Pilkington Glass Price Increase

As the industry struggles to come to terms with the dual problem of the deepest recession for decades and saturation in the replacement window market, Pilkington have sent the following letter to its customers informing them of impending price rises:As you will be aware, the demand for raw glass in the UK in the last year has declined to unprecedented levels and revenues have fallen dramatically along with demand.Pilkington has taken action to reduce its cost base and to try to balance output and demand.

The Company ceased production on one float line in St Helens last October and has also closed five downstream branches across the UK. However, both demand and prices have continued to fall and despite the cost reductions, glass manufacture and supply has become uneconomic and the Situation cannot be sustained. As a result we have taken the decision to urgently and substantially increase the price of our raw glass. We understand that this will put pressure on our customers in the short term but we hope that you will recognise that it is vital in the long term to return prices to a viable level.

We will apply increases to the prices of glass products supplied by Pilkington in the UK & Ireland, commencing Monday 8th June 2009. Therefore, please be advised that, with effect from that date, price increases will be applied to all deliveries of glass products from Pilkington Building Products UK.

I’ve not included the full list of items to be increased, but the highlights are:

Pilkington Optifloat Clear 3mm-12m +50%

Pilkington Optiwhite +25%

Pilkington K Glass and Pilkington K Glass OW +10%

Pilkington Activ, Pilkington Activ Blue and Pilkington Activ Neutral +10%

In a period of deflation and increasingly cut throat competition, are installers likely to pass this price increase on to consumers? Of course not, so basically, Pilkington is forcing lower margins onto it’s customers.

Of course, if there was competition in the float glass market then we could switch to other glass suppliers, but as they work as a cartel then Guardian, Saint Gobain and Glavabel will follow suit.

Read the full story.

600450 Pilkington Glass Price Increase glassonweb.com

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