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Fire adds to headaches for PHP

Inflation makes price increases inevitable, company says.

13th September 2021

Innovation in Textiles
 |  Obernburg, Germany

Industrial, Transport/​Aerospace

On the afternoon of September 8th, PHP Fibers, part of the Indorama Mobility Group, was beset by a fire at its Obernburg plant in Germany, which is still under investigation.

While posing no danger to life or health hazard to local residents, this latest setback comes at a time when the company is experiencing very volatile market conditions.

The manufacturer of industrial fibres, cords and fabrics reports that even as the Covid-19 pandemic eases in certain parts of the world, global freight remains unreliable and expensive, the costs of energy and global commodities are increasing, and an increasing focus on sustainability and environmental impact is driving compliance costs upward in most parts of the world.

PHP Fibers, like many companies, has been confronted with significant inflation since the beginning of the year, including:

-A hike in utilities costs. Gas prices have tripled in the past few months in Europe, from a level of €15/MWh to €45/MWh, while increasing by 50% for PHP in USA.

-Prices for CO2 certificates in Europe have almost doubled, approaching €60 per ton from €30 per ton at the end of last year, while regulations continue to expand the need for CO2 compensation.

-The cost of chemicals and additives – spinfinish, dip chemicals, coating and laminating chemicals – has increased by 5%.

-Prices for standard packaging materials have increased by more than 30%.

Despite a local manufacturing footprint which is not fully affected by global freight issues, the company reports that regional road transport logistics costs have also increased by around 20%.

“Despite continuous efforts to optimise our cost structure through extensive operational excellence initiatives, such cost inflation has now reached a level we can no longer offset and must pass on to the market, with a general price increase effective October 1st 2021,” said Indorama Mobility Group marketing manager Hans-Bernd Lüchtefeld. “It is a necessary step to continue supplying high quality products and services from our broad product portfolio.”

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