Growing CINA Shakes Up Sales Network


2005 was a good year for Castrol Industrial North America,which saysit posted a 7 percent increase in sales revenue in the United States and Canada. This year the lubricant supplier expects to top $200 million in sales revenue, despite scaling back its service to some industries.

In fact, the company says this years achievements will in part be due to its decision to be choosier about the types of businesses it serves.

Castrol Industrial officials discussed the companys performance and projections as part of discussions about the restructuring of its sales channels – an undertaking that it first announced in March. At that time, the company said it planned to reevaluate which customers were supplied directly and which by distributors with the intention of rationalizing an accounts collection that had evolved into somewhat of a mish-mash through a series of acquisitions.

In mid-July the company announced it will focus on seven industries – automobile manufacturing, metals, machinery manufacture, aerospace, mining, cement and engineered wood products – and that only customers in these industries will be supplied directly. Businesses in other industries – such as petrochemicals, polymer processing andglass manufacturing – may continue to buy Castrol products but must obtain them from distributors.

Castrol said it also lowered the number of distributors it uses to 35 – a reduction of more than 60 percent – and completed a major shake-up of sales accounts. Hundreds of locations that had been supplied directly by Castrol were assigned to distributors, and hundreds that had been served by distributors were converted to direct accounts.

Officials said the realignment allows Castrol to streamline supply chains and to focus direct services on industries where it believes it has core competency and a competitive advantage. They claimed customers will benefit, too.

The transformation will allow the Castrol direct sales teams to focus on strategic and key accounts, the company said in a news release. Direct customers can look forward to better service from Castrol staff due to extra technical support for all their industrial lubricants and fluids applications.

The company added thatcustomers supplied by distributors should enjoy quicker delivery responses.

Castrol said the shake-up was generally well-received by customers. When the company decided which accounts it wanted to change, only tens contested its decisions. Castrol said it allowed most of those accounts to remain unchanged.

Castrol Industrial, which is based in Naperville, Ill., said it also invested in facilities and personnel. It spent $1.5 million this year to expand and modernize production capacity at its blending plant in Warminster, Pa., and hired 15 people to technology, sales and application engineering positions. A spokesman was unable to say how many were previously employed in such positions but stated the company had a staff of more than 150 in these activities plus marketing and technical support.

Castrol Industrial North America claims to be one the largest industrial lubricant suppliers in the United States and the largest supplier of metalworking fluids. Marketing Manager Vasu Kulkarni said the company projects another year of healthy performance this year.

The incremental growth in 2006 is expected to be much higher than the market growth rate, Kulkarni said, mainly due to decent continued growth in U.S. gross domestic product, which is supported by reasonable strengths and contributions from the manufacturing sector…. He said the realignment will also help improve the companys top line by allowing it to focus on areas of strength and to serve customers better.

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