To: All Gypsum and Drywall Steel Customers

The manufacturers of drywall steel and gyp have announced and implemented several price increases that you need to be aware of.

First, due to the newly assigned steel tariffs, there are price increases scheduled on all drywall steel products, including bead, of 20% on April 15, 2002, approximately 20% on May 15, 2002 and I have been told that it's likely that June and July will also present price increases.

Furthermore, due to the demand for 20g steel products from both the automobile industry and the appliance industry, there is an additional increase of 10% on 20g products effective immediately. Manufacturers will not protect any previous pricing unless you award and list the job with them prior to any scheduled increase. If you have a large job that you have committed a price to, check with me to see if it can qualify for price protection.

Gypsum has already increased 15% on March 11th and is scheduled for another 15% increase on May 13th. Also due to the fact that excess gypsum manufactured in the south and midwest is no longer being shipped to our market, and that our market is very busy, we are in an allocation situation. Board and to some extent plaster, is in short supply. We should be able to supply our regular customers of gyp and plaster without any problems, however, new customers may experience a delay of several days to fill their orders and some orders may even be refused. Please allow plenty of lead-time for delivery orders and plan ahead on your upcoming and current jobs.

So you can see, these price increases and supply issues are serious and can cause you unforeseen costs and delays. While I can't control the actual increases and the supply issues, what I can control is our ability to get this information to you quickly and allow you to make adjustments that lessen the impact to you and your customers. As your supplier, my job isn't just to sell you a product when you walk in, it's also, and more importantly, to keep you informed and able to manage your business in a profitable manner.

If you have any questions about any of these issues, please call me.

Sandro
Kesseli & Morse Co.