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Archroma Increases Prices as Logistics Costs Spike

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The global spike in freight and logistics costs has led to price increases throughout the fashion industry, including specialty chemicals company Archroma, which on Wednesday announced a general uptick in pricing across its portfolio beginning Oct. 1.

According to the company, which produces anline-free indigo and natural EarthColor dyes, the increase was unavoidable.

“Archroma made every effort to absorb these increases,” said Marcos Furrer, Archroma chief operating officer. “We have however reached a point where these adjustments are needed for us to be able to maintain our service levels.”

Prices of its products will increase by up to $0.25 per kg. The adjustment comes on the heels of a price spike last November, when the company issued a 20 percent increase for all of its Nuva N and Fluowet fluorocarbon polymers products. The substances are often used in applications where a water and/or oil barrier is needed, such as personal protective equipment (PPE) for health professionals.

At the time, the company said the price increase was “necessary to support the increasing regulatory and other costs, as well as ongoing investments that Archroma continuously makes in its own manufacturing technology and process.”

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Companies across the board are experiencing similar obstacles as a result of supply chain disruptions and added costs related to the Covid-19 pandemic. A study from Panjiva, an S&P Global Market Intelligence company, indicated that freight costs may have added $9.53 billion to corporate costs in the fourth quarter of 2020. And according to Michael Lasser, U.S. hardlines retail analyst at UBS, shipping rates are expected to climb even higher, and customers will likely be responsible for covering the difference.

Some companies have noted that customers could remain unfazed by price increases with the right approach. During an earnings call in July, Levi’s shared that it raised prices while simultaneously elevating the brand with high-profile collaborations as part of its premiumization strategy, noting that it’s important to only increase pricing “when the brand is resonating with consumers—not when you need to.”

Similarly, Wolverine Worldwide CEO Blake Kreuger said there was little pushback when the footwear manufacturing company increased pricing as a result of tariffs two years ago, and he expects a similar response in the near future.