Up to date news on the global chemical distribution industry
May 10, 2009
US chemical distributor JLM Industries Inc. of Tampa, has closed because of the firm's equity funding firm became insolvent and was forced to withdraw cash and credit.
"In today's banking environment it was impossible for JLM to secure a new working capital line," says Sean D. Macdonald, chairman, in a statement, so the firm declared bankruptcy and shut all US operations.
As such, JLM Industries, Inc. declared bankruptcy on Thursday, April 23, 2009 through a General Assignment for the Benefit of Creditors in the state of Florida. All JLM companies with the exception of foreign subsidiaries were covered by the move.
JLM Industries was supposedly one of North America's largest chemicals distribution companies with sales of $330 million in 2008 and was No. 10 in the latest Purchasing Top 100 Chemicals Distributors listing with 30 million gallons of domestic storage in 275,000 square feet of warehouse and a fleet of 20 tankers and 150 railcars.
The company, which had been in business for more than 20 years, was one of the largest marketers of acetone and phenol in North America, and was also a global distributor of olefins including propylene with terminals in the United States and subsidiaries around the world. If, or in what form foreign subsidiaries in Venezuela, Brazil, India, Spain, Turkey, Russia and China will continue is still to be confirmed.
Comment: The 2008 sales revenue declared to www.purchasing.com may well have been overstated. A large part of JLM's business was Acetone and Phenol trading sold on commission basis. Trading sales when the distributor does not take title of the goods should be declared as commission. However, it seems likely that JLM may have misrepresented these sales by providing them with turnover and not commission values to significantly improve their ranking on purchasing.com.
One silver lining of this is that the debt default could be much lower than expected since the ‘real’ sales revenue is likely to be much lower than previously estimated.
Source: JLM website - now suspended
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