Plastics price rise ‘inevitable’
Monday, 7th of April, 2008
Uncertain economic conditions and rising oil prices despite plentiful supplies will see prices of plastics products increase, according to industry trade bodies.
The British Plastics Federation (BPF) argued that despite there being “no shortage of oil,” speculation
and the cold weather have driven oil prices to a “record high”. On 12 January last year Brent Crude was $51 a barrel. But on 2 January this year on the Nymex Exchange in New York the oil price hit $100 a barrel for the first time and Brent Crude reached a record high of $98 a barrel in London.
Director general of the BPF, Peter Davis, said: “Inevitably this increases the cost of producing plastic products, which will have to be passed on to customers.
It is essential plastic processors recover these increases to maintain profitability, investment and innovation.”
Davis also urged the UK government to abandon plans to raise fuel tax by 2p per litre in April as it argued
that the move would harm competitiveness of UK industry.
David Tyson, chief executive officer of the Packaging and Films Association (PAFA) agreed that price rises were inevitable and said: “2008 is going to be a difficult year particularly with the changes in the economic situation across the globe.”
He said that a key advantage to the plastics packaging sector was its innovation and that the key to survival was being able to “adapt quickly” to the “changing markets”.
But he added: “Service and innovation and reaction to customers’ needs is clearly as important as the product you are producing in today’s environment.”
The Gauge and Toolmakers Association (GTMA) argued that specialist engineering suppliers to the plastics industry, including tool and mould makers, participate in increasingly complex multinational supply chains. GTMA chief executive officer,
Julia Moore, added: “Improving relationships within these supply chains will be key to the success of UK suppliers to the industry in 2008 and beyond – with the capacity for efficient management of large and complex projects being
a prerequisite for survival.”
She argued that current trends indicated that OEMs and first tier suppliers of plastic systems and components will continue to buy a large proportion – estimated at around 70% – of moulds from low-cost countries.
Moore added: “This leaves Europe and USA suppliers to compete for the remaining 30% of mainly high precision, high complexity moulds which often require concurrent engineering, certified quality and advanced technologies.”
Source: http://www.prw.com