Posted 16 October 2012
It would be difficult to write this without acknowledging the current market conditions. Certainly some projects are being put on hold or cancelled and some sectors will spend a lot less this year on development and growth than they did last year.
There is still strong demand in some sectors however and while it appears fashionable to predict gloom, doom and despondency there are still a large amount of projects going ahead.
A common problem in the industry has been the fall in copper price which has resulted in practically every distributor holding stock that was purchased at significantly higher rates. With lead times of up to 25 weeks, an order placed in July 2008 with copper at USD$8800/ton would not have arrived until late 2008 when copper had dropped to USD$3200/ton.
Many distributors are now sitting on some very expensive stock. With much of the data and signal range we sell, copper is not such a significant part of the cost. On our higher copper content items we have decided to drop the prices to give you a saving immediately and to allow us to restock at new lower prices.
We have also seen more customers buying exactly the length they need rather than a standard drum length. This has reduced the average value of orders but increased the number of orders!
If you are experiencing cash flow problems please talk to us. We hate putting people on stop but if we don’t have a dialogue we fear the worst.
Finally the latest ‘Little Red Book’ has been very well received, expanded to include some new product ranges. If you haven’t got your copy yet send back the reply card with this issue. You could also win a torch!
Best wishes
Jon Herbert