Feature Industry Comment
Bob Masters from Newey & Eyre discusses some of the products that have been affected by raw material prices over the years and looks at some of the new techniques available to the electrical engineer and contractor
he design and manufacture of some of the more commonly used electrical products has been affected by the volatility of raw materials costs such as steel and copper. Over the past few decades there has been a shift in mindset from producers who are looking to not only ensure their offer continues to be competitively priced, but also meeting contractors’ needs for lightweight and easier to install, higher specification versions. Over the last few years the cost of copper and steel (a raw material that is used in many of our day to day electrical products), has been partic- ularly volatile. Many manufacturers have been presented with the chal- lenge of producing quality equip- ment in line with customer and regulatory requirements, while also remaining competitive.
The cost of electrical cable, which has historically followed the price of one of its key components, copper, would be one example of this - and the price of copper has been high for the last few years. Another example would be steel, which is used for the manufacture of products such as cable trays and conduits. All the raw materi- als within these goods are linked to market commodity pricing.
Rare Earth elements
Due to their scarcity and in some cases, because of new environmental levies, the cost of rare Earth elements, which are used in the manufacture of products such as fluorescent tubes, LEDs and magnets, is also being driven up. ‘Anti- dumping’ levies have also impacted product supplied into the UK. November 2012 saw the introduc- tion of EU legislation covering the import of products such as threaded malleable fittings from China. Under regulation EU1071/2012, many of these items are now subject to a levy of 67.8%, which is a further cost that has to be passed on by the manufacturer.
Transportation and fuel Other elements that continue to affect product prices are transportation and fuel costs. These days businesses are feeling the effects of what seems like continuous rises in fuel for the provi- sion of energy and the movement of products around the country and
20 across the globe.
In some cases, raw materials are sup- plied from the UK and then shipped out to the Far East for additional work or assembly before returning to the UK, and as transportation costs increase, so will the cost per item. Some would say there are environmental arguments for not undertaking this route because of the effect on the carbon footprint for the manufacturer and the end product. It is also important not to forget that while labour in the Far East, par- ticularly China, is still much more cost effective when compared to those in the UK, the last year to 18 months has seen these costs also con- tinuing to rise. Some manufacturers are now beginning to question how long it will be before returning to pure domestic-based production becomes a more viable and an envi- ronmentally desirable option. Retaining continuance of quality and integrity of products while ensur- ing recyclability is very important. Raw materials used within an item need to have their tolerances con- trolled, but making sure they are also environmentally friendly are key con- siderations for the manufacturer. However, despite environmental con- siderations and loyalty to our home market, the real world means that ulti- mately, cost still continues to be king. Choosing products that use fewer raw materials without affecting the integrity of manufacture and performance, while remaining competitive, will always win
Make sure you don’t get a raw deal T
Right and below: the volatility of raw material costs such as steel and copper has had a profound impact on the design and manufacture of some of the more commonly used electrical products
the day. Providing the right balance in these areas is vital when attempting to achieve these goals.
When working with products that require high ‘bespoke’ volumes, there are solutions available for those wanting to keep labour costs to a minimum, while also reducing wastage of precious resources. Newey & Eyre has launched a new prefabrication service for those using steel containment and support prod- ucts with a pre-determined, non- standard size and specification. An example would be where a large quantity of short lengths of strut is required, such as 200 x 225mm. This would normally require hot working permits and would involve a great deal of labour time and wastage on-site. Pre-fabricated products made to an exact specification can now be supplied, ready to use for efficient installation. In such situations, there is less wastage of steel and the prod- uct comes exactly as it should do ready to use, connecting perfectly and saving time.
Summary
Manufacturers, electrical engineers and contractors are all faced with difficult choices when it comes to balancing raw material costs with meeting regulations and maintaining a good carbon foot- print. However, with careful planning and working with suppliers who can offer expert advice and solutions, it is possible to keep on track with ensuring quality and sustainability, while keep- ing within budgets.
Newey & Eyre
www.neweysonline.co.uk T: 01622 757 374
Enter 218 JUNE 2013 Electrical Engineering
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