All in the same boat
Flexibility is key when stability is not on offer. Levchenko notes that logistics costs can be higher and safety stocks must be carefully managed. “All our competitors have the same circumstances to work with. Indexes do not reflect the whole situation as they include different grades of resin for different applications, whereas we are concerned with PET.”
Justina Volcek, product development specialist at PET resin and polyol producer NEO GROUP, agrees that while the indexes may differ from reality, this brings with it opportunities to circumvent issues - when handled carefully. “Price and availability of raw materials are the problem, it’s not just one or the other. PET production is continuous, 24/7, 365 days a year, so we can’t just stop it even if we wanted to, and it’s the same for our customers, as it can take up to two months to restart production with all the necessary cleanings.
“Maintaining a supply of raw materials is paramount and it’s up to us to keep that flow through continuous monitoring of the market, seeing where containers are available, and being prepared to act quickly and decisively.”
With NEO GROUP and RETAL sister companies at RETAL Industries, the teams can communicate in a quick, clear, and easy manner – a valuable commodity in difficult times. Levchenko says, “Our vertical integration is a huge advantage in terms of security of supply because we have an extra layer of openness.
"We’re like family; you might not always like what they say, but they have your best interests at heart. The fluctuating pricing and availability issues we’ve seen in recent months are now showing positive signs as each of the force majeures recede, so now we’re focusing on accurate forecasting.”
‘Accurate forecasting’ has certainly taken on a new meaning now that all industries are accurately aware that anything can happen. Buying on spot base or on short lead times are not practical solutions for unforeseen complications as everyone is trying to do the same thing. The only way to maintain the least fluctuation possible in terms of supply is to accurately share real-time data, and to create - and honor - contracts that have been carefully designed to meet demand, with allowances for straight-talking when everyone is in the same run-aground boat and keen to get sailing again.