“Heading towards a catastrophic situation”, says Director of aluminium-based materials producer in Aube

Larbaletier Group, the manufacturers of aluminum-based materials in Aube, North-east of France, stated the economic recovery is on the way, while the surge in the price of raw materials is the new problem which is alarming and the outcome could be dreadful to the sector and the organization.

Olivier Choiselat, Director of the Larbaletier Group located in Fontaine-Les-Grès in the Aube department, France said: "We had to put employees on short-time work during the crisis because orders were missing, now the order books are full and we risk putting employees back on short-time work, because we do not have enough raw materials. The situation is mind-blowing.”

“It must be said that the problem affects many manufacturers in France and worries more and more. In fact, for the past few weeks, the price of raw materials has continued to rise. For a year, the price of semiconductor materials has risen 80%, that of foam 48%, + 40% for wood, and an increase of nearly 30% for steel. For aluminium, widely used by the Larbaletier Group, the LME (London Metal Exchange) Aluminum curve in London rose from April 2020 to April 2021 from $ 1,450 to $ 2,350, a dizzying increase of 61%.”

"In 30 years of career, I have never seen that just painting has jumped 12% in 1 month, it's an incredible situation and the whole industrial sector is impacted, there is a real fear because we can no longer meet our initial estimates, because of this outbreak and above all, we will run out of raw materials”, added Olivier Choiselat. 

“France did not anticipate this recovery at all. In Asia and the United States, countries have been able to buy our French raw materials to stock up and today we no longer have stocks with our suppliers. We are all wrong at the national level. " 

However, some of the Larbaletier Group's competitors did not feel the drift at all. Olivier Choiselat and his teams were able to preserve the essentials and accredit the loan guaranteed by the State (PGE) made during the crisis. 

"We took advantage of the PGE to buy the equivalent of three million euros of raw materials, in particular in electronic components, which allows us today to continue our activity, fortunately. Without it, we could not produce anymore. The problem is that our stocks are running out and things are not getting better. Components and raw materials are nowhere to be found in France. I keep calling our suppliers and everyone is at dry”, Oliver said.

The pressure is therefore starting to mount on the industrial sector, precisely, are gathering fear to stop their production lines due to lack of raw materials. The delivery time for the final product is also getting lengthier. The real trouble professionals are countering now, as the initial contracts often have to be redone with new quotes and a price that soars for the end-user.

"Indeed, relations with customers can be strained in the future, because we cannot respect the starting prices. This price surge is completely new and even if there is a strong demand, some customers are not ready to pay more for a project they had in mind for a long time ", concludes Olivier Choiselat.