FMC Corporation to introduce energy and fuel surcharges on industrial chemicals

Global chemical manufacturer FMC Corporation announced 12 March 2003 that it is implementing an energy surcharge to recoup some of the cost increases resulting from the sharp increase in natural gas p…

Global chemical manufacturer FMC Corporation announced 12 March 2003 that it is implementing an energy surcharge to recoup some of the cost increases resulting from the sharp increase in natural gas prices. The energy surcharge will be effective from 1 April 2003 and will cover most of FMC“s industrial chemical products including soda ash, hydrogen peroxide and persulfates. In all cases the energy surcharges will be based on the three-month forward average of natural gas futures as reported in the New York Mercantile Exchange (NYMEX). The amount of the energy surcharges will vary with the NYMEX price and will be adjusted each calendar quarter. The energy surcharges will be removed when NYMEX natural gas futures return below the level of USD 5.00 per MMBTU. The company is also putting transportation fuel surcharges on all industrial chemical products effective from 1 April 2003. These transportation fuel surcharges are being imposed to offset the impact of rail and truck fuel surcharges being charged by the companies that transport FMC“s products and will be adjusted from month to month. The rail transportation fuel surcharges will depend on the price of West Texas Intermediate (WTI) crude oil. The truck transportation fuel surcharges will vary according to the price of diesel fuel as reported by the US Department of Energy“s Energy Information Administration (EIA). The amount of energy and transportation fuel surcharges vary by product line. Customers will be informed by letter of the specific charges per product and the information is also available on the FMC website ( http://www.fmcchemicals.com/). In mitigation, FMC say they have absorbed natural gas and fuel cost increases to date, but the size of the cost increases is such that the company has decided than it must take action to offset part of the rises.