Amidst continuous unprecedented load shedding, the demand for uninterrupted power supply (UPS) has soared boosting turnovers for battery manufacturers and increasing sales of power generators manifold.
Dealers said that instead of household use, the UPS has become popular in offices especially for powering computers. The household sales of UPSs declined during the year compared to surging sales of generators owing to the long hours of power outages.
To offset the impact of load shedding on business, the millers are forced to pay heavy cost. The per unit cost of running a generator on diesel is three times up than the Water and Power Development Authority (Wapda) tariffs, said Chenab Group Chief Executive Officer Mian Latif while talking to The Express Tribune.
During the prevailing crisis, overseas buyers ask local exporters before giving export orders to ensure continuous power supply to their factories, he added.
Larger Industries have the affordability to install heavy duty generators forcing the small and medium sized units to invest heavily in power generators to stay in business.
There is no business not owning a generator, said Latif.
The diesel generators incur Rs30 per unit compared to gas generators producing at Rs7.5 per unit, he added.
The small and medium traders said that despite massive costs of production due to running diesel generators, small and medium sized units are forced to buy generators to stay in competition and to meet additional work order of big exporters.
The soaring overhead expenses have caused extra burden on the industries however, on the other hand few sectors owing to load-shedding are witnessing a rise in profits like battery manufacturers due to the rising demand for batteries for UPSs and generators, said traders while talking to The Express Tribune.
Battery manufacturers inflated the prices in the last few years to cash in on the growing demand. They are revising rates upward every month, especially during the load-shedding peak season in summer.
For example, revenue of Atlas Battery in 2010-2011 rose to Rs5.86 billion from Rs4.024 billion in 2009-2010.
Exide Pakistan’s net sales in 2010-11 jumped to Rs7.7 billion compared to Rs6.189 billion in 2009-10. The company’s net profit after tax was Rs276 million in 2010-11 against Rs197 million 2009-10 and Rs118 million in 2008-2009, following an upward trend. In 2004-05, the profit after tax stood at a meagre Rs54 million.
UPS dealers said that a 180 ampere battery which was priced between Rs8,000-8,500 last year, is presently available for Rs12,000-12,500, said Arshad Malik – proprietor of a battery retail shop in Faisalabad.
However, the rise in UPS and generators’ price increases are no match to the extraordinary surge in battery prices, he added. Market sources said that the business of supplying smuggled generators is growing due to high duties and taxes on generator imports. Prices of generators have risen 20% especially after imposition of taxes and duties.
The consumers urged the government to abolish the 16% general sales tax on generator imports as long as the country is in energy crisis.
Published in The Express Tribune, July 26th, 2012.