UK Financial

Raw material surcharge

Oldham, 12 April 2017 – Due to the unprecedented increases in raw material prices we have incurred since the end of 2016 we have taken the regrettable but necessary decision to implement a Raw Materials Surcharge (RMS) across all European and Middle East countries.

  1. The RMS will apply to all shipments of our elastomeric foam materials from 1st May 2017 and in the UK & Ireland this includes the following product ranges:

    AF/ArmaFlex Class O, ArmaFlex Tuffcoat, HT/ArmaFlex, NH/ArmaFlex, ArmaFlex Duct, Arma-Chek Silver, ArmaFlex LTD, ArmaFlex Ultima, ArmaFlex Rail, ArmaFlex Protect and ArmaSound products.
  2. The RMS is based on four transparent and independent indices which have a major impact on our manufacturing costs. These can be reviewed and monitored freely on the internet:

    Aluminium (LME): http://lme.com/en-gb/metals/non-ferrous/aluminium/
    Bromine (100ppi): http://www.sunsirs.com/uk/prodetail-643.html
    PVC (KI Web): https://www.kiweb.de/
    Butadiene (IHS): https://connect.ihs.com/home
  3. Our reference will be the “Armacell Price index”, which is set from December 2016 at a value of 100. The value of the RMS to be implemented on 1st May depends on the average value of the four indices in February 2017, when compared with December 2016 levels.
  4. The weighted average of the four indices that comprise the Armacell Price Index grew by 15.4% from the end of December to the end of February. We will apply only half of this percentage increase, so need to apply an RMS of 7.7% (of our net sales). This will appear on each line of our invoices as “Raw Mat. Surcharge”.
  5. This variable surcharge will be reviewed every 6 months. Initially it will be applied from 1st May until the end of October. The next surcharge (to be implemented 1st November) will be based on the August 2017 Armacell Price Index when compared with our December 2016 reference.
  6. Future values of the RMS can be either lower or higher than the 7.7% start point. If the weighted value of the Armacell Price Index varies by less than 2% points – downwards or upwards; initially between 5.7% and 9.7%, then the RMS will not be changed.

We are committed to being transparent in applying this surcharge across all our markets. Our sales teams in all European and Middle East countries remain at your disposal to answer any of your questions and we thank you for your understanding.

 

Access our FAQ page for more information