Monday, 31 January 2011

New Entrepreneurs Feel The Psychological Impact of Increase of Electricity Cost

With the increase of electricity cost by 10-15%, which, in reality, the percentage is higher or 11-80% depending on the type of industry, it could reduce competitiveness and hamper investment, so, consequently, it was feared that some industries could not be able to continue production.

Franky M.A. Sibarani, Chairman of Forum of National Industries Association as well as Chairman of Indonesian Food & Beverage Association (GAPMMI), when contacted by Business News on Tuesday (July 13), stated that to businessman, the effect would be felt in the few coming months. At present, what happened was the psychological impact of this government’s policy, but the real impact would be felt in the next few months.

Traders already increased prices since they considered this as a good momentum near Ramadhan fasting month and Lebaran. At present, manufacturers not yet increased prices.

We will make a calculation in August. So, producers, especially those in the food & beverage sector, decided to increase prices around October (or after Lebaran) with range of price increase of between 10 and 15%.

This was due to the fact that increase of electricity cost in food and beverage industry reached 30-45%. Small and medium industries in the food & beverage sector would also face a similar condition.

For example, small and medium industries bought raw materials for packaging. There are no plastic packaging producers which are small-scale industries. Averagely, these producers are large and medium corporations. And, if these small and medium industries consume electricity of 1,300 VA, they would feel the impact of the increase of electricity cost”.

On Monday (12/7), a meeting with around 20 associations at the office of the Ministry of Industry was held. Minister of Industry, Hidayat, accommodated all requests of the associations, and would do a recalculation, which was to be discussed in the meeting of the Coordinating Ministry of Economy.

Chairman of NAMPA: The Effect of Meat Processing Industries Varied

Donatus Hartono, General Chairman of National Meat Processor Association Indonesia (NAMPA), told Business News that he not yet knew precisely about the effect of the increase of electricity cost on meat processing industries.

Theoretically, if cost of electricity increased 10%, and other additional electricity costs could be eliminated, it was expected that the effect on meat processing industries would not be too significant. Electricity consumption of meat processing industries varied. For small meat-processing industry that does not use large-capacity freezer, electricity consumption is low. But, for a large industry that uses large freezer to store stocks of raw materials and finished products in large amount, electricity consumption is high.

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