News from Notch Consulting, Inc.

June 18, 2008

PPG Announces Silica Price Increase

Filed under: Silica — Notch @ 10:28 am

On June 17, PPG Industries announced a price increase of up to 20% for all precipitated silica products, including Hi-Sil silicas and Lo-Vel flatting agents. The increase will be implemented on July 1, or as contracts allow.

From the press release:

“Due to an unforeseen rise in global demand, PPG continues to experience triple-digit percentage cost increases in sulfuric acid, which is used in the production of our silica products,” said Paula Shepard, PPG general manager, silica products. “The magnitude of these increases over a dramatically short period of time, as well as the continued escalation of natural gas and transportation costs, have significantly impacted operating expenses to a level well beyond what can be absorbed internally.”

PPG has implemented production efficiency measures and cost-saving initiatives to minimize costs over the years, but these efforts are not enough to offset the more than 200-percent global price increase in sulfuric acid, Shepard said.

“It appears that this inflationary environment will continue for the foreseeable future. This unique situation of historic cost increases requires immediate and swift action to ensure that PPG remains a viable and leading supplier of high-quality precipitated silica products,” she said.

The amount of each increase will vary by product in accordance with cost inflation factors. The company will continue to evaluate raw material and energy costs for silica products on a quarterly basis and adjust pricing as necessary.

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