Rising raw material prices threaten European flexible tubes industry

By Andrew McDougall

- Last updated on GMT

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Having registered sales volume increases so far in 2010, huge raw material price hikes threaten to derail the European tube industry, says manufacturing assocation.

“The raw material price developments in the last twelve months are now drastically squeezing the European tube producers’ margins,”​ said Martin Hintz, president of the European tube manufacturers association (etma).

In the last year, oil prices have risen by 23 per cent and the price of aluminium has increased by 40 per cent.

Higher still, the plastic materials, PE-LD and PP, have risen by 53 and 64 per cent respectively, second only to the price of paper, which has increased by 77 per cent, according to etma reports.

Knock on effect

As a result of these price increases, many haulage contractors, lacquer, printing ink and cardboard producers have all raised their prices, piling more pressure on the European tube industry.

Further problems have arisen, as customers are requesting longer payment terms from the tube producers, and the desire for short term orders with smaller lot sizes is demanding enormous flexibility from tube producers.

Hintz, who was elected president a few months ago, believes this could become a major problem for the industry because business margins are a precondition for securing innovativeness, sustainable production and necessary investments in new technologies.

Glimmer of hope

However, these developments come on the back of a positive start to the year as the European tube industry enjoyed two-digit increases in order income, in certain cases.

By the end of the year, etma members are confident that tube deliveries will have exceeded 10 billion units again.

The positivity continued at the annual ‘Tube of the Year’ competition, as innovation took centre stage, despite the difficult economic situation.

Hintz added: “etma members mastered the 2009 crisis thanks to productivity improvements, intelligent working time systems and the innovative spirit of the industry.”

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