February 26, 2021

Dear Valued Customer:

Our team at Capital Adhesives continues to wish you, your families, and your businesses a safe and healthy 2021 as we navigate these challenging and unprecedented market conditions.

With the recent events in weather conditions throughout the Southwest, and more specifically the Texas region, we want to confirm the unprecedented dynamics that have disrupted the adhesive and polymer industries in Q1 of 2021. While the situation prior to last week was already difficult, the significant damage from the winter storm in Texas and surrounding states has made an already strained supply situation more complex. The full impact continues to be evaluated as many key raw material manufacturing facilities are just now being inspected for damages. This historic winter storm, combined with the quickened increase to petrochemical markets, extensive logistical delays, and reduced raw material availability makes the present situation increasingly difficult to navigate.

Capital Adhesives remains committed to meeting customer needs and will continue to keep you updated on the ever-changing situation. Our priority remains to keep our customers supplied with the same quality adhesive products you have come to know from Capital. Please note, that due to the current supply conditions we will protect inventory levels as best we can, such that, order volumes will be kept to what is reasonable and within the capabilities that supply allows. Order requests that are above historical volumes will be monitored and possibly not filled at this time in order to protect all business clients.

At this point, we are still working hard to understand the total impact of the current state. The force majeure imposed from numerous key raw material suppliers, the continued logistical challenges to the market, and the on-going impact of CoVid-19 on all suppliers are factors we must consider. While prices have continued to rise thru Q4 2020 and into the first quarter of 2021, we have absorbed these costs in hopes that they were temporary in nature; however, it has become evident that these rising costs are expected to continue, and possibly worsen in the coming weeks. While we are not announcing any immediate price increase, if conditions continue to evolve as they are, we will need to work with clients more closely on pricing matters.

As we work together thru this sensitive matter we ask all customers to plan ahead; be wise to your adhesive use; revisit your forecast needs over the coming 60 days; and expect potential delays.

Capital Adhesives is taking all possible steps to secure supply for our customer base. We will continue to reach out as more information becomes available from our suppliers. Please reach out to your territory manager if you have any additional questions. Thank you for your continued partnership with Capital Adhesives.

Sincerely,

Mark Angermeier
V.P. Sales, Capital Adhesives