Consumer durable makers are staring at high raw material and logistics costs due to a surge in commodity prices including copper and global freight costs over the past few months. Players are looking to hike prices of products such as air-conditioners, refrigerators as well as LED TVs from June onwards.

Kamal Nandi, Business Head & EVP, Godrej Appliances, said: “Prices of commodities such as copper have shot up by 25-30 per cent over the past three months. Even aluminium prices have been witnessing a surge. Global freight costs have increased by 60-70 per cent. This has put pressure on the input costs for players. Raw materials are usually purchased a quarter in advance and the impact will be felt more in the July quarter. Therefore, some increase is expected in prices of products such as air-conditioners and refrigerators in the July quarter.” 

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This comes at a time when cooling product categories such air-conditioners, refrigerators and air coolers are witnessing strong demand due to the ongoing heatwave in parts of the country.

Sanjay Mahajan, Chairman & Managing Director, Carrier Midea India, said, “Last three months, commodity prices have been going up. Globally, costs of copper and aluminium are practically at an all-time high. So, some price corrections in air-conditioners segment in the market will begin from next month onwards in response to this hike in raw material costs.”

For LED TV makers, open cell rates, a critical component, have been on a high since early this year. Factors such as commodity costs surge and global freight price hikes are adding to these pressures.

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Avneet Singh Marwah, CEO, SPPL, Indian brand licensee for Kodak and Thomson, said, “The cost pressures are further mounting. Global freight costs have surged multi-fold, open cell pricing remains high and commodity costs have also risen. We will have to hike LED TV prices by 5 per cent in June and may even need to increase prices further by 3-4 per cent in July.”

“Rise in costs has led to higher manufacturing expenses, increased working capital requirements, disrupted cash flow, extended production timelines, have complicated delivery schedules for companies. We are strengthening our collaboration with logistics partners and implementing careful inventory management practices,” said Arjun Bajaj, Director, Videotex, contract manufacturer for televisions.

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