22 January 1996 00:00 [Source: ACN]
RISING operation costs, especially increases in electricity rates, dumping of excess products from neighbouring producers and the startup of additional capacities in Malaysia are expected to be major issues for the country's chloralkali industry for 1996, Malaysian producers at the Asean Chemical Industries Club meeting said in December last year.
Producers said dumping of hydrochloric acid into the Malaysian market by other producers in the region was still apparent. Local producers said relevant government bodies or regional groups must address the issue this year.
'The threat of dumping by other producers in the Asean region is expected to continue with the full implementation of Afta,' said the report.
'While Afta represents significant opportunity for intra-regional trade, it is also a threat to producers when products are dumped into neighbouring markets,' it continued.
Although sales volume for all chloralkali products rose last year, operating costs have also increased. The short supply of labour in the country has caused wages and transport costs to rise by about 10%. Electricity rates rose by 10%. These cost increases have affected the profitability of the chloralkali industry in Malaysia.
Demand for chloralkali products continued to be strong due to the buoyant growth in the manufacturing sector. Local producers are now operating at 100% operating rates.
Both CCM Chemicals and Malay-Sino Chemical Industries have announced expansion plans to double their individual plant capacities.
CCM Chemicals will expand its operating capacity from 20 000 ECUs chlorine/year by end-1996, while Malay-Sino Chemical Industries will expand from 13 500 ECUs chlorine/year to 27 000 ECUs chlorine/year.
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