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Posted: 2022-02-24 03:18:48

Blackmores boss Alastair Symington says he expects Australian manufacturers that rely on imported materials to experience supply disruptions for at least the next six months.

The vitamins maker grew revenues for the six months to December by 14.3 per cent to $346 million, while profits were up 44 per cent to $20.3 million, but supply chain disruptions led to shortages of some products throughout the period.

Blackmores chief executive Alastair Symington.

Blackmores chief executive Alastair Symington.

While Blackmores had a strong local manufacturing presence, its reliance on raw materials from overseas complicated its production amid the global pandemic-induced supply chain chaos - and other local manufacturers were experiencing the same, Mr Symington said.

“We expect that at least [over the coming] six to 12 months we will have quite a bit of volatility,” he said, adding this could mean some products will be temporarily off the shelves.

“We won’t see long term ‘out-of-stocks’ in one particular market - we will see products coming in and out of stock. Shoppers might find they might not be able to find products for a few days or weeks,” Mr Symington said.

Supply chain woes also hurt the company’s PAW range of pet vitamins - and pet owners staying at home during the lockdowns didn’t help either, the Blackmores boss said, though he’s still optimistic about the future growth of the pooch pill market.

“What we weren’t planning for was the extent of the lockdowns, and people are not visiting their vets as often as we expected,” Mr Symington said. “The products are recommended by vets, and we rely on that.”

He said escalating freight expenses and rising costs of raw ingredients for the company’s products were another “big challenge”, with the cost of transporting fish oil, for example, having increased by four times over the past 18 months.

Blackmores has resisted the temptation to discount products in the local market to boost sales, maintaining that a disciplined pricing strategy was key to maintaining the premium position of its brand.

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