Raw material shortages and prices

Raw material shortages and prices along with increased shipping costs are effecting most if not all suppliers. The message below is from one of the largest furniture manufacturers and suppliers, TC Group and explains the reasons for the current volatility.
I hope this letter finds you in good health and enjoying the significant improvement in the weather after a very wet Spring. So much seems to have happened already in 2021 that I cannot quite believe it is June already!

As the easing of lockdown allows greater freedom of movement and a sense of normality returns, many predict a significant up tick in the economy in H2 of this year. I hope they are right but until that time I must write to you again to update you with the changes in supply routes and raw materials that are stressing our market.

After many, including us, forecasted a reduction in shipping costs post Q2 we now face a further increase well above the forecasted position. Equipment shortages & space issues have all continued and have not been helped by the Suez Canal delays. Last time I wrote to you we took a position that would soften the blow of the changes impacting your prices, unfortunately with this further increase we are unable to do so again.

shipping costs 2021Alongside shipping we continue to receive increases in raw material with changes in steel & plastic the most significant. As steel hits +200% and plastic +150% versus December rates, the impact on cost prices across a range of products is severe.

steel costsFor obvious reasons, we are now forced to revisit our approach and increase catalogue prices. The previous temporary price increase of 5% will remain and a further increase will be applied at an individual product level. The average increase is 7% however this will vary by product. At the source of this decision is the disparity between Asian and European sourced product and the related impact of shipping goods to the UK, alongside the raw material impact that differs by product.

All prices will go live for all orders placed on or after July 19th, 2021.

We also wanted to briefly update you on what is going on within our marketing department at the moment.

We just recently launched our newest Titan product, Arc. Arc has been designed for use within multiple environments and is one of a limited number of products that has been certified to both Parts 1 & 2 of the education standard BS EN 1729, specifying strength, stability, and ergonomic requirements. Arc is also 100% recyclable, fire resistant and antimicrobial. Arc will be available from August 2021.

Within the next few weeks, we will also be releasing our latest Titan Brochure and a new soft seating range.

Tax breaks for Office Furniture!

Super-deduction TAX BREAK to save money on office furniture

uk tax breaks for office furnitureNow is the perfect time for your customers to invest in new office furniture and
re-shape their offices as the UK Government has introduced a significant tax incentive scheme to encourage business investment.

In the Budget 2021, the Chancellor announced a temporary change to tax relief which allows companies to claim enhanced capital allowances on qualifying plant and machinery assets, which includes office chairs and desks.

For expenditure incurred from 1st April 2021 until the end of March 2023, companies can claim 130% capital allowances on purchases of office furniture.

Under the super-deduction, for every pound a company invests, their taxes are
cut by up to 25p.

HM Treasury Budget 2021 – Super-deduction

Gov_Super_Deduction_Guide

See link above to the super-deduction factsheet issued by HM Treasury.

The wellbeing of employees in the workplace is becoming more vital, and office furniture can play a huge part in help to keep people happy and healthy when they’re working. We can help businesses retro-fit their existing products, making the office covid-19 secure, and help them re-imagine the new normal.

Don’t miss out on this incentive to improve the office environment and re-design the workspace.

Friday 11th June 2021 Updates

Do Forklift attachments need to be certified and tested? June 10th 2021

Yes, forklift attachments, forks and extensions need to be professionally inspected for safety every 6 months.
Get a thorough examination, Our trained Consolidated Fork Truck Services (CFTS) Inspector attends your site and inspects your lifting equipment. They will check:

• The operation of equipment
• If it’s fit for purpose
• Assess wear and tear
• Look for faults
• Check the safety

The inspector leaves you with a report of thorough examination. It will include the next inspection date, as required under LOLER, and details of any repair or maintenance work.

ARRANGE YOURS through your local supplier or contact Merlin Industrial Products

 

Raw Materials Update June 2021

We are getting frequent updates, as below regarding raw materials for manufacturing and price rises monthly.  As you can imaging this has put a lot of strain on our web technicians to keep the shop updated. This is making it very difficult for customers needing to budget for projects in 6 months to a year.

This communication concerns the runaway costs of raw materials, and the knock-on effects caused by the collapse in the organisational capabilities of supply chains across the market.

As you may well know, the cost of raw materials that are overwhelmingly used in the production of office furniture products have skyrocketed. To name but a few examples, the cost of steel has increased by +50% since January this year, wood products by +30%, and foam and plastics by +25%.

Shortages in the supply of raw materials are further compounding this problem by increasing lead times that in some instances are multiplied by a factor of four for basic materials used in everyday production.