Kinpo Group (金仁寶集團) chairman Rock Hsu (許勝雄) said yesterday the large electricity price rises that start on May 15 would drive up local companies’ operating costs and have a negative impact on local industry.
The energy price rises would also increase inflationary pressures and hurt GDP growth this year, Hsu said.
Hsu, chairman of the Chinese National Federation of Industries (CNFI, 全國工業總會), said the government’s move would increase costs at electronics companies by about 20 percent a year.
For some other industries, such as textile and steel, the electricity price increases could raise costs by between 45 percent and 50 percent, Hsu added.
“We do not oppose increases in [petroleum-based] fuels and electricity prices, but the government should not raise prices by that much at the same time,” Hsu told reporters.
Hsu raised concerns about looming inflationary pressures following the government’s move, which could dampen private consumption and hurt the nation’s economic momentum.
Hsu also called for the acceleration of the government’s development of alternative sources of energy to maintain the nation’s competitiveness in the future.
Another business heavyweight, Teco Group (東元集團) chairman Theodore Huang (黃茂雄), also said the price rises have made him more cautious about business prospects this year.
“I had thought the spring swallows would come this year, but [I] need more time to think about that forecast now,” Huang said.
However, Huang maintained a relatively optimistic view on the inflationary pressures, saying he has not seen any signs that the move would impact overall consumer prices.
In addition, some business opportunities could emerge following the price rises, as many companies could see the need to invest in more energy-efficient facilities for their long-term corporate development, Huang said.
Huang said enjoying low electricity prices was very attractive, but some companies have been a little wasteful with their energy consumption.
“Since new technologies are able to help save energy, such new facilities will be necessary and worthwhile investments for local companies,” Huang said.
For transportation companies, the increase in fuel prices would be more harmful than the increase in electricity prices, Evergreen Group (長榮集團) vice chairman Lin Shing-san (林省三) said, adding that the group hopes to maintain its profitability by raising its rates and imposing a surcharge.