03/22/2021 / News
Strained situation on the procurement markets
For some time now we have been facing massive disruption to worldwide supply chains. This is hugely affecting delivery time and costs of raw materials. Certain base materials (and their precursors) required for the production of our insulating profiles are in particularly short supply right now. In particular, this is affecting glass fibers and ADN, a primary product needed to make polyamide 66. Many products are subject to allocation, i.e. desired order quantities are only delivered in smaller quantities or delayed, regardless of the price.
Force Majeure
The situation has worsened as a result of several force majeure declarations by the major producers of PA 66 and their suppliers in Europe and the USA, which means we anticipate continuing shortages in the next few months. Because of the strong economic recovery, the strained procurement situation is colliding with a very high global demand.
The extremely difficult current supply situation for raw materials is chiefly affecting glass fibre reinforced PA 66, which is required for the manufacture of insulbar insulating profiles.
Prices at an all-time high
Suppliers will not accept any long-term price fixing, and the prices of the named raw materials are rising exorbitantly. Alongside the price increases for materials, energy costs and in particular also cargo rates have risen significantly.Possible supply bottlenecks
Thanks to our supply contracts and plans, we will continue to be reliably supplied for the foreseeable future. Nevertheless, there are risks in the supply chains that cannot be fully controlled in the short and medium term, which may lead to temporary under-deliveries of important materials such as additives and glass fibers. If the demand for insulbar profiles remains high, it can be anticipated that the high production output cannot be maintained. Unfortunately, this will also have a negative impact on our delivery capacity and delivery times. The situation is expected to ease towards the end of the 3rd quarter of 2021.Working in partnership
We took comprehensive measures early on to minimize the impact of the situation. But the current development on the procurement market is something we cannot influence. We alone are unfortunately no longer able to compensate for this. Consequently, we are banking on a partnership-based approach; discussions with your purchasing departments are already underway. We are confident that we will find a solution to the strained situation which is acceptable and fair for both sides.