27/09/2021 – Manufacturing costs continue to rise — auf Deutsch lesen
Indorama must pass on costs to customers
The cost inflations have reached a level that Indorama can no longer offset. Therefore, the manufacturer will increase the price effective October 1st 2021.
Like many companies, the Indorama Mobility Group, manufacturing industrial fibers, cords and fabrics, is confronted with significant inflation since the beginning of the year. In particular, the inflation has been notable for the following cost items:
- Utilities: gas price has tripled in the past few months in Europe (from a level of 15 EUR/MWh in Q4’20 to 45 EUR/MWh recently), while increasing by 50% in USA.
- CO2 emissions and compliance cost: prices for CO2 certificates in Europe have almost doubled, approaching 60 EUR/ton from 30 EUR/ton at the end of last year, while regulations continue to expand the need for CO2 compensation.
- Chemicals and additives (spinfinish, dip chemicals, coating & laminating chemicals): cost have increased by 5%.
- Packaging: prices for standard packaging materials have increased by more than 30%.
- Logistic: despite the local manufacturing footprint of Indorama which is not fully affected by global freight issues, the regional logistic costs are also increasing up to 20% (road transport).
Despite continuous efforts to optimize their cost structure, through extensive operational excellence initiatives, the cost inflations have now reached a level that Indorama can no longer offset and must pass on to the market, with a general price increase effective October 1st 2021. It is a necessary step to continue supplying high quality products and services.