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 user 2008-06-03 at 11:05:17 am Views: 52
  • #20340

    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.