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trex92
27-05-2006, 10:18 AM
High power rates worry industries

THE manufacturing and cement industries are disappointed and worried over the high increase in electricity tariff rates and the bearing it would have on industry players’ cost structure and bottomline.

The Cement & Concrete Association of Malaysia (C&CA) said in a statement the energy-intensive cement industry would, under the new tariff structure, face a 14% rise in electricity rates, which would translate into an additional RM64mil a year in energy costs.

This comes after about 30% increases in production costs from 1995 to 2005, contributed mainly by a major climb in coal price and logistic costs.

As cement was a price-controlled item, the industry could not pass down the costs to consumers, C&CA said, adding that the ceiling price that was revised in 1995 was now lower than the domestic selling prices in most countries in the region.

“The profit margin of the cement industry has been progressively eroded over the years and the return on investment has reached the level where it may no longer be attractive for new investments, which will be necessary as the Malaysian economy continues to grow.

“We urge the government to review the current cement ceiling price, which no longer reflects the market situation in Malaysia. A revision of the ceiling price is long overdue and justified,” it said.

In a separate statement, the Federation of Malaysian Manufacturers (FMM) said the manufacturing sector would be paying 12.4% to 14.5% higher electricity rates under the new structure.

The higher tariff rate would result in additional energy costs of RM11.4mil a year for a company in the iron and steel sector; and an increase of RM1mil to RM7mil per company annually for other energy-intensive industries, including electrical and electronics.

The manufacturing sector would also be affected by the indirect impact of pass-through or multiplier effect from the increase in prices of purchased inputs, which accounts for 40% of total production costs.

FMM estimated profit margins could be reduced by up to 3% for highly energy-intensive industries; and at least 0.5% to 1% for other industries.

“These percentages are significant because manufacturing companies generally record profit margins of only 3% to 5%,” it said.

Exporters, which are facing lower proceeds from the stronger ringgit, could also lose their competitive edge.

“Malaysia would be uncompetitive and unattractive to investments vis-à-vis our Asean neighbours in terms of electricity cost,” it added.

Perhaps the start of a domino effect across our economy and prices of goods and services? Eat ur words, LKY, who says the 60% would not be affected?

donkey
27-05-2006, 11:25 AM
The gov will give plenty of excuses and reasons to place the burden to the rakyat.....poor us. Malaysia really BULEH!

kevin23
27-05-2006, 11:43 AM
Woohoo,i cant wait for them to raise every single thing that we use daily.Go on,increase price for water,telephone services,internet charges,oh yeah,go on and increase the price of petrol by lets say 200 sen.Why dont the guv increase toll rates for every single tolled highway? dont forget the road tax.Just increase it so high that people wont pay it.That solves our traffic jam woes right?Cant wait to see that scenario happen and wonder what happens next!

penangkia
27-05-2006, 11:55 AM
Anyone remember "COLA" we used to have in the 70s? Coming back?

trex92
27-05-2006, 01:17 PM
Anyone remember "COLA" we used to have in the 70s? Coming back?

i thought COLA is in use all this while? I remember that the govt announced an increase in COLA recently about maybe 6 months back or something...

Teeque
28-05-2006, 03:17 AM
i thought COLA is in use all this while? I remember that the govt announced an increase in COLA recently about maybe 6 months back or something...

Yep..announced during Bajet 2006 last Oct.

hmckl
28-05-2006, 11:50 AM
i thought COLA is in use all this while? I remember that the govt announced an increase in COLA recently about maybe 6 months back or something...

unfortuanately COLA is available to government servant only :mad:
and it is RM 150 in big place like (KL, Penang per month) cannot even cover for the fuel usage (increment) per month ! :mad:

USJ27Resident
28-05-2006, 08:55 PM
unfortuanately COLA is available to government servant only :mad: ............

Sudahla.... enough... since when, politician speak on behalf of rakyat... semua gemilang, terbilang, temberang... punya cakap!!! :mad:

They speaketh as thou as they are part of the rakyat... as far as I see it - we the rakyat are insignificant specks as far as they are concerned - cakap lebih or protest - and they send in our FRIENDLY RESERVATION UNITS to say "hello" with their batons and water cannons... and to wallop you until ter-berak! in public... :eek:

I boil water - have to use LPG, if don'y use LPG - have to use electricity... now if I have a factory that needs boiling water (how??) My cost goes up... means I have to sell at a higher price... so what the **** is that stupid MP talking about... :mad: ...."bersembur tak bertempat!!!"

and by the way... for the private sector and everyone else that want COLA, you can get your daily COLA at the nearest hypermarket or contact Sentinel :p - might even get staff discount ! :D