Insight

Fastener + Fixing Magazine last published an article from the European Fastener Distributor Association (EFDA) back in May  2022 – regarding the association’s conference in Madrid, Spain. With that in mind, we spoke to EFDA President Andreas Bertaggia about what the association, and its members, have been focused on since the conference and what they will be concentrating on for 2023. 

How did the second half of 2022 progress for the association and its members after the Madrid conference? What topics do you believe will be the main focus for the fastener industry in 2023?

“Our members from all over Europe were very happy to finally meet in Madrid after the Covid-19 pandemic. Since then, we have been able to continue our work online and with in-person meetings, most recently at Fastener Fair Italy in Milan in December. The issues that have been challenging EFDA and its member associations, and affiliated companies, are many: How secure are the procurement markets? How do we deal with increasing supply chain regulation? And how do we adjust to more sustainability?

As for 2023, I believe that supply chain regulations and compliance requirement, as well as Environmental, Social and Governance factors (ESG) – especially sustainability – will be big factors for European fastener distributors. For instance, many regulations originate in Brussels, such as the planned EU Directive on Corporate Social Due Diligence, the planned EU Force Labour Ban Regulation and the planned Carbon Border Adjustment Mechanism (CBAM). 

Laws also come from the nation states that are formally only applicable to local companies, but – as always with cross-border business – they also have an impact on our members in other countries through the supply chain. One example is the German Supply Chain Act, which came into force on 1^st January 2023. Similar laws already exist in other EU member states. 

EFDA and its member associations are committed to ensuring that the requirements of the legislation are appropriate for the small and medium-sized structure of its trading companies. The laws must stand up to the test of practice. It must not be the case that smaller trading companies have to give up because they can no longer cope with the bureaucratic requirements. It is therefore a question of a fair balance between the overriding interests of the public and feasibility in the company. This is what we stand up for as the voice of the European fastener distributors in Europe. Of course, we keep our members informed about the progress of the legislative process and provide them with information for the implementation.” 

It has almost been a year since the anti-dumping duties were applied to certain iron and steel fasteners from China. How has this impacted EFDA’s members and the European fastener market a year on? 

“This disproportionately high anti-dumping duty of 86.5% hit the industry at a time when it had already faced multiple challenges, such as unreliable delivery times, as well as high container and raw material prices. Now, high energy prices and geopolitical uncertainties are added to the mix, as well as the legislative requirements already mentioned. The outlook for the industry is anything but certain. 

With regard to the anti-dumping duties per se, a particular challenge for our members is dealing with imports from Chinese companies, to which the lower duty level of 39.6% applies. European importers must be extremely careful to ensure that the imported goods are also subject to the lower duty rate. In practice, this can be more difficult than one might think. If mistakes are made here, the importer will end up paying the high duty rate of 86.5% for the imported goods. 

For the industry, it can mean that this case of ‘internal circumvention’ within China leads to the high duty level being extended to all imports from China. A similar situation applies to circumvention via third countries. EFDA informs its members about what to consider when importing fasteners from China and also educates in Asia about the risk
of circumvention.”

Some European fastener manufacturers have looked to increase their capabilities when it comes to the products involved in the anti-dumping duties. Has this helped EFDA’s members? Where have they looked to source these products if not within Europe?

“Diversification in supply sources is certainly called for – due to many reasons. That is why, in addition to the People’s Republic of China, supply markets, particularly in Asia, continue to be important. For instance, Taiwan has always played an important role as a supplier of fasteners. 

At the same time, it is still valid that there is no adequate supply of standard parts in the EU at all. At least according to our perception, this has not changed after the imposition of the anti-dumping duties. EFDA had repeatedly pointed out to the European Commission during the anti-dumping investigation that EU manufacturers will not produce sufficient quantities of standard parts. We have been proved right.” 

What is EFDA’s approach regarding the anti-dumping duties? Is it still looking to overturn the decision?

