Rhodia pushes up prices to counter costs

By Laura Crowley

- Last updated on GMT

Related tags Cost

Rhodia Organics today announced double figure price hikes for its
salicylic product range on the back of the rising cost of raw
materials and fuel.

The product range, set to increase in price by 10 to 15 per cent, includes salicylic acid, Rhodine aspirin, methyl salicylate and salicylate derivatives used in flavour and fragrance applications, as well as pharamceuticals. Global business director for Rhodia Salicylic, Graham Merfield, said: "We have worked to improve productivity and supply chain efficiency to mitigate cost increases. However, we have reached the point where we will have to increase prices for 2008. "We will work openly with our customers to seek the appropriate increase based on the total cost of supply." ​ The cost of food and ingredients has shot up across the industry due to higher raw material and energy costs. Oil prices are now reaching around $100 (€67) per barrel causing the price of raw materials to rise, few businesses have remained unaffected. For this sector of international chemical company Rhodia, the price has risen significantly for key materials such as phenol - a toxic, colourless crystalline solid with a sweet tarry odour produced in oxidation processes. As a result, Rhodia is transferring costs onto its customers. Rhodia said these soaring prices are expected to remain high or even rise further in 2008, with no relief expected any time soon. ​Several analysts have predicted more worldwide food price rises in the future, as manufacturers' packaging and energy bills continue to soar on the back of high oil prices. Increasing demand for raw materials from emerging markets such as China and India is also spreading resources more thinly and contributing to price wars.

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