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Kenai Supply Inc.: poised for growth.

This Kenai company is grabbing a large share of the wholesale plumbing and heating market.

Pipes and valves are the heart of Kenai Supply's business, and have been since 1953, the year president William "Bill" Wells started the original company, Kenai Plumbing and Heating. Since then, the company has grown into a statewide supplier of building materials with outlets in Anchorage, Wasilla and Homer as well as Kenai. A Fairbanks yard served the North Star Borough for four years but closed this July, primarily because the company could not reach agreement with the landlord, according to a company spokesman. Tough competition from large retail chains in a relatively small population center also contributed to the decision.

Headquarters for Kenai Supply is on a sprawling gravel pad above Kalifornsky Beach Road on the Kenai Peninsula, across from the intersection with Bridge Access Road. The K-Beach Road location is corporate headquarters as well as a wholesale distribution center and a re-supply point for the Homer store. About 30 of the company's 80 employees work there, including about 15 people who comprise the office staff.

According to Wells, the company moved into the Anchorage plumbing market in 1970 when he acquired the property on Arctic Spur Road. Wells' eldest son Kevin first started developing the Anchorage market in the summers while a student at the University of Washington. He would fly up for a day and sell, then fly back to Kenai and drive a tractor-trailer rig back up the next day to deliver. Sometimes the procedure would be repeated twice a week.

In 1969, after graduating from college, Kevin established a full-time outlet in Anchorage focusing on the plumbing and heating market. Later, the company built a large stand-up concrete warehouse on the corner of Arctic Spur and Arctic Boulevard. That property was sold three years ago and now houses Arctic Wire Rope and Supply Inc. In 1979, the company expanded Anchorage operations into the underground utilities market selling the American Darling line.

In recent years, Kenai Supply's most visible location in Anchorage has been on the corner of International Airport Road and Minnesota Drive. But the decision was made this summer to terminate the lease on that property and run utilities operations out of the Arctic Spur Road office. This was in keeping with a decision to focus sales mainly on the building trade.

"In Anchorage, originally we dealt just with the trade," says Bill Wells. "Then we deviated from that. Now we're going back to our original practice of selling mainly to contractors in the Anchorage area." The Arctic Spur location serves just fine for dispatching materials to fulfill private and government contracts which make up the company's underground utility business, Wells notes.

Up, Up and Away

And business has been growing. The company reported $19 million in gross revenues in 1992, up from $17 million the previous year. All indicators point to continued growth this year and next.

Warehouseman Tom Bernier, who has been with the company for a decade, agrees. "I've been getting lots of hours. It's been a good year, the best I remember since the crunch," he says.

Bill Wells, who characterizes himself as "fairly conservative," says, "There seems to be quite a lot of business available, and we're getting some of it." In fact, according to Ken Johnson, manager of the company's central receiving yard in Birchwood, freight shipments have increased noticeably in the past two years. His crew has received as many as 16 rail cars a day, though according to Kevin Wells, the average is seven to 10 cars a day.

Johnson, who has been with the company since 1988, says he dispatches three sets of doubles a day to serve the company's three major wholesale outlets, Kenai, Anchorage and Wasilla. When the Fairbanks store was open, he used to send one or two trucks a week to them as well.

Part of the company's reorganization of its Anchorage operations was also a step to ensure itself a larger piece of the wholesale plumbing and heating market. This summer, Kenai Supply acquired American Plumbing and Steam Supply Co. from its parent company, Consolidated Supply of Portland, Ore. The acquisition included the lease of a 25,000-square-foot warehouse on a lot located on Hartzell Road off Dimond Boulevard. According to Bill Wells, the company intends to operate American as a subsidiary. No personnel or service changes are anticipated in the near future.

"We actually married up pretty well," says Kevin Wells. "They handled some of the same major lines as we do. This will allow them to consolidate their inventory, and in fact, they will be able to diversify their inventory and offer additional products that we carried and they didn't. This will help them serve their contractors better."

Pipes for the Water Works in Anchorage

One of Kenai Supply's steady customers is Anchorage Water and Waste Water Utility (AW&WWU). When asked how long they have been buying from Kenai, general foreman Joe Ward says simply, "Since the beginning." The fact that Kenai Supply is the sole distributor of American Darling parts in Anchorage helps. "They supply the type of material we often need," says Ward.

"We've been here a long time," says Kevin Wells. "And we are one of a very small number of companies in the trade that is Alaskan owned and headquartered here. Our major competitor in water works is based in Seattle."

In other words, Kenai Supply is here to stay. Asked about the prospects for the future, Bill Wells grins. "Well, the bank tells me that next year should be good too."
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Title Annotation:The new 49ers
Author:Phelps, Jack E.
Publication:Alaska Business Monthly
Article Type:Company Profile
Date:Oct 1, 1993
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