14 February 2012 21:36 [Source: ICIS news]
HOUSTON (ICIS)--Raw materials costs will continue to rise this year, with some products approaching double-digit hikes, US paints and coatings maker Valspar said on Tuesday.
"The costs of raw materials like titanium dioxide (TiO2) and others are expected to grow 5-10% this year," said Valspar chief executive Gary Hendrickson in a conference call with investors.
Earlier, Valspar reported that first-quarter net income rose 67% year on year to $58.8m (€44.7m) on net sales for the three-month period ended 27 January of $885.6m, up from $842.4m in the same period a year earlier.
In an effort to curb rising raw material costs, Valspar said it is continuing to reformulate its products to use more sulphate titanium from China rather than higher-priced chloride titanium from other sources.
While Valspar sees paint and coatings demand challenges in Europe, the company is cautiously optimistic that market demand will improve in North America and Asia.
"Coatings demand for use in agricultural equipment has been strong and Valspar expects the industrial segment to do well this year," Hendrickson said.
Paint volume growth in North America is expected by Valspar to be flat to increasing up to 5% in 2012.
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