'I never heard of the Strait of Hormuz before this': How one medical supply CEO is navigating the oil price shock
David Navazio, CEO of Gentell, is facing significant challenges due to rising oil prices linked to the Strait of Hormuz. The company, which supplies medical products, is experiencing increased raw material costs and shipping expenses. As they navigate these pressures, Gentell must decide whether to pass costs onto consumers or absorb them, impacting their margins.
- ▪Gentell's raw material costs have surged by as much as 30% due to oil price increases.
- ▪Shipping costs have risen dramatically, with a container from New Zealand to California now costing about $4,500.
- ▪The company supplies products to nearly 5,000 nursing homes across the U.S., primarily through government contracts.
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A few months ago David Navazio, founder and CEO of medical supply company Gentell, had never heard of the Strait of Hormuz. But now, the narrow waterway thousands of miles away from the company's headquarters in Yardley, Pennsylvania, is impacting the company's operations in more ways than one.Chief among them is price, with Gentell under pressure from multiple angles. The company relies on derivatives from oil and gas production to manufacture its products, which includes medical dressings. Some raw material costs have surged by as much as 30%.And, with a global footprint that spans five continents, moving those products around has become a lot more expensive.
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