Rising costs lead to “tsunami of price rises” says Klarius
Gone are the days of stable pricing for UK manufacturing as the cost of energy and raw materials continues to fluctuate wildly, with the underlying trend being relentlessly upwards.
Like most manufacturers, the Klarius Group of Companies (including Klarius, Emissco and KMT) has absorbed increased price pressures wherever possible, offering customers a degree of product price stability. Tackling monthly and even fortnightly supplier price changes, usually with only a few days’ notice, is no mean feat. Now as energy and raw material prices are set to reach record levels, the burden will be felt throughout the supply chain.
“These are unprecedented times, we’ve had to regularly review the post-pandemic roller-coaster of material costs but most recently it’s been more like a tsunami,” says Mark Brickhill, CEO. “We used to guarantee customer pricing for 6-12 months, but now we’re having to pass on costs mid-month! Unlike petrol on the forecourt, our industry and customers haven’t experienced such fluctuations before and no amount of working with suppliers can protect end-consumers from the current cost price inflation, especially from fuel and energy.”
A particularly challenging area for the automotive and transport industries is the extreme volatility in AdBlue production costs. Large volumes of natural gas are used in the production of AdBlue. Russia’s actions continue to put pressure on European gas supplies, which is escalating gas prices, so AdBlue costs are on an upward trend. Consequently, this puts more pressure on car owners and the predominantly diesel-powered transportation industry – trucks, buses, shipping and rail.
“By my reckoning, half of Europe’s fertiliser, urea and AdBlue capacity is now moth-balled because of gas costs,” continues Brickhill. “Modern environmentally-friendly, low-emission diesels require AdBlue, and we’ve already seen 11 cost price changes since January with AdBlue four times more expensive than a year ago. Despite this we continue to serve our customers, whilst others are failing to deliver. This is thanks to sound supplier partnerships protecting AdBlue availability. Our customers include supermarkets, their home delivery van fleets and even the emergency services. We will continue to work together with all our customers to maintain supply, but this will inevitably mean further cost increases on very short notice. For what it’s worth, I’m very sorry for this and I wish we could protect customers from these costs. However, we’re a distributor and filler, not one of the gas producers.”