UPS becomes dearer

UPS prices have shot up by five to 10 percent in the last one month. In fact,
many leading brands have increased their prices, while others are following
suit, since the cost of raw material skyrocketed over the last few months. Basic
material such as copper and lead are scarce in the international market, which
has created a big gap in supply-demand position. Result-copper, which was
earlier being traded at $5,500 per tonne, is now hovering between $7,500 and
$8,000. Similarly, lead prices have also increased as the metal consumption has
gone up by 300 percent in recent times. According to market reports, China and
the US, the biggest consumers of these metals, directly contribute to the
present supply-demand gap and it is also quoted that there is a worldwide
shortage of copper and lead due to strike and closure of mines in Mexico and
Chile.

Whatever be the reasons, finally, vendors and consumers have to bear the
brunt. “Though price fluctuation (increase) actually started in the month of
February this year, we did not pass on the cost increase to our customers
immediately waiting for better times. But things did not change for long and we
are forced to take this decision now,” said R Aravindan, Director, Compact
Systems Pvt Ltd, which recently increased its entry-level UPS price by Rs 100.
Compact 600VA is now sold in the market for a price of Rs 1,950 (taxes extra),
while there is a price increase of five to seven percent in other ranges.
However, Aravindan claimed that the cost burden was not entirely transferred to
the customers and only shared with them, while vendors are also facing some
losses (in margin) in business.

Compact is not the only company in the industry that has hiked prices. In
fact, power-solution giants like Numeric, Emerson and APC have also increased
their product prices across the board. There are news reports that new
investments in mining are not happening worldwide, while the demand is growing
exponentially, said a source close to APC. The US-based giant has increased the
prices between five and 10 percent, across its product categories.

Averagely, about 30 to 35 percent of the total cost of UPS goes in copper
purchase, while battery and fabrication are other important aspects of the power
box. Even lead price has increased considerably in the recent past forcing
battery (lead is an important constituent in it) manufacturers to revise their
prices, pointed out Aravindan.

According to market sources, pure-play UPS importers like Mercury, D-Link,
Gigabyte and iBall are having tough time in business since the dollar price on
import has increased, which will subsequently influence the duty price also.

“We have increased our entry-level product prices only by Rs 50 to 70,
while the actual manufacturing cost went up to Rs 200. In business, vendors are
also absorbing the losses to great extent, with the intention of not burdening
the customers too much,” said A Imtiaz Ahmed, GM-Sales and Distribution,
Numeric Power Systems Ltd.

According to Prashant Mehar, Corporate Champion-Channel Business, Emerson
Network Power India, “The price increase has not affected the business in
general. Both, channel partners and consumers are in a position to understand
the market situations and compulsions behind this price increase.”

S Gopikrishna & Nelson Johny