HCM: Raw Materials Supply Chain

From Hitachi Manchester Cable:

Do to the extraordinary circumstances surrounding us I am writing this letter to notify you on the state of our supply chain. In this time of global economic recovery, demand for materials has increased dramatically, in many cases stressing the already “downsized” production capabilities in many industries. The catastrophic events in Japan have magnified these concerns across many markets globally.

In order to discuss more specific details I would first like to offer the following information. HCM sources over ninety percent of our raw materials from North American manufacturers. All critical components have redundancy at many levels, from raw material manufacturer, UL approvals and construction; HCM has the capability to flex with the changing market conditions. In addition, we constantly monitor the state of our suppliers and their raw material supply chain in order to forecast any major disruption that may occur.

The rising oil prices have maintained constant pricing pressure on materials such as polyethylene, polypropylene, plasticizers and the products downstream. But none have received more press than the fluoropolymer industry. With emerging markets such as photovoltaic’s and lithium batteries, the appetite for fluoropolymer type resins has exploded over the past twelve months. The threat of allocation in the wake of the events in Japan has stressed the supply of these products tremendously.

The fluoropolymer supply will remain tight for many months to come. HCM and all of our competitors are faced with this fact from which no one is immune. Until capacity is added to satisfy the demand, this tight supply will remain. In order to service our customer base we have taken many steps to mitigate the risks. Although I cannot share the details I can tell you that HCM is in good health in all raw material supply across all items.

We will continue to work diligently to maintain a consistent supply of material. We will do so in order to keep these supply issues transparent to our valued customer base. If you have any further questions or concerns please feel free to contact me at your convenience.

Regards,
Jim Stocking
Supply Chain Manager