The sharply increasing raw material costs and their influence on the global economy now forces Hempel to react.
The oil price has been increasing and is currently at a record high
. The majority of raw materials used in the paint industry are oil related. Paint raw materials such as epoxy resins have, over the past months, increased markedly, some even as much as 30%. Due to the general positive trend in the world economy, the price of metal is also under pressure, in particular Zinc and Copper. These metals constitute a major part of the cost of many protective and marine coatings.
Apart from the raw material cost increases the paint industry is faced with increasing demands from both federal and local authorities regarding raw material testing and registrations. These additional tasks have an extra impact on the cost of our products.
Hempel's first reaction to increasing costs is to exploit further rationalisations and productivity increases. This has been done, however, as the trend is continuing we are no longer in a position where we can absorb the increase. Therefore, we now see no other options than to increase our prices. The increases will vary from product to product depending on raw materials used. The level will be between 5 and 15%.