Chemical company cites soaring energy costs for new price boost, following a 20% jump three weeks ago.
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| Dow CEO Andrew Liveris says price rises - in additional to a new freight surcharge - are "extremely unwelcome but entirely unavoidable." |
MIDLAND, Mich. (AP) -- -- Dow Chemical Co. announced its second comprehensive price hike in less than a month to offset the "relentless rise" in costs for energy and related raw materials.
The Midland-based chemical company announced Tuesday it will raise prices by as much as 25% next month. That follows price increases of up to 20% that took effect June 1.
Dow (DOW, Fortune 500) makes key ingredients used in paints, textiles, glass, packaging and cars.
Dow said it's also adding a freight surcharge for North American customers of $300 per shipment by truck and $600 per shipment by rail effective Aug. 1. The company said it will add the surcharges in other regions later this year.
Dow also announced it's moving ahead with plans to temporarily idle or cut production at a number of manufacturing plants. Cost cuts at Dow's automotive unit includes its work force and plants in light of a North American sales decline.
Chairman and Chief Executive Andrew Liveris said in a statement that the steps are "extremely unwelcome but entirely unavoidable" as global energy costs surge.
"The price increases we announced May 28 helped, but they were not enough to fully cover the additional costs we are now facing," he said.
"Even since our last announcement, the cost of hydrocarbons has continued to rise, and that trajectory shows no sign of changing. We must restore margins in our businesses, both through price increases and the reduction of operating costs at certain production facilities."
Dow Chemical makes everything from the propylene glycols used in antifreeze, coolants, solvents, cosmetics and pharmaceuticals, to acrylic acid-based products used in detergents, wastewater-treatment and disposable diapers.
Its products are sold in 160 countries.
The company in April reported a 3% drop in quarterly earnings. At the time, Dow said it considered that a strong showing in the face of a 42% jump in feedstock and energy costs.
Shares rose 43 cents to $38.05 in premarket trading.
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