Peabody Engineering LLC, a manufacturer of tanks, telecommunication disguise equipment and other plastic products, is among the processors exposed to possible cost increases due to recently announced tariffs on many imported goods.
CEO Mark Peabody was notified fiberglass grating and structural products will be seeing a price increase in the next 30 days or so in addition to a few other items.
The Corona, Calif.-based company may have no choice but to adjust pricing, Peabody said in a letter to customers "so you can prepare for it."
"These price increases, if necessary, may be temporary or they may be permanent, but it's too early to tell at this time," Peabody said. "In addition, we will be looking at alternative sources on those items affected where we may be able to avoid the tariffs altogether."
For example, Peabody said in an email to Plastics News that the company primarily uses fiberglass grating that comes from China.
"We have a domestic manufacturer we are migrating to this year," Mark Peabody said, adding the material is used to produce some tank components, like ladders, stairs, platforms and containment basins.
Founded in 1952, Peabody manufactures five to 20,000-gallon tanks in single- and dual-wall configurations for commercial and industrial uses; concealment systems for antennas and cell towers; and fiberglass reinforced polymer (FRP) structural shapes for ladders, handrail systems and other uses.
Peabody manufactures most of its products in Corona or its other site in Liberty, S.C., with as much domestically sourced raw materials and components as possible, the CEO said, "because we believe that American manufacturing is crucial to our long-term success and security as a nation."
However, some of Peabody's suppliers are exposed to possible cost increases, the CEO added.
"We believe these tariffs will be transitory or will equalize in due time as foreign manufacturers or importers absorb all or a portion of those tariffs by reducing their margins to stay competitive," Peabody said.
In the meantime, Peabody officials will strive to keep prices as low as possible, the CEO added.
"We are going to take a pulse of customer sentiment with respect to tolerance of tariff increases and may consider trimming our margins to offset part of them," he said. "Again, I believe it will be temporary, so we may be able to absorb most of it, unless it persists over the next 6-12 months.
Three years ago, Peabody Engineering opened the South Carolina site to shorten lead times and improve regional availability.
The company had started out selling agricultural fertilizer equipment but grew quickly as a manufacturer of bulk storage containers.
Then, Peabody Engineering added products for telecom concealment systems that are made from fiberglass, foam or vinyl and are designed to also serve as clock towers, flag poles, steeples, windmills and church crosses.
Despite all the tariff uncertainty, Peabody is optimistic.
"We believe that there are great times ahead and that our economy is going to boom in the next four years as business conditions improve with reductions in regulations, incentives to manufacture products domestically and a release of the American energy sector to open the floodgates on energy production, which will ultimately drive down prices on everything and reduce inflation significantly," Peabody said.