From:
Rob McGlennon
Sales Director
Deceuninck

I read with interest the letter from Euroglaze MD Martin Nettleton, in which he asks for views on whether upstream suppliers are increasingly encroaching downstream into their customers’ territory. Martin refers specifically to fabricators competing with installer customers, but this is a trend we’re seeing across the entire supply chain. Heading up the Sales & Marketing for a system’s company, I come across examples of other profile suppliers competing with customers every day. And it comes down to our industry’s elephant in the room – price pressure.

The further up the supply chain you are, the more you’re expected to - and indeed relied upon - for innovation and investment in new products and services that add value downstream. But there isn’t a finite pot of money to make this happen. The more that customers squeeze their suppliers for pence per metre savings, the less capex is available to invest in innovation. In the short term this may not seem significant, but longer term as in our industry now, the consequences become clear. Markets become crowded with more ‘me-too’ commodity products, trying to be sold on price alone because that’s the only point of differentiation left available. Suppliers are also then forced to compete with customers as they try to increase volume in the face of lower value.

While Deceuninck has not and never will compete with our fabricator customers, I do understand why some of our competitors have found themselves forced to do so. Whether at system company level or downstream as Martin points out, I believe we need to focus on the longer-term, sustainable health of our industry by maintaining realistic prices that allow for re-investment and innovation. In this way, we can all reap the benefits of a vibrant, growing market place rather than fighting on price in a diminishing market.