Moduplay Cost Increases 2022-2023
Moduplay is an Australian manufacturer of export quality playground and fitness equipment and park furniture. We are committed to manufacturing in-house, in Australia, and will always take the required steps to ensure the sustainability of our business to provide secure employment and to be here for our clients over the long term. Our supply chains have stood up well to the tests of recent years with most disruptions being absorbed through intelligent and proactive management practises.
However, as with many industries and markets, the current trajectory of inflation is having a significant impact on our cost bases which is forcing more regular price reviews. We have worked to contain these price changes through design modifications and supply chain innovation, however, there remains significant structural cost pressures that force our hand in these matters.
The significant cost centres in our supply chain that are experiencing these impacts are as follows:
1. STEEL: Much of the structure of our products is produced from mild and stainless steel. This has seen sharp increase around the globe and can be traced on the London Metal Exchange (LME). In real terms current costs are 45% higher than 2019/2020 prices.
2. ALUMINIUM: We use aluminium as a light weight and corrosion resistant alternative to steel. This is widely used in our structural vertical members and platforms. Again, this can be traced through the London Metal Exchange (LME). Current costs are 32% higher than 2019/2020 prices.
3. TIMBER: Our Premium and Bushwood ranges are constructed predominantly of timber. Timber has undergone a number of shocks from fire damage in floods to steep demand spikes from pandemic stimulus responses which has driven prices up. Prices are currently 30% higher than 2019/2020 prices.
4. PLASTIC and RUBBER: We use plastic products in the sheet and moulded products that are commonly used as panels, slides and components in playgrounds. With a direct link to oil prices, plastic and rubber commodities can also be traced in various indexes, however our raw materials costs are currently 33% higher now than 2019/2020 prices. These price rises effect both virgin and recycled plastics.
5. FREIGHT: Especially in the case of imported products, on which only a small portion of our supply chain relies, well publicised freight increases to the order of 125 – 200% have been seen of late as compared to 12 months ago.
6. FUEL: The price of fuels such as diesel and petrol have a direct impact on our construction activities and also impact the general cost of running the business.
7. LABOUR: Whilst labour rates so far have remained fairly static, there is a high expectation that labour rates will start and continue to increase throughout 2022. As a company we welcome such movement in view of elevating the circumstances of our team members, however with the long design and delivery cycle that exists in our industry, steps need to be taken ahead of time to ensure we can provide sustainable employment.
As a reasonable and responsible partner in the supply of goods and services to the industry, we have followed a staged process in the way we have increased prices over the periods referred to above. Therefore, many of the increases we have absorbed are still being carried and will need to be factored in as further cost increases loom. We have kept our overhead base consistent despite the changing and challenging times we live in and continue to work on optimising our processes for maximum efficiency and therefore value for money for our valued client base.
As a further consideration, we feel it is our responsibility to take this opportunity to advise Local Government bodies across NSW and Australia, that it would be wise to proactively consider increasing budgets generally for community facility projects, to prevent decrease in amenity and long term value for the communities they serve, that would eventuate if budgets are left at current levels.
We thank you for your understanding as we continue to navigate this volatile environment. We look forward to “Bringing Play to the World” together into the future.
Please contact our Customer Service Team with any queries or requests for further information.