Iran war drives 40 percent rise in plastic material costs
Alternicq reports a 40 percent rise in plastic costs due to the Iran war. The firm is passing costs to clients and expects prices to normalize within six months.
The surge in costs for raw materials used in the production of plastics for consumer goods, paints, and personal care items has reached 40% following the outbreak of conflict in Iran. This regional instability has led to a sharp increase in the price of Brent Crude Oil, impacting industrial operations across India that rely on petroleum-derived polymers.
Alternicq, the largest rigid plastic packaging manufacturer in the country by capacity, has reported that the rising costs of polyethylene terephthalate and polypropylene are squeezing margins. The company supplies packaging to several major industry leaders, including MARICO LTD, HINDUSTAN UNILEVER LTD, and ASIAN PAINTS LTD. As key polymers like polyethylene terephthalate and polypropylene are derived from crude oil, the sustained price increase poses a risk to the profit margins of these consumer-facing companies.
Thimmaiah Napanda, the CEO and managing director of Alternicq, stated that the company is passing these higher costs to its clients to mitigate the financial impact of the price spike.
Costs of both polyethylene terephthalate and polypropylene have risen about 40% since the beginning of the war.
Napanda expects raw material costs to stabilize within four to six months if the conflict is resolved quickly. To help manage the impact of oil supply disruptions, Alternicq has relied on its long-standing relationships with major refiners such as RELIANCE INDUSTRIES LTD.
While Marico declined to comment due to a pre-earnings silent period, Hindustan Unilever and Asian Paints did not immediately respond to requests for comment.
