Honkarakenne Ltd does not manufacture products in or import raw materials from Russia. In the case of construction materials, operators in the supply chains of Honkarakenne’s subcontractors have imported goods from Russia, but that activity has now ceased for the most part. The war and the sanctions imposed on and by Russia will have a significant impact on the availability of raw materials and construction materials. The war also has a severe impact on energy and fuel prices.
Key materials
Honkarakenne purchases the sawn timber it uses from Finnish sawmills. Sawn timber has been imported from Russia for use in other industries, and when that activity ceases completely there will be a significant increase in the demand for Finnish sawn timber. As a result, the availability of sawn timber will be uncertain and limited in the future.
The availability of glass also has a major effect on window and door production. In the past, a significant part of the construction glass used in Finland came from Russia, but is no longer imported from there. This has led to an enormous increase in the demand for glass by European manufacturers. Moreover, since energy is the largest cost item in glass manufacturing, the increase in energy prices will have a direct effect on the prices of windows and doors.
The increase in fuel prices has significantly increased freight costs, which applies to all material and product costs.
The supply of steel has also been badly affected, and availability problems and significant price increases are also expected to occur with steel.
Summary
The above-mentioned circumstances together constitute for Honkarakenne a force majeure as defined in procurement and delivery terms for construction products. Due to this unforeseeable course of events, Honkarakenne may be unable to comply with the delivery period stipulated in the agreement. The force majeure may also make it necessary for Honkarakenne to revise its previous offer to meet current prices.
Honkarakenne is collaborating closely with its suppliers to minimise the effect of the situation on its customers.
Our customer service personnel will personally contact all customers for whom the full or partial delivery of their house will be delayed.
We apologise for the inconvenience, and will do our best to deliver the ordered products on the agreed schedule. We kindly ask for your understanding regarding this disruption in the global commodities markets.
Yours sincerely,
Marko Saarelainen
CEO
Honkarakenne Oyj
