Henkel exec says materials prices up 15 pct plus

Mon May 19, 2008 1:04pm BST
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VIENNA (Reuters) - An executive of German consumer goods firm Henkel (HNKG_p.DE: Quote, Profile, Research) said in an interview published on Monday that raw materials prices were up more than 15 percent.

The company, which makes a range of goods from Persil washing powder in Germany to cosmetics and adhesives, said prices in Austria would go up 6 to 8 percent in the next two months.

Guenter Thumser, the company's president for central and east Europe, told Die Presse daily: "These days this is a massive issue for us. I would almost say a problem. We are suffering enormously from shortages and a price explosion in the raw materials sector. We have seen costs increase beyond 15 percent."

The raw materials for its detergents had gone up by 11.5 percent, the executive said. Among these, phosphates were in short supply because of their use in fertilisers and had gone up 40 to 45 percent. Soda is short because of its use by the glass industry, he said.

Sudden Chinese demand for lemonade meant a shortage of citric acid, which Henkel uses in its products, Thumser said.

The adhesive in its tile cement was in very short supply because of a shortage in Russia.

"We have enormous cost pressure for which we must compensate in trade prices," said Thumser. He also cited wage and energy costs as reasons for the price rises.

(Reporting by Paul Bolding; Editing by Quentin Bryar)