(May 12): Shiseido Co is looking to potentially swap out oil-based inputs for plant-derived materials as the Middle East conflict upends the global skincare and cosmetics supply chain.
The Japanese beauty brand warned Tuesday that shortages of petroleum-derived naphtha could affect the ingredients used in products like moisturisers and makeup. The company is exploring how to source alternatives, including broadening the network of suppliers it procures materials from and looking at plant-based substitutes.
“We are already optimising our operations while assuming a worst-case scenario,” chief executive officer Kentaro Fujiwara said. Shiseido has factored in an impact of around ¥5 billion (US$32 million or $40 million) on core operating profit this fiscal year due to the war, including lower sales in the region and higher raw material and logistics costs.
Still, Shiseido reported first quarter core operating profit of ¥13 billion, exceeding the average analyst estimate of ¥10.4 billion, as structural reforms and cost management outweighed lower sales. The company also said it will close its Hsinchu plant in Taiwan in the second half of 2027, resulting in a fixed cost saving of ¥1 billion per year.
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