Aluminum’s Minor Impact on Coca-Cola FEMSA’s Cost Structure
Gerardo Cruz, the Finance Director of Coca-Cola FEMSA, stated that aluminum is the only raw material causing slight pressure on their cost structure. However, he emphasized that aluminum represents a small fraction of their overall input mix, so it doesn’t significantly concern them.
Aluminum Price Pressure Following US Tariffs
The pressure on aluminum prices emerged after the US administration imposed a 25% tariff on aluminum and empty aluminum cans imports in March and early April, respectively.
Stabilizing Production Costs with Lower Sweetener and PET Prices
Cruz highlighted that the decrease in sweetener and PET (Polyethylene terephthalate) prices has helped stabilize production costs. He expressed optimism about a favorable sweetener environment for the remainder of the year, noting declining energy and refined product prices, mainly PET.
Capitalizing on Declining PET Prices
Coca-Cola FEMSA is taking advantage of falling PET prices to enhance their financial coverage, according to Cruz.
Decreased Volumes in Mexico Due to Economic Slowdown and Geopolitical Tensions
Ian Craig, the General Director of Coca-Cola FEMSA, explained that volumes in Mexico decreased by 5.4% due to the economic slowdown and geopolitical tensions, primarily.
Key Questions and Answers
- What raw materials are causing pressure on Coca-Cola FEMSA’s cost structure? Aluminum is the only raw material causing slight pressure, but it represents a small fraction of their overall input mix.
- What factors led to the pressure on aluminum prices? The pressure emerged after the US administration imposed a 25% tariff on aluminum and empty aluminum cans imports.
- What raw materials have helped stabilize production costs? Lower sweetener and PET prices have contributed to stabilizing production costs.
- Why are Coca-Cola FEMSA capitalizing on declining PET prices? The company is enhancing their financial coverage by taking advantage of falling PET prices.
- What caused the decrease in volumes for Coca-Cola FEMSA in Mexico? The decrease was primarily due to economic slowdown and geopolitical tensions.
