Effective July 1, the Chinese government repealed the VAT export tax refund for 553 “high energy consuming, high polluting and scarce natural resource-consuming” products.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. Several other ink companies have announced similar price hikes recently.
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,” says 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,” he adds.