Pregis Protective Packaging Europe is announcing an 8% price increase across all of its products and equipment, effective May 1, 2011. The price increase affects Pregis customers in all European countries.
In making the announcement, Kevin Baudhuin, global president of Pregis Protective Packaging, stated that the latest price increase is necessary to compensate for sharply higher costs, coupled with continued volatility in raw material and fuel costs due to political unrest in multiple Middle Eastern and North African countries.
"Raw material price increases are compressing operating margins to an unsustainable level. Immediate recovery of a portion of these soaring costs is necessary so that Pregis can continue developing innovative solutions designed to help its customers grow," Baudhuin said.
Crude-oil futures surged to their highest level in 2 1/2 years last Friday. Strong global demand is expected to continue through the remainder of 2011, further stressing available oil resources. Low-density polyethylene resin, which is used extensively to create protective packaging materials, also rose to a historical high in March. Political uncertainty in oil producing regions is expected to be an ongoing issue.
"We continue to work hard at controlling all aspects of our manufacturing and distribution costs to minimize the impact of these rising costs on our customers," Baudhuin said. "This includes driving continuous productivity improvements, as well as looking at petroleum alternatives and other appropriate raw material substitutes to help mitigate price swings to our customers."
Pregis Protective Packaging Europe operates eight manufacturing facilities in eight countries. The operating division specializes in providing protective packaging solutions for a wide variety of products and markets.
Pregis increases the price