The supply chain in the global outdoor industry is increasingly endangered by the skyrocketing costs of sourcing and manufacturing, especially in China. This is highlighted by a recent letter from Vibram, the Italian specialist in high-quality soles, to its customers among manufacturers of rugged outdoor footwear. The letter was sent out by Paolo Manuzzi, the company’s sales director.
In the letter, Manuzzi argues that it is necessary for Vibram to raise prices for production in China, effective Sept. 1, in light of the continuing increase in the cost of manufacturing, particularly in the last six months.
Vibram will raise prices by 10 percent for composition rubber products, including rubber, rubber/polyurethane and rubber/phylon soles that are made in China, effective Sept. 1. Also on that date, prices will increase by 20 percent for EVA and expanded rubber products. The increases are limited to products made in China; soles from Italy and the USA are not affected.
The new prices are only guaranteed until Feb. 28, 2009, due to, as Manuzzi puts it, current volatile and unpredictable market conditions. In addition to costs of labor and production, the Vibram manager blames the rise of the cost of gasoline by nearly 100 percent over the last year. This cost has an impact on shipping, petro-chemicals, rubber base polymers and general energy.
In particular, the cost of the ingredients of rubber base polymers has jumped. According to company information, the cost of butadiene has risen by 52 percent since January, styrene by 13 percent and acrylonitrile by 10 percent.