Essity Temporarily Shielded from Energy Price Surge Amid Middle East Tensions

Global hygiene and health company Essity remains partially insulated from the recent surge in energy prices triggered by geopolitical tensions in the Middle East, supported by its strategic energy hedging approach, according to CEO Ulrika Kolsrud.

Speaking to Dagens Industri during an investor conference in the United States, Kolsrud noted that the company has secured a significant portion of its energy needs in advance. Essity has hedged approximately 80% of its gas purchases for the first quarter and more than 50% for the full year 2026, limiting immediate exposure to rising energy costs.

However, the protection is temporary, and the company expects cost pressures to gradually increase as hedging coverage declines over time.

Kolsrud highlighted that certain areas of the business—particularly transportation—are already experiencing cost increases due to indexed contracts. Despite this, transport costs represent only a relatively small share of the company’s total cost of goods sold.

To mitigate the impact of rising input costs, Essity plans to implement pricing adjustments across its product portfolio.

“Our intention is to compensate for cost increases through price adjustments. However, this is not unique to us—the entire industry is affected,” Kolsrud said.

Essity is a significant energy consumer, purchasing approximately 6 terawatt-hours (TWh) of fossil gas annually—equivalent to around 60% of Sweden’s total gas consumption—underscoring the importance of effective energy management strategies.

The company continues to monitor market developments closely as geopolitical uncertainty and energy price volatility persist.