By Rafal Wojciech Nowak April 14 (Reuters) - The U.S.-Israeli war with Iran has not materially disrupted Givaudan's business so far, and the fragrance and flavour maker will continue to combat its
Givaudan CEO: Iran War Effects Manageable for Now with Supply and Price Steps
By Rafal Wojciech Nowak
Givaudan’s Response to the U.S.-Israeli War with Iran
April 14 (Reuters) - The U.S.-Israeli war with Iran has not materially disrupted Givaudan's business so far, and the fragrance and flavour maker will continue to combat its effects through price hikes and supply adjustments, its new CEO said on Tuesday.
Inflationary Pressures and Price Adjustments
The Swiss group is seeing some inflationary pressure on input costs, notably in freight and logistics, CEO Christian Stammkoetter said. It aims to raise prices in collaboration with customers to fully offset these increases.
Regional Exposure and Business Segments
The Middle East accounts for a high single-digit percentage of Givaudan's total sales, with higher exposure in its fragrance and beauty business than in food flavours, where it represents a mid-single-digit share, Stammkoetter said.
Crisis Teams and Employee Safety Measures
The company, which employs more than 1,390 people across 13 countries in South Asia, the Middle East and Africa, said it had set up crisis teams to ensure the safety of its staff and continuity of supply.
Sales Impact and Supply Chain Management
Finance chief Stewart Harris said Givaudan's first-quarter sales were little affected by the war, crediting local and central teams who managed freight disruptions, though road shipments for food flavours faced "a slight impact."
The company will deploy similar supply chain measures in the second quarter, "unless the situation escalates", Harris added.
Contractual Coverage and Future Uncertainties
He said Givaudan was "relatively well positioned" on contractual coverage for the first half of the year, but the second half was a bit more uncertain.
Potential Risks from Prolonged Conflict
Stammkoetter also warned that a prolonged conflict could disrupt fertilizer supply, which would hit agricultural input costs, particularly in the global south.
"As long as the conflict is not lasting too long, I think this will be manageable," he said. "If the conflict would drag on for months and months, that will become more relevant."
Customer Behavior Amid Conflict
Givaudan has seen no signs of customers changing ordering patterns due to the conflict, Stammkoetter said.
"We have no indication that there is stocking. They rely on us to secure the supply," he said.
(Editing by Milla Nissi-Prussak)
