This excerpt taken from the VLG 10-K filed Sep 28, 2006.
We purchase industrial gases pursuant to supply arrangements having no minimum commitments and open purchase orders with four of the five major gas producers in the United States. One such producer accounted for approximately 38% of our gas purchases in fiscal 2006. If any of these arrangements were terminated, we believe that we would be able to readily secure an alternate source of supply.
We purchase welding equipment and consumable supplies from a number of vendors. Of these purchases, the top five vendors represented approximately 60% of total purchases in fiscal 2006. Purchases from major vendors are made pursuant to purchase orders that are cancelable by us upon minimal notice. Large volume purchasers, such as Valley, are generally able to participate in vendor discount programs and obtain products at competitive costs. We are able to purchase welding supplies from vendors of our choosing.
We purchase propane from pipeline sources at various supply points in our market areas from approximately five primary vendors. One such vendor accounted for 59% of total propane purchases in fiscal 2006, generally on a short-term basis at prevailing market prices. We have historically been able to adjust prices to reflect changes in product cost, which varies with season and availability. We are not dependent upon any single supplier for propane and supplies have historically been readily available. Unlike small residential distributors of propane, we also supply propane to commercial customers who purchase propane throughout the year, and we believe the year-round demand this creates causes us to be less susceptible to allocation during periods of tight supply, which occurs from time to time.