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Raw material shortages impede production at Mohawk

16.11.2021 − 

According to Mohawk Industries, the supply problems concerning various chemical upstream products - which have been ongoing for a considerable period - deteriorated in the third quarter. The originally anticipated easing of the situation did not materialise. As a result, production capacities for LVT, carpeting, wood-based panels and laminate flooring could not be fully utilised. In individual markets, especially Malaysia, Australia and New Zealand, production and sales were negatively impacted by further corona-related lockdowns. On the European sales markets, stronger seasonal factors could be observed again in some areas during the third quarter; as a result, the previously overheated demand situation cooled somewhat. However, utilisation of capacities is ensured at least until the end of the year due to the still relatively high level of orders in hand. The strong increase in gas prices and the resulting cost increases in the areas of chemical upstream product and energy pose additional problems for Mohawk’s European locations.

Due to the combined effect of these factors, turnover in the flooring rest of the world business division declined compared to the strong second quarter. However, at US$768.1m, turnover still exceeded the preceding year’s figure by 12.7%; adjusted to account for currency fluctuations, an increase of 10.5% was achieved. Cost increases observed during the quarter for raw materials, energy and transport were largely offset by price increases. Nevertheless, operating profit - at US$133.6m - exceeded the previous year’s figure by just 3.5%. The operating margin thus declined to 17.4%.

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