Indian plastic maker Alternicq says Iran war has pushed up costs
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Key polymers used for making plastic goods, such as polyethylene terephthalate and polypropylene, are derived from crude oil.
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BENGALURU – Raw material costs for plastic used in fast-moving consumer goods, paints and personal care products have surged as much as 40 per cent since the start of the Iran war, said a top executive at Indian rigid plastic manufacturer Alternicq.
The weeks-long conflict has sent oil prices surging amid fears of supply disruptions, with the impact rippling across sectors.
Manufacturers are passing some of that pressure on to everyday goods, such as bottled water.
Alternicq, India’s largest rigid plastic packaging maker by capacity, counts consumer goods firms Marico and Hindustan Unilever, and Asian Paints among its customers.
Key polymers used for making plastic goods, such as polyethylene terephthalate and polypropylene, are derived from crude oil.
A sustained surge in the prices risks hitting the margins of consumer goods and personal care companies.
Costs of both polyethylene terephthalate and polypropylene have risen about 40 per cent since the beginning of the war, Alternicq’s chief executive and managing director Thimmaiah Napanda said on April 17.
The company is passing higher costs to clients, limiting the financial impact from the price spike, he said.
Raw material costs are expected to normalise over four to six months if the conflict is resolved soon, he added.
Hindustan Unilever and Asian Paints did not immediately respond to Reuters’ requests for comment, while Marico declined comment due to a pre-earnings silent period.
Alternicq’s longstanding ties with refiners such as Reliance Industries have helped cushion the impact of oil supply disruptions to some extent, Mr Napanda said. REUTERS
