The food, encapsulation, beverage and mouthfeel starch supplier company warned the market in October that costs would be passed on as raw material costs continued to increase.
Yesterday's announcement from the company sees a massive price increase from $1.25 to $4.00/cwt. Waxy corn based products are to rise by $1.25/cwt. High amylose corn based products and blended products will increase $1.65/cwt and tapioca, potato, sago and waxy rice based products will rise by $2.00/cwt.
'There will be a product specific increase for dent corn based products and manufacturing intensive speciality products will increase from $2.00 - $4.00/cwt,' National Starch said in statement.
A raft of reasons are quoted by the company as responsible for the rises, effective on 1 January, 2004. 'Continued high energy costs and rising healthcare costs combined with increases in agronomic supply chain expenses, impacted by the corn market's continued move to genetically modified crops,' National Starch claimed.
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.
In October the starch company - that has manufacturing operations in the US, Canada, Germany, Brazil, Thailand and the UK - told 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,' National Starch said at the time.