The rising cost of plastic resins is forcing Newell Rubbermaid (Atlanta, Georgia / USA; www.newellrubbermaid.com) to scrap some of its products, cut its workforce and raise prices. The US manufacturer of plastic household and office products said it plans to divest, downsize or exit product lines accounting for sales of approximately USD 500m (EUR 315m). The rationalisation, designed to cut Newell Rubbermaid’s exposure to volatile commodity markets, will focus on the most resin-intensive product categories.

CEO Mark Ketchum said the company has not yet determined how many of its 22,500 employees will lose their jobs. "In recent weeks, input cost inflation has accelerated dramatically, especially in resin, which is the largest single component of our cost of goods," he said. "Unfortunately we don't see this situation reversing course.”

Newell Rubbermaid said a more aggressive pricing strategy will involve price increases of up to 22% for some product lines later this year. From January 2009, the company will initiate a new quarterly price adjustment mechanism in its resin-intensive businesses, based on independent industry raw materials indices as well as actual changes in raw material, processing and transportation costs.

Newell Rubbermaid also downgraded its full year earnings projection. It expects 2008 normalised earnings per share to fall within the range USD 1.40 to USD 1.60.