Kimberly-Clark to Boost Prices as Commodity Costs Rise -- Update
31 Marzo 2021 - 9:59AM
Noticias Dow Jones
By Dave Sebastian and Colin Kellaher
Kimberly-Clark Corp. on Wednesday said it would raise selling
prices across the bulk of its North America consumer-products
business to help counter rising costs of raw materials.
The maker of Huggies diapers and Scott paper products said it
would raise prices by a percentage in the mid- to high-single
digits, and the increases will go into effect in late June.
The moves will affect its baby- and child-care, adult-care and
Scott bathroom-tissue businesses, Kimberly-Clark said.
The Irving, Texas, company said the increases, which it will
implement almost entirely through changes in list prices, are
needed to help offset significant commodity cost inflation.
The company in January guided for a commodity inflation of $450
million to $600 million in 2021, expecting costs to rise for
materials like pulp, recycled fiber and resin. At that time, Chief
Executive Michael Hsu said the company wasn't planning for
broad-based increases to list prices.
"The pricing plans we outlined in January were based on the
commodity inflation outlook we provided at that time, so it's fair
to say that we wouldn't be announcing these price increases if the
commodity environment hadn't worsened," a company spokesman said
Wednesday.
Since then, global supply chains, which were already
experiencing a crunch due to the Covid-19 pandemic, have seen
additional disruptions. The February freeze that triggered mass
blackouts in Texas led to chemical plant shutdowns and caused a
shortage of the raw materials needed for everything from medical
face shields to smartphones. As a result, prices for polyethylene,
polypropylene and other chemical compounds reached their highest
levels in years in the U.S. as supplies tighten.
Inflation is poised to leap higher in the next few months due to
a sharp dip in prices a year ago, Federal Reserve Chairman Jerome
Powell said in March.
"We could also see upward pressure on prices if spending
rebounds quickly as the economy continues to reopen, particularly
if supply bottlenecks limit how quickly production can respond in
the near term," Mr. Powell said. "However, these one-time increases
in prices are likely to have only transient effects on
inflation."
Meanwhile, shipowners, exporters and importers are now racing to
secure berths and containers at ports while warning of delays and
higher costs for cargoes after engineers freed the Ever Given, a
1,300-foot container ship that had been stuck in the Suez Canal. In
the U.S., container ships anchored off the Southern California
coast are waiting for space at the ports of Los Angeles and Long
Beach. The ships are carrying tens of thousands of boxes holding
millions of dollars' worth of washing machines, medical equipment,
consumer electronics and other goods that make up global ocean
trade.
A raft of consumer-facing companies, including Cheerios maker
General Mills Inc. and Olive Garden parent Darden Restaurants Inc.,
have also recently signaled concerns about rising commodity
prices.
Write to Dave Sebastian at dave.sebastian@wsj.com and Colin
Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
March 31, 2021 11:44 ET (15:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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