Energy surcharges
To whom it may concern, (Our customers, colleagues & other interested parties)
Everybody will now be aware of the recent events in the Middle East and the increasing shockwaves resulting in both rapidly increasing energy costs around the world and specifically the supply & cost impacts of the reduction in the freedom of movement of shipping traffic through the Strait of Hormuz.
While Christeyns and all the companies under the Christeyns umbrella have up until now taken a very balanced and watchful stance, preferring to operate with facts rather than speculation before deciding on any course of action, we now have no alternative but to act.
It is now clear that we will experience from April, a significant double digit % increase in our operating costs because of sustained rapidly increasing oil and gas prices and the additional resultant cost impacts on the raw materials required to manufacture our core product offering. On top of this, due to the shipping problems, trade flows are reduced and availability is under pressure, driving prices up even more.
Therefore, please take this as advanced notice, that we will be introducing a surcharge mechanism (or other equivalent local appropriate mechanisms) to effectively pass on these additional costs throughout all our businesses, from the 1st of May. We will be able to communicate on the extent of the surcharge by the middle of April.
The conflict in the Middle East is extremely unpredictable, as are consequences impacting the smooth running of our collective businesses, therefore the surcharge approach is the only sensible option to effectively manage our way through this crisis. Although the specific approach will be managed and communicated by the local businesses, given their local context, the overall principles we will operate to will remain the same regardless of territory or business sector.
How the surcharge will work
- The surcharge mechanism will allow for the reduction of pricing when markets settle to a degree of normality. (or if the situation worsens, increased)
- The level of surcharge will be regularly reviewed based on prevailing conditions (at least bi-monthly – individual businesses will agree the appropriate approach)
- As much transparency as possible will be provided with its introduction and applied by the local businesses (e.g. the potential link with market oil & natural gas costs)
Our commitment
At Christeyns we are committed to work in partnership with our customers wherever possible, we will be taking the burden of these additional costs for over a month before passing them on, a choice we made to ensure we were making decisions based on the best data available. By providing as much notice as possible of our intentions, it will hopefully give our customers the best opportunity to manage the impacts in their own businesses.
I thank everybody in advance for managing the impacts of this global situation in a professional and measured way and look forward to a much more settled time where we can focus on driving forward with our mutual businesses rather than managing the consequences of global events.
Alain Bostoen
CEO
