2007 Price Announcement
FOR IMMEDIATE RELEASE |
Contact
Norit Americas Inc.
800-641-9245 |
December 1, 2006 - As the cost of energy, packaging, and coal continues to rise along with costs for employee healthcare and pensions, it is impossible for Norit Americas Inc. to maintain our current activated carbon pricing. Therefore, effective December 30, 2006, we will increase pricing for all products shipped after that date, regardless of the date the order was placed.
View the Producer Price Index PDF for Basic Organic Chemicals with data shown from 1996 until present. This is the US Government Pricing Index that best mirrors our industry and is accepted by most companies. As you can see from this chart, between 1996 and 2002 the cost of producing basic organic chemicals (such as activated carbon) did not increase a significant amount (annual average). During those times Norit did not increase prices to any extent.
From 2002 until 2005 the cost of producing basic organic chemicals increased over 56%. During that time, Norit improved its efficiency in carbon production. As a result of those efforts, we were able to minimize price increases. Over the past 18 months we instituted moderate price increases that have captured a small fraction of our cost increases. While those price increases have been helpful, they certainly have not recouped the tremendous cost increases we have experienced over the last four years in spite of our efficiency improvements. The year 2006 has been no exception to the latest trend as costs increased over 10% through October. Therefore, the action we are taking at this time is an important step, as we work toward a return to reasonable profitability.
You may also be aware of the antidumping duties recently imposed on all steam-activated carbon imported from China. The effects of low market pricing caused by dumped Chinese imports have greatly contributed to the situation in which the carbon industry finds itself. However, as can be seen by the PPI, rising costs continue to be the major component of the need for price increases.
We value the business you have entrusted to us and assure you that we are continuing our cost control efforts. We appreciate your patience and understanding during this challenging period. If you have questions please feel free to contact us at 800-641-9245.
|
