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ABB AND POWER PARTNERS TO IMPLEMENT
ADDITIONAL SURCHARGE DUE TO HIGHER MATERIAL COSTS
June 25, 2004 — ABB Inc. announced today an additional
2-1/2% surcharge effective July 1st, 2004, on all invoices
for liquid filled
distribution transformers manufactured in Jefferson
City, MO, and Athens, GA (Power Partners Inc.).
This surcharge is applicable to existing blanket contracts
and will be reevaluated periodically based on fluctuations
in major
commodity prices. This surcharge is in addition to the
2-1/2% announced on March 1st, 2004.
ABB and Power Partners must implement this additional
surcharge to partially offset unprecedented increases
in the costs of all major
commodity materials (carbon steel, aluminum, copper,
oil, electrical steel) for transformers. The average
increases we have seen in
these commodities are as follows:
- Carbon Steel - increased 130% over 2003 baseline
- Aluminum - increased 20% over 2003 baseline
- Copper - increased 55% over 2003 baseline
- Oil - increased 30% over 2003 baseline
- Electrical Steel increased 10% over 2003 baseline
The net effect of all of these increases, on average,
is a net 25% increase in total material cost. These
increases are being felt across all
domestic businesses, and are being driven primarily
by the global commodity markets.
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