Distributor buying/marketing group Affiliated Distributors (AD), Wayne, Pa., announced that it has set up shop and hired a leader to develop a presence in the Latin American markets, beginning with Mexico, Colombia and Brazil.
The move into Latin America “is driven by our sense of responsibility to our existing members and supplier partners and consistent with AD’s mission to help strong Independents work together in order to counter the geographic scale advantage of national and international chains,” AD Chairman and CEO Bill Weisberg said in a release.
The Latin American operation will be run by Carlos Garcia Ramirez as managing director and vice president of Latin America. Ramirez brings experience as managing director in Latin America, Caribbean, Europe and the Middle East over 24 years with Panduit Corp. He’ll be based in Guadalajara, Mexico.
Ramirez told Electrical Marketing the goal is to establish AD as a partner in members’ and suppliers’ global expansion plans. “The expansion into Latin America will provide added value for existing members and help strengthen our position with existing suppliers by viewing AD as a more valued partner in their interest in international expansion. AD global expansion will insure that AD members and suppliers don’t get left behind, in increasingly global industries,” he said.
The initial focus on Brazil, Mexico and Colombia will give AD the best start in establishing itself in the region, Ramirez said. “Mexico, Colombia and Brazil have a very specific dynamic in the market and require immediate attention because of manufacturing base expansion and industrial development. The experience we gain in those countries will help us be more efficient in the rest of Latin America.”
Over the next few years the group will expand to additional countries in Central and South America “and other strategic markets around the globe,” said the AD release.
AD’s initial foray into Latin America will focus on the electrical and industrial sectors, recruiting independent distributors and locally based suppliers to join the group. After that the efforts will be expanded to all AD’s seven lines of trade. The group enters the Latin American market with some membership already operating there. The EDGE Global Supply group 11 U.S. industrial-electrical distributors set up a few years ago already has acquired three electrical distributors in Brazil, and by virtue of EDGE’s ownership those operations are already AD members.
The nuances of the Latin American market that Ramirez learned in his years spent operating there for Panduit will help AD translate what it does in North America to the new markets, Ramirez said. “We have a lot of market diversity in different Latin American countries. There are some national chains already, but also very strong independents,” he said. “The Latin American distributors are similar to the U.S. distributor with a narrower basket. The constant challenge is around financing the contractors and the manufacturers, because the cost of money in Latin America is very high. The normal terms in Latin America are longer than in North America.“
Ramirez believes AD’s established expertise in building networks in which distributors can share best practices will be welcomed in the Latin American markets.
“We believe that AD’s culture of diversity and respect for local market differences will be very well received in Latin America. AD doesn’t have just one way of doing things. We work in seven industries and two countries and we customize our approach in each market based on its unique dynamics,” Ramirez said in the release.
AD’s core presence is in the U.S. and Canada now, where it has divisions devoted to seven vertical markets — electrical, industrial, HVAC, PVF, plumbing, drywall and clean energy. Those groups together produced aggregated revenues (not all through AD suppliers) of $28 billion in 2013.
