Sun Chemicals ups global pigment prices

By Simon Pitman

- Last updated on GMT

Related tags Cosmetics

Rising production costs means that Sun Chemicals joins a growing
list of ingredients suppliers that have increased prices in
the last few months.

The company says that it will be increasing prices for a range of ingredients in its Performance Pigments division from 31 st March.

Pointing to increasing costs for both its organic and inorganic color cosmetic pigments, the company says it will raise prices by between 5 and 7 percent, as a means of plugging the gap.

The company blames increased raw material, energy and transportation costs, which have led manufacturers in a range of other industries to also raise their prices.

Rising costs have to be passed on Indeed Sun Chemical's Performance Pigments Division serves a variety of other industries, including the automotive, packaging and paints markets - where similar price rises have also had to be passed on.

With respect to the cosmetics industry, the company's pigments are marketed mainly for foundation, lipstick, mascara, blusher, eye shadow and nail polish products.

Vice president and general manager Brian Leen said that although the company is trying to control its own costs through improving internal operations, external price increases were beyond its control.

"While these efforts have helped to offset some rising raw material costs, the increased cost of energy and transportation combined with the rising cost of raw materials have forced us to pass some of these costs on to our customers," said Leen.

In recent months other leading global ingredients players, including Croda and Rohm and Haas, have all announced significant price increases.

Indeed Croda recently revealed that the average price of its ingredients rose by 12.3 percent during the course of 2007.

Increasing oil prices are largely to blame The rising production costs are largely being blamed on increased oil prices, which is affecting manufacturing at all levels and stages of the production process.

This coincides with oil prices hitting record levels in the last few weeks - peaking at $103.95 a barrel at the beginning of this week.

While ingredients suppliers have been able to increase their prices, competition is so fierce in the market for finished goods that cosmetics manufacturers have been forced to absorb the increased cost of ingredients.

Procter & Gamble, Colgate-Palmolive and Kimberly-Clark all mentioned high oil prices as a factor that had a negative impact on their profits in recent financial statements.

Japanese-based Kao recorded a reduction of 7 per cent in operating profits for the first nine months of 2007.

The cosmetics manufacturer attributed the fall to the increased costs of petrochemical, natural oils and fats used in its formulations.

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