Manufacturers begin to raise product prices
Two prominent HME manufacturers have served notice that they’ll raise prices on standard products this month to help offset an increased cost of doing business in China. Other manufacturers may follow suit shortly, if they haven’t already, say industry watchers.
Come Jan. 1, Graham-Field will increase prices on many standard products by 4% on average, said Ken Spett, vice president of global marketing. Invacare plans to increase prices on some standard products beginning Jan. 15 by 1% to 4%, said Carl Will, group vice president for HME.
“Everything adds a little cost these days,” Spett said in early December. “This is not the year that prices are going down.”
A number of factors have contributed to boost the cost of manufacturing products and parts in China: the declining U.S. dollar, an increased tax on exports, stricter regulatory and environmental controls and rising materials costs.
“I’ve seen factories dumping the residue from the chrome-plating process into rivers,” said Dave Jacobs, vice president of Medline’s HME business. “Regulating these more will raise costs. It’s the right thing to do, but it can cost a factory $1 million to put the right kinds of environmental controls on a process like that.”
Chrome plating is used on many DME products made in China, including wheelchairs, IV poles and bed rails.
In September 2007, Drive President Harvey Diamond said he expected product prices to creep up, but that they would still be reasonable. Diamond did not return a call for this story nor did Sunrise Medical.
Medline does not plan to raise product price at this time, but will open a factory in Vietnam in February as a hedge against future increases in China, Jacobs said.
There could be additional pricing increases in 2008, say industry manufacturers.
“I’m not saying I’m going to increase prices (again), but if those factors continue to increase, we’ll have to increase the pass along,” Will said.