LATEST INFORMATION FOR CUSTOMERS AND STAKEHOLDERS:
UPDATED 12th October 2023
Pricing
As we indicated in 2022, the unprecedented increase in raw materials and transportation costs which has been seen worldwide, necessitated the need for price increases to maintain our service levels in a sustainable manner.
Unfortunately, the impact of the Russian military operations against Ukraine generated an additional upward pressure on our energy costs in the UK and Europe, where currently all our manufacturing activities take place (with our China facilities coming online in FY 2024), with gas and electricity being the primary fuels. Most economic indicators show that the UK in particular saw the steepest increase in energy prices since the start of 2022 and this also impacted the cost of raw materials. Even with the Energy Bill Relief Scheme introduced by the UK Government on 1 October 2022 to limit the rates our suppliers can charge, we continued to experience significant energy cost inflation which reached an unsustainable level for us.
Throughout the pandemic, we globally achieved high service levels and over 90% On Time in Full (OTIF) performance for our customers. We implemented the Energy Surcharge to help us to sustain the strategic business continuity investments we have made in supply chain, capacity, inventory, and quality.
The Energy Surcharge was proportionate/correlates to our direct increase in energy costs. It was a temporary measure and capped in line with the Energy Bill Relief Scheme. The Energy Surcharge concluded in July 2023.
Sustainability
Sustainability is at the heart of Victrex’s business model and is a clear part of our purpose ‘Bringing Transformational & Sustainable Solutions That Address World Material Challenges Every Day’.
Our products enable environmental & societal benefit for our customers and society, for example, by supporting lightweighting and CO2 reduction in Aerospace and Automotive applications, and clinical benefit in Medical. We have a target to grow our Sustainable products from around 50% today to over 70% by 2030. We are accredited by the likes of Apple, in their Clean Energy Supplier programme; FTSE Russell, in their Green Revenues Index and MSCI, one of the leading ESG rating agencies, with an A rating. Our most recent Lifecycle Analysis (LCA) showed a favourable result for Victrex PEEK’s carbon footprint vs the industry average of PEEK, based on use of UK produced monomers in our process. Further detail can be found in our most recent Annual Report on page 63: Victrex plc Annual Report 2022 (wp-victrexplc-2020.s3.eu-west-2.amazonaws.com)
Our broader Sustainability agenda is focused on three areas; People, Planet & Products. This includes Planet (Resource Efficiency) and minimising our use of resources, including aligning to the Science Based Targets Initiative (SBTi) with a Net Zero goal across all scopes by 2050 – further detail will be communicated in 2024 once SBTi has reviewed our targets; People (Social Responsibility), including a strong Diversity, Equity & Inclusion (DE&I) agenda, a focus on STEM (Science, Technology, Engineering & Maths), where we are seeking to develop and inspire the next generation of students in science and innovation through outreach work; and employee volunteering in the communities we serve.