How the world has changed in a couple of months. From business as usual, suddenly we all have a new challenge: how to survive the Lockdown!
When a business loses a whole month of trading, the priority has to become COST SAVING. You still have a years’ worth of costs but only 11 months of income, so tightening the belt is essential to survive. Loans or government assistance can also help to bridge the income gap.
To make matters worse, the currency has also weakened causing price increases on imported inputs. So what are the ways to cut costs, and how can we help? Here are some things you could consider:
- Salary cuts
- Job sharing
- Reduce staff
- Request a payment holiday on rent
- Apply for government assistance
- Take a bank loan
- Reduce debt
- Shelve expansion plans
- Remove “nice to haves” and luxuries from the budget
- Work smarter
- Sell scrap to vendors
- Reduce stock holding
- Take advantage of bulk or payment discounts
- Replace an expensive raw material with something cheaper
- Increase filler loadings if you can
SERINA TRADING is in the business of fillers and extenders, so it is in those last two points that we can play a role. We have given some thought to how our products could help customers cut costs in different industries. After all, we need YOU to survive for us to survive! Here are our suggestions:
The biggest cost item in paint is titanium dioxide, which has shot up in price lately due to the weaker currency. We wondered, would it be possible to make a reasonable-quality paint without adding titanium dioxide at all? So we asked an independent paint consultant to develop a TiO2-free contractor’s paint formulation, which we are offering you for free!
Click on this box for your free download:
The high price of titanium dioxide has also had a major cost impact on plastic products such as TiO2-filled masterbatch and other white compounds. Traditionally these filled products contain 50 – 80% TiO2 and are specified by the converters for end use.
In some instances, the percentage TiO2 is over-specified or is not completely relevant to the required performance of the end product. This results in unnecessary cost, but convincing the converter of this has always been a challenge. SABS regulations have also been a limiting factor when trying to change the status quo.
However, with the arrival of the Covid-19 pandemic we are moving into unchartered territory where the total market size will shrink due to the lockdown and resulting economic hardships. The market will become considerably more competitive as everyone fights for a piece of a smaller pie. Those willing to think “outside the box” and make changes to the way things were done before, will be the ones more likely to survive this crisis.
SERINA TRADING has a very competitive white pigment called FP460, that can assist you to cut costs by targeting and creating new markets within the filled white masterbatch sector. We suggest you introduce a lower-TiO2 product which performs just as well. We have found that FP460 can comfortably replace 30% TiO2 in a TiO2-filled compound without compromising performance. In UV-related applications, performance was in fact improved due to the lower overall TiO2 content.
Typical saving per ton TiO2 substituted with FP460: R 16 600/t
Potential cost saving per ton of product produced at 30% TiO2 replacement
50% TiO2 R2 490/t
70% TiO2 R3 480/t
We encourage you to experiment with higher than 30% replacement, to achieve higher savings.
Applications that could benefit from this suggestion are pigment blends, masterbatches, filled masterbatches, PVC Compounds and dough moulding compounds.
- PVC PIPES
As is the case with most fillers, the more calcium carbonate you add the more you save, but also the more the quality of the product is compromised. It is always a trade-off of savings vs properties.
In PVC pipes it is usually the strength that is compromised the higher the CaCO3 loading, particularly elongation and notched impact strength. Too little and the pipe is too expensive, too much and the pipe does not pass the SABS test. In South Africa the general filler loadings are between 9% -16%.
We have noticed that PVC pipe producers in India have been able to get away with much higher loadings – up to 50%. What is the secret to such high filler loadings, or are the quality standards there so much lower?
I wish I knew the answer to this, so I could pass on a useful tip! Perhaps they have a secret strength-enhancing additive that we don’t know about.
What we do know however, is that the finer the filler, the higher the loading you can achieve without loss of properties. So a finer grade (even if slightly more expensive) can be more cost-effective than a coarser grade. This table compares three 2-micron coated grades currently available in South Africa. It is the Topcut that you should look out for:
|Comparing 2-micron coated grades of CaCO3|
Our ASCOM 50T has a Topcut of 8.5 microns, which means basically all of its particles are less than 8.5 microns. This should give it an edge as a filler against the other two competitors which have Topcuts of 10 microns. We’d be happy to send you a trial sample, so you can test out this theory for yourself.
So, there you have it. Some ideas from SERINA TRADING to help you cut costs in these challenging times. For a quote or sample, just reply to this email.
Happy experimenting, and stay safe!