At last we have finally have had good weather over the Easter weekend. For years and years this has always been a critical date for the supply of garden products to our customers. It is gratifying to see that for once all their hard work in preparing the garden centres has been worthwhile as they have been reporting record sales for the Easter period. We are also delighted to have successfully supplied our products to the centres in time for the holiday. Our suppliers performed very well this year and the shipping lines and managed to get our containers away from the Asian ports without delays. We even received assistance from her Majesty's Customs and Excise Department - last Wednesday before the holiday seven containers that were due for delivery on Thursday were pulled for examination which would have meant that they missed their booking in dates prior to the holidays. Following on from a conversation with the officials at Felixstowe port, all seven containers were released without delay - it helps to have good relations with the port authorities.

As usual at this time of year our buying department is in Asia visiting factories and also attending the trade exhibitions. The purpose of this trip is to finalise all the details for the new ranges of indoor and outdoor items being launched in the next few months. A complete report from this trip will be sent at the end of May once all our meetings have been concluded, however the early reports are substantiating the views that that we made in last month's report. Prices next year will show a substantial increase over this year. There was an article in this week's Sunday Times which repeated the points that we have already made. Prices in China are rising as a result of inflation caused by the ever increasing cost of raw materials, labour and power. Whilst clearly there is an element of speculation in the rise of the cost of raw materials, labour costs have increased throughout Asia as a result of political intervention designed to prevent exploitation of the workforce. The Chinese government has plans to increase the wage rate of the labour force by up to 15% a year over the next five years. The official interest rate in China has now reached 6 1/2% whilst the official inflation figure is running at over 4%. As the economies in Asia continue to prosper the demands for oil and oil based products continue their relentless increase in price. One only has to look at the price of petrol in the UK to see the huge increases that have been experienced over the past 12 months. In basic English, we are expecting the factory price increases to be in double figures over the next twelve months

Many factories are no longer taking orders even though there is demand. The factory stance is that there is no point in taking orders which are unprofitable. It no longer matters whether you are a large customer such as Walmart or small customer such as us. We are still able to supply repeat orders of garden products at existing prices; however we are working on an order by order basis.  We would not be surprised if our factories were to also start to refuse orders shortly.  For indoor products we are currently being notified of price increases that will come into effect from the middle of May.

The overall picture is much the same throughout all the major Asian manufacturing economies. In Vietnam the situation is much worse however as inflation is now into double figures and the bank borrowing rate is over 20%. This is causing big issues with our suppliers in setting prices for next season. Having said all this we have faced similar problems to these in the past and after the initial hiatus we have managed to negotiate successfully with the suppliers and compromised to meet everybody's expectations. On the positive side our discussions on new products have gone well and we will be able to offer exciting new ranges for the forthcoming season.

As we are not in a position to discuss in this month newsletter specific products in depth, it is worth mentioning our company's philosophy and repeating how we operate. Innovators began its existence as a one stop sourcing company. We have continued over the past 23 years to operate on the same basis. We visit our clients and based on their individual requirements approach factories who we have dealt with for many years and develop products in accordance with client specifications. We arrange the production, the quality inspection, the shipping of the goods, and the delivery of the goods and provide the finance. We act as the buying department for our clients thereby removing all the headaches in dealing with the supply chain located all over the world. Our services are provided in a totally confidential manner and we take full responsibility for the quality of the products that are supplied. It has taken years of experience to build up our network factories throughout the world. We have many customers who are willing to testify to the quality of our products and service.

In this rapidly changing world we have always maintained our basic philosophy. With the advent of the Internet and e-commerce a number of companies who operate in a similar market to us have set up their own internet retailing businesses, which compete directly with those of their customers. Innovators do not operate in this manner. We value the loyalty of our customers and recognise the investment that our customers make in their businesses. Our role is very clear to us and we will continue to operate in the same manner as we have done over the past 23 years and serve our customers to the best of our ability.

As mentioned above we are still able to produce products for shipment in approximately 35 days. This would enable any customers placing orders in the coming week to receive their goods at the beginning of July.  We currently have a limited selection of hardwood furniture ready at the factory that could be delivered in the UK by mid June. We are convinced that this will be the last chance to get products at very good prices. If you have any current requirements please would you contact your sales representative immediately in order to take advantage of this one off opportunity

Finally, over the next few weeks our sales executives will be contacting our regular customers in order to arrange appointments to view the new products at our 10,000 ft.² showroom by junction four of the M1. If you would like to arrange an appointment please do not hesitate to contact us. We assure you that you will find your visit to be of great benefit. Customers are always surprised by the huge variety of products that we are able to offer.