The rising cost of petroleum is making its impact felt throughout many pool and spa manufacturing segments.
“It’s not just the effect on gasoline prices and
freight,” said Mark Laven, president and CEO of Latham
Plastics in Latham, N.Y. “We’ve seen the escalation of
raw material prices that began last year continue to accelerate in
In recent months, the price of crude oil has hovered around the
$105-per-barrel mark — well in excess of the $75 that has
constituted petroleum’s average cost over the past five
years. The price per barrel continues to rise at a gradual but
Because petroleum is a major component of the resin used in the
production of many plastics, manufacturers in the pool industry are
finding it increasingly expensive to create fiberglass pools and
steps, polymer pool panels, and vinyl covers and liners. Products
such as pumps and filters, whose designs incorporate plastics, also
will likely be affected by rising petroleum costs.
“The price of our resins has gone up four times in the past
four months,” said Scott Cook, president of Family Fun Corp.
in Louisville, Ohio. “Anything oil-based is getting more
expensive to produce.”
So far, most manufacturers have responded to the increase by
absorbing much of the higher costs. “We know that mid-season
price increases are disruptive to our customers,” Laven said,
“and we try to avoid those whenever possible.”
Other manufacturers are working to offset the price hikes by
proactively working with supply chain networks. “We have a
team that’s dedicated to making certain that we’re
negotiating the best prices out there,” said Carlos Del Amo,
vice president of marketing and product development at Pentair
Water Pool and Spa in Sanford, N.C. “We’re monitoring
the market day by day.”
Still, many suspect that some degree of price increase will be an
unavoidable outcome if crude oil costs continue to climb.
“The only other thing you could do is reduce the quality of
your product,” Cook said, “and that’s obviously
not a direction we’re going to take. That’s short-term
thinking, anyway — it’ll catch up to a manufacturer in
the long run.”
Though it’s clear that the rising price of gasoline is rooted
in higher crude oil prices, experts continue to debate various
causes of the high petroleum cost itself. Historically, oil prices
have often spiked when political upheaval in the Middle East
disrupts the international oil trade, but many agree that this
factor alone is insufficient to create a sustained climb in
Increased demand for crude oil in rapidly industrializing countries
like India and China also has played a major part in the current
price bubble, and some blame a boom in speculation on oil futures
on the international commodities market. Another commonly cited
factor is monetary inflation: The U.S. dollar — the currency
in which oil is traded internationally — has been valued
increasingly weakly against currencies such as the euro and the yen
over the past several years.
The effects of the price increase are likely to be as varied and
interwoven as the causes, manufacturers say.
“There’s no question that higher pricing on a barrel of
oil is going to impact the entire market,” Laven said.
“My hope is that if there can be some peaceful or early
resolutions of these matters [in the Middle East], that maybe some
of the price pressure we’ve seen will ease off.”