CRI president and CEO George Sickinger indicated that the price increases are necessary due to two major factors – elimination of refunds that Chinese exporters receive from the Chinese value-added tax (VAT) and a continuing rise in raw materials, transportation and energy costs.
Effective July 1, 2007, the Chinese government repealed the VAT export tax refund for 553 “high energy consuming, high polluting and scarce natural resource-consuming” products. Products affected include leather, chlorine, some fertilizers, certain lumber and metal products, dyes and other chemical products - including pigments, resins and additives used in printing inks.
In addition to the increased import costs due to the VAT refund elimination, increasing energy costs are also forcing CRI to adjust their pricing.
“The increase in demand for petroleum and petroleum derivatives has a dramatic effect on the cost of raw materials,” said Mr. Sickinger. “These increases have a tremendous impact on our production costs and we need to reflect some of that in our product pricing.”
“However, we will continue to look for methods and resources to help us keep production costs as low as possible,” said Mr. Sickinger, “because it is in the best interest of CRI and our customers to do so.”