Film extruder Tredegar Corp. has reacted to major resin price increases with a resin index-based pricing plan.
Tredegar's Tredegar Surface Protection unit announced June 21 that the plan will apply to all products and customers. Officials with Tredegar in Richmond, Va., said in a news release that the plan is in response to "unprecedented price increases and supply issues for polyethylene and polypropylene resin."
They added that the bilateral pricing model allows for decreases if resin prices fall in the future and will be effective on all shipments beginning July 1.
Tredegar Surface Protection President Bapi DasGupta cited "growing cost pressures" in the release. He said that while the unit is seeing cost inflation in many areas, "the increase in the cost of our primary raw material is the most challenging, given that resin prices have doubled over the past year."
"In addition, resin supply continues to be tight as a result of recent force majeure events and issues associated with COVID-19 conditions, including supply chain delays," DasGupta said. "We continue to focus on cost-control measures across our business and remain fully committed to delivering industry-leading product quality and supply reliability to our customers."
North American PE resin prices are up a net of 53 cents per pound since January 2020, according to the Plastics News resin pricing chart. Regional PP resin prices are up a net of 55 cents since December.
Plastics-related sales accounted for about 38 percent of Tredegar's $755 million sales total in 2020. The remainder of the firm's sales came from its Aluminum Extrusion unit. Tredegar's sales total was down almost nine percent vs. 2019.
Tredegar's plastics-related units fared better in 2020. Its PE Films unit, including Surface Protection, showed a sales gain of 4.5 percent to more than $139 million for the year. Tredegar's Flexible Packaging Films unit, including polyester films, saw sales roughly flat for the year at just under $135 million.
Tredegar ranked 52nd in Plastics News' most recent ranking of North American film and sheet manufacturers. The firm employs 2,400 at locations in North America, South America and Asia.