FMM: Production cost to double on tariff hike

Friday, 29 November 2013 00:00 

Sathish Govind

SIGNIFICANT INCREASE IN COST: (From left) Yong, FMM VP Datuk Saw Choo Boon
and VP Datuk OK Lee at the presentation of the survey findings in Kuala Lumpur yesterday.
(Pic by Ismail Che Rus)

The government’s announcement on the expected rise in electricity tariff will have an impact on manufacturers, resulting in a double-digit increase in production cost, according to the Federation of Malaysian Manufacturers (FMM) yesterday.

Its president Tan Sri Yong Poh Kon said the recent FMM-Malaysian Institute of Economic Research (MIER) Business Conditions Survey indicated that local manufacturers expect the cost of production to increase on the back of the tariff hike.

These concerns come at a time when the government is on the verge of rationalising its subsidy and implementing the Goods and Services Tax (GST).

“Manufacturers are already expecting some form of energy price increase due to the subsidy rationalisation, so this will impact not only the gas users, but also the electricity costs,” Yong told reporters at the presentation of the survey findings in Kuala Lumpur yesterday.

Yong added that different industries will be impacted differently by the adjustments, depending on their electricity usage, but there is no doubt that the double-digit increase is quite significant.

“The government has been saying that they need to reduce the subsidy and also to fund the price of imported liquefied natural gas, as such we anticipate electricity tariffs to move up.

We do not know the actual amount of the increase yet, so we have to wait for the official announcement.

“We hope it (tariff hike) will move up gradually rather than be implemented at once. We are looking forward to greater details on how this is which alleged that FCB imports from Thailand were being imported into Malaysia at a much lower price than the price in the domestic market of the alleged country.

“The petitioner claims that this is causing material injury to the domestic industry in Malaysia,” MITI said, adding that the duties on FCB imports from Thailand will range from 13.96% to 63.1%.

MITI also said the final determination will be made based on the outcome of the verification visits to the foreign producers’ premises no later than 120 days from the date of the preliminary determination report.

The government has also imposed anti-dumping duties on imports of tinplate from China and South Korea.

On Feb 20, 2013, the government initiated an antidumping investigation based on a petition filed by Perusahaan Sadur Timah Malaysia Bhd (Perstima) on behalf of the domestic industry producing electrolytic tinplate (tinplate).

Perstima alleged that imports of tinplate originating in or exported from China and South Korea are being imported into Malaysia at a price much lower than the price in the domestic market of the alleged countries.

On April 10, Southern PC Steel Sdn Bhd filed a petition to MITI on behalf of the domestic industry producing stranded wire alleging that imports of stranded wire originating in or exported from China are also being imported into Malaysia at a price much lower than the alleged country's domestic market.

MITI found that there is sufficient evidence to continue with further investigation on the importations of stranded wire, however, the government decided not to impose provisional anti-dumping duties on imports of stranded wire originating in or exported from the alleged country.