On June 1, The Dow Chemical Co. announced a price increase for all products by up to 20%, depending on the product’s exposure to rising energy, feedstock and transportation costs. The company also announced plans to review all terms to all customers.
Andrew N. Liveris, Dow chairman and CEO, said the sweeping
price increases and reviews are essential as the company attempts to mitigate an
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
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
“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