Adrian Vicker, General Manager at SIEGENIA talks about the recent price increase the company introduced to its customers, and the outlook for the hardware sector going forward.
Having delayed for as long as possible, SIEGENIA took the decision to introduce a price increase of 2.8% on core products – with the exception of the surface coating ‘E Look’ which had a further increase – to its distributor and fabricator partners in June this year. Like many others in our sector, and in the wider industry we are aware of the sensitivity of increasing prices into what remains a nervous marketplace, uncertain of how its future will unfold and where the various customer groups it serves sit right now.
The consumer market remains cautious, and while the demand in other sectors such as new house building and the development of high-end high-rise apartment buildings across all our major cities remains strong the impact of price increases cannot be under-estimated.
We had originally planned to introduce an increase in January but decided to delay its implementation due to much talked about ‘other’ factors including potential tariffs and uncertainty surrounding the rate of exchange with the EURO linked to the Brexit process.
We were very determined not to react in a ‘knee-jerk’ manner to the looming Brexit deadline and like many others hoped that with a satisfactory resolution to this political issue, a price increase would not be necessary. However, with that not being forthcoming, and deadlines being missed, we were left with no choice but to react to the sliding value of the EURO against the pound and increases in other areas including, material, labour and utilities.
We therefore introduced the minimum increase possible to try to minimise the impact on our customer base, and to make the process for them passing the uplift onto their customers as easy and justifiable to explain as possible.
The increase need not be permanent; much like the glass sector did some years ago with its energy tariff we will continue to monitor currency and act accordingly.
How did we calculate the price increase? The basis for currency consideration is that we used an average of the exchange rate over the previous 12 months and calculated the increase figure based on that historical information and how we think it might move over the coming months. We are not planning any further increases this year unless there are truly dramatic currency fluctuations going forward.
Many of our distributor and fabricating partners have long term commercial contracts and we fully understanding the difficulties they face when trying to introduce increases midway through these and we will continue to work with them to provide as much stability as we can.
Our technical and support staff keep in almost weekly contact with all our partners and we know that good communication is an essential part of the process in times of uncertainty especially. It is something I know SIEGENIA is very good at, as well as supplying an outstanding range of tried and tested technically excellent products.
We now have the Brexit deadline coming back into focus, and a ‘new’ government committed to the UK leaving the EU on October 31st. SIEGENIA has all its contingencies in place for a seamless flow of hardware into the UK whether it is a deal or no-deal outcome and it is a key part of our commitment to our distributor and fabricator partners that we will continue to support them today and long into the future.
Adrian Vicker, General Manager SIEGENIA UK