SIC 5074
PLUMBING AND HEATING EQUIPMENT AND SUPPLIES (HYDRONICS)



This industry consists of companies that primarily wholesale hydronic plumbing and heating equipment and supplies. Industry products include: steam and hot water boilers, prefabricated fireplaces, oil burners, plumbing fixtures, solar heating panels, and water softeners. Companies that primarily install plumbing and heating equipment from their own stock are in SIC 1711: Plumbing, Heating and Air Conditioning.

NAICS Code(s)

444190 (Other Building Material Dealers)

421720 (Plumbing and Heating Equipment and Supplies (Hydronics) Wholesalers)

According to the U.S. Census Bureau, the plumbing and heating equipment and supplies (hydronics) wholesalers consisted of about 4,756 establishments in 2001, employing approximately 52,669, with an annual payroll of about $2.1 million. There were approximately 1,504 establishments with fewer than five employees. By 2003, the number of establishments increased to 11,874, with annual sales of about $44 million. The average sales per establishment was approximately $5 million. The total number of employees climbed to 108,853.

Plumbing and hydronic heating supplies dominated the industry. This segment totaled 5,387 offices and controlled about 45 percent of the overall market. Plumbing fittings and supplies numbered 2,269 offices and controlled about 19 percent of the market. Water purification equipment numbered 1,370 and held about 11 percent of the market. Combined, they accounted for more than $35 million of the overall annual sales. States with the largest presence were California with 1,264, Texas with 857, New York with 814, Florida with 710, Pennsylvania with 610.

The British conglomerate Wolseley plc, the largest distributor of heating and plumbing products worldwide, owned two of the top three industry leaders in this category: Ferguson Enterprises, Inc. (purchased in 1982 and based in Newport News, Virginia) and Familian Corp. (purchased in 1987 and based in Los Angeles, California). On June 18, 1998, Wolseley announced its integration of Familian into Ferguson with the new, single entity headed by Ferguson president Charles A. Banks. The companies generated approximately $2.3 billion in combined sales for 1997. The merger brought the employee count of the combined company to almost 7,000 and the number of locations to 391 in 41 states, the District of Columbia, and Puerto Rico. In 2003, Ferguson Enterprises extended its market presence and acquired Triangle Supply, Inc. of Dallas, Texas.

According to trade publications, Ferguson ranked as the largest distributor of plumbing supplies in the United States; the third largest for pipe, valves, and fittings (PVF); and the fifth largest for heating and cooling (HVAC) equipment. Ferguson achieved its market dominance through integrated inventory strategies: first, local market needs determined branch inventory; second, Ferguson located its distribution centers strategically to maximize accessibility; and third, Ferguson offered justin-time inventory delivery for products not in stock. Primus, Inc., of Dayton, Ohio, represented the other of the top three industry leaders before the consolidation of Ferguson and Familian. Primus garnered sales of $829 million with 2,962 employees in 1998,$780 million in 1997 sales with 2,175 employees, and $700 million in 1996 sales with 2,150 employees.

In 1994, according to the U.S. Department of Commerce, 9,341 establishments did business in this industry, compared to 8,931 in 1987. Of this total, 7,930 were merchant wholesalers (wholesalers who take title to the goods they sell); 1,118 were agents, brokers, and commission merchants. The remaining 278 were manufacturers' sales branches and offices. Combined sales for all establishments topped $27.8 billion in 1992, compared to $23.2 billion in 1987.

According to the Annual Benchmark Report for Wholesale Trade, wholesalers of hardware, plumbing and heating equipment, and supplies saw April 1999 sales (seasonally adjusted) of $68.7 billion. This amount was projected to increase into the 2000s.

Further Reading

D&B Sales & Marketing Solutions, 2003. Available from http://www.zapdata.com .

Ferguson Enterprises. Inc., 2004. Available from http://www.ferguson.com .

U.S. Bureau of the Census. Statistics of U.S. Businesses 2001. Available from http://www.census.gov/epcd/susb/2001/US421420.HTM .

Wolseley, plc, 2004. Available from http://www.wolseley.com .

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