Huntsman to increase prices on all products
NEW YORK (Reuters) - U.S. chemical maker Huntsman Corp (HUN.N), which is being bought by Apollo's Hexion unit, said on Thursday it will raise prices up to 25 percent and impose an energy surcharge across a wide range of products.
The move, which is driven by a sustained increase in costs for energy, transportation and raw materials, mirrors similar actions taken by other U.S. chemical makers like Dow Chemical (DOW.N) and Rohm and Haas ROH.N.
Huntsman said the amount of each price increase and energy surcharge will vary by product, in accordance with costs attributed to each product.
The price increase and any surcharges will be effective immediately, or as soon as applicable contracts allow, the Woodlands, Texas-based company said in a statement.
Huntsman, in July 2007, agreed to be bought for $6.5 billion by Apollo Management's Hexion Specialty Chemicals unit. The deal, which has been delayed due to regulatory hurdles, is expected to close in July 2008.
The price increases by Huntsman and its counterparts are likely to pressure plastics packaging makers like Bemis Co (BMS.N), Sealed Air (SEE.N) and Pactiv Corp (PTV.N), which have in recent months already seen profits affected by rising resin costs.
Chemicals also form a large portion of costs for makers of paints, coatings and adhesives. These companies have already been ravaged by the slump in the U.S housing market and the slowdown in the U.S. automotive markets, the price increases will likely pose an additional hurdle.
(Reporting by Euan Rocha, editing by Maureen Bavdek)
