News
Press article of the VVVF in the Paint & Ink magazine of the association of Paint and Ink producers (VVVF)
09 Aug 2011 - 09 August 2011 - The VVVF (Paint and Ink association) has spread a news article in which she speaks her concern about the rising raw material prices. The raw material situation already was concerning but the unannounced strengthening of the economy made raw materials supplier having difficulties supplying raw materials. The crisis in the building branch is getting worse. The VVVF is reporting unknown price increases on the short term in a few raw materials.
According the VVVF the cause of this price increase is the rapid increase of worldwide demand of certain raw materials and on the other hand a too strongly reduced production capacity. The situation in 2010 was already very concerning, tells VVVF managing director Martin Terpstra, but since the beginning of this year it only became worse. Price increase percentages of the most important raw materials like binders, solvents and the widely used titanium dioxide is running in double digits.
Terpstra notifies that many of the raw materials suppliers decreased their production capacity and volume as a result of the economic downturn next to that they also fired employees to cope with the economic downturn. The suppliers were surprised by the rapid recovery of the world economy. Therefore they could not cope with the increased demand for upcoming countries.
Raw materials in the Paint & Ink Industry make up more than 50 percent of the total cost. It shall be no surprise that the increase in raw materials and the long delivery times have an enormous impact on the resistance of the industry. This resistance has already been tested by the strongly diminished situation in the building sector.
The biggest part of the production is done by members of the VVVF. After a recent dip in 2009 the total delivered building in 2010 decreased again with 32 percent. This results in a decrease of turnover of consumer paint with 3 percent after a decrease of 12 percent in 2009.