In a strategic shift aimed at protecting its margins from the looming threat of tariffs, Procter & Gamble has overhauled its supply chain for the specialized stainless steel used in Gillette razors. The company, based in Cincinnati, has increasingly sourced its steel from Jindal Stainless, an Indian manufacturer, to ensure cost efficiency and offset potential tariff increases under the incoming U.S. administration. P&G’s decision to change its supplier reflects broader trends in the global steel market, where manufacturers are looking to mitigate risks and secure competitive advantages in the face of trade uncertainties.
The steel used in Gillette razors is unique. It is specifically engineered to be extra-thin and durable, designed to ensure a smooth shave while preventing nicks and cuts. However, this specialized steel is not produced in large quantities in the U.S. Instead, it has traditionally been sourced from companies in Japan, Sweden, and other countries. P&G has noted that only a handful of manufacturers worldwide can produce this high-quality material. However, rising tariffs on foreign steel imports, particularly from Japan and Sweden, have increased production costs for the company, prompting the shift to Jindal Stainless.
The move to Jindal Stainless, which began in 2022, has been a game-changer for P&G. Import records reviewed by Reuters show that the company has imported at least 4,283,569 kilograms (approximately 4,721 metric tons) of stainless steel from Jindal over the past three years. This shift to a cheaper supplier has enabled P&G to maintain a competitive edge in the razor market, especially as the U.S. steel tariffs have escalated under President Trump’s administration. Steel from Jindal is estimated to be 20-25% cheaper than steel from other suppliers, offering significant savings for P&G, especially on a large scale.
Jindal Stainless, headquartered in New Delhi, is a leading producer of stainless steel, and is currently the world’s largest supplier of steel for razor blades. Although it has primarily supplied international markets in the past, the shift in P&G’s sourcing strategy has made Jindal a key partner for the company’s U.S. operations. P&G’s decision to source from Jindal is driven not just by cost savings but also by the need for a reliable, high-quality supplier. According to P&G’s spokesperson, the company values its relationship with Jindal, which has consistently met its high standards for production and delivery.
While cost is a major consideration, P&G’s spokesperson emphasized that it is not the sole driver of the company’s sourcing decisions. P&G’s chief financial officer, Andre Schulten, noted in investor meetings that the company is continually adjusting its supply chain to navigate changing market conditions, including potential tariffs from the incoming administration. The U.S. has already experienced a 1.4 billion USD increase in external costs due to tariffs under Trump’s first term, and with more tariffs expected, P&G is proactively securing more favorable terms with Jindal.
The shift to Indian steel is not the only change in P&G’s sourcing strategy. The company has significantly reduced its imports from Proterial, a Japanese supplier, and Alleima, a Swedish company. According to the data, P&G’s imports from Proterial in 2024 have been nearly 59% lower than in 2023, and there have been no shipments from Alleima this year. These changes reflect both the increased costs associated with steel from these countries and the growing importance of securing more cost-effective sources like Jindal Stainless.
Despite the challenges, P&G’s grooming division, though the smallest by revenue, is seen as a key area of focus for the company. The global razor market has become increasingly competitive, with direct-to-consumer brands like Dollar Shave Club and Harry’s eating into Gillette’s market share. To maintain its leadership, P&G has been refining its product offerings and adjusting its supply chain to reduce costs and improve profitability. The company's ability to navigate these challenges with strategic supplier shifts positions it well for the future, even amid ongoing market disruptions.
Looking ahead, the impact of tariff policies on global supply chains remains uncertain, but P&G’s strategic adjustments reflect a broader trend of companies seeking to manage risks and maintain profitability in a volatile market. By working closely with Jindal Stainless, P&G is safeguarding its ability to provide high-quality razors at competitive prices while navigating the shifting landscape of global trade. As the political climate evolves, the company’s supply chain flexibility and commitment to sourcing from cost-effective suppliers will likely play a critical role in its ongoing success.
