April 7, 2021
By Scott T. Becker, CEO
It seems every year brings new difficulties.
While COVID-19 may be less of an issue in 2021 due to vaccines being administered around the globe, its concerns remain, and the need for acute attention to hygiene protocols remains. However, added to the COVID-19 challenges of 2020, today we are dealing with shortages in a number of raw materials. Such shortages are not limited to petro-chemicals and our immediate markets. A shortage of semiconductors is already constraining motor vehicle production globally. And we see construction and home improvements have been constrained by shortages of labor and building materials. Then, there is a shortage of shipping containers and truck drivers. Complicating all of this are jammed ports with cargos to be offloaded.
Of course, during all this turbulence, we are seeing demand strength due to the need to rebuild the world’s supply chain as the result of the rundown of inventory and the many shutdowns across the globe during the April/May 2020 timeframe. I suspect part of the current increase in demand is also associated with customers’ concerns about raw material shortages. My instinct is that business will continue to show strength through at least the first half of 2021. Supporting this continued demand is massive stimulus hitting markets around the world while vaccines are becoming more available. How these elements will translate into the second half of 2021 and particularly Q4 is not clear, but they will likely continue to advance demand.
So, we are adapting to the new challenges that 2021 has brought us. Chromaflo plants are working diligently to rebuild inventory during this period of strong demand and constrained raw materials. It is also evident that global inflation is here. Because of these issues, we will be investing in more automation to enhance efficiencies and effectiveness. We have already installed new additional production equipment in most of our 13 plants. Our newest facility, in Uruguay, will become operational in quarter two of this year.
We also continue to invest in new technologies, such as our FLV line of colorants based on a sustainable binder made from renewable sources. We have seen successful use and adoption in epoxy applications. We have been investing in graphene and single wall carbon nanotube dispersion technologies for the past few years. We are approaching some early adoption opportunities in both industrial coatings and thermoset composite applications. And finally, we are developing the next generation of Architectural POS colorants. This next generation of Deco colorant will be a breakthrough on a host of parameters and will be introduced this Fall at the European Coatings Show.
So, investments in additional production capacity are underway, and advancements in technology offerings are as well. Our goal right now is to improve our abilities to meet your colorant demand and technology needs. Hopefully, the world supply chain will help in this regard by reaching some level of equilibrium and operating processes become a bit more routine. Let us hope this is soon.