It’s not just raw material that is causing concerns for the tanning segment. Chemical products are in the mix as well. The latter, due to a number of reasons, are generally undergoing a series of changes that are causing the prices to increment significantly for all product types. Such tensions are being mentioned by many tanners and risk, among other things, of becoming an additional boomerang for the chain. That’s why the entire segment, starting with its players in Italy, are asking for a renewed sense of responsibility from suppliers.
Tensions over chemicals’ prices
The general tension is described by tanneries in the same manner. They point out that many suppliers have already spoken of imminent increments, starting April 2021, without going into details regarding the amount. According to some tanneries, the range is wide: between +5% and +40%, with an average of +15%. This could be an enormous problem for the tanning industry, for which chemicals is the 3rd largest expense. Also considering that such increment comes at a time of the year during which negotiations (even during a difficult time such as this one) have already started with clients, as they began selecting from the tanners’ samples.
The reasons behind these increments are to be attributed, for the most part, to the challenges of suppliers’ in getting raw materials to make the chemicals, as well as their increasing prices. Everything is aggravated by the additional challenges when it comes to transporting materials and thus logistics’ costs. For example, the rental of containers. Many chemical brands are thus now less capable of minimizing and absorbing such costs. As a consequence, many have decided to increase costs as to (according to them), not impact the quality of the goods they supply, along with the timeliness of delivery. For the chain and the tanning industry this would be, undoubtedly, a destabilizing choice that coincides with a moment in which the normal equilibrium of business has been radically impacted and the smallest changes could have extensive effects.
The chain’s responsibility
And so, some entities remind them (also because of the situation of raw hides), that all sides had already called for responsibilities during the first lockdown period. This responsibility must be shared by the entire chain. A necessary responsibility today, to maintain all market positions. All while waiting for the vaccination plans to restart the engine, not just for the tanning segment), but the entire world.
Images from the Archive of La Conceria