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Natuzzi Says Raw Material Costs Are Rising at a Slower Rate – Commodity Commentary

By on September 30, 2022 0

By Marie de Wet

Natuzzi SpA said on Friday the supply chain environment remained unstable, with the cost of wood and other raw materials rising at a slower rate.

On its supply chain:

“Due to ongoing geopolitical instability and soaring energy costs, the overall cost of key raw materials (i.e. steel, timber, chemicals and other oil) continues to increase, albeit at a slower pace compared to previous quarters,” the furniture maker said.

“Conversely, the cost of transport, especially for the longer Asia-North America routes, which represent around 75% of the total cost of transport, has started to reverse its upward trend observed in recent quarters.”

On prices:

“As previously stated, since price adjustments on our products are reflected in delivered sales and not in the confirmation of an order written by the customer, and it takes up to four months for a order is programmed, manufactured and then delivered to the end customer, then in a period of high inflation, such as the one we have experienced, we have difficulty decreeing price increases on our products as quickly as we have suffered them from our suppliers of raw materials.

“Provided commodity prices do not deteriorate further, we expect our pricing adjustments to be fully reflected in revenue in the second half.

“We remain vigilant in finding alternative solutions to reduce gross margin pressure from rising input costs, as we do not yet see signs of a return to trend in the cost of materials and energy.”

Write to Mary de Wet at [email protected]