05 November 2007 | Andy Allen
Unilever has reported a sharp rise in commodity costs in its third-quarter results, but said the increase had been offset by higher prices and contributions from savings.
In a statement Patrick Cescau, group chief executive, said: "We have seen a third consecutive quarter of underlying improvement in operating margins, despite a significantly tougher cost environment."
A spokesman told supplymanagement.com the firm's food manufacturing business had been affected by increased costs of dairy products and edible oils, such as palm and grapeseed. The rise in mineral oil costs had been significant for other parts of the business.
"Across the business 40 per cent of our non-foodstuff business input is petrochemical," he said. "But everybody, whether they're manufacturers or retailers, is seeing the same increases."
The spokesman added that a programme of supply chain restructuring was proceeding throughout Europe. In August Unilever announced plans to shed more than 20,000 employees. Among the proposals were the construction of an automated warehousing facility in Gloucester and investment of £10 million in a deodorant factory in Leeds.