We are writing to you due to the unstable economic environment in the world today, bringing many challenges to our industry. We touch on some of our challenges below:
Plastic tax: As you are probably aware, HMRC are placing a tax on plastic packaging on any goods with less than 30% recycled plastic content, as an incentive to drive a demand for recyclable material and divert unnecessary waste away from landfill and incineration. The tax will come into force on 1st April 2022 and will be charged at a rate of £200 per tonne. As a result of this, product affected by the tax will increase, such as our Plastic Mixing Cups.
Ukraine: Russia’s invasion of Ukraine has created a major challenge, with increased cost of raw materials highly likely to happen. With oil prices being reported at a 14-year high and cutting imports from Russia, this has led to supply chain issues, therefore getting materials such as oil and metals will be costly as Russia and Ukraine are big suppliers of metals and other commodities.
Fuel price/Transport issues: There continues to be so much uncertainty in the economy and carrier companies are now experiencing high levels of inflation (with the Government advising this may peak at 7% in the summer). Additionally, there are several issues we are facing, such as:
The above are only a few of the issues our carriers are facing, but all leads to key costs increasing by as much as 20-30%.
As well as transport issues, we are also faced with the fuel prices escalating due to the oil price surge. This has resulted in carrier companies applying surcharges more than 15% to cover the rising fuel costs.
Container costs: Since the Covid pandemic, the Global supply chain issues remain unstable, with the Russian invasion of Ukraine adding to this. Therefore, containers and ships are being diverted, leading to container shipping costs going from $2k per 40ft container to $15k and these costs are still predicted to increase further. This has made importing of certain goods extremely costly, making us look elsewhere for suppliers, meaning a slight cost increase in the goods.
Our Strategy: To reduce these increases as much as we can, we have raised our stock levels by 80% already this year and are continuing to hold prices where we can for our customers. Nevertheless, as the situation continues to be unpredictable, replacement stock on some items are coming in at a higher cost than our currently selling price. Despite this, we are always ensuring stock availability at the best price possible.
Please check the prices on our order confirmation after placing orders for any changes in costs.
If you have any concerns or queries, please do not hesitate to contact me and I'd be happy to work with you and your company to traverse any challenges together.
Ultrimax Managing Director
Other Reading You May Be Interested In
Why Are Prices Rising In The Paintshop ? - View Article
Guaranteed reply in 1 hour within business hours.
Thank you for your interest in Ultrimax Coatings Ltd.
There was a problem with the form submission, please try again.