THE MATERIALS SUPPLY CHANNELS ARE BLOCKED - WHAT TO DO?
Currently, companies are spending a significant amount of time sourcing materials to ensure construction can continue throughout the summer.
We sent information to our stakeholders about the availability of materials as early as March 11th. We were looking for a rebar supplier abroad for one of our clients. We contacted dozens of suppliers. Only one of them was able to deliver the entire shipment, and in the end, no other supplier was able to offer even partial shipments. Construction News also wrote about the difficult situation of material procurement on March 22nd, 2022.
In Ukraine, factories are not operating due to the war. There are many steel plants, among others, located in Russia and Belarus, from which goods cannot now be bought due to sanctions. The same problem applies to glass and wood. The prices of both have been rising even before the situation in Ukraine.
Although risk assessments are carried out in procurement, risks are always highlighted in crisis situations. The whole world faced the previous crisis situation two years ago when the COVID-19 pandemic began. We managed to get through that by adapting to the situation and ensuring the availability of materials through other channels than traditionally used.
Why is the availability of steel material so difficult?
Steel is made from iron ore, which is mined from the bedrock. Both crisis countries, Ukraine and Russia, are major exporters of iron ore. When iron ore is not available locally, the focus shifts to other parts of the world where iron ore might be obtained. This further impacts price increases.
In the article from Rakennuslehti, it is suggested that, for example, the steel inventories of companies might only last for a few months. Rakennuslehti has learned that the mentioned situation has led to the halt of one apartment building construction site.
What to do in this situation?
It is imperative to start looking for new procurement channels. This, in turn, requires time and energy from the person undertaking it, in addition to:
Searching and mapping new suppliers
Contract negotiations
Sending requests for quotations
Contacting
Utilizing contacts
Before we can actually procure and bring material to Finland and consequently to construction sites for projects, the aforementioned tasks need to be completed.
We want to help you by taking care of this entire process, saving you time, energy, and sleepless nights.
Contact us, and we can discuss how we can assist you during this challenging time!
Juha Koskinen
CEO
050 530 9347
juha.koskinen@kospro.fi