http://www.purchasing.com/article/CA6566111.html?industryid=48392
Kodak hikes consumables prices to cover costs
Raw materials costs continue to weigh on bottom line.
Purchasing,
6//2008 Eastman Kodak has become the latest in a string of
manufacturers to issue a sweeping price increase for a broad range of
products in an effort to offset spiraling raw materials and energy
costs.
The world’s largest film maker will hike prices by as
much as 20% to offset higher costs for silver, aluminum, plastics and
resin, which added about $25 million to Kodak’s first-quarter spending.
Company officials said the increases will be rolled out by product
group and geography in the coming weeks and will be implemented by July
1. The changes are limited to items relating to the film business,
which has faced declining demand as consumers go digital.
Kodak
CFO Frank Sklarsky said that a $1 increase in the price of silver costs
Kodak an additional $20 million. According to Purchasingdata.com,
silver prices are now nearly $17/troy oz. vs. $13 a year ago.
Ironically,
analyst Ron Glaz at Framingham, Mass.-based technology research firm
IDC, said in a recent Bloomberg report that it’s the decline of film
use that gives Kodak the leverage to increase prices for its
consumables because it is now a niche or specialty item. “If someone’s
looking for film, they’re willing to pay more because it’s becoming a
specialty product.”
Last week, Dow Chemical said it will boost
its prices by up to 20% to offset increasing raw materials costs. In
late April, chemicals maker Rohm and Haas said it was implementing a
new raw materials price surcharge. Purchasing magazine’s Commodity
Price Index jumped by 4.3% in May to a record 262.1.