Price Increase Letters
November 28, 2011
Valued customers:
You are undoubtedly aware of the gypsum industry’s plan to substantially raise drywall prices
effective January 1st, 2012. Domestic volumes continue at half of national production capacity and the
manufacturers, along with most economists, predict only gradual improvement in the building industry
over the next few years. In order to remain viable, the 8 U.S. drywall producers have announced price
restructuring as follows: immediate elimination of job pricing coupled with a significant price increase
effective 1/1/12. “Significant” means some letters indicate a 35% increase. We don’t think this is likely,
but you should know what the letters state.
Obviously the manufacturers’ intentions in this matter are unprecedented. We can’t predict to what
degree they will succeed in obtaining this aggressive increase. As this is written, more information is
entering the pipeline. We are monitoring daily what the producers are saying and publishing. The
most difficult part of these abrupt policy and pricing changes is that they come when contractors and
distributors face extremely competitive markets. Prices generally rise when demand rises. The impetus
behind these unconventional increase announcements is not demand-driven, rather the factories’ desire
to generate a profit, or just to break even. Several years of financial losses have prompted this bold
attempt.
We don’t doubt that significant pricing changes will occur, though probably not in the amounts
published. As with contractors and distributors, the gypsum producers need to generate profits to
remain viable. During the past 2 months we’ve communicated with you verbally what we’ve been told.
The specific increase has not yet been established, but we believe it soon will be. When bidding 2012
contracts, we recommend you communicate the manufacturers’ intentions to your customers. We can
provide copies of letters should you need them.
Our salespeople and managers will be able to share more specific information with you shortly. Thank
you for your patience as we navigate our way through these unprecedented times. We offer sincere
gratitude for your support and for your business.
Respectfully
CB Wholesale
Bellingham
Burlington
Recently we received notice of price increases from the following CB Wholesale vendors which prompted our above letter.
Click below to view letters from:
| ASC Building Products - Dec 21, 2011 Letter - Jan 26, 2012 Letter |
American Gypsum Company |
CertainTeed Gypsum - Oct 3, 2011 Letter - Nov 11, 2011 Lette |
| CertainTeed Roofing - Dec 22, 2011 Letter - Feb 21, 2012 Letter |
GAF Roofing |
Hunter Panels - Feb 6, 2012 Letter - May 9, 2012 Letter |
|
Insulfoam
|
Pabco Gypsum
|
|
| Pabco Roofing Products - Jan 31, 2012 Letter - April 17, 2012 Letter |
National Gypsum Company - Sept 30, 2011 Letter |
RMAX |
| Trim-Tex - March 8, 2012 Letter |
United States Gypsum Company - Sept 28, 2011 Letter - Feb 17, 2012 Letter |
|