Ceiling vowed for industrial LPG price

Ceiling vowed for industrial LPG price

The price of liquefied petroleum gas (LPG) for the industrial sector will be capped at 30.13 baht a kilogramme to keep Thai exports competitive after being floated for two years so far, says the Industry Ministry.

Kittiphat Panitaporn, director of general administration at the Industrial Promotion Department, said the price cap is critical for heavy consumers of energy such as steel, ceramics, electronics and appliance makers.

The price of LPG for industrial use was floated in July 2011, then rose by three baht each quarter to 28.07 baht per kg for the time being.

"The LPG price increase will likely add 2-3% to total production cost, depending on the industry, so one way to overcome this is through innovation," said Mr Kittiphat.

The department has introduced schemes to support businesses coping with rising LPG prices, subsidising up to half the cost for small producers.

Consultation programmes include total energy management, entrepreneur development for innovative productivity and manufacturing development to improve competitiveness.

"Interested parties must apply to join the scheme, and the department selects successful candidates," said Mr Kittiphat.

Total energy management focuses on energy efficiency and maximising energy use.

With a total budget of 5.9 million baht, the programme wants 70 businesses to take part each year. A 10-20% reduction in cost is realistic.

The other two programmes help to guide firms towards innovative products and increased productivity so they can achieve higher quality and profit margins.

One industry taking part is electronics and appliances, whose export value is US$45 billion a year or 19.6% of the country's total.

Bitwise (Thailand) Co, a leading maker of air conditioners under the Tasaki brand and an original-equipment manufacturer, is among those benefiting from the programmes.

"Bitwise has been able to increase productivity and reduce LPG use at our facilities," said managing director Somyos Keeratichivanant.

Measures undertaken by the company include changing its paint formula to require less heat to dry.

While Bitwise's LPG consumption remains unchanged, overall productivity has increased by 30%, said Mr Somyos.

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