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Industry Advisory – Q3, 2021

Empty warehouse/distribution center

If you joined us last time or have received our email updates and written notifications, you are probably well aware that the chemical industry (amongst almost all others) has been experiencing unprecedented turbulence. This turbulence is proving a mighty challenge for manufacturers and suppliers in the sealant and adhesive industry, resulting in extended lead times, product shortages, and extremely high spikes in costs.

As a manufacturer, these challenges have forced us into inefficient jumps in production scheduling, idle machines, and more significant investments in securing materials. It has also required a concentrated effort on vendor follow-up, product sourcing, cost tracking, analysis, and customer communication. Unfortunately, it also means price adjustments, which proves challenging when our vendors cannot even tell us the cost until materials ship. To top it off, has anyone had a hard time finding and hiring good team members lately?

Maybe this is the new normal everyone has been talking about. 2020 had its challenges with Covid, but 2021 has been a close rival, presenting additional challenges that we have never experienced before.

Many of our vendors declared force majeure on critical materials, including acrylic monomers, polymers, and chemicals used in our acrylic latex products; silicones; MDI, TDI, and polyols for foam sealants; oil derivatives and polymers for our grease compounds and auxiliary chemicals for our lubricants.

The shortages weren’t limited to just chemicals. Caulk tubes (imagine a caulk manufacturer without caulk tubes!), bottles and bottle caps, and other packaging components that are crucial in the manufacture and distribution of our products are either under allocation or have lead times of eight weeks or more.

“To say this has been a challenging time would be an understatement. With raw materials delayed and ship dates being only optimistic estimates at this point, planning production has been a challenge. Hectic.” says Bobby Hamm, Everkem Production Supervisor.

To say this has been a challenging time would be an understatement. With raw materials delayed and ship dates being only optimistic estimates at this point, planning production has been a challenge. Hectic.”

– Bobby Hamm

Production Supervisor

“We try to run similar products one after the other whenever possible for the sake of efficiency – like clear silicone and then white. Or our Ecotex 25 product followed by our SilTex 40. These shortages, delays, and allocations have made that virtually impossible to do with any consistency. This forces us to jump products and leave machines empty.

As much as we hope this will loosen up soon, we still see gridlock and additional increases in Asia and Europe. Most chemical industry professionals seem to agree that it will most likely get worse before it gets better as shipping container shortages persist, compounded by the rapidly approaching holiday season. That said, we are thankful to all of our partners and friends who have been patient with us as we’ve navigated these choppy and uncharted waters.

Our plan moving forward is to continue sourcing excess materials when and where possible from our existing vendors, while building relationship with new suppliers. This should enable us to have backup supplies at a more competitive price.

“I think this has taught everyone how important it is to be open to relationships with multiple suppliers because you never know when you may need a backup,” says Materials Manager David Gorrell.

“I’m not going to lie,” says Steven Johnson, Southeastern Territory Sales Manager. “It’s been frustrating and stressful as a sales person. It makes it challenging to sell and to grow business when everything is in such short supply and at a higher price.

The best we can do is to keep good communication and maintain good relationships with our customers and to continue to ask new prospects to keep us in mind as an option moving forward once things settles down. Right now, you never know if we will have something when their existing vendors don’t, or vice versa. It’s a good idea to keep your options open.”

To all of you who have stuck with us through the Great Recession of 2008, we all made it through. Similar to then, we have an opportunity to learn, grow, and adapt to find balance amidst the chaos. In crisis, there is opportunity, and in these challenging times we will grow stronger. We thank you for your patience, understanding, and continued support. We look forward to continuing to serve you when the smoke clears.