March
21, 2011
Dear Valued Cogent Tooling Customer:
If you do business with any other tooling company, this letter
should not come as a surprise to you. Over the past few years, prices of carbide products have escalated exponentially. China,
the world’s primary source of raw tungsten (the main ingredient of tungsten carbide), has restricted its supply to the
market. As a result, over the past 12 months, the market price for tungsten carbide has increased in excess of 85%.
Over just the past six months, both of our carbide suppliers (the main two in the world-wide market) have each passed
on two price increases, resulting in a 15% to 20% increase in the cost of our solid carbide products such as carbide inserts
and solid carbide spiral router bits. It has also affected the costs of carbide-tipped products such as sawblades and carbide
tipped router bits. To further compound the problem, raw steel prices have continued to rise, resulting in further price increases
from other suppliers.
At Cogent Tooling, we’ve been able to
resist passing on price increases up until now by working with suppliers or sometimes changing suppliers for certain items,
and cutting our profit margin. We’ve also continued to search out creative means of cutting our import costs and shipping
costs. In nearly 6 years of operation, this will be our first significant price increase.
As we are finding
out about individual price increases from suppliers on a weekly basis, the exact details of the price increase are not 100% defined, but this is what you can expect:
Solid Carbide Products (Standard carbide inserts, solid carbide spirals, etc.) +10%
Exceptions
– SuperPac and some very common turnblades
SuperPac Knives & backers No
Change
All
other standard items +5%
Custom Profiled Inserts +0%
to +10%
There will be individual exceptions to these
rules. This
price increase will go into effect with orders placed on or after April 1st, 2011. All orders placed before
that date will be honored at current prices. Stock up now!
What can you do to offset these increases?
a. Recycle your carbide products. In the next few weeks we will be finalizing the details of a carbide
recycling program where we will accept used carbide products and issue a credit on account for its value.
b. Investigate the possible
cost savings of polycrystalline diamond (PCD) tools. While the cost of carbide has continued to escalate, the cost of diamond
products have decreased. In addition, in some cases the manufacturing technology has increased to the point where feed speeds
can be increased to the point where diamond tools can be extremely cost-effective, especially in CNC routing applications.
We sincerely regret having to pass on this price increase, and appreciate the trust
and support you have given us to provide you with the highest-quality products at the most reasonable prices. Thank you for
your understanding.
