Materials

The Dow Chemical Group, which supplies chemicals to the packaging industry, has reported a 24% fall in pre-tax profit to $1m (£502,756) in the second quarter of 2008 after experiencing the largest increases in feedstock and energy costs in its history.

The company's net sales for the second quarter were $16.4m, an increase of 24% on the same period in 2008.

Dow reported that purchased feedstock and energy costs had surged by 42%, or $2.4bn, compared to the same quarter in 2007.

Andrew Liveris, Dow chairman and chief executive, said: "We reacted quickly the surge in oil prices by announcing two broad-based price increase initiatives, adjusting plant operating rates and implementing additional cost-cutting measures.

"The fast implementation of these price increases limited margin compression over our hydrocarbon and energy costs to approximately $130m in the quarter. This is remarkable performance when you consider that this is only 1 to 2% of our total quarterly hydrocarbon and energy costs."

Dow's pre-tax profit for the first half of the year was $2.3m, compared with $2.7m in the same period of 2007.

Its net sales were $31.2m in the first six months of the year, compared with $25.7m the first six months 2007.