Everwhite in Administration. Who’s next?

Dear Richard

Following the news that Everwhite Plastics Ltd has gone into administration, I am writing to urge distributors and installers to think seriously about the security and sustainability of their building plastics’ supplier. In the wake of the collapse of another cellular foam extruder, roofline companies who take a gamble on their supplier could find themselves like current Everwhite customers. Not long ago, Permacell customers were in the same boat too. Who will be next? As the volume market leader, we’ve been banging the drum for the last 18 months about the importance of a secure supply chain for the future health of our industry. 2008 looks set to shake out the winners.

Being able to rely on your supplier for the short, mid and long-term supply of PVC and PVC-UE building products has never been more important. We are heading into a year of continued high raw material prices and disruption as suppliers try to make the move to VINYL 2010 compliance. I encourage Glazine readers to ensure their future commercial success is not doomed to failure through being tied in with potentially short lived or struggling suppliers who are not blending their raw materials, and as a consequence do not have the correct cost base to supply from.

Everyone keeps a tight reign on their customer and credit risk, but how many truly monitor supplier risk? And by monitor, I mean ask direct questions of your suppliers, just like you do of your customers. Don’t believe the hype or be persuaded by gimmicky propaganda. Don’t let your supplier tell you what they have got. Ask them what they can’t offer you.

Two questions should be top of mind now for our industry.

1) How close to being VINYL 2010 compliant is your supplier? I.E are they ready to meet the Pan European code voluntarily agreed by the PVC industry to commit to the full replacement of lead stabilisers in production by 2015? But will lead free be enough? It is likely that dibutyl tin stabilisers of the type used in profile extrusions will be affected by CMR (Carcinogenic, Mutagenic and Reprotoxic substances) categorisation under REACH. So what is really in the product you’re buying?

2) Does your supplier have their own blending facility, or do they outsource this critical part of the manufacturing process?
Positive answers to both these issues are critical for customers because without them, suppliers will have a major competitive disadvantage. For suppliers not using 100% calcium organic stabilisers in both the skin and foam core, the move to change material composition will be costly and time consuming. It’s not something you can do overnight. As we’ve seen with recent failures, conversion is disruptive and some suppliers are paying the ultimate price. Kestrel-BCE Ltd. was the first (2002) and is the only major British manufacturer to utilise Calcium Organic stabilisers throughout its products. Unlike some manufacturers who claim to use Calcium Organic stabilisers but only use them in the co-extruded skin of their profiles, Kestrel-BCE uses them in the skin and the foam core - 100% Calcium Organic.

The issue of blending is critical too. Suppliers without a blending facility cannot guarantee they will remain in full control of their cost base in the face of higher raw material costs. Lots claim to have full production facilities but relying on others to blend on their behalf means they can’t have as much control of their full raw material costs. Again, customers will be left to bear the brunt of this major competitive disadvantage. As a fully vertically integrated supplier, including in house blending, we can have more control over our efficiencies. And don’t believe the hype! Self proclaimed market leaders don’t necessarily blend. Ask straight out.

Don’t gamble your future

Kestrel has invested a great deal in offering customers what they need to differentiate in a competitive market. We’ve already gone through the pain of investing in 100% calcium organic stabilisers in the skin and core of our products and can offer the market the robust benefits of a vertically integrated manufacturing centre. At a time when others are failing or pulling back, we will continue to invest in what the market wants and needs.

For any distributor or installer concerned about the health of their supplier, I urge you to be careful about who you choose to bank your future on. Don’t let them tell you what they have got, but ask them what they haven’t got. We’ve been saying for some time that change was imminent and within the first week of 2008, the market has started to move. Who will be next? Don’t risk your future in the hands of a supplier who may well struggle in 2008 and beyond that could impact on your livelihood.

Yours sincerely
Tony Crutcher Sales and Marketing Director, Latium Building Products