PGI Announces Price Hike
Polymer Group, Inc. announced that it will begin implementing additional price increases on a global basis in response to increases in raw material costs that continue to reach unprecedented levels.
Price increases of petroleum-based products from suppliers to PGI have risen in excess of 20 percent since March of 2008 and are expected to continue to increase significantly in the coming months, primarily driven by the continued high cost of oil. Additionally, certain suppliers have declared force majeure and are increasing prices as a result of higher energy and transportation costs. The raw material most affected by these actions is polypropylene, but the costs of all petroleum-based raw materials are higher.
As such, the company will increase prices of its products to customers, the amount of which will vary based on product composition. Additional increases are expected based on current raw material market projections.
"We are operating in an unprecedented raw material environment, the definition of which continues to be challenged," said Veronica (Ronee) Hagen, chief executive officer. "This is a phenomenon that is not specific to PGI, but affects our entire industry. We believe we are best positioned to address the issues due to our global scale and industry leadership. PGI is committed to providing customers with the best value proposition and to continue offering products where customers need them. Accordingly, price actions such as these are required to ensure that PGI maintains a sustainable business that is positioned to serve customers over the long term."
The company is taking numerous steps on a global basis to mitigate the impact of higher raw material costs. However, the extent of such cost increases and the company's ability to offset them is subject to rapidly changing market forecasts. The timing and eventual amount of such raw material cost increases could negatively impact the company's results during the year and its ability to meet its previously communicated earnings estimates.
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