The company primarily utilizes petrochemical resins, including polyethylene, polypropylene, and PVC resins, as well as reclaimed polyethylene and PVC materials, waste wood fiber, aluminum, and additives such as modifiers, titanium dioxide (TiO2), and pigments. Supplier contracts are generally short term, ranging from one to three years, with pricing often variable and based on industry benchmark price indexes. Most resins are purchased under supply contracts averaging one to two years with minimum purchase obligations. The company does not currently hedge raw material costs but may consider doing so in the future. Raw material costs fluctuate due to market supply and demand and economic conditions. To mitigate cost fluctuations, the company broadens its supplier base, increases recycled material use, reduces waste, and explores material substitutions. Although no single supplier dominates the supply of raw materials, the company relies on a single supplier for certain critical capped compounds used in decking and railing products. Supply disruptions could impact operations while new suppliers are qualified and contracts established.
The Azek Inc's Comment on Supply Chain
The company primarily utilizes petrochemical resins, including polyethylene, polypropylene, and PVC resins, as well as reclaimed polyethylene and PVC materials, waste wood fiber, aluminum, and additives such as modifiers, titanium dioxide (TiO2), and pigments. Supplier contracts are generally short term, ranging from one to three years, with pricing often variable and based on industry benchmark price indexes. Most resins are purchased under supply contracts averaging one to two years with minimum purchase obligations. The company does not currently hedge raw material costs but may consider doing so in the future. Raw material costs fluctuate due to market supply and demand and economic conditions. To mitigate cost fluctuations, the company broadens its supplier base, increases recycled material use, reduces waste, and explores material substitutions. Although no single supplier dominates the supply of raw materials, the company relies on a single supplier for certain critical capped compounds used in decking and railing products. Supply disruptions could impact operations while new suppliers are qualified and contracts established.
Sources:
The Azek Company Inc 's official press releases and regulatory filings; CSIMarket.com's supply-chain research; and the financial filings and press releases of other companies cited in this report.
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