August 5, 2008
Kuraray Plastics Co., Ltd.
(the Kuraray Group)
Kuraray Chemical Co., Ltd. (Headquarters: Osaka City; President: Nobuo Iwawaki) announced its decision to upwardly revise the prices of activated carbon and other related products by 15% to 30%. The price revision will be implemented for shipments within Japan and overseas shipments commencing August 11, 2008.
The activated carbon market is showing steady growth both in Japan and overseas. The application of activated carbon is increasing particularly in the environmental fields, including gas treatment processes, which involves dioxin removal and deodorizing, and water treatment processes for water supply and sewage systems. However, the surging prices of crude oil and raw materials have placed significant pressure on Kuraray Chemical, which is working to achieve stable growth of its activated carbon business.
In more specific terms, the price of coconut shell, which is a primary raw material of activated carbon, has nearly doubled compared with the price level in 2004, due to tightening supply-demand conditions attributable to the increased use of coconut shell as a fuel. In addition, the price of coal, another primary raw material of activated carbon, has soared to approximately 3.5 times the level in 2004 owing to increased demand on a global scale. These price increases have resulted in serious difficulties in securing stable supplies of these raw materials. To make the situation worse, kerosene, heavy oil and other fuels used in the manufacture of activated carbon, as well as marine freight charges, are all continuing their sharply upward trends.
With due consideration given to these operating conditions, Kuraray Chemical has concluded that it will not be able to absorb cost increases caused by the aforementioned price increases only through its cost reduction efforts and thus will not be able to avoid deterioration in its revenues and earnings. Based on such conclusions, Kuraray Chemical has reached the conclusion that it must transfer these cost increases to product prices to maintain stable supply and quality of activated carbon and other related products as well as to improve the profitability of the business. Brief details of the price revision are described below.
Activated carbon and other related products
(Shipments both in Japan and overseas)
15%-30%, depending on the product
Shipments from August 11, 2008