Tiles maker Malaysian Mosaics Bhd (MMB) will raise prices by 20 per cent in the face of costlier petrol, diesel and natural gas.
"We have no choice but to pass on some of the higher costs. We have already absorbed as much as we can," said chief executive officer Thomas Karl Rapp.
MMB is one of seven major tile manufacturers in Malaysia. It ranks third after White Horse Bhd and Guocera. Its three factories in Kluang, Johor, are able to produce 15 million sq cu metres of tiles per year.
"We are known for our premium quality tiles. While we have decided to source felspar locally to cut down transport cost from Thailand, we can only reformulate some of our tiles to an extent," he said after a shareholders' meeting in Petaling Jaya yesterday.
Following the government's decision to raise petrol and diesel prices, tile makers have been paying more for transport services.
It will also have to pay more for natural gas as the government is reducing subsidies that have been keeping prices low.
Ceramic producers now pay RM12.87 per million metric British thermal unit (mmBtu) to Gas Malaysia Sdn Bhd.
However, tile makers have yet to know the new price.
In an interview with Business Times, the group's sales director David Lai said that this year's export sales are due to grow by 30 per cent from last year's RM120 million.
"Despite high freight costs, we see export growth. Our locally designed rustic tiles used in hotel porches, walkways and landscaped areas are gaining popularity in the Middle East," he said.
MMB's key markets are Australia, Germany, Singapore, Vietnam, South Africa, the United Arab Emirates, Russia, India and Pakistan. - By Ooi Tee Ching (Business Times)
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