06/14/2010

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Further price increases for Stepan aromatic polyester polyols

Commenting on the announcement Roger Stubbs, Vice President for European Polymers, stated "It is regretful that we have to make this further increase so soon after our announcement a month ago of quarter 3 price increases of between EUR 100 - 150 per tonne but the fact is our key raw material costs have shot up further since we made that announcement and large increases for other components, particularly flame retardants, have also recently been announced. Since May last year the cost of DEG has moved from around EUR 400 to over EUR 1,000 per tonne, a +150 % increase! We cannot continue to absorb this massive increase and unfortunately have no option but to share some of the pain. We are mindful of the fact that our customers are also seeing increases from other raw materials and this will ultimately have an impact on the competitiveness of polyurethane insulation. But for any industry to thrive, every stakeholder in the value chain has to achieve a sustainable level of margin and today that is simply not happening.”
On a more optimistic note, Stubbs added, "It's our hope and belief that the commodity market is reaching its peak. It's unfortunate that the decline in value of the euro has exacerbated the increased cost of commodities, such as DEG, coming in from outside of Europe. But it is important we continue to invest in assets to support market growth, especially in the area of rigid PIR insulation. Despite having been forced to pass on some of these increased costs to the market, demand has remained above 2009 levels. Our investment to more than double the capacity of our Wesseling manufacturing plant near Cologne, Germany, is necessary to support the industry and is progressing according to schedule. This will ensure a continued supply of high quality material at the most economically beneficial cost for our customers.”

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