R&H president expects feedstock costs to peak in Q2
22 May 2003 14:34 [Source: ICIS news]
HOUSTON (CNI)--While oil and natural gas prices have declined from the first quarter, supply/demand dynamics for several key raw materials are keeping feedstocks prices high, according to the president and chief operating officer of Rohm and Haas (R&H).
Speaking at the Goldman Sachs cyclicals and specialty materials meeting in New York City, J Michael Fitzpatrick said the company expects raw material and energy costs to peak in the second quarter.
To maintain the profitability to support new product development and technical service efforts, Fitzpatrick said the company must pass raw material and energy increases on to customers.
Continued Fitzpatrick: "We expect significant traction in the second quarter from price increases implemented as of 1 April, slightly closing the gap between raw material/energy costs and selling prices from first quarter levels."
Fitzpatrick said that while global markets remain uncertain, R&H sales in the first six weeks of the second quarter were "on plan," adding that the company expects sales for the quarter to be similar to first quarter levels with improved mix, as sales in the salt business seasonally decline, offset by increases in coatings and electronics.
Fitzpatrick said May and June are key to the company's second quarter results due to the seasonal nature of coatings, plastics additives and consumer and industrial specialties.
Key areas of focus for R&H this year include driving sales growth, raising selling prices to offset the impact of increases in raw material and energy prices, as well as attaining sustainable improvements in operating efficiency, he said.
Added Fitzpatrick: "With our businesses now structured to better leverage our top-line growth, sales gains from both new products and market share gains will play an even greater role in our continued profitability improvement."
By: Mike Sheridan
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