Dear Valued Customer
This past year has certainly been a very challenging year for businesses in South Africa, who have had to endure very unique events. Roemers Grinding Works has through these times been working very hard to improve our service to our customers by adopting various LEAN manufacturing principles throughout the business. We are glad to be seeing many successful implementations of these additional processes and look forward to pleasing our customers more in future.
Over the last year local steel prices saw quite an increase due to more reliance on imports, issues around our ports and heavier fees and tariffs making importing of raw materials difficult and expensive. These steel prices climbed, but then stabilised after the shutting down of local mills and massive reliance on foreign imports in carbon and mild steels has entwined itself in our business and economic fabric. Copper and silver, which are used in the manufacturing of our Inlay blades, have however increased by 14,2% putting pressure on our ability to keep pricing down. It is however the imported alloy steel prices for D2, HSS, O2 and Stainless steels that have really rocked the boat, with an average increase of between 24% and 62% due to things like increased transportation costs and increase alloy and scrap surcharges in addition to the added energy tariff due to the war in Europe. Also import costs have increased due to the changing laws around import and protection tariffs and storage. Energy (+17,6%) and labour costs (+7,2%) as well as fuel adjustments (+7,8% this year) have not made life much cheaper either. The real shock of course has been the Prime Lending Rate shooting up to and holding at 11,75%. Electricity price increase at 17,6% and the addition of “admin fees” despite us being predominantly relying on Solar Energy provision has added quite a chunk to the operating cost.
However, some prudent savings and effective stock management and a lot of recycling have managed to alleviate some of these pressures. But it has been incredibly difficult to control the cost increases and are thus forced to increase our prices by 7%, effective 17th of September 2024. However, savings can be achieved on specific manufacturing quotes where alternate methods or steels can be used or larger quantities can be produced at the same time, where these savings will be indicated to you on the quotations. In addition, selected services have actually achieved some savings and these will be communicated to you through the following weeks where they apply to the services used.
To limit the impact Roemers Grinding Works will honour all confirmed quotations received prior to the increase for 45 days after the increase date.
If you have any queries, please contact your Customer Service Consultant.
Warm regards
ROEMER’S GRINDING WORKS
