The global market has been unbalanced for a few months now due to the coronavirus disaster, which is panicking and infecting the whole world. China, where this global pandemic began in November 2019, quickly got control over the contagion in the first half of 2020. Thanks to its totalitarian regime, dynamism and cheap manufacturing, the country got back to work very quickly to supply the rest of the world. For several decades now, the world has become dependent on this "sleeping giant" (although it is now awake) for all kinds of supplies.
China has become the world's main factory, including for the pool market
Chinese production has woken up
As far back as 1989, Alain Peyrefitte, a former statesman, diplomat, writer and member of the Académie Française, sounded the alarm in his book "Quand la Chine s'éveillera" (When China Wakes Up).
Unfortunately, no one took notice and we are now highly dependent on this cheap economy, having failed to react in time.
Oh yes! It has happened! The Middle Empire is definitely awake!
The salary of a skilled worker is about EUR280 there for 48 hours of work a week, with 3 weeks' holiday per year!
While a French skilled worker earns 5 to 6 times more. It is obvious: for now, it is still very difficult to manufacture in France and to compete with this labour cost.
The lure of making easy, instant profit and above all, without any ecological risk for our local environment or technological risks for our western countries, was a deal we all made, without worrying about the future economic, social and, above all, health consequences that we are currently experiencing.
Almost all the organic chlorine used in swimming pools now comes from China
Following the disaster in Toulouse, where the AZF chlorine unit exploded on 21 September 2001, killing 31 people and injuring over 2,500 more, France no longer makes organic chlorine (stabilised chlorine). France now gets its chlorine supplies from China for disinfecting swimming pools.
Of course, there is still some small-scale production in Spain. Until recently, there was also still some remaining organic chlorine production in the USA, but after an explosion in 2020, more than 30,000 tons went up in smoke, shutting down American production.
The problem of imported components and raw materials, indispensable in swimming pool equipment
Our European manufacturers, including those which have chosen to make their swimming pool materials in Europe, import their raw materials and even their by-products from low-cost Asian countries. It is now very difficult to get hold of electronic parts, transformers, etc., to make electrical boxes, chlorinators, chlorine and pH regulators, heat pumps, LED spotlights, hot tubs, etc.
Certain automotive production chains have had to temporarily halt their businesses in Europe due to a lack of electronic parts, which we no longer make in the west.
All these imports from China in the last few months have made prices skyrocket. Rising global demand has led Chinese manufacturers to increase their prices considerably, which is perfectly understandable, although unfortunate for us.
Maritime transport of a 20-foot container, which used to cost EUR1,800 between China and France, now costs EUR7,000, an increase of 250%! Shipping companies, which do not have enough boats to guarantee transport, are profiting from it. This is sadly market law!
Certain goods and products spend weeks in factories and on port quays in China due to a lack of containers and boats, which explains the very long delivery times that our manufacturers are experiencing.
Furthermore, this global economic recovery has seen the price of oil and gas increase again, and the price of plastic will therefore soon follow suit.
This will inevitably lead to higher prices for your supplies from your suppliers, as well as unavailable stock.
Swimming pool professionals: pool purchases have to be well negotiated this year
If you registered many orders in 2020, at last year's rates, to build your swimming pools this year:
>> Run an analytical check, site by site, to check your margins. If necessary, get help from your accountant. There are simple pieces of software available to make calculating your margins easier.
2021 is going to be a big year for our profession, but we must nevertheless remain vigilant and must not only be blinded by the figures. We must primarily monitor the margins, which keep us afloat.
Richard CHOURAQUI
MABIS Consulting
[email protected]
