Epoxy hikes needed for R&D pipeline - Dow

05 June 2008 17:48  [Source: ICIS news]

HOUSTON (ICIS news)--Raw materials costs have escalated to the point where Dow Chemical must raise its epoxy resins prices by double-digits to avoid compromising its capacity to invest in the research and development (R&D) pipeline, a company official said on Thursday.

Dow Chemical is seeking 10-18% price increases throughout its global epoxy resins business.

“Recent oil prices at $135/bbl highlight the critical nature of the situation,” Dow's vice president of epoxies and specialty products Patrick Ho said.

He added: “Rather than accepting low margins and cutting investments on R&D and manufacturing to support the future of the epoxy industry, we decided to go forward with a price increase to restore profitability and assure we are in a financially sound position to continue investment”.

Ho said the company would avoid a “one size fits all” approach to the epoxy resins price hikes but would adjust its proposals according to the cost impact on different products.

Most of the price hikes were to take effect immediately, he said, adding that some customers have 30-day price protection.

Dow’s epoxy resins investments include new production facilities and R&D centres in Asia.

In North America, Ho said Dow has no near-term plans to add epoxy resin capacity at its Freeport plant in Texas but would continue a strategy of growing its epoxy formulation business in the US.

“We are acquiring, and we will continue to expand our capacity in the recently acquired system houses,” Ho said. “In North America, we will be investing more on the systems side to service infrastructure and wind applications.”

In 2007 the company acquired two small formulating businesses in the US, Polycarb and GNS Technologies. Both have long histories of expertise in highway and bridge repair applications.

Major epoxy resins producers include Hexion, NanYa and Huntsman.

($1 = €0.65)

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