South Hackensack, N.J.-based AEP in mid-May had announced 4 percent price increases on film and bag products made by all nine of its divisions. Sigma Plastics Group of Lyndhurst, N.J., and Evansville, Ind.-based Berry Plastics Corp. each announced similar moves on polyethylene-based stretch film, with Sigma taking the same action on its custom film products.
AEP, Sigma and Berry each rank among North America's 10 largest film and sheet extruders, according to Plastics News' ranking. Sarasota, Fla.-based Intertape Polymer Group — ranked 23rd on that list — also announced a similar price increase.
AEP executive John Powers said in a June 5 phone interview that although most major stretch film makers are supporting the increase, makers of can liners and other types of film products have not done the same. This lack of support led AEP to push the effective date back from its original date of June 2.
“Customers are saying they want orders at the old price, or they're holding off on placing orders,” said Powers, AEP's executive vice president of sales and marketing. “A non-resin price
increase is an unusual thing and I think that [film makers] are fearful of losing market share.”
Sigma has not delayed its increase attempt, but the firm “will meet competitive situations,” President and Chief Operating Officer Mark Teo said by phone June 6.
“It's been challenging,” Teo said of his firm's attempt to raise prices. “Certain segments of the industry haven't supported it.”
“I think people [who aren't supporting the increase] might be afraid of losing business,” he added. “But we've spent the last month explaining the rationale for the increase, and everyone we've talked to has said they're seeing the same conditions.”
Officials with firms trying to raise film prices had said the increases are needed because of recent increases in costs for a wide range of items, including fuel, shipping, freight and health care. But many of them have contracts with their customers that allow for price increases only when the price of resin increases.