Cost Of Condom, Tyre Set To Rise


Globally, the cost of tyres, gloves and condoms is set to rise following a recent 65  per cent jump in the price of natural rubber.

The surge is the result of heavy rains in the main rubber-producing region of  south-east Asia, which have disrupted rubber tapping.

The situation is putting pressure on manufacturers to raise prices or face lower  margins. Major tyre companies including Bridgestone, Michelin, Goodyear and  Continental have raised prices by 5-15 per cent this year — and some businesses have  announced a further round of price increases.

Continental is to put prices up by 5 per cent from the start of next year, citing  “the currently very high price level for the main types of natural rubber used in  the production of car tyres”.

Goodyear last week reported a loss for the third quarter in spite of its highest  sales in two years, sending the shares tumbling 12 per cent in two days.

Adam Glickman of Condomania, one of the largest speciality condom retailers , said  the price of condoms had risen 10-20 per cent in the past year and manufacturers  were warning of further increases.

The branded condom market is dominated by SSL International, the London-based  company that owns the Durex brand and is being acquired by Reckitt Benckiser, as  well as Church & Dwight of the US and Australian-listed Ansell.

Lim Cheong Guan, executive director of the world’s biggest rubber glove  manufacturers, Malaysia’s Top Glove, said it was forced to raise prices “in order  for us to sustain our business”.

Analysts expect prices to remain high. While supply has disappointed, demand is  rebounding from the lows of the financial crisis.

Global light vehicle sales will rise 10.5 per cent this year, according to  consultancy JD Power, while tyremaker Pirelli estimates demand for truck tyres has  risen by more than a half in markets such as China so far this year.

Jom Jacob,  senior economist at the Association of Natural Rubber Producing  Countries, said he expected the tight situation in the rubber market to worsen: “The  concerns over natural rubber supply are likely to persist until the end of 2011.”

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