Robust supply chains for reliability

Garnalex CEO Roger Hartshorn looks at the implications of tariffs on imported aluminium, and highlights the benefits of a robust, vertically integrated supply chain.

Until 2020, I’m betting most fabricators didn’t know where their aluminium window systems were made. But then Covoid-19 disrupted global trade, leaving containers with their profile orders marooned in ports six to eight weeks away on the other side of the world, with the ships that were meant to transport them stuck in Rotterdam waiting for the queues to clear.

Now they’re about to get a second shock, when their artificially low-priced aluminium systems and profiles get hit with massive price hikes.

On Tuesday September 22, the European Commission announced plans to impose provisional anti-dumping duties on aluminium extrusions from China. This includes imports of aluminium bars, rods, profiles, tubes and pipes, either unassembled or prepared for use.

The announcement came amid ongoing investigations into Chinese exporters dumping aluminium products at artificially low prices in Europe.

Price dumping is seen as unfair competition because it undermines markets, jobs, and business investment. The proposed duties to neutralise these unfair subsidies are as high as 48%, ranging from 30.4% to 38.2% for some companies; 34.9% for companies that cooperated in the European Commission’s anti-dumping investigation; and 48% for those companies that did not cooperate.

These duties are in addition to the EU’s standard 7.5% import tariff. Aluminium producers had until Friday September 25 to respond to the individual calculations before the commission published a detailed report on the calculations. The new regulation came into force on October 15. While the European Commission’s ongoing anti-dumping investigation is expected to be finalised in April 2021, the import duties are likely to remain in place for a further five years.

This is going to make it unprofitable to sell subsidised Chinese profile, which will fundamentally change the market.

Like other British aluminium producers, Garnalex welcomed this announcement as an important measure to protect the European aluminium sector and ensure its long-term sustainability. Some reports suggest Chinese imports of semi-fabricated aluminium products had more than doubled between 2014 and 2019.

According to European Aluminium: “The destructive impact of dumped imports has led to a decrease in production and a loss of market share for European producers across the entire value chain, which forced several companies to restructure or close plants with significant job losses as a result.”

Nevertheless, these proposed tariffs will impact many aluminium companies across Europe. The UK relies heavily on aluminium imports, consuming around 190,000 tonnes of aluminium a year, while extruding around 110,000 tonnes. So about 80,000 tonnes a year is imported.

There are only three or four extruders in the UK, one of which is Garnalex, out of 80-90 aluminium systems companies, plus stockists who buy their profiles from extruders here and in China. Systems companies who outsource like to keep their suppliers’ identities to themselves, but prices will inevitably go up significantly for those buying from China.

We can’t say for certain what the UK will do, but one of the importers is assuming the UK will take similar action to the European Commission and has put its prices up to reflect the expected changes.

We set up Garnalex with the aim of transforming the aluminium window and door market, and improving customers’ experience of buying aluminium. Understanding the importance of a robust, vertically- ntegrated supply chain we’ve invested over £9 million in manufacturing, software, quality control, and logistics to ensure that efficiency, quality and service are built into our foundations. We also assembled a brilliant team of top designers and technical people. Our raw aluminium logs are sourced from Wales and all our Sheerline profile is extruded in-house. We even make all Sheerline Thermavic and PVCU window components, and bespoke profile is also painted on site in Derbyshire.

Garnalex’s purpose-designed software system, GarnerSys, ensures all operations – ordering, manufacturing, quality control and deliveries – are synchronised and integrated for unparalleled levels of quality, customer service and short, reliable lead times.

These investments give us exceptional control of the supply chain, helps cut the UK’s import bill, cuts carbon miles, and reduces the uncertainty of supply chain and quality issues for customers.

The European Commission’s anti-dumping measures and the resulting price rises will soon start to bite. Coming on top of the expected turmoil in ports and surrounding travel networks in Kent and potentially other port routes from January, users of imported profile can expect significant disruption.

We’re proud to be Made in Britain, but it’s becoming clearer that it’s also prudent to make in Britain too.