Making headway in a volatile market

Sharing some reflections on the state of play for Minoli as we start September in a strong position but operating in a very changeable marketplace.

Last Friday, on Radio 4s Today programme, we heard from the managing director of a long-established, Derby based construction firm, Ian Hodgkinson of Hodgkinson Builders, talking about the difficulties in securing supply of fundamental building materials and the unpredictability of material costs. Whilst Minoli have taken substantial measures to bolster supply for our clients for the foreseeable future, we’re not completely immune to similar pressures.

Over recent months we’ve chosen to increase our UK stockholding by around 33%, with the rolling average in our warehouses increasing from circa £3m to near £4m of landed inventory, ready for delivery. Whilst this ensures we can reliably supply our existing clients (and we’ve welcomed some new customers as well), we’re having to plan and order further ahead than ever before.

Another challenge that’s impacting the European ceramics industry is the surging price of energy, in particular gas. Minoli’s policy is to work only with the top-flight production plants in Italy and Spain who are more resilient to supply fluctuations, have material reserves and longer-term energy deals. For some second-tier tile manufacturers however, despite a rise in demand due to the post pandemic building boom, there are knife-edge decisions about whether to pass on higher costs to customers or to scale back, or even halt, production.

Regardless of their size and standing, nearly all tile manufacturers have either introduced or are considering the necessity of applying a form of ‘energy surcharge’ on production orders, which we have so far chosen to mostly absorb. The issue that lies ahead is uncertainty around the extent to which those surcharges will increase and over what period of time they will be applied.

One thing our clients can be certain of is the efforts we’re making to source the right products for our market, to keep stock levels high, to plan ahead collaboratively and to provide as much certainty as possible about costs and delivery timelines.

This year we have added over twenty new ranges to our portfolio, including more Core developer ranges and the launch of the Outdoor By Minoli series of 20 mm exterior use porcelain pavers, with more product lines to be previewed shortly for launch in 2023.

In addition to the sizeable investments we’ve made in stock, we’re also significantly upgrading our vehicle fleet. With a total of four new purpose-built DAF trucks ordered, we are delighted that the first went into service on September 1^st, just last week. This latest addition, the 500,000^th to be produced at DAF’s Lancashire factory, is a state-of-the-art 16-tonne GVW DAF LF, which has been adapted and enhanced to our exacting specifications. A further 16T truck is due this week, an 18T Curtain-Sider and a 20T Curtain-Sider with Moffett will also join the fleet in the coming months.

Given that we have plentiful stocks of excellent products and our own vehicle fleet with Minoli-employed drivers, we’re more in control of our own destiny than some, but there’s another issue caused by these turbulent trading conditions that’s harder to manage. Despite having some of the most experienced staff in the industry, previously straightforward tasks simply take more time as we juggle production, transport, customer orders and delivery schedules. As such, we’re also investing in the Minoli team with new starters in our showrooms, customer services, warehouse and delivery teams.

Our client account managers and sales administrators are working tirelessly to provide as seamless a service as possible and, for existing or new customers, we would be delighted to discuss requirements for any forthcoming projects.