipe Yards in North America MRC Locations Australia Kazakhstan Belgium Netherlands Canada New Zealand China Singapore Finland South Korea France Thailand Germany United Arab Emirates Indonesia United Kingdom Italy United States Includes MRC Midfield, MRC Transmark and MRC SPF (On the Ground) MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 5 Corporate Timeline May 2010 MRC Acquires South Texas Supply September 2008 Andrew Lane Appointed as President & CEO July 2008 Purchased Remaining 49% interest in Midfield June 2005 Red Man Acquires Midfield Supply in Canada Aug 2010 MRC Acquires Dresser Oil Tools & Supply January 2010 Re-branded Company Logos to MRC 2011 October 2008 McJunkin Red Man acquires LaBarge March 1977 Red Man Pipe and Supply Company Founded 2009 2010 2007 May 2011 MRC Acquires SPF 2008 1989 December 2009 Andrew Lane Chairman of the Board 2005 1921 1977 January 1989 McJunkin Merges its Oil & Gas Division with Appalachian Pipe & Supply February 1921 McJunkin Corporation is Founded January 2007 Goldman Sachs Capital Partners Makes Strategic Investment in McJunkin Oct 2007 Merger of McJunkin and Red Man April 2007 McJunkin Acquires Midway Tristate February 2009 MRC Opens Houston Headquarters October 2009 MRC Acquires Transmark Fcx VSC July 2011 MRC Acquires VSC MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 6 The Evolution of Valve Manufacturing & Distribution 1970s • Many manufacturers; mostly U.S. manufacturers serving the U.S. • Many local, some regional distribution • Some segment of project work was sold direct 1980s • International sourcing grows, mainly for projects; Europe, Japan primary options • Traditional manufacturers begin to outsource (Mexico, Korea, India) • Some initial consolidation of distribution regionally 1990s • Consolidation of manufacturing grows; migration to China with increasing capacity • Long-standing brands begin to lose historical identity • Distribution expands nationally 2000s • Rapid consolidation of manufacturing, distribution • Many new brands enter market as business explodes in mid-decade • Market slide in later years left an oversupplied North American marketplace • Manufacturers tend to have a regional distribution strategy MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 7 TODAY • Manufacturers expand integration chain; acquire additional lines, distribution • International expansion of distribution stretches manufacturer recognition • To grow markets & capture large CAPEX projects (especially international), manufacturers focus on high-end products, special services with desire to pull through balance • European “buy direct” model moving to North America; full line PVF uncommon outside North America MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 8 Today’s Challenges are Similar to Challenges in 2005 MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 9 Today’s Challenges from End Users Supply Chains becoming more complex and influential • Consolidate spend with smaller group of suppliers • Expectation to execute on leveraging initiatives • Global commercial expectations End Users requiring distribution to align with competing brands • Dilution thru multiple distribution • Compromises distributors and manufacturers Difficult to obtain accurate forecasting information • Distribution and manufacturers take on financial risk //Continued MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 10 Today’s Challenges from End Users Migration away from industry standard valves and growth of customer specific valves • Challenge associated with service requirements (commercial and technical) • Unique inventory means additional costs • One product-one customer Price Updates • Requests for industry indicies to support price changes • Delay, Delay Resolution of product quality issues getting far more challenging • Distribution and manufacturers take on financial risk MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 11 Examples IOC and Petrochemical Model for Valves • Direct agreements with manufacturers for commodity and specialty products • Distribution supports MRO requirements with service fee • Service models for project requirements • Separate agreements for valves and top works creating complications Shale Play Business • Complexity of well head skid packages • Multi-site fabricators involved • New pipeline projects and integrity initiatives using varying supply models. Australia LNG Market • Significant project activity through global EPC’s • “Shorts” and future MRO requirements need to be supported MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 12 Ongoing Challenges for Distribution Continued pressure to provide low cost “premium” product with “premium” service model Low Cost Sourcing will continue to gain influence of decision makers as quality differences narrow Increasing demand for value add products and services • QA/Documentation requests increasing • Elevated requests for inbound inspection • Ship and hold • Extended warranty period • Opportunity-but also cost creep Reduction of knowledgeable workforce Regional Standards • Engineering reductions • End user maintenance and repair groups are much smaller organizations • Replacement of experienced knowledge base at manufacturer and distributor level • Additional responsibility shifting to distribution • Variations by country/region • PED • TUV • GOST • JIS MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 13 What can manufacturers do to help? Ship on time View distribution as a partner • Timely communicate changes in manufacturer lead times • Improves customer service • Better aligns end user demand with production forecasting • Minimize safety stock Challenge end users regarding unique inventory and standards Be involved with developing indices regarding price adjustments Manufacturer quality products that our customers expect to receive • • Consider value of distribution as well as future MRO requirements when developing position on major project requirement Engage distribution in project opportunities where appropriate Involve distribution in sales channel Develop data to support elimination of inbound inspection • • Look for ways to reduce, not add cost Opportunity to differentiate from competition MRC ® // Global Supplier of Choice ® Confidential Information for Internal Use Only // Page 14 Thank you
