Indian plastic maker Alternicq says Iran war has pushed up costs

Raw material costs for plastic used in fast-moving consumer goods, paints and personal care products have surged as much as 40% since the start of the Iran war, a top executive at Indian rigid plastic manufacturer Alternicq said.

The weeks-long conflict has ‌sent oil ⁠prices ⁠surging amid fears of supply disruptions, with the impact rippling across sectors. ​Manufacturers are passing some of that pressure onto everyday goods, such as ​bottled water.

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Alternicq, India's largest rigid plastic packaging maker by capacity, counts consumer goods firms Marico and Hindustan Unilever, and Asian Paints among its customers.

Key polymers ⁠used for ‌making plastic goods, such as polyethylene terephthalate and ​polypropylene, ​are derived from crude. A sustained surge in ⁠their prices risks hitting margins of consumer goods ​and personal care companies.

Costs of both polyethylene ​terephthalate and polypropylene have risen about 40% since the beginning of the war, Thimmaiah Napanda, Alternicq's CEO and managing director, said on Friday.Also Read: Oil prices surge from Iran conflict boosts global biofuel demand

The company is passing higher costs to clients, limiting the financial impact from the ‌price spike, he said. Raw material costs are expected to normalise over four to six ​months, if ​the conflict is resolved ⁠soon, he added.

Hindustan Unilever and Asian Paints did not immediately respond to Reuters' requests for comment, while Marico declined comment ​due to a pre-earnings silent period.

Alternicq's long-standing ties with refiners such as Reliance Industries have helped cushion the impact of oil supply disruptions to some extent, Napanda said.