2 August 2005 - Areva's Transmission and Distribution division is to index the price of its transformers in response to the recent surge in raw material costs.

Under the proposed pricing policy, the company will index the price of its transformers against the cost of raw materials such as magnetic steel, mild steel, copper and oil. The move is designed to put an end to speculating on future raw material costs.

Another major transformer producer, ABB, issued a profits warning in July, citing the high cost of raw materials and overcapacity as the reason for the stunted growth forcing it to cut 1300 jobs. Earlier in the year ABB announced it was to increase the cost of its transformers by ten per cent.