In addition to climbing raw material costs the biggest challenge in the SLA battery industry stems from stricter government regulations on the use of lead. SLA battery production accounts for nearly 70% of domestic lead consumption, estimated to reach 4.1 million tons by year end positioning China as the world’s top consumer of refined lead. Currently, the Chinese government has shut down nearly 90% of sealed lead acid manufacturing plants. As a result of Chinese environment campaign, lead times on production of the SLA batteries continue to extend. Currently, factory lead times are running 16-18 weeks on new orders.
During the past two quarters, our inventory levels have been dramatically reduced due to longer lead times. Factors such as basic supply and demand, a weakened dollar, increased manufacturing costs collectively contributed to a price increase of approximately 10-15%. Market projections indicate this trend will carry through into the first half of 2012. Our response is to position ZEUS Battery Products in a more proactive way. Increased inventory levels, annual forecasting and careful monitoring of pricing trends will allow us to remain competitive and provide our distribution and OEM partners the supply they require. From a sales and distribution standpoint, the time to stock is NOW! A distributor that has stock will be able to increase gross profit, while those who buy on demand will most likely find difficulty sourcing product along with significantly higher prices.
To learn more about ZEUS Battery Products agenda to ensuring we meet our customers supply needs during this economic downturn, visit our website at http://www.ZeusBatteryProducts.com, email sales@ZeusBatteryProducts.com or call us at 630-295-6800.