The plumbing and ceramic sanitary ware manufacturer Geberit announced a 2% price increase for its plastic pipes and certain other products starting in June. This decision aims to offset the rising costs of plastic materials and energy resulting from the conflict with Iran.
The Swiss group, considered a barometer of the construction sector, had already raised its prices by 5% this year on copper-related products – which represent a relatively small part of its turnover – in addition to its usual annual increase of around 1%.
“We are impacted by the substantial rise in plastics and energy,” said CEO Christian Buhl to journalists, specifying that this latest measure was motivated by an inflation of raw materials now extending from basic plastics to technical plastics.
Plastic prices have increased following the surge in oil prices, as the conflict in the Middle East led to the closure of the strategic global trade route of the Strait of Hormuz. Geberit, however, clarified that the conflict had little direct impact on its activities, as shipments through the Strait of Hormuz represent less than 1% of the group’s sales.
“The rest of the Gulf region is functioning relatively normally,” added Christian Buhl, emphasizing that sales in Saudi Arabia have been increasing since the beginning of the year, including in March.
These statements follow the publication of first-quarter results, where Geberit reported a slight decrease of 0.7% in revenue to 873 million Swiss francs (1.11 billion dollars), in line with expectations. EBITDA, on the other hand, increased by 2.3% to reach 283 million francs, surpassing the 279 million expected by the consensus Visible Alpha.
Geberit noted that the escalation of geopolitical risks makes it difficult to assess the overall economic environment, especially regarding inflation, consumer sentiment, and interest rates, all key factors influencing demand in construction.
Nevertheless, Christian Buhl clarified that the company’s market outlook has hardly changed since March, with European demand proving resilient so far and Germany expected to remain stable or slightly growing.
“We have not yet seen a direct impact of the war in Iran on demand in the European construction sector,” concluded the executive.
(1 $ = 0.7847 Swiss francs)
