2014 News

Shin-Etsu announces silicone products price increase

Tokyo, April 22, 2014 - Shin-Etsu Chemical Co., Ltd. (Head Office: Tokyo, President: Shunzo Mori) announced that it is going to increase the prices of all of its silicone products, one of Shin-Etsu's main products. The price increases for its silicone products will be for 10%, both in Japan and globally, effective for product shipments made from June 2, 2014.

The production cost of silicon metal, the main raw material of silicone products, has increased because of such causes as the rise in electricity rates in China, a major world silicon metal producer, combined with the impact of fluctuations in foreign exchange rates. For these reasons, the production cost of silicone products is sharply increasing. Going forward as well, production costs in China are expected to increase due to such factors as the need to make new facility investments to comply with new environmental regulations, and the outlook is for the price of silicon metal to continue to be at a high level. In addition, with recent sharp increases in crude oil prices, the cost of energy for manufacturing, such as for heavy oil and gasoline, as well as transportation costs and the costs of secondary materials are also rising and they have become a factor in squeezing the earnings of silicone products.

Under these circumstances, Shin-Etsu has continued to make all-out company efforts to reduce manufacturing costs through implementation of various measures such as rationalization activities. Nevertheless, it has become difficult to absorb the entire burden of these increased costs only by our own company's efforts. Thus, unavoidably, it has become necessary to reflect a portion of the increased costs in the sales price of our silicone products.

We respectfully ask for your understanding of the severe situation surrounding our silicones business and of the reasons why this price increase has become necessary.