By: N Jayalakshmi
Last updated : December 02, 2021 11:07 am
Signage and other solutions and supplier segments have been hit hard by the recent steep rise in prices of raw materials like aluminium and steel. Retail4Growth reached out to a few industry players to get their take on this.
The sharp rise in raw material prices in the last 5-6 months has had an adverse impact on many industries. Industries such as signage and those catering to the retail industry, including store fixtures and others, have been hit hard and are feeling the punch, being forced to absorb the costs.
Prices of metals like aluminium, mild steel and stainless have seen a 30-40 % increase in prices in the last 6 months.
Agrees N Badri Narayanan, Managing Director, Sinex Systems Private Limited/Euroceil Systems Private Ltd, “Yes we are facing huge problem because of the cost escalation. Earlier the price increase would happen once or twice a year and we would be informed about it well in advance by the suppliers, so we could be prepared. But now post Covid, it has been increasing continuously and we have to keep watching it like the Sensex. So any project we
Says Harjee Gandhi, Director, HG Graphics, sharing his concerns, “The raw material cost is definitely affecting us. People who are working on volumes are still able to survive, but businesses that have already been hit are hardly able to survive. Metal is the material mainly affected, but the fact is that whenever something of this sort happens then everybody tries to take advantage of it, so even the cost of other materials like vinyl goes up.”
Given the situation, some retail clients do agree to revise the contracts and purchase orders based on revised pricing due to the increase in raw material cost, but not many do, as these players point out. This is especially so now since many of the retailers are also facing the brunt of the pandemic and are themselves under margin pressures.
Nevertheless, some of these solution providers have sought to communicate to the clients on the need to revise pricing or include an escalation clause in the contract so that any increase in raw materials will result in a corresponding increase in the total price of the final product.
He adds, talking about the clients,”Retailers also understand that there is an impact and that there is a need for collective effort to manage the situation. We have both walked a few steps and managed the situation through proper dialogue.”
As Murali too says summing up, “These are tough, unprecedented times, and there is no tailor-made solution. All of us stakeholders have to do our bit and take a viable decision.”
Indeed, if all stakeholders in the eco-system, the suppliers and the buyers, could come together, understand each other’s pain points and arrive at a consensual approach that takes away at least some of the pain points for all concerned, then perhaps everyone could tide over the challenging times with as less damages as possible.