Crompton Announces Price Increases for Flexzone Products.MIDDLEBURY, Conn. -- Crompton Corporation Crompton Corporation, formerly Crompton and Knowles, is a chemical research, production, sales and distribution company headquartered in Middlebury, Connecticut. The company produces specialty chemicals used for polymers, fire suppressants and retardants, pool and spa water (NYSE NYSE See: New York Stock Exchange :CK) today announced that it is implementing price increases for all of its Flexzone(R) anti-degradent products. Over the last five years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time prices of Flexzone anti-degradent grades have declined dramatically. Throughout this period, Crompton continued to invest in the Flexzone product line to keep plants operational and meet increasingly stringent health, safety and environmental requirements. Concurrently, the company very aggressively implemented cost-saving measures to help compensate for these necessary expenditures. However, even with these improvements and running at full capacity, this product line has remained unprofitable for several years. During 2004, the situation has been exacerbated by dramatic raw-material and energy cost increases. In particular, the price of benzene benzene (bĕn`zēn, bĕnzēn`), colorless, flammable, toxic liquid with a pleasant aromatic odor. It boils at 80.1°C; and solidifies at 5.5°C;. Benzene is a hydrocarbon, with formula C6H6. , the key raw material for Flexzone, tripled, and pricing for another important raw material, MIBK MIBK Methyl Isobutyl Ketone , also increased substantially. The combination of these cost issues has resulted in unsustainable losses for Crompton. Because of the above factors, the company finds it necessary to take the following pricing actions: --Effective September 1, or as contract terms permit, Crompton is increasing the price of all Flexzone products by $1.32/kg. or equivalent local currency per kilogram kilogram, abbr. kg, fundamental unit of mass in the metric system, defined as the mass of the International Prototype Kilogram, a platinum-iridium cylinder kept at Sèvres, France, near Paris. (Price Schedule attached). --Crompton is also implementing a quarterly benzene price adjustment of $0.022/kg. for every $0.10/gal. increase or decrease in benzene above or below the base benzene price of $1.90/gal., the three-year average. As announced earlier this month, the company is shutting down 20,000 metric tons of our worldwide Flexzone capacity by year-end. This will include the closure of Flexzone production sites in Ansan, Korea and Rayong, Thailand, representing 7,000MT of capacity. With the closure of these locations, Flexzone customers in the Asian market will primarily be serviced from Crompton's production facility in Kaohsiung, Taiwan. The balance of the reduction will be implemented at other worldwide Crompton locations. The company will continue to manufacture Flexzone at a total of six facilities worldwide, in Europe, the Americas and Taiwan. Crompton also previously announced that it would reduce production of a Flexzone intermediate (called 4-ADPA) by 13,000 metric tons, at its Geismar, Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. facility by the end of the
year.Crompton is committed to improving our rubber chemicals business, and it is our intention to remain a viable, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. supplier of Flexzone products to the tire and rubber industries. Crompton Corporation, with annual sales of $2.2 billion, is a producer and marketer of specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. and polymer products and equipment. Additional information concerning Crompton Corporation is available at www.cromptoncorp.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements made in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, general economic conditions, the outcome and timing of antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. investigations and related civil lawsuits to which Crompton is subject, the ability to obtain selling price increases, pension and other post-retirement benefit plan assumptions, energy and raw material prices and availability, production capacity, changes in interest rates and foreign currency exchange rates, changes in technology, market demand and customer requirements, the enactment of more stringent environmental laws and regulations, the ability to realize expected cost savings under Crompton's cost reduction initiatives, the amount of any additional earn-out Earn-out Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement. payments from GE, and other risks and uncertainties detailed in Crompton's filings with the Securities and Exchange Commission. These statements are based on Crompton's estimates and assumptions and on currently available information. The forward-looking statements include information concerning our possible or assumed future results of operations, and Crompton's actual results may differ significantly from the results discussed. Forward-looking information is intended to reflect opinions as of the date this release was issued and such information will not necessarily be updated by Crompton.
Flexzone(R) Price Increase Schedule
Product Price Increase, $/kg
(excluding Benzene adjustment)(**)
Flexzone 3C/P (IPPD) 1.32
Flexzone 4L(*) (77PD) 1.32
Flexzone 6H 1.32
Flexzone 7C/F/P (6PPD) 1.32
Flexzone 11L 1.32
Flexzone 15L 1.32
(*) Benzene price adjustment does not apply to Flexzone 4L
(**) Or equivalent local currency per kilogram
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