Your point regarding older plumbers preferring the traditional methods that they already know and are familiar with is spot on. As with anything, young people are more open to new ideas and methods. The time savings benefits that Sharkbite provides should be more than enough to convince more and more younger plumbers to use Sharkbite.
This reminds of an older relative of mine who has a few investment properties. Up until she died, she preferred to go the tenants' places every month to collect her rental cheques and then go to the bank to deposit them. Every now and then, she liked to say that she was too busy doing all of these routines every month.
When I asked her why she didn't ask the tenants to deposit the rentals directly into her account, she answered that she preferred getting cheques in person as this gives her peace of mind and also allowed her to check on the properties at the same time.
As long as she was happy doing it, then I guess there is nothing wrong with that. But, I can't imagine young and busy property investors willing to do what she did every month. I imagine a similar thing is also happening in the plumbing industry. Before we know it, less and less younger plumbers will know how to use the traditional methods. And even if they know how to do it, they will not be as proficient as the older plumbers in using the traditional methods.
RWC has a video showing the time saving comparison between Sharkbite and other methods.
The result of the comparison is startling:
- Copper sweat method: 2:00:01
- PEX crimp method: 0:49:17
- CPVC glue method: 0:28:19
- Sharkbite method: 0:08:08
If a plumber costs $100/hour, the customer has every incentive to ask the plumber to use Sharkbite instead of other methods because the higher costs of the fittings will be more than offset by the savings in labour time.
The 25 year warranty on Sharkbites products is also made void if used in conjunction with other cheaper products, such as Auspex.
I haven't read the warranty terms of Sharkbite, but I know for a fact that Auspex is actually owned by RWC. The prospectus actually mentioned that Auspex was purchased by RWC back in 2007.
RWC estimated that in 2014, in Australia by unit sales volume, the market share of Sharkbite in PTC fittings is 85% and the market share of Auspex in crimp fittings is 30%.
In the PEX pipe category, the combination of Auspex and Sharkbite brands held 25% market share in Australia.
I guess the main point is Sharkbite is not going to displace crimp fittings and other methods overnight. The traditional methods will still be around for a little while. In the mean time, RWC is perfectly positioned with feet in both camps. It has market leading presence in the new and growing segment of PTC fittings and also presence in the crimp fittings segment.
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For those interested in RWC, please check out this corporate video recently released by RWC. It certainly makes me quietly optimistic about the future.
RWC Price at posting:
$2.73 Sentiment: Buy Disclosure: Held
(20min delay)