Degussa plans more price hikes to offset higher costs

21 October 2005 17:24  [Source: ICIS news]

LONDON (ICIS news)--Degussa warned on Friday that further substantial global price hikes would be needed for many of its products to offset drastic increases in energy and raw materials costs.

"We have so far tried to absorb these increases in particular through intensive cost management and greater efficiency," said Utz-Hellmuth Felcht, chairman of the German specialty chemicals company.

"However, the extent of the increase in costs is now obliging us to pass on price increases to our customers on a broader basis, not just in individual cases."

Degussa said costs for key special chemical raw materials, including C4 products, propylene, acetone and methanol, have risen by at least 10% this year. The company's global annual electricity and natural gas bill will be 12% bigger this year and it expects energy costs next year to rise by over 20%.

There was no-one immediately available at Degussa to comment on the expected scale of its planned product price hikes. It said in a statement, however, that "business units will determine the extent and timing of the price increases for individual products".

Degussa is only the latest in a growing list of major chemical companies to respond to rapidly rising energy and raw material costs by announcing plans for substantial and across-the-board product price hikes.

By: Neil Sinclair
+44 20 8652 3214

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