ITWTF Americas

October, 2004 - ITWTF Americas

To all ITW Thermal Films Distributors and Potential Customers,

With the amount of coverage in the industry trade publications and national/international distribution newspapers, I am sure it does not come as a surprise that the raw material costs that we use in the production of our thermal transfer ribbons are increasing. The cost increases on paper goods used to package the thermal ribbons along with the raw production materials including the resins, PET and solvents have risen substantially in the past months. These costs are projected to continue to go up.

Over the past few years, ITW Thermal Films has used the competitive market place to negotiate savings avoiding these price increases, and in turn, eliminate the need to increase prices to you, our valued distribution partners. However, it appears the market has reached its breaking point. We continue to receive unannounced and unpredictable price increases on the raw material components we use in our production processes. We are working with our suppliers to fully understand the increases they are experiencing. This is being done so we can better predict the direction of the potential escalation of our costs going forward. In addition, we are also monitoring the allocation of the same raw materials mentioned above.

We wanted to bring this issue to your attention as the 2004 year reaches for a strong finish. The pending election, the global market conditions and further understanding of the raw material prices will impact all of our businesses. We felt it was important as you start to plan for 2005 that we share the market conditions regarding the products that you purchase from us. While we do not know the full impact of the price increases in the materials we use, it is certain that they will continue to rise in the near term. Any impact of these increases will be kept to minimum for your organization. We would suggest that you take this opportunity to also provide direction to your customer base so they can plan appropriately.

Hopefully this addresses some of the planning questions that you may have as you look forward to 2005. If you would like to discuss this further, please feel free to contact your ITW Thermal Films representative or myself directly.

Sincerely,

James R. Landry, Jr.
Vice President & General Manager
ITW Thermal Films

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