| Nippon Gohsei provides our customers with highly advanced Soarnol EVOH along with intensive technical support to meet our customer's expanding R&D requirements. Over the years we have strived to maintain or even reduce resin pricing to help our customers remain competitive in their respective markets. This has been achieved through the pursuit of continuous improvement in our processing and distribution functions to reduce costs and thus offset raw material and energy price escalation. |
| In the last couple of years the dramatic increase in energy and raw material prices, on top of normal inflation and regulatory compliance costs, has resulted in a significant discrepancy in the pricing of Soarnol. This despite continued cost reduction efforts and a modest increase in price implemented in the last year. |
| As a result we must proceed with an overall increase of at least 0.50 Euro/kg in the European region. This price adjustment will take effect starting 01 January 2007. |
| This will enable us to continue to invest in cost reduction projects and maintain a reliable source of supply for our customers. We hope that energy and raw material pricing stabilises or even reduces in the months ahead so we can shortly return to our past practice of offering stable prices for Soarnol EVOH. |
