Price Increases from Scott Bader, AOC and Reichhold

16 February 2003

Scott Bader, AOC and Reichhold have all announced price increases this week. From 1 March 2003, the Scott Bader Composites Business will be increasing its polyester resin and gelcoat prices by 100 Euro/T. The price increases will apply throughout Europe. The increases are due to the sustained high price of crude oil at over $30/barrel and the resulting strong upward movement in the price of styrene, the key component in polyester resins. Increases in the prices of other key raw materials such as phthalic and maleic anhydride and propylene glycol have compounded the situation. Prices are expected to climb further in the coming months.

Commenting on the increases Malcolm Forsyth, European Commercial Manager said “These price increases have been forced upon us by the continuing uncertainty over global oil supply arising from the threat of conflict in the Middle East and the general strike in Venezuela. Whilst such global events are out of our control, we will continue to seek ways to minimise the need for action of this kind in future. We are committed to working with our customers during these difficult times by focussing on delivering product or process solutions which can reduce the impact of these unavoidable price increases”.

Reichhold, Inc. announced a new price increase of $ .04 per pound on all unsaturated polyester resins sold in North America. This is in addition to the $ .04 per pound increase which took effect February 7. This price increase is effective for all North American orders shipped on or after March 10, 2003. “This additional price increase is necessary due to continuing strength in styrene, benzene, and natural gas prices,” explained Reichhold’s Composites Senior Vice President Julia Harp. “Uncertainty in Venezuela and the Middle East is creating increased market volatility and driving an increase in styrene monomer costs.”

“The price of natural gas has doubled since March, 2002. On February 7, crude oil closed at $35.12 per barrel gaining 4.8% in one week on the New York Mercantile Exchange, the highest closing price since November 27, 2000. As a result of these significant and continuing conditions, we are required to take this action,” Harp continued. “We are redoubling our efforts to reduce costs and improve efficiencies. We will continue to provide our customers with the best products, service, and value in the industry. We encourage customers to speak directly with their local Reichhold representatives who can answer questions related to this pricing adjustment.”

AOC will increase prices by US $0.05 per pound on all products, including resins, gel coats, and pigments in North America shipped on or after March 3, 2003. This is in addition to the price increase that was effective February 10, 2003. The continuation of sharply higher energy and raw material price increases cannot be absorbed.

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