23 September 2022

Dear Ladies and Gentlemen,

During the course of 2021 we have experienced significant energy cost increases and this development has not only continued in 2022 but has of late deteriorated even further. Since the Russian attack on Ukraine we have seen electricity and gas costs continue to rise. Prudent measures previously taken to help handle this situation are unfortunately no longer able to mitigate the impact this is having on our business.  

This puts us in a very difficult situation forcing us to take immediate action. While we continue to do everything possible to manage costs, it is necessary to announce a price surcharge on short notice for all the products produced at Prefere Phenolics.

In addition, in order to guarantee supply security, we are more and more faced with requests by suppliers to not only shorten payment terms, but in some cases to pay in advance. Commodity and other raw material increases across all sectors of our business has led to significantly higher capital commitments. Furthermore, credit insurance limits are not following the inflation development which means we often see substantial increases in our business risks. All of these factors are putting a significant burden on our cash and risk management. It is unfortunately unavoidable but we will need to review the payment and credit terms which we can offer. This will shortly be discussed in further detail by your Prefere Resins Contact.

We very much hope that all of the circumstance outlined above improve giving us the possibility to reduce some of the measures we are being forced to take. However in the event that the situation further deteriorates, we cannot rule out further actions to address this. We will of course keep in close contact with you to continue to keep you up to date and to do all we can to support you in your business despite the difficulties.

We very much appreciate your business and the relationship which we have with you. Thank you for your understanding during these difficult times.

Best regards

Dr Micaela Schönherr                    Jens Böttcher                             
CFO                                                    VP Sales & Marketing Phenolics