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Andrew N. Liveris, Dow chairman and CEO, said the sweeping price increases and reviews are essential as the company attempts to mitigate the extraordinary rise in energy and related raw material costs.
“Our first quarter feedstock and energy bill leapt a staggering 42% year over year, and that trajectory has continued, with the cost of oil and natural gas climbing ever higher,” Liveris said. “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.”
Dow spent $8 billion on energy and hydrocarbon-based feedstock costs in 2002. At the current rate, those costs would climb to $32 billion this year.
“In addition to these price increases,” Liveris said, “the Company is continuing its aggressive cost-control plan internally and is accelerating its existing top-down competitiveness review for all of its businesses and manufacturing facilities in the light of these new feedstock and energy prices.”