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Rising steel and copper prices in particular are affecting suppliers to the Swiss watch industry.
The global rise in prices, including industrial metals such as steel and copper, is affecting Swiss suppliers to the watchmaking sector, who are anticipating a drop in their margins for this year, 2022.
“We are not currently suffering from supply disruptions, but from a steady increase in delivery times,” Pierre Dubois, managing director of Dubois Dépraz, a manufacturer specializing in watch components and complications, told AWP. “Prices have increased by an average of 10% to 20% depending on the alloy and the different suppliers. (…) “If prices are adjusted, it is to reflect a generalized increase in costs, from labor to energy to materials. As well as investments in machinery and other means of production,” he continued.
One of the Swiss watch industry’s largest subcontractors, Acrotec, is also facing this increase in the price of its components. “We are passing on these increases to our customers to a certain extent. But discussions with them are not always easy,” explains François Billig, CEO of Acrotec. The company anticipates a certain reduction in margins for the current financial year, as watchmaking contributes about 50% of the annual turnover of the group, which is also active in medical devices, the automotive industry and aeronautics.
The impact of China
At the end of last year, China, which has been driving the sector’s growth for several years, was the main export market for the Swiss watch industry, as luxury goods consumers turned to buying in their own country.
But in March 2022, Swiss watch exports to China fell by almost 30% due to Covid-19 restrictions, although the country remains the second largest market for the sector. “The evolution of sales is good for the moment, but we are somewhat worried about China in view of the evolution of Covid-19 and the current restrictions,” says François Billig.
Despite this, exports from the watch industry are in good health, thanks in particular to enthusiasts on the other side of the Atlantic, gaining 14.3% in the first three months to 5.8 billion Swiss francs.
Read also > MORGAN STANLEY : WHICH ARE THE LEADING BRANDS IN THE SWISS WATCH INDUSTRY ?
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Rising steel and copper prices in particular are affecting suppliers to the Swiss watch industry.
The global rise in prices, including industrial metals such as steel and copper, is affecting Swiss suppliers to the watchmaking sector, who are anticipating a drop in their margins for this year, 2022.
“We are not currently suffering from supply disruptions, but from a steady increase in delivery times,” Pierre Dubois, managing director of Dubois Dépraz, a manufacturer specializing in watch components and complications, told AWP. “Prices have increased by an average of 10% to 20% depending on the alloy and the different suppliers. (…) “If prices are adjusted, it is to reflect a generalized increase in costs, from labor to energy to materials. As well as investments in machinery and other means of production,” he continued.
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Rising steel and copper prices in particular are affecting suppliers to the Swiss watch industry.
The global rise in prices, including industrial metals such as steel and copper, is affecting Swiss suppliers to the watchmaking sector, who are anticipating a drop in their margins for this year, 2022.
“We are not currently suffering from supply disruptions, but from a steady increase in delivery times,” Pierre Dubois, managing director of Dubois Dépraz, a manufacturer specializing in watch components and complications, told AWP. “Prices have increased by an average of 10% to 20% depending on the alloy and the different suppliers. (…) “If prices are adjusted, it is to reflect a generalized increase in costs, from labor to energy to materials. As well as investments in machinery and other means of production,” he continued.
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