Dow Chemical Raises Global Prices
Dow Chemical Co. will raise its prices by as much as 20% in a few days to offset the soaring cost of energy,
and the chief executive of the chemical giant lashed out at Washington on Wednesday for failing to develop a sound energy policy.
Dow said it spent $8 billion on energy and hydrocarbon-based feedstock, or raw materials, in 2002 and that could climb to $32 billion this year.
Some of the company’s biggest customers are companies such as Unilever, the Dove soap producer;
Procter & Gamble, which makes Pampers nappies; and Kimberly-Clark, the lavatory-roll manufacturer.
Chairman and CEO Andrew Liveris: "For years, Washington has failed to address the issue of rising energy costs and, as a result...
the country now faces a true energy crisis, one that is causing serious harm to America's manufacturing sector and all consumers of energy.
The government's failure to develop a comprehensive energy policy is causing U.S. industry to lose ground when it comes to global competitiveness,
and our own domestic markets are now starting to see demand destruction throughout the U.S."
The sweeping price increases were “essential to mitigate the extraordinary rise in energy and related raw material costs.
HOur first-quarter feed-stock and energy bill leapt a staggering 42% year over year, and that trajectory has continued,
with the cost of oil and natural gas climbing ever higher.
The new level of hydrocarbons and energy costs is putting a strain on the entire value chain
and is forcing difficult discussions with customers about resetting the value proposition for our products.
"You can only hedge so much. The cost of hedging for oil at $130 a barrel is hugely expensive.
We used to raise prices according to each industry and geographical region, we would look at the costs and test the market. We can’t do that anymore.
The price of oil is not a short-term problem. It is not going away.
We have to face up to the fact that we are living in a new environment of higher oil and gas prices."
Hattip to L.A. Times and Business Times
and the chief executive of the chemical giant lashed out at Washington on Wednesday for failing to develop a sound energy policy.
Dow said it spent $8 billion on energy and hydrocarbon-based feedstock, or raw materials, in 2002 and that could climb to $32 billion this year.
Some of the company’s biggest customers are companies such as Unilever, the Dove soap producer;
Procter & Gamble, which makes Pampers nappies; and Kimberly-Clark, the lavatory-roll manufacturer.
Chairman and CEO Andrew Liveris: "For years, Washington has failed to address the issue of rising energy costs and, as a result...
the country now faces a true energy crisis, one that is causing serious harm to America's manufacturing sector and all consumers of energy.
The government's failure to develop a comprehensive energy policy is causing U.S. industry to lose ground when it comes to global competitiveness,
and our own domestic markets are now starting to see demand destruction throughout the U.S."
The sweeping price increases were “essential to mitigate the extraordinary rise in energy and related raw material costs.
HOur first-quarter feed-stock and energy bill leapt a staggering 42% year over year, and that trajectory has continued,
with the cost of oil and natural gas climbing ever higher.
The new level of hydrocarbons and energy costs is putting a strain on the entire value chain
and is forcing difficult discussions with customers about resetting the value proposition for our products.
"You can only hedge so much. The cost of hedging for oil at $130 a barrel is hugely expensive.
We used to raise prices according to each industry and geographical region, we would look at the costs and test the market. We can’t do that anymore.
The price of oil is not a short-term problem. It is not going away.
We have to face up to the fact that we are living in a new environment of higher oil and gas prices."
Hattip to L.A. Times and Business Times
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