Demand for Alcantara is So High that the Company Can’t Keep Up
Adjustments are being made to address the supply issueby Kirby Garlitos, on
The demand for Alcantara has risen in recent years to the point that Alcantara s.P.a, the company that produces the premium material, has come out and said that a shortage in supply is becoming a real problem. Alcantara chairman and CEO Andrea Boragno made the proclamation to Motor Trend, saying that the synthetic material is now used in so many industries that the company is being forced to turn away new business opportunities because its plants are running at full capacity.
According to Andrea Boragno, the premium material is now being used in a lot of different industries.
With great popularity comes great demand. That’s the reality Alcantara s.P.a. is dealing with as the demand for the suede-like material skyrockets. According to Andrea Boragno, the premium material is now being used in a lot of different industries. The auto industry still accounts for a majority of its business — roughly 80 percent of all supply is used in that sector — but the material is slowly finding its way to planes, luxury yachts, fashion, interior design, and even consumer electronics. Microsoft is one company that has jumped on board the Alcantara wagon, using the material as a high-end cover for the Surface Pro 4 laptop.
The demand for the material means that business is booming for the company. Net sales have increased three-fold since 2009 when the company took in almost $80 million to last year when it reached $230 million. The auto industry has been responsible for a majority of that growth. It makes sense because automakers have become increasingly fond of using the material to cover as many surface areas of their cars as possible. It’s become increasingly common to see car models with Alcantara-covered dashboards, seats, steering wheels, and headliners.
Alcantara is investing around $370 million to double production in the next five years
All that has forced Alcantara to increase production of the material to meet the demand. Not that it’s a problem for the company because it’s basically doing so on the grounds that will allow it to make even more money than what it already has. Seems like a good problem to have, right? In any event, Alcantara is investing around $370 million to double production in the next five years. That means going from producing eight million yards per year in the present to producing 16 million yards per year by 2023.
No one’s going to feel bad for Alcantara s.P.a. for the shortage of the premium material because the company’s business is booming. I don’t imagine the company losing any sleep over it, especially when it’s been successful creating a material that hasn’t deviated too far from how its produced over the years. With the exception of improving color, thickness, and texture, the basic process of creating Alcantara hasn’t changed a lot in the last 50 years, keeping research and development costs at a minimum.
With the demand expected to increase even more in the years to come, don’t shed a tear for the company. If anything, it’s probably crying tears of joy at the incredible uptick in business.
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Source: Motor Trend