Veka on raw materials surcharge: “Protecting our customers, not profiting”

The raw materials surcharge across the fenestration industry has been a bone of contention for many since its implementation by systems companies, with some people attributing it to just another way for systems companies to make more money. Veka has offered a clear view on the purpose of its surcharge; it exists to protect their customers, which will ultimately protect the industry.

The formidable economic environment has had a huge impact on the whole supply chain, Veka’s representative argued. Being at the mercy of the crude oil market, we are all facing exceptional costs. The challenge for Veka and all systems companies is to manage and mitigate these price increases.

Tim Taylor, Veka’s commercial director, said: “Pricing fluctuations each month are frustrating for customers. As a business, we feel those frustrations too. But by being transparent and notifying everyone 4 weeks from implementation, our customers have the information and time for their own business planning. We will continue to be very clear on the numbers, month on month.”

Veka’s raw materials surcharge is attached to the public S-PVC (U) index published by Plastics Information Europe, which the business argues is ‘the true indicator’ for the cost of raw materials. This is tracked closely by Veka’s commercial support team, which then bases the business’ surcharge on the previous month’s movement in price. This allows for being reactive and means that they can pass on cost reductions to customers immediately.

This month, for the first time since Veka has had to implement the surcharge in 2021, Veka has managed to reduce the surcharge. The reduction is to be sustained throughout August.

Tim continued: “I have visited many customers recently that continue to have healthy order books. As a business, we will continue to focus on service and delivery performance. As the challenging economic conditions push us, like the rest of the industry we will continue to respond: to do everything possible to manage costs, put our customers first and ride out this rocky period together.”