Global sourcing key to TP acquisition
Published: 07 July, 2010
NORTHAMPTON: Improved purchasing and global sourcing lie at the heart of UK building supplies company Travis Perkins' decision to acquire distributor BSS Group for £558m.
The group said it expects its procurement functions to become more efficient following the deal, saying that a "powerful strategic logic" underpins the combination of BSS and Travis Perkins' existing distribution and retailing businesses in plumbing and heating.
"The enlarged group would have the operational and financial size and scale to purchase products more competitively and secure the benefits of the trend towards global sourcing," the company said in a statement.
"The combined purchasing of plumbing and heating products through BSS and Travis Perkins' plumbing and heating activities... should provide the enlarged group with the opportunity to achieve material procurement gains."
Travis Perkins and BSS have expanded their global sourcing activities recently, with plumbing and heating products offering considerable scope for sourcing gains from global sourcing "due to their favourable value-to-freight cost ratio and the establishment and development of low cost manufacturing facilities capable of producing high quality products".
In terms of supply chain, Travis Perkins stated that purchasing BSS would allow it to service customers more efficiently both locally and nationally using Travis Perkins' "route to market" supply chain. "Travis Perkins' merchanting division has continued to focus on building relationships with its key branded suppliers and has worked closely with them and Travis Perkins' internal supply chain division to improve product availability within its branch network," the company said.