BRL Devaluation Leads Sun Chemical Brazil to Increase Prices across All Product Lines
Thursday, June 13, 2013
São Paulo, Brazil – Due to the continued devaluation of the Brazilian Real versus the U.S. dollar and the Euro, Sun Chemical will increase prices across all product lines for its Brazilian customers, effective July 1, 2013.
The percentage of the increase will vary dependent on the product composition and product line. Sun Chemical will communicate specific increases directly with customers.
“In the short period of five months in 2013, our currency has already suffered a devaluation of 4.5 percent, intensifying the trend over the past two years and impacting our local prices in BRL of imported products/raw material,” said Fernando Tavara, President, Sun Chemical Latin America. “While Sun Chemical has 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 implemented by Sun Chemical 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 U.S. dollar and the Euro,” Tavara said. “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.”