Volume 41, Issue 3 March 2006
Distributors and Contract Glaziers Handle Rising Energy Surcharges
Float glass manufacturers AFG Industries, Cardinal Industries, Guardian Industries, Pilkington and PPG have each instilled energy surcharges for the first quarter of 2006. Citing increasing energy costs as the basis, each manufacturer added a $2100 natural gas surcharge, as well as a $375 diesel fuel surcharge per truckload of glass. Distributors and contract glaziers have since been forced to make changes in their operations as a way to compensate for the increase in prices.
“It [the surcharge] has made everything priced higher than it should be. We order glass per square feet, and for example, the other day we ordered two [lites] of glass and it cost $25 for the glass and $23 for the fuel surcharge,” says Jeff Talbott, who works for Airtite Windows, Siding & Sunroom in Knoxville, Tenn.
“Everybody I buy from has increased their prices, from mirrors, windows, shelving, etc. They add the new surcharge and they don’t take it away. It’s just going to go up, up and up,” says Maureen Spotts, owner of Building Products in Daytona Beach, Fla.
Lisa Milner, owner of Black Mountain Glass & Mirror in Black Mountain, N.C., says the surcharge increase has affected her business greatly.
“All of the prices on all of the glass, such as insulating glass, have gone up because it takes natural gas to make it and then gas to get it to us,” Milner says.
The changing prices pose a problem for contract glaziers when they give quotes, as well.
“It’s extremely difficult to give a quote for a job late in the quarter not knowing what the surcharges are going to be six months in advance. That is difficult at best,” says Dan Davis, manager at Parsons’ Penn Glass Co. in Erie, Pa. “It is a big problem in glass and now aluminum,” he adds.
But, glass companies are finding ways to cope with the increase.
“We try to guess [what the surcharge will be] as best as we can, based on the history of the surcharge. We try to work with distributors and manufacturers getting the purchase order in time so they can hold the prices,” says Davis.
“We’ve had to go up on our prices because of the surcharge. We don’t show it [the increase] as a surcharge; we show it as an increase in the price,” says Talbott.
Some companies, such as Black Mountain Glass & Mirror, have tried to not pass along the surcharges to its customers. In turn, however, these companies are feeling the effects.
“Well, we’ve eaten the cost for quite some time, but we’ve had to raise our prices, recently, to keep from going in the hole. We had to raise the prices to get a paycheck,” says Milner.
“When I explain the situation to return customers and tell them why the prices have gone up, they say, ‘What [prices] haven’t [gone up]?’ It’s as if they kind of expected it before they came to us,” adds Milner.
Looking ahead, most companies expect the increase of prices to continue. Spotts says she gets higher surcharges from glass companies almost weekly.
Davis says he has heard from his suppliers about another fuel surcharge increase. “Aluminum is going up 7 percent in March,” Davis says. “I figure we will also see another increase in the energy surcharge for glass. There are also rumblings of an increase in glass itself, because the raw material costs are going up,” he adds.
Talbott says he hasn’t heard if there is going to be another surcharge increase from glass companies.
“The first time they [companies] increased it, they sent a letter out in advance, but since then, they have just raised it without letting us know in advance,” says Talbott.
Milner says the price increase goes up quarterly, so she is hoping that once March passes, if gas prices continue to fall, the surcharges will drop. But she is quick to add, “Sometimes, once the prices are raised, they just stay that way.”
Vistawall Adds Second Extrusion Press at Greenville Plant
A second extrusion press at Vistawall Architectural Products’ Greenville, Tenn., manufacturing facility is now operational.
“Our new press will double the capacity of our Tennessee plant,” said president Tom Harris. “Plus this new short-stroke press extrudes a much longer billet, which means we can produce at least 25 percent more product, with less scrap, in the same amount of time as a conventional press.”
The press also provides for numerous improvements in both quality and productivity. The company says that since the press is almost completely automatic, production parameters from a quality production run can be stored and repeated in future runs. The press control system can also calculate an optimal run of the entire extrusion process, which, according to the company, provides a better product to anodize.
The current 250,000-square-foot facility in Tennessee has been in operation since 2001, primarily serving customers in the Eastern United States.
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