Shares of Kimberly-Clark de México (KCM) fell 3.83% to 29.62 pesos per unit on Friday on the Mexican Stock Exchange (BMV), after the company announced that it faces pressure due to the rise in the cost of raw materials you use, while planning to increase the price of your products.
“Our expectations are that some of the raw materials that we use in our products will increase in price sequentially, in the first quarter of this year compared to the fourth quarter of 2021 (…) So we are in the process of implementing a price increase” commented Pablo González, CEO of the company that manufactures diapers and toilet paper in a conference call with analysts.
“There is still a lot of volatility, particularly around raw materials, material costs and it is not clear when they may stabilize and eventually come down,” he added.
During the call on the occasion of the presentation of its results report for the fourth quarter of 2021, the manager explained that the price of virgin fibers increased by an average of 30%, imported fibers for recycling increased by nearly 60%, while fibers for domestic recycling and the fluff averaged increases of close to 10 percent.
On the personal care side, superabsorbent materials are up more than 50% and polypropylene resins are up more than 90%. Another of the inputs that registered an increase of more than 80% was gas.
Pablo González stressed that 2021 was a “challenging” year, particularly the second half of the year, which was characterized by slow growth in domestic consumption and the impact of Covid-19.
This coupled with rapid and unprecedented increases in the costs of basic products and raw materials.
This situation weighed on the company’s results and was reflected in the volume of products sold, which fell 9.5% in 2021 compared to 2020.
To counteract these effects, Pablo González announced that they are implementing actions, but that they take time to materialize.
For the next two years, KCM, which markets products under brands such as Escudo, Kleenex and Huggies, will make capital investments (capex) for 250 million dollars to implement improvements in technology, reduce costs, achieve greater efficiencies, among other actions.
judith.santiago@eleconomista.mx
