Steel is our greatest cost

Colin Egan, Banagher Precast concrete, Co Offaly

Banagher Precast Concrete is encountering price hikes and supply chain issues but remains upbeat about the rest of 2021, according to Colin Egan. The company has had to adjust to operating in the midst of a global pandemic and Brexit.

The most recent challenges have arisen in the availability of raw materials and the cost of inputs: “There have been relentless price hikes on some of our key raw materials in recent months. The increase in steel is well documented and despite us being a concrete manufacturer, steel would be our largest material cost here due to the high level of reinforcement in our products.”

Colin says the company has reached a point where quoted prices are 30% higher than just 12 months ago as well as issues with sourcing and longer delivery lead-in times.

“The agricultural sector has been a key pillar of our business. We have looked internally at methods of reducing costs and improving efficiencies, however we have been unable to absorb all increased costs. As a result, we increased pricing across our slat range by approximately 7% earlier this year.”

Colin is hopeful that the market will stabilise in quarter three of 2021 on the back of mills returning to normal production. “Quarter one would typically be our quietest time but we have had a very encouraging start to the year and are expecting a busy second half to the year.”

Steel price hikes are unprecedented

Billy Heffernan, O’Dwyer Steel, Co Tipperary

The rate of steel price hikes has been unprecedented, says Billy Heffernan from O’Dwyer Steel.

“There has been a lot of talk in recent years of a price increase coming in global steel prices but nothing like what we are currently experiencing. We have had numerous large price increases since the turn of the year and prices are edging up every week, not only with steel but also significantly with timber.”

Billy says the uncertainty surrounding further price hikes is leading to more caution being required around quoting for building projects or the supply of materials.

“We have unfortunately had to reduce the period for which quotes are applicable to about two weeks. There is just no way around this to be able to guarantee supplies and maintain business integrity.”

Billy is advising all farmers who are planning to build sheds or undertake any form of yard work to keep informed of price changes and to order materials well in advance of when they will be required.

“There is major disruption to supply chains. Even if you were prepared to pay whatever price the market wanted, there is no guarantee you will get materials given the competition present.

“For example, ordering cladding had a turnaround time of two to three weeks. This is now pushed out to three months, showing the importance of forward planning.”

Building works continuing apace

Noel Nolan, Carlow Concrete Tanks, based in Co Wexford

The level of new building works and farmyard upgrades is continuing at a fast pace, according to Noel Nolan from Carlow Concrete Tanks.

“The strongest activity is on the dairy side and is being driven by herd expansion or farms converting to dairy but there are also continual upgrades or new projects on other farms too.

“We still find the 8,000 rectangular or square slatted tank is our best seller and is a common option for collecting yards or areas where farmers are targeting a quick turnaround and want to complete a job and be back in action in as short a time frame as possible.”

Noel says that while the price of steel has increased to the greatest degree, the cost of most raw materials has also crept upwards and will inevitably lead to price increases.

“Steel prices have increased at an alarming rate over the last few months and talk of further increases is common. While not at the same level, the cost of other materials continues to creep up also and all of these combined are significant costs.”

“We have been thankfully able to hold prices of our products stable so far but it is inevitable that prices will have to go up. There is only so much materials that can be bought forward and input costs are being reviewed on a weekly basis. We are working closely with our customers and keeping them informed of any significant changes.”