US HB Fuller expects raw material costs to begin rising again in Q2

29 March 2012 17:40  [Source: ICIS news]

HOUSTON (ICIS)--HB Fuller expects its raw material costs to begin rising again in the second quarter after falling in the first quarter, the chief executive of the US-based producer of sealants, adhesives, paints and specialty chemicals said on Thursday.

HB Fuller CEO Jim Owens said that raw material prices would likely increase in the second quarter after declining by about 1.5% sequentially in the company’s 2012 fiscal first quarter, which ended on 3 March.

“We expect [raw material prices] to increase again beginning in the second quarter, and then to continue to modestly increase through the balance of the year,” Owens told analysts during a conference call.

Generally, Fuller expects a more benign raw material cost environment this year, compared with 2011 when raw materials saw extreme price inflation, he said.

Materials such as vinyl acetate monomer (VAM) and acrylic monomers may be on the rise, especially in emerging economies where demand continues to be robust, he added.

Fuller will react to raw material cost volatility by aligning its product prices, and by changing the formulations of its products to optimise costs, said Owens.

Owens added that Fuller is optimistic about its outlook, with 2012 revenues from the company’s base business – excluding the recent acquisition of an industrial adhesives business – expected to rise by up to 9% year on year.


By: Stefan Baumgarten
+1 713 525 2653



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