Chemicals maker looks to offset raw material and energy costs.
By Dave Hannon -- Purchasing, 4/29/2008 4:44:00 PM
Rohm and Haas announced today that effective May 1 it will apply an indexed raw material and energy surcharge to all products in its Specialty Materials business.
A spokesperson for Rohm and Haas tells Purchasing.com that the indexed surcharge will be based on cost changes for energy and raw materials "that include crude oil, natural gas, and 11 of the major raw materials we purchase to make the products including.
Those 11 materials are: ethanol, ACH, styrene, butadiene, propylene, tin, acetone, butanol, methanol, VAM and ammonia.
"By using a surcharge, we take the guesswork and negotiating out and recover raw material and energy costs--or give them back to customers--in essentially real time," the spokesperson says. Customers are being notified individually about how the index will apply to their purchase, the company said.
The Specialty Materials Group comprises three business units and represents the majority of the company’s chemical business. Earnings in those three groups were down in the first quarter due to higher raw material costs, according to the company's recent earnings statement.
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