All of a sudden, things feel a tad unstable. After years of relative serenity in terms of supplier relationships at the fabricator/systems company level, that now appears to be changing, and at some pace.
You cannot fail to have noticed that there is quite a lot of movement happening right now, and it’s making waves. So let’s try and break down exactly what has been happening.
All change
The process began a few months ago when it was announced that Duraflex had lost its supply agreement with Safestyle UK and that Liniar would take its place. This is a huge supply contract and provided UKWDG with a significant portion of the group’s revenue. There had been long-term concerns about Duraflex, but this appeared to be the final stroke which led to the decision by UKWDG to close down Duraflex.
The closing of a systems company is a significant decision. Not only for the business that is closing it but who they supply to. For fabricators of Duraflex, it leaves them in an uncomfortable position. They are left looking for new suppliers, which is not a simple process. When an installer decides to change suppliers, the upheaval is relatively minor, although not perfectly simple. For a fabricator, there is a ton of internal changes that need to be made, including stock holdings, machinery, tooling, marketing, communications to their own clients, warranties on previous products etc. It’s a massive shift, hence why a decision to change systems company is such a major decision.
UK Windows and Doors Group as a business is what you call vertically integrated. Within the group, you have trade counters and fabricators. Duraflex supplied those other businesses within the group, with the exception of Evolution which is supplied by VEKA. UKWDG had to seek out a new supplier for the other companies within the group. That new supplier turned out to be VEKA. They had an already established relationship with Evolution, so it appeared to be the most readily available option to go with. That decision however has not been without some vocal scrutiny, which I will come on to later.
So, that’s one company out of the way. Next are Eurocell and Polyframe. As you’ll know, Polyframe was part of the failed Customade Group. It is still referenced on their website. Polyframe were users of Rehau and Duraflex. However, they announced this week that they had a new supply agreement with Eurocell. You can read more about that here. This is a major gain for Eurocell but again represents a major change for Polyframe and their own customers, who are going to need to rapidly get up to speed with new product offerings and marketing changes.
Then we had the announcement that Glazerite has added Deceuninck’s 2500 series to their portfolio. You can read that announcement by clicking here. Glazerite is one of the biggest VEKA/Halo fabricators in the country and has been for a while. The decision to then add a system from Deceuninck is a massive decision. The addition of the 2500 series has been touted as an option mainly for Glazerite’s commercial installers. But the 2500 series, as advertised on Deceuninck’s website, is also aimed at residential properties. My read of this decision is that Glazerite are giving themselves options should the nature of their trading relationships change or the market dips further. Perhaps there is also a little bit of needle with the UKWDG supply decision, but that is unlikely to be confirmed publicly.
Following on from the UKWDG supply deal with VEKA, there was then a statement from Modplan confirming that it was “business as usual” and that they would continue their operations with VEKA. Although the statement was issued to show stability in an unstable market, it was also an opportunity for Modplan to politely voice their disquiet at the decision to supply UKWDG. They did also acknowledge that change was inevitable.
The pattern of change has not been limited to the window and door profiles part of the market. Conservatory roofs have also seen major moves. Prefix, up until recently one of Ultraframe’s biggest fabricators of the Classic roof system, has now moved over to the S2 Sheerline roof. The S2 system has been developed from the K2 roof system. There are stories about the relationship between the two companies, which may provide context to the decision to move roof systems. But as with window and door profiles, the effort required to change systems like this is massive, not only for Prefix, but the clients of Prefix as well.
Relationships tested
The supply deal between UKWDG and VEKA has certainly raised some eyebrows within the sector. Indeed, it has perhaps been the catalyst for some of the recent changes and statements mentioned above.
What is clear is that in these testing market conditions, where business is harder to come by and the slowdown is beginning to hurt, relationships are being tested. Companies are looking for new ways and additional opportunities to win new business and keep revenue coming in. This is where tough decisions are now beginning to be made. The priority right now is survival and profitability. If that means companies have to look elsewhere for new opportunities then that is what is going to happen.
To be clear, although others may not like it, VEKA is well within their rights to seek out new business opportunities. One came up with the removal of Duraflex from the market, and they were able to fill that gap. They were very likely aware that some of their other fabricator customers would not like it, but as Modplan referenced in their own statement, change is inevitable. VEKA have every right, as do other systems companies to increase their market share. We have seen that with Eurocell striking a deal with Polyframe.
From my vantage point, the market is becoming more unstable. The slowdown is likely ruining plans and budgets made in 2022. There is most certainly a scrappy battle going on to win new business. It is the kind of environment where we expect more existing relationships to be tested, and perhaps more changes similar to what we have seen in the last few weeks. Indeed, it’s going to be a testing time for everyone.
To get weekly updates from DGB sent to your inbox, enter your email address in the space below to subscribe:
By subscribing you agree to DGB sending you weekly email updates with all published content on this website, as well as any major updates to the services being run on DGB. Your data is never passed on to third parties or used by external advertising companies. Your data is protected and stored on secure servers.