Suppliers raise prices to offset surging raw materials costs

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BIRMINGHAM, Ala. – Components produced by Marmon Highway Technologies will receive a price adjustment to compensate for an unprecedented rise in materials costs, the company has announced.

Marmon, under various brands such as Fontaine, Leland and Fleetline, manufactures everything from fifth wheels to brake systems to clutches and transport trailers. Marmon president Kelly Dier said the company has done everything possible to reduce production costs and thus far has been able to compensate for the increased costs of raw materials. Now, however, the only option remaining is to increase prices, he said.

Nearly every product produced by Marmon’s companies consist of metals as the primary raw material. Prices for scrap metal alone have surged 88% in the first quarter, the company pointed out in a release.

“These immediate actions are essential to allow us to continue our long history of providing innovative products and unsurpassed service,” Dier said. “As the technology leader in our product categories, we are absolutely committed to research and development that will continue to reduce weight, improve product performance and deliver market-leading value to meet the needs of our customers.”

Meanwhile, Webb Wheel also announced it will adjust prices to compensate for surging raw materials costs.

Webb announced that it will immediately implement a monthly pricing schedule through all its product lines, which will reflect current raw materials prices.

“Castings are a significant part of our total product costs,” explained Pedro Ferro, Webb Wheel Products president. “Webb has been working closely with our casting suppliers to monitor the scrap market trends. In the first quarter of 2008, scrap prices have increased 88%, and we have experienced further alarming increases since the first of April. It’s unfortunate, but we have no reason to believe the extreme scrap market volatility will subside any time soon, thus making the immediate pricing changes necessary.”

The increased cost of raw materials is blamed on increased demand for scrap metals around the world. A weak US dollar and weak supply is contributing to the problem. Webb officials said the company will try as much as possible to mitigate the impact rising materials costs are having on customers, but conceded that raising prices is inevitable.

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