| Wesco International, Inc. | (NY: WCC) |
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June 19, 2013
WESCO International, Inc. (WCC) is one of the largest suppliers and distributors of electrical construction products in the United States. This was an $83 billion market in 2004, with an average growth rate of 5% over the 19 preceding years. Products in the electrical construction distribution market are sold to industrial, electrical contractor, utility, commercial, institutional and government customers. The market is highly fragmented, with the four largest providers accounting for just a 16% combined share. Additionally, the company is a leading provider of electrical and industrial maintenance, repair and operating (MRO) supplies. The total MRO market is currently estimated to be approximately $400 billion. WESCO has an automated electronic procurement and inventory replenishment system, which allows customers to purchase a wide range of products from a single source. Management has leveraged this capability of penetrating the integrated supply sub-segment of the MRO market, which has been doubling every five years.
WESCO's products can be broadly classified into Lighting (lamps, fixtures, ballasts and lighting controls), Distribution Equipment (circuit breakers, transformers, switchgear, busway wire, cables and conduits), Control and Automation Equipment (industrial computers and controllers, man-machine interfaces, safety equipment and motor control centers), and Data Communication Products (wires, cables, terminals, connectors, hubs and routers). It also offers supplies like batteries, fuses, safety equipment, ladders, tools and tape, among others. The company procures over a million products from more than 24,000 suppliers. The 10 largest suppliers provided 33% of WCC's total purchases in 2006, of which Eaton Corporation alone accounted for 12%. In addition to products (hard items) and supplies (consumable items), WESCO provides related services in the form of national account programs, integrated supply programs and major construction project programs. Currently, over 350 of the fortune 500 companies are on national account programs.
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