Dow Chemical Co., the top chemical maker in the United States, reported on Wednesday it will raise the price of all its products by 20 percent citing high energy, raw materials and transportation costs.
The increment will be made effective June 1 as the company deals with record high prices in natural gas and oil, the main feedstock for the chemical industry. Crude futures traded at $135.09 a barrel last week and prices are more than double from last year. Natural gas has also climbed by 56 percent since the end of 2007.
Dow Chemical said its costs of energy and feedstocks rose 42 percent in the first quarter compared to the same period in 2007 and noted that the U.S. government of been incapable to ease the energy crisis.
For years, Washington has failed to address the issue of rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm to America's manufacturing sector and all consumers of energy, said Andrew N. Liveris Chairman and Chief Executive of Dow.
As a result, Dow is in going through a cost-control plan and is accelerating its existing top-down competitiveness review for all of its business and manufacturing facilities, Liveris said in a statement.
Furthermore, in December Dow agreed with Petrochemical Industries Co. based in Kuwait, to sell 50 percent of its commodity-plastics unit for $9.5 billion, giving Dow cheaper raw materials.
Shares of Dow Chemicals rose 0.57 percent or 23 cents to $40.46 in morning trading on the New York Stock Exchange on Wednesday.