EuPC: European Plastics Converters Brace Themselves For Further Price

If, as expected, the prices of plastics raw materials continue their steady climb owing to the persistence of higher oil prices and a shortage of the materials in Europe, plastics converters will have no option but to significantly increase the prices of their own products, the industry´s Brussels- based trade body, the European Plastics Converters Association (EuPC, www.eupc.org), warned today.

EuPC´s Managing Director, Alexandre Dangis, said: "The prices of polymers and additives are already at a high level. Announcements made by suppliers make it plain that raw material prices will reach record heights in the coming months. Price increases over the last eighteen months have in some cases reached 100%".

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"The raw material component of the converter´s selling price can be anything between 30%-70% depending on the product manufactured. In terms of sheer survival for many firms substantial increases in plastics product prices will be absolutely necessary to recover something of the rises in costs".

Dangis spoke of the particular predicament currently facing plastics converters. "Not only have their been raw material cost increases. The plastics conversion industry, like many others, has been hit by escalating energy costs – for some companies by over 100% for electricity and gas. Combining this with the raw material price increases, announced by suppliers in October, creates a terrible pincer movement for the converters who experience immense difficulty in passing on the cost increases to their customers, either because of the sharp competitive situation in their markets or simply because the customer is unwilling to accept the reality of conditions in the upper reaches of his supply chain. We are now at a point where single digit plastic product price increases will not do. Recovery of costs means tens of percentage points."

EuPC believes that the potential for innovation and problem solving which the plastics industry presents, not the least in helping user industries save energy, is being held back by these conditions.

EuPC pointed to the following factors which had contributed to the situation:
- the escalation in oil prices.
- global insecurity: the temporary closure of refinery and petrochemical facilities in the USA following the hurricanes, Rita and Katrina.
- the buoyant global demand for energy products.
- the rapid economic growth of China and India.

European Plastics Converters, Brussels, Belgium

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