Raw Material Shortages - wallcoverings

Press Release

20th January 2011

RAW MATERIAL SHORTAGE CONTINUES IN 2011

The British Coatings Federation (BCF) is warning that a shortage in raw materials used in the process for manufacturing wallcoverings could be cause for concern throughout 2011 and will put increasing pressure on manufacturers leading to a continuing inflationary spiral.

The short supply of raw materials was originally reported by the BCF in the first half of 2010. This situation is likely to get worse in 2011 and although predominately affecting other areas of the coatings industry - the wallcoverings sector is also feeling the repercussions.

Supplies of plasticisers, particularly DINP, vinyl resins, paper and cardboard have all become restricted in recent months. Cotton, the basis of many textiles used by the wallcovering industry, has suffered from prices that have been increasing sharply due to crop failures in Pakistan, caused by the flooding disaster in 2010 and generally lower yields in other parts of the world.

The supply of pigments has been hit by mounting environmental challenges and increasing intermediate costs. Organic pigments for the printing ink industry are sourced from China and India where a surge in domestic demand has put limits on the material available for export. The availability of a key intermediate in the manufacture of Violet 23 has been seriously limited, leading to reduced availability of the pigment itself. China and India have announced more stringent environmental rules for the production of pigments and in addition, the energy saving program in China has affected many pigment and pigment intermediate suppliers.

Titanium Dioxide has been another area of concern. The product has been in tight supply for over a year but none of the European suppliers has announced an expansion in capacity. Given the long lead time to put in extra capacity, it is clear that this problem is not going to disappear quickly.

“The short supply of raw materials continues to be of major concern to our member companies and procurement has become a daily nightmare," commented Tony Mash CEO of the BCF.

“There is little or no clear view as to how long the shortages and product allocations are likely to last. As a result, wallcoverings manufacturers face a situation in which they have only minimal control over the cost and supply of the raw materials they need to manufacturer their products. The wallcovering industry needs to raise awareness of these difficulties to both its suppliers and customers."

-ENDS-

For further press information please contact Emma Marsh at CIB Communications on Tel: 01372 371 800 or Fax: 01371 371 801.