THE STRUGGLE.
You don’t need me to tell you what a struggle the last year has been for our industry. Brexit was going to be bad enough but throw a global pandemic into the mix for a laugh and you’ve got yourself a cocktail of struggle, hardship and problems. Being in construction/manufacturing we couldn’t work from home, we had to go to work, we had to go to building sites and mix with all manner of people we didn’t know or know where they’d been……. Share facilities and work spaces with strangers then go home to our loved ones, a tad stressful, but the job had to be done! I don’t want to be all doom and gloom, especially on a Friday, but I just wanted to write about the current state of our industry especially when it comes to the materials and products we use on a day to day basis.
TIMBER AND PANEL PRODUCTS.
I’m sure most of you will remember the plaster shortage of last year, bulk buying plaster when you could, limited stocks and travelling across the country for a few bags of multifinish, we were lucky to not really be affected by this, except maybe plasterboard, but this was for our Unit 4 renovations so not too much of a problem. However this year is our turn for the shortages…. With disruption caused by Covid-19, combined with huge domestic demand during lockdown, plus the consequences of Brexit, has had dramatic effects. This in turn has left us in a volatile market where things are changing very quickly.
Globally, people’s demand for wood based products is much higher than the rate at which it is being produced. Demand is particularly high in China and the US, and they are willing to pay more to get their hands on the stuff! This leaves less to go around for the rest of us. Production in Europe in 2020 was far lower than the previous year, as saw mills shut down due to Covid. Back at full capacity now, but planned shutdowns this summer might mean higher prices into the autumn.
We have seen increases in the realms of 150% in MDF 90% in Birch ply!!! (A sheet of Birch ply now being around £79.00 +VAT) With a 3 week wait, if you’re lucky! We are being charged surcharges of anything from 5% to 12% on items we order, this is being done because of the volatility of the market. For example, a tube of silicone could cost £2 on Tuesday and then £4.50 on Thursday! Suppliers are quoting with disclaimers saying things like:
“Due to market conditions and stock availability, all quotes are subject to final confirmation at time of order.” and “Due to market volatility and increasing raw material prices worldwide, it is unfortunately impossible to keep absorbing the extra costs as we have done until now. Therefore a surcharge of 7.5% will be applied to all invoices/purchases”
The industry is experiencing serious supply shortages of key materials used in the manufacturing of items, products such as MDF and melamine faced board.
The Brexit transition period with Covid-19 related restrictions still in place in the UK and around the world, leaves significant uncertainty left to be navigated as we move through the rest of the year.
COMPONENTS AND CONSUMABLES.
It’s no secret that the EU make great components for cabinets, we use Blum hinges and drawer runners, Blum is an Austrian company, their stuff is fantastic. The hinges haven’t failed us yet and the movento runners are next level! A real quality product! However, we are now really struggling to get it all! Complications in import caused by Brexit are really taking its toll! Also the increase cost due to import tax.
We also use a company called Ostermann who are a German based company, we purchase edgings and some aluminium components from them, real quality stuff, the range of edging colours they stock will blow your mind! However, they stock it at their HQ in Bocholt, Germany. This wasn’t a problem before the “divorce from the EU”. We’d have it within 3 days, now we have to wait a week or so for our order, then when it inevitably hasn’t arrived we will chase the order to be told (every time) that it is being held at customs….. Not ideal when you are working to deadlines.
HOW WE ARE DEALING WITH IT.
This is how it is, nothing we can do to change it, we just have to roll with it and price accordingly. The enquiries are still coming in, will the conversion rate to orders decrease due to the material cost increase? I guess we’ll find out soon. All we can do is keep shopping around for the best price and hunt around for suppliers who have the stock of the items needed.
We work with enough suppliers and different varieties of materials to be able to offer alternatives to most things but the client will have to be flexible.
Lead times will go up, especially if something that used to take 2 days to arrive now takes 3 weeks. Unfortunately due to the diversity of our work we can’t hold much stock, the only things we can guarantee the use of is MDF, Birch ply and probably backing laminate.
Will this be the norm from now on? Will the prices come down to the range in which we are used to? Or is that it now? Who knows. Those who voted remain didn’t want the price increases, probably the reason for the remain vote. I’m pretty certain those who voted to leave didn’t want this either. Either way we’re going to be poorer from now on. We’ll get used to it I guess, but it will be interesting to see the changes because of it!
I can’t change any of it really, I control the goings on of a little company in Nuneaton, a little company that makes cabinets, so I’ll focus on that and do my best to navigate it through the obstacles of the future. One thing I can be certain of is:
We will still do everything we can to deliver a top quality product,
- on time
- in budget
- to a high standard
We always have done and we always will!
Have a great weekend!!
Adam