“The anti-dumping duties are and remain wrong. The level of the general duty of 86.5% is completely unrealistic, harmful and also legally contestable. As already mentioned, the lower duty rate of 39.6%, which is to be applied to imports from some Chinese manufacturers, also leads to considerable difficulties in practice. We still see hardly any benefit in these duties for anyone, but considerable damage for many companies in Europe, especially our customers. We can look forward to the duties being declared illegal one day. One possibility is a determination by the WTO.” 

EFDA will have a stand at the upcoming Fastener Fair Global show in Stuttgart, Germany. What are the association’s plans for the show? 

“EFDA will again be present with its own stand at the upcoming trade fair in Stuttgart. The point is to have a contact person on-site for a personal discussion, also on the part of the association. In times of online meetings, face-to-face meetings are more important than ever. 

We are also using Fastener Fair Global to gain new members. In addition to national member associations, companies can also become members of EFDA directly if there is no national association for fastener distribution in their country to represent their interests. These companies become members of the so-called MEFDA group, where we already have companies from Finland to Portugal, and from Hungary to Belgium. 

The MEFDA group meets regularly and exchanges information on current topics in the fastener business. The companies receive important information from EFDA. We hope that many European fastener distributors will visit us in Stuttgart in March.”

A big factor over recent months has been the huge increases in energy prices. How have EFDA’s members been impacted? As an association how have you looked to support members with information, etc? 

“Rising energy costs and the associated uncertainties are playing a major role for fastener distributors pretty much everywhere in Europe. We hear that many companies are taking a close look at the issue and where they can make savings. 

Within EFDA, we regularly exchange views on the current challenges of our industry in various committees and groups. Of course, energy demand plays an important role in this, especially as manufacturers are hit harder than retailers by rising energy costs, which they pass on to retailers or end customers in the supply chain, which in turn fuels inflation.”

What do you see as being the big trends for the fastener industry in 2023 and beyond? How can your members benefit from these trends?

“Sustainability is a big issue and is steadily gaining importance for the fastener industry and the economy as a whole. The Environment, Social and Governance (ESG) requirements for companies also continue to increase and become more comprehensive – at European and national level. As already mentioned, EFDA is involved in the legislative processes at European level, its national members at national level. They all inform their members about the new challenges and developments so that they can adapt to the changes. 

However, ESG compliance already plays a major role for almost all fastener distributors in Europe. Although SMEs are often exempted by the legislator, even the smaller companies are active in this field because in many cases a strong customer dictates what compliance is required – and EFDA members are prepared for that. 

Of course, ESG compliance causes a lot of administrative costs, efforts, and complexity, that nobody likes from a company point of view. However, many European fastener distributors have also realised that ESG compliance can create a competitive advantage, in the home market, in Europe, but also in global markets. The EU has the most ESG regulations to comply with compared to other regions. We assume that Europe is and will remain the leader here, while governments in other parts of the world will sooner or later follow the same or a similar path. For this reason, it is worth being at the forefront right from the start.

Another major factor is geopolitical situation, which is more uncertain that it has been for a long time. Taiwan is a particular focus. Should the international tensions have a negative impact on Taiwan or even lead to a slump in the Taiwanese market, this would have disastrous consequences for the fastener industry. 

Another unknown is the Russian war of aggression on Ukraine. We can only hope that this will come to an end soon and that stability all over the world will return. 

A further challenge for our members is the difficult labour market situation. This affects basically all of Europe, some countries more, some less. The problem is that there are too few or too few qualified workers. Accordingly, the salary expectations of many applicants are rising immeasurably. With the shortage of labour, personnel costs in fastener distribution companies are rising, which has a negative impact on margins. We still expect great pressure here in 2023. 

Finally, digitalisation will change the industry even faster than before, making it even stronger and indispensable. We can observe that most companies are analysing and defining their digitisation strategies. Many companies have already done a lot and have made big investments to keep up with the pace.

Throughout all this, EFDA will be active on behalf of its members and provide them with comprehensive information.”