ANALYSIS
January Perspective A review and preview of the European Fastener Industry
One of the persistent features of our discussions with fastener companies during the second half of 2011 was the sense of disconnect between current business performance and the increasingly doom laden predictions of financial and economicmedia.
A
s the New Year approached we asked a wide spectrum of European fastener business leaders to give us their retrospective of 2011 and thoughts on the prospects and challenges for 2012. We asked them to consider not just economic and financial issues but also technology drivers for the fastener industry and to identify priorities for the fastener industry. We are grateful to the many senior managers that took the time to respond and clearly invested considerable thought
in doing so. Many were happy their contribution should be attributed. From the submissions of those that provided their thoughts on a background basis we have drawn together a summary. No one’s thoughts have been omitted. If ideas are not represented it is simply because they were not provided. Through necessity
of space, some contributions have been edited but we have been meticulous in retaining the core of each contributor’s perspective. Of course, the sample is self-selecting and we make no claim for how representative it is. However, the final review, to our minds, makes fascinating reading. Hopefully you will agree.
Anders Karlsson president: European Industrial Fastener Institute
W
e all agreed at our EIFI congress in May that we expected 2011 to be a good year but unfortunately we are most often wrong. This time I do think our prediction has been correct though the final outcome remains to be seen. Also the picture is very heterogeneous, depending on the type of business, region and customers, but generally 2011 will be remembered as the year we fully recovered from 2009. When speaking to the machine industry we understand that new investments
have been on record levels, which is good evidence for an optimistic view of the future. This in an economy that is so full of negative information in all newspapers that it has the risk of being self fulfilling, but so far the Euro and political crisis has not had a dramatic effect on the industry even if we have seen a slow down during the last quarter. We have all been going around and waiting for a new meltdown like 2009 but have not been able to notice it yet. Some events affected us more than others. Strangely two of the main factors occurred at more or less the same time in the spring.
“ For sure, some countries and regions will have to change old habits and it will be very painful for all until we establish a growth phase again.”
The giant Japanese Tsunami was not only a big tragedy for Japan. It also reminded us of how interlinked the world economy is today. Suddenly there were supply shortages in Europe, stopped factories and lots of uncertainty on how the supply chain could be changed at short notice. Luckily Japan has recovered quickly and the effects were only short lived in Europe. At the same time we had, once again, a gigantic increase in steel prices
that affected our industry immediately from the second quarter of the year. Although not a natural disaster it hit us all with the same effect, suddenly and unexpected. The main topic in the industry, once again, was how to recover these increased costs. It cannot be right that the main proportion of our time is spent
discussing this constantly with our customers instead of developing the business. EIFI supports the development of the DSV steel price index (see
www.schraubenverband.de) and its usage as a reference. All possible efforts are taken by Deutsche Schraubenverband to ensure that it reflects the development of the steel wire cost and with a track record from 2004 we can all only agree that it is true and correct. It must be in the interests of all parties to use such an index to adjust the final prices to customers
automatically. Instead of having regular negotiations it is necessary only once to establish a model for how the index is applied. Such discussions must take part by the commercial parties and EIFI has no mechanism for the index’s implementation. Positively, some customers have already decided to use the index and thereby save a lot of time. We can only predict that steel prices will continue to fluctuate over time without any influence from the fastener industry. What can we expect of 2012? Is the double dip finally coming? With the political uncertainty in Europe it is extremely difficult
to predict anything. For sure, some countries and regions will have to change old habits and it will be very painful for all until we establish a growth phase again. And for our industry? We are, for sure, dependant on these political decisions and will have to be flexible to adjust ourselves to the situation. The fasteners industry employs around 50,000 people in Europe so many depend on our fortune and we are an important part of the economy - even if rather anonymous. We would like to wish everyone a successful 2012.
56 Fastener + Fixing Magazine • Issue 73 January 2012
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