Surface & Panel - Q3 2022

Page 98

WITH

Amir Bakhtyari PRESIDENT, SYNERGY THERMAL FOILS

Q.

Supply chain disruptions have rocked our industry. How are wood products manufacturers addressing supply problems? Are you seeing light at the end of the tunnel now that the COVID-19 pandemic is transitioning into its endemic phase?

Q.

The supply crunch created by COVID is not over. Demand is far outpacing supply in most cases. Global supply chain disruptions are especially pronounced for large cabinet manufacturers who require high volumes of material. They are at times still finding it difficult to get all the needed quantities for just about everything from hinges to handles to MDF. What used to be standard delivery times of two to three weeks are now three to four months or more.

The war in Ukraine has poured fuel on the fire. For one, U.S. sanctions have virtually shut off imports of Baltic birch plywood from Russia, which has been widely used in North America, second to domestic suppliers. Russia also makes a lot of MDF, mostly sold to cabinet and furniture manufacturers in Europe and the Middle East. Those companies are now looking for alternative sources, which puts added price pressure on the global MDF market.

Our response has included stocking up inventories of foil at our expanded South Florida facility and adding a warehouse on the West Coast to service customers. We can cover the customers who buy one roll each of eight colors, but when a customer needs material for a 150-unit project, we encourage them to plan ahead. We used to rely on customers’ historical order data to determine our inventory levels. Now we ask large-volume buyers to provide us with forecasts and to place their orders much further ahead. Most of them are doing that and our focus is having it stocked at our warehouse that is closest to them. Some customers will order it today even if they won’t need it for six months from now. They would rather have the inventory on their floor than wait until the last minute and hope that it’s available. We obviously encourage them to plan ahead as best as they can. The bottom line is that the days of “just-in-time” manufacturing are gone. Anybody who is trying to do just-in-time is never going to have all the materials they are looking for when they need it. I don’t think just-in-time manufacturing methodology is coming back this year or next. It’s more like hand-to-mouth manufacturing right now. Of course, we don’t want that to be our customers’ experience, but it’s impossible for us to estimate what volumes of each design to inventory and we are totally powerless to what happens over the water. At times, we see the third container come in before the first. Sometimes, our East Coast shipments will come in before our West Coast shipments. Other times, the container will be off the ship for a month waiting for the port to make it accessible to transport from the storage yard. 98

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How has Russia’s invasion of Ukraine impacted the supply chain situation?

Another obvious, big impact of U.S. sanctions is rising fuel costs. These increases affect the delivery rates of all modes of transportation—ships, trains, and trucks—further adding to supply chain disruption price spikes. We’ve heard a lot of people say that it’s hard to make money because after they give someone a price, they turn around to buy the material and find it’s gone up double digits. That is not a reflection of our pricing but since we are part of mix, we hear about it.

Q.

What new or emerging design trends are you seeing in decorative surfacing products? We’ve seen a big shift away from dark colors. Hardly anybody wants Chocolate Pear anymore. Instead, it’s lighter wood colors that are more and more in demand. Shaker doors are immensely popular as are our super matte and high-gloss finishes. Grays are also still popular and we’re seeing more interest in blues. Every once in a while, someone will ask for green. That was never requested before! I think the biggest emerging trend is matching programs. I don’t hear a lot of cabinet or store fixture customers say they just want white oak or walnut foil anymore. What they really want is a white oak or walnut thermofoil that matches a specific brand of TFL or HPL. As a result, we are more and more engaged with all of the new and established North American panel laminators to see what matches we might offer based in many cases by our customers’ requests. s p


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