The company will not implement blanket increases but calculate price rises dependent on exposure to these inflationary pressures.
Cosmetics exposure
Dow Chemical spokesperson Chris Huntley told CosmeticsDesign.com that its cosmetics products are quite far down stream and therefore less directly exposed.
Overall though the company has seen its energy and hydrocarbon-based feedstock costs catapult from $8bn in 2002 to $24.5bn last year, added Huntley.
The increase is expected to accelerate this year as oil prices climb beyond $130 a barrel.
"Our first quarter feedstock and energy bills leapt a staggering 42 percent year over year," said Dow CEO Andrew Liveris. "The new level of hydrocarbons and energy costs is putting a strain on the entire value chain and is forcing difficult discussions with customers about resetting the value proposition for our products."
Effeciency savings
Huntley said Dow has worked hard to improve its access to lower prices and increase its energy efficiency. The company has increased its energy efficiency 22 percent between 1995 and 2005 and aims to beat that improvement for the following ten years.
However the extent of the increases in its input costs has forced Dow to pass them on to manufacturers.
Other chemicals makers have reached the same conclusion.
Rohm and Haas is applying an indexed raw material and energy surcharge to many of its products this month.
Other major suppliers to the cosmetics industry including BASF, Cognis and Croda have all implemented significant price increases in recently.
