HOW TO SURVIVE A DELUGE OF PRICE INCREASES

[2023 UPDATED]

In early 2022, I wrote that the challenge for 2022 would be how to survive a deluge of price increases. This challenge continues! Price increases seem to be relentless, caused by inflation, higher interest rates, port congestion surcharges and many other issues. Almost everything has an imported component, so no-one can escape the impact. We are all facing higher costs, shrinking margins, shortages, and strict budgeting.

So what are ways to cut costs (or increase income), and how can we help? Here are some things you could consider:

1. Salary cuts
2. Job sharing
3. Reduce staff
4. Automate 
5. Put prices up
6. Look for government incentives
7. Take a bank loan
8. Reduce debt
9. Shelve expansion plans
10. Remove “nice to haves” and luxuries from the budget
11. Work smarter
12. Sell scrap to vendors
13. Reduce stock holding
14. Take advantage of bulk or payment discounts
15. Replace an expensive raw material with something cheaper
16. Increase filler loadings if you can
17. “Upsizing” – replacing one grade with a cheaper grade that is the next size down

SERINA TRADING is in the business of fillers and extenders, so it is in those last two points that we might 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:

1. PAINT

The biggest cost item in paint is titanium dioxide, which has shot up in price and further increases are predicted. 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:

2. MASTERBATCH

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. 

However we are moving into unchartered territory where the total market size is shrinking due to the weak economy. 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.

SERINA TRADING has a very competitive white pigment called FP550, that can assist you in cutting  costs if you are open to targeting and creating new markets within the filled white masterbatch sector. We suggest you introduce a new  lower-TiO2 product which performs just as well. We have found that FP550 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. 

To work out the typical saving per ton TiO2 substituted with FP550, just subtract the FP550 price from the TiO2 price – the saving can be substantial!

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.

3. 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 filler 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, not just the D50: 

Our ASCOM 50T has a Topcut of 8.5 microns, so 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 free sample, so you can test out this theory for yourself.

4. UPSIZING

So here’s another tip for you. I call it UPSIZING.  As you know a mineral like calcium carbonate comes in different particle sizes, such as two, five and ten microns. The smallest particle size is the most expensive because it takes longer to mill, then it gets cheaper as the grade gets coarser. So just say you’re using all three sizes and now everything has gone up in price. 

The UPSIZING concept is pretty simple, but sometimes one can miss the obvious. Where you were using the 2-micron grade, test to see whether the 5-micron grade will do the trick in its place. Similarly, where you were using a 5-micron, see if you can’t use a 10-micron instead, and so on.

Our 10-micron calcium carbonate called ASCOM 10 is particularly good for this. That is because it has a D50 of 6.5 microns, not 10. So, it is not far off a 5-micron and many of our customers have found it to be a successful substitute. The cost saving comes in because you pay the 10-micron price and get (close to) a 5-micron performance. 

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 Contact Us

Happy experimenting, and stay safe out there!