A Message from Ivan Stiehl: 2023 Outlook
Starting the New Year in a ‘Very Good’ Place
By Ivan Stiehl
Hamilton Kent, President and General Manager
While there is still a lot of uncertainty clouding the construction outlook, this year already looks different from 2022, and, in my opinion, in a good way. Record customer demand in 2021 faced off against significant supply chain shortages globally, leaving the entire industry short on inventory and fighting to service customers at all cost. After working through those issues, we start 2023 in a very good place, having rebuilt our inventory and shored up the supply chain. At the start of 2023, everything feels a little more normal.
The market outlook remains mixed, however. Record amounts of spending in both the U.S. and Canada have been approved, but the specter of recession looms. Many multi-year, multi-million-dollar infrastructure projects have been approved, and that will lead to increased demand for our products. However, project owners are moving cautiously, waiting for input prices to stabilize after spikes last year.
The price of steel, plastics, and some concrete inputs are trending lower. However, one of our main raw materials, isoprene rubber (IR), remains in very tight supply due to the global impact of the war in Ukraine. We were not buying directly from Russia, but Russia supplied about 20% of the world’s IR. When that disappeared, it disrupted the global supply.
We expect prices to remain high for this critical material, but our supply chain team worked diligently through 2022 to secure a steady supply of IR and suitable alternatives. We also increased our manufacturing capacity last year, and that will enable us to bring new products to the market in 2023. We will soon be announcing a series of innovative HK products for the infrastructure and transportation sectors, and we are excited about the prospects.
Another 2022 initiative that is bearing fruit is an intense focus on safety. It remains our top priority here, and despite all the challenges, we saw a 78% improvement in our reportable incident rate. That is a trend we plan to continue in 2023.
We expelled a great deal of energy to recruit and train high-level talent last year. We doubled our staff at the Winchester, TN, manufacturing facility and created a best-in-class supply chain team to partner with our customers. These efforts will benefit HK and its customers for years to come.
In many ways, 2022 was very challenging. It was the toughest year ever in the company. But having some new people, fresh energy, and the collaborative way we solved some of our biggest problems is quite positive. It gives us all great hope that whatever comes our way this year we are quite prepared and able to adapt.
