Increases in raw material prices can affect the Company’s profitability depending on its ability to effectively mitigate the risk by operative actions. The magnitude of this risk is dependent on several factors, such as the demand for the Company’s products, the negotiation power of major suppliers and customers, the Company’s timely planning and management of sales prices as well as availability of key raw materials. Raw material price risk is managed by several complementing ways. The Company is continuously identifying new raw material suppliers and alternative materials to strengthen its negotiation power. Contractual risk management methods are continuously improved, and the Company has aimed at making annual contracts with suppliers to ensure better raw material availability. Managing raw material price risk continues to be a top priority for the Group.
Updated: February 2017