Raw Materials Surcharge: protecting our customers, not profiting
July 25, 2022
The Raw Materials Surcharge across the Fenestration industry has been a bone of contention for many since its implementation by systems companies, with some attributing it to just another way for systems companies to make more money. But VEKA has a clear view on the purpose of their surcharge (RMS) and that is to protect their customers, which will ultimately protect the industry.
The formidable economic environment has had a huge impact on the whole supply chain, being at the mercy of the crude oil market, we are all facing exceptional costs. The challenge for VEKA and all systems companies is to manage and mitigate these price increases.
Tim Taylor, Commercial Director said, “Pricing fluctuations each month are frustrating for customers and as a business we feel those frustrations too, but by being transparent and notifying everyone 4 weeks from implementation, our customers have the information and time for their own business planning. We will continue to be very clear on the numbers, month on month.”
VEKA’s RMS is attached to the public S-PVC (U) index published by Plastics Information Europe, which is the true indicator for the cost of raw materials. This is tracked closely by their Commercial Support Team, and they then base their surcharge on the previous month’s movement in price. This means that they can be re-active and pass on cost reductions to customers immediately.
This month, for the first time since VEKA had to implement a surcharge in 2021, they have managed to reduce it, and this reduction will also be sustained in August.
Tim continued, “I have visited many customers recently that continue to have healthy order books. As a business we will continue to focus on service and delivery performance. As the challenging economic conditions push us, like the rest of the industry we will continue to respond, to do everything possible to manage costs, put our customers first and ride out this rocky period together.”