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[July 2008]
Energy Price Hike Bites Malaysian Ceramic Industry Hard
Bernama and Daily Express Malaysia report that effective 1 July 2008 the price of ceramic goods manufactured in Malaysia will be increased by between 20% to 45%, depending on the category of products, in reaction to the country's recent fuel price hike.
According to the Federation of Malaysia Manufacturers (FMM), the products involved are ceramic formers, ceramic tiles, ceramic tableware, clay pipes and sanitaryware.
"Following the startling and unprecedented hike in energy costs, ceramic producers under the FMM-Malaysian Ceramic Industry Group (FMM-MCIG) are forced to review their operations to stay afloat and hopefully to mitigate losses," said FMM in a statement last week.
With the government's decision to increase petrol prices by 41% and 63% from 5 June 2008, the costs of doing business have increased as a result.
"Soon after the announcement, with immediate effect, logistics and transport providers started to impose a surcharge of 30% to 50% on FMM-MCIG members," said the Group.
The sweeping effects of the energy cost hike is making it very difficult for manufacturers to control production costs, potentially crippling industries and endangering the jobs of more than 18,500 employees in the ceramic industry sector, according to reports.
"Under these conditions, ceramic producers have to pass on some costs to the market through price adjustments to sustain operations," FMM said.
ENDS