- July 11, 2013
SÃN PAULO, BRAZIL | Sun Chemical has increased across all product lines for its Brazilian customers, effective July 1, due to the continued devaluation of the Brazilian Real versus the US dollar and the euro. The percentage of the increase will vary dependent on the product composition and product line, and the company will communicate specific increases directly with customers.
Fernando Tavara, president of Sun Chemical Latin America, says, ““Our currency has already suffered a devaluation of 4.5 percent [in the first five months of 2013], intensifying the trend over the past two years and impacting our local prices in BRL of imported products/raw material. While [we] have increased prices incrementally over the past two years, we have absorbed most of the cost increase and passed it on only moderately to customers. The last price increases…only partially offset the escalation of costs we’ve been seeing due to the Real’s devaluation.”
Raw material prices are another contributing factor to the price increases.
“The weakening of the real has had a direct impact on our cost structure since the raw materials in our industry are highly commoditized, with prices set in international markets by the US dollar and the euro,” Tavara says. “Combine this with the continuing upward trend of raw material prices, it has become necessary to further increase customer prices to ensure the long term sustainability of our business in the region and to maintain our commitment to continue delivering high levels of product quality and service. We expect this situation to stabilize. However, it is not in our control; a further weakening of the local currency could trigger new price increases.”