AFTER THE RISE COMES THE FALL, DOESN’T IT?
Various political/geopolitical developments are still putting the construction industry under considerable pressure. Construction costs have skyrocketed, house building is stagnating and increasingly fewer projects are being awarded. Most people will be aware of this by now. The war in Ukraine, high energy prices and increased inflation all made a dent in the proverbial wallet last year. Raw material contracts were also unilaterally cancelled, resulting in huge surcharges.
At that time, we searched for solutions so we could still offer our customers price certainty on a tender or order without us facing unpredictable business risks. We opted for a separate raw material surcharge and fuel surcharge.
This was a fair system that evolved with raw material and fuel price developments. However, with the market decline we’re now seeing a reversal in this movement: the reduction in raw material and fuel prices is underway.
We had previously introduced a raw material surcharge, which enabled us to pass on the huge increases to our customers. But now that the situation is reversing and prices are falling, we think it’s time we passed on this reduction to our customers too. After all, in a long-term customer relationship, you should be there for each other. In good and less good times. That’s why new orders placed and produced from 15 May will be allocated a raw material discount.
Orders already placed and already produced prior to 15 May will be delivered as agreed.
Raw material prices
The raw material prices for our concrete retaining walls (sand, gravel and granite, but especially cement and reinforced steel) have started to fall again after a period of major increases. Our purchase price for steel is largely linked to the ‘Grymafer’ index. The price trend can be seen in the following graph.
We have factored part of this decrease into a temporary raw material reduction. This is determined for the quarter in which you make your purchase, based on price trends in the previous quarter and expectations for the coming quarter. Your sales advisor can give you further information on this. Your deduction is listed separately and is calculated on your quotation. Please note that if you change the quarter in which you make your purchase, the deductions may also change.
Both raw materials and the retaining walls are largely delivered by truck. Fuel costs have now also fallen, following unprecedented increases. The Evofenedex graph is attached for information. Should prices increase, we will bear some of these costs ourselves as part of our business risk, but have also factored in a (temporary) fuel surcharge to cover the remaining costs. This fuel surcharge is determined according to the average 4-week price level at the time we confirm your order and is therefore fixed regardless of the time of delivery. The fuel surcharge is currently 0%.