The pressure of rising raw material prices continues to challenge ingredients companies with Imperial Chemical Industries (ICI) subsidiary National Starch this week announcing a hike in the price of starch.
Although the company has already faced increasing maize and other raw material costs for a number of months, the situation is unsustainable and these added costs will have to be passed on to the market, the company said in a statement.
The leap in price is by no means insignificant with National Starch quoting price increases from anywhere between 8 per cent and 20 per cent for all products sent on or after 3 November this year.
Significant increases in raw material costs have already put pressure on the company's margins. In April this year ICI warned investors that ongoing lifts in raw material prices at National Starch - that reported a turnover of £1,841m in 2002 - had already had an impact on the group as a whole.
The starch company - that has manufacturing operations in the US, Canada, Germany, Brazil, Thailand and the UK - warned the industry that the situation is unlikely to improve.
'The serious and worsening cereal supply situation in Europe is driving starch prices higher and the exceptional raw material situation means that further price increases cannot be ruled out,' added National Starch this week.