Mumbai: Air conditioning and refrigeration companies are having a tough time battling substantial increases in input costs of almost all raw materials.
The cost of steel, including galvanised steel which forms an important raw material, has seen a substantial increase of 24 per cent this quarter, compared to the average for the previous three quarters.
Similarly, aluminium too is expected to be dearer by 14 per cent, copper by 8 per cent and high impact polystyrene by 7 per cent. With oil prices touching $120, a chain effect has been evident on a variety of goods, both directly and indirectly, through higher transportation costs.
Currently, the air conditioning and refrigeration industry sources some materials from domestic manufacturers, and others through imports. Component manufacturers have been sending notices in anticipation of a price increase of roughly 10 per cent, including from Chinese manufacturers, who account for the vast majority of imports.
According to S K Sinha, president of Refrigeration and Airconditioning Manufacturers' Association (RAMA), ''Air conditioning and commercial refrigeration companies have no option but to pass on part of the raw material cost increase to the end users. The prices of air conditioning and commercial refrigeration equipment are set to increase between 5 to 8 per cent sometime in May 2008.''
The increase in prices will be applicable to all product segments in the air conditioning industry, including room air conditioners, packaged air conditioners and central air conditioning products, as well as commercial refrigeration products such as deep freezers, cold chain equipment and supermarket refrigeration products.