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Blum UK Update

Thursday 8th July, 2021

Dear customer,

Back in February of this year I wrote to all of our partners to give you an update on how the pandemic was affecting Blum and the knock-on consequences to you.

The end of June was the end of the Blum financial year, so it now seems the time is right to give you a further update.

This update covers two subjects:

1) Product Supply Chain

2) Product Pricing

 

Product Supply Chain

The surge in demand experienced in the final six months of 2020, as predicted in my letter in February, has not receded and in fact has increased.

In previous communications we committed to investing in both capacity and process so as to meet this predicted increase in demand, and to protect our partners. I can confirm that this promised investment has now taken place.

Unfortunately, although our production capacity is now ready and able to meet the demand, we are facing a worldwide shortage of the basic raw materials. This situation is obviously out of our control and has resulted in a turbulent supply chain picture over a range of products.

We anticipate that this situation will continue throughout the rest of 2021, continuing to create uncertainty around supply.

We are committed to doing our utmost to minimise the effect upon your business, and to this end we will instigate a new ordering procedure with immediate effect on all key product lines across our ranges.

Details of the new system are outlined below for all customers who buy directly from Blum UK including our distribution partners.

1) On each key product line per customer we will take an average monthly usage (AMU)

2) The AMU will be the amount of that product you can order going forward each month.

3) Any order going above the AMU will be placed into our stock allocation process for further analysis.

4) If, after analysis, we have sufficient local stock holding of the product to supply against the order placed, then we will despatch accordingly.

5) If we don’t have enough local stock holding, then the order will be placed on back order and delivered at a later date.

6) Any order placed into the stock allocation process will mean that information regarding our ability to supply will be delayed by approximately 3 days. We would ask for your patience and understanding with our sales team at this time if they cannot give you the answers you require immediately.

The system has been put in place so as to give a fair and equitable distribution of stock to all of our partners who have shown loyalty to our brand over many years.

As further commitment to our loyal longstanding partners we have taken the unprecedented decision to not open any new trade accounts until further notice, so as to make sure that the stock we do have is solely allocated to our existing customer base.

 

Product Pricing

In direct consequence of the supply chain disruption detailed above, the cost of raw materials has also risen, as the macro economic assertion of supply and demand has caused a significant rise in the price of any available stock on the market.

At the beginning of 2021 we made a commitment, a decision consistent with the three previous years, that we would provide pricing stability to all of our customers for the rest of the calendar year.

We take that commitment very seriously, and so, despite several significant price increases to Blum UK this year, we have decided to honour our promise to you our partner and WE WILL NOT APPLY A PRICE INCREASE IN 2021.

We continue to value our relationship with you and feel that this is the type of commitment you would expect from the Blum brand to your business.

I am sure it will come as no surprise to you that we will have no option but to increase our prices in January 2022. In the spirit of our culture of information transparency we promise to inform you of the details of that increase no later than the 15th September 2021.

I would like to take this opportunity to once again thank you for your support and business during the last 12 months and I wish you every success in the coming year.

Please do not hesitate to contact myself or your regional manager if you require any further clarity on the detail above.

 

Yours sincerely,

David Sanders

Sales & Marketing Director



Asia
Europe
Oceania

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