Evonik is latest supplier to hike its prices

By Simon Pitman

- Last updated on GMT

Related tags: Price increases, Material, Cosmetics

Evonik becomes the latest supplier to the cosmetics and personal care industry to raise its prices, adding to the growing problem of rising costs that is affecting businesses throughout the supply chain.

The Germany-based fine chemicals provider announced that it is raising the prices of its personal care ingredients by up to 10 per cent, an increase that will come into effect for all deliveries made after July 1st.

The company said the increases will affect its mainstay personal care ingredients across the board, specifically making reference to surfactants, emulsifiers, conditioning agents, thickeners and emollients.

It has become a familiar tail that the current trend for price increases is being fed by contributing factors associated with the manufacturing process, including raw materials and energy costs.

Evonik cites transport, energy and raw material costs

Specifically Evonik’s management pointed to the higher cost of raw materials and feedstocks, together with higher costs incurred to comply with regulatory requirements and bigger bills for energy, transportation and packaging.

In a press statement the company said that the price increases were unavoidable and were necessary to maintain ongoing improvements in its production processes, making specific reference to itsefficiency goals.

“However, steep increases in the costs of raw materials, energy and transportation leave thecompany with no other choice but to pass on to customers some of the resulting increases in its production costs,”​ the company press statement said.

Costs remain a challenge, despite improved economic outlook

Although most of the big cosmetic and personal care manufacturers have reported significant improvements in their financial performance during the course of this year, several of the big players have also remained cautious as to the outlook for the rest of the financial year because of the continued threat of price increases and inflation in the economies.

This was underlined by the fact that Avon CEO Andrea Jung cautioned on the need to keep tight control over costs in the coming year when the company’s most recent financial results were results, while oral care giant Colgate-Palmolive also said that is expecting profits to be significantly impacted by rising costs during the course of 2011.

Other suppliers to have announced price increases during the course of this year have included Dupont, ISP and DSM, while fragrance provider Givaudan said that it expects to report price increases throughout the course of 2011.

Related topics: Business & Financial

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