The effects on a global business
Increases of more than 18% in the last year in the price of raw aluminium are a reminder that the UK window and door industry is not immune from global influence, according to Paul James, sales director at Extrudaseal.
It’s very easy to forget that we’re all subject to the influence of the global economy. You may be fabricating aluminium windows but the price you pay from your systems company is inextricably linked to the global price of aluminium – and in the last year, that’s sky rocketed.
Aluminium prices have averaged close to $1,900 (approximately £1,400) per metric ton so far this year, around 18% higher than the average for last year.
Why? According to economic analysts, the attempt by the Chinese government to prop up its economic growth, by making increased funding for infrastructure projects, has swallowed up global aluminium supplies.
At the same time China, which accounts for 60% of global aluminium production, is in the process of closing down polluting smelting factories, with new more sustainable facilities to follow in their place.
This has reduced aluminium supply at a time when demand has increased, something which analysts warn won’t be rebalanced until the new sites come on line.
And that’s having an impact on prices here in the UK, with increases passed down the food chain on everything from aluminium systems to reinforcements.
It’s very easy to imagine that the UK window and door industry operates in ‘splendid isolation’, but the reality is that we’re as susceptible to fluctuations in raw material prices as anyone else.
We’ve seen it in the price we pay for TPEs and Nitriles, which has gone up with the price of crude oil. Raw material costs are on the rise across the board: aluminium, PVCU, steel, glass. These are things that as a fabricator you have little or no control over but there are others where you can make savings.
Forecasts suggest aluminium will remain one of the key drivers of growth for the UK window and door industry. Ultimately, however, it’s about margin and raw material cost increases – and as they are passed down the line to fabricators, it eats into profitability.
Extrudaseal has lowered the cost of gasket and has worked with its customers to develop product enhancements, which either give them new USPs or which deliver enhanced efficiencies.
We extruded more than 10,000km of gaskets in the last year, alongside weather seals, Glazepta tapes and U-channels, pressure plates, box sections and bifolding door seals for leading systems, plus an extensive back catalogue of extrusions.
We work in partnership with fabricators. We’ll sit down with production directors, but the first thing we do is to get down on the factory floor and talk with the guys who are actually using it because they’ll tell you exactly how it’s not working for them.
Our design team will then take that feedback and develop drawings and prototypes and test those with manufacturing teams to make sure that we’re providing a solution that actually works in volume manufacture. We don’t put anything into production until it’s been fully tested and is fabricator approved.
We also extrude gasket in a choice of more than 1,000 RAL colours, which means that you create an effect where the gasket almost melts away into the frame, making the glass unit appear larger.
We need to look at the cost not simply in terms of unit price but also through life performance and opportunity. If you start losing business because installers are getting call backs because your gasket is failing, then ‘cost’ takes on a whole new context.
Alternatively, if you miss out on a sale because a competitor can offer a colour-matched gasket, that’s another cost. Putting all of that to one side, fundamentally, if you can buy your gasket 30%-40% cheaper – why wouldn’t you?
Most systems companies buy in gasket, which adds handling and cost, and which increases the price fabricators pay. We sell to fabricators and installers direct so those costs aren’t there.
You can’t control the price of raw aluminium but you can pay less for your gasket.