Cost hikes from BASF to impact packaging suppliers

By Jane Byrne

- Last updated on GMT

Related tags Basf Price increases Material

BASF, a major supplier of polymers and other chemicals for use in a variety of industries like consumer packaging, said that it is raising the prices for its paper and card board dispersions by up to 20 per cent with immediate effect.

BASF, which indirectly supplies paper and board to packaging manufacturers, said it was looking at helping the industry with solutions to the problem. "We are working on this issue together, but costs for raw materials and energy have risen significantly forcing us to increase prices accordingly,"​ a spokesperson for the company told The price increases are taking effect in Europe, the Middle East and Africa, the German chemical giant said. BASF said that it is constant communication with its customers to develop ways to offset any price increases in the long term: "We are always looking at providing effective, sustainable solutions that will, we believe, ultimately benefit the packaging industry,"​ said the spokesperson. "We are aware that improved efficiency over the whole value chain is an overall challenge to raw material suppliers like BASF and for our customers and their customers," ​added the spokesperson. The announcement comes after BASF's major competitor Dow Chemical increased prices across its divisions on June 1. Cost pressures​ The increases from the chemical companies continue to add to the growing pressures on packaging suppliers. A report published in March warned that the future remains challenging for European packaging firms, as rising input and transportation costs will continue to weigh down on the industry. Fitch Ratings, the credit agency which compiled the report, said that many packaging firms are currently suffering financially as they are not passing their costs on to customers. "Failure to pass through raw material and transportation cost inflation, together with an inability to generate sufficient mitigating cost efficiencies are the hallmarks of weaker credit quality for highly leveraged packaging producers,"​ said analyst Michelle de Angelis. De Angelis told that the although nine companies reviewed for the study cannot be revealed, as the shadow ratings are private, more than half provide packaging for the food and beverage industry.

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