4
Meeting with Triumph
Fastener & Fixing
Magazine
18 Alban Park,
and Disaster?
Hatfield Road,
St Albans,
The problem with the expression ‘tipping point’ is that, as often seems
Hertfordshire,
to happen, something with a fairly specific meaning is rapidly applied,
AL4 OJJ, UK
pretty carelessly, to all kinds of situations. Doing a bit of research, the
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expression appears to owe its roots to epidemiology, as a description of
the point at which an ordinary and stable phenomenon – like a low-level
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By Phil Matten
flu outbreak – turns into an epidemic of crisis proportions. I suppose in a
Publisher
more general sense it describes the level at which the momentum for
Jeremy Ramsdale
change becomes irreversible.
jerry@fastfair.net
Why am I pondering word origins? Well, it is because the expression has come to mind regularly
over the last few weeks, as news of soaring raw material and other fastener input costs have
Editor
poured in. Combine that with the looming deadline for a decision from the European Commission on Phil Matten
preliminary antidumping tariffs and the initiation of an antidumping investigation in the US on
phil@fastfair.net
threaded rod, and I recall a conversation of a few months ago with Alfons van der Aa, CEO of Fabory.
At the end of an interview we debated the state of the global fastener industry and the current
Assistant Editor
economic trends and talked about the potential for unforeseen consequences. Raw material
Will Lowry
increases, had not, by then, begun to reach their current giddying heights. The potential impact of
will@fastfair.net
the credit crunch was becoming obvious if not clear. Nevertheless the premise was that the
Advertising Director
application of significant antidumping tariffs on China could, to use another expression, become the
Jamie Mitchell
straw that broke the camel’s back.
Now, of course, it depends on what your business is and where it is located as to how you feel
jamie@fastfair.net
about this particular camel’s back being broken, but the discussion actually wasn’t a partisan one at
Senior Advertising
all. What it did explore, though, was the point at which there could be radical and irrevocable
Executive
changes in the way the global fastener industry functions. It is a fact that, whatever the product or
Harry Whyte
industry, China has ceased to export deflation to western economies and is strongly exporting
harry@fastfair.net
inflation. As we now know, and have considered in a special report in this issue, steel cost increases
have dramatically impacted fastener manufacturers wherever they are based. There are additional, Advertising Executive
wide-ranging inflationary pressures, specific to China as its economy and business structure rapidly
Claire Lake
evolves. Many of those factors are not entirely unique to China – India is also suffering inflation at
Claire@fastfair.net
levels well above 7%. Increases in the cost of staple food commodities, oil products and energy are
impacting other Asian countries.
Production Manager
Getting back to tipping points, the current pressures on fastener costs surely cannot be sustained
Gemma Edwards
– can they? Inevitably each level of the supply chain, starting at ore and coal extraction, has pushed production@fastfair.net
for maximum possible gain.
At some point, there has to be a correction, doesn’t there? Yes, very probably – the question is
Fastener & Fixing Magazine
is a dedicated, trade-only
when and at what level? What, though, is unrealistic is to expect the lid to be slammed back onto
publication which is circulated
Pandora’s box. All the fundaments are strongly inflationary. Raw material supply is controlled by a
freely throughout the European
handful of companies. The steel industry continues to consolidate and is understandably committed
trade.
to maintaining profitability. Energy and other staple costs show no signs of reverting as population
and economic growth drives demand. Mono-dimensional fiscal control through interest rates is not
Disclaimer
going do a great deal when inflation is strongly supply driven. Fastener manufacturers have
The Publisher cannot be held
necessarily committed to materials for production. Wholesalers and distributors have committed to
responsible or, in any way, liable for
errors or omissions, during input
inventory and forward orders. The increased costs are firmly ‘in the system’.
or printing, of any material supplied or
So, maybe, just maybe, we are hovering on the verge of a tipping point for this industry, which
contained herein. The Publisher also
could mean all bets are off. There are a number of potential consequences, and some early
cannot be held liable for any claims
indicators of them that can already be discerned. Fastener end users, locked into cost-down cultures, made by advertisers
are seeking to, and in some cases apparently succeeding in, bypassing the import and distribution
or in contributions from individuals
structure that has serviced them historically. There are reports of accounts lost as companies set up
or companies submitted for
their own logistic chains to handle product from Asian fastener factory gate to their own lines.
inclusion within this publication.
Conversely, a thought again owed to Alfons van der Aa, the combination of need presented by
Copyright
severe antidumping tariffs, and opportunity, in terms of the huge foreign exchange surplus China
Entire contents copyright
now possesses, could just see major Chinese fastener enterprises buying along a supply chain, into © Fastener Fairs Limited
returns that they clearly perceive as outweighing their own tight margins. Both are big changes in
No part of this publication may
business culture, but that is the nature of a tipping point, changes are no longer incremental or
be reproduced, stored in a retrieval
marginal.
system, or transmitted in any form
or by any means without the prior
Of course, everything might just subside and allow us all to slip back into our normal ways.
permission of the publisher.
Personally, I cannot see it. While the tipping point may not be reached, while there may not, in the
end, be an epidemic, the one thing that is likely to be constant…. is change. Which places a real
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