Manufacturers respond to rising raw material costs

By Staff -- Industrial Distribution, 10/1/2000

Bridgewater, N.J.-In August, National Starch and Chemical Co. announced it would add a 9.5 percent surcharge to the price of all its liquid adhesives sold in the United States, due to escalating raw material costs.

"This temporary surcharge is intended to help National Starch recover a portion of raw material costs which have been steadily rising over the past 15 months," W. Dexter Brown, senior vice president, adhesives-Americas, said in a prepared statement. "We do not expect any relief before the end of the year."

The surcharge will be rolled back as raw material costs decline, according to the company. The move follows continued high oil and gas prices and a slowdown in the manufacturing sector over the summer.

In early September, the National Assn. of Purchasing Management said its production index for August fell to 49.5 percent from 51.8 percent in July. The trend indicates a cooling economy, as manufacturers continue to pay higher prices for their purchases, according to NAPM.

The NAPM index uses 50 percent as a break-even point, with anything above that number signaling growth and anything below indicating a decline.

In a similar move, National Starch and Chemical raised hot melt adhesive prices an average of seven percent beginning in mid-August, also due to higher raw material costs.