With burgeoning world crude oil prices the challenges of the manufacturing industry have doubled this year around. With the price of a barrel hovering at the $-70 mark there is a definite indication that energy cost in the country too may need some changes.

As such the whole manufacturing circle is being disturbed and thrown into disarray. Cost of raw materials has already increased and interestingly enough amidst such a scenario the demand for goods has not increased as much as in the last fiscal. Under such state of affairs, passing the burden of augmented prices to the consumer will not be feasible – we found this earlier too!

However in these conditions, manufacturers can concentrate in making the existing units more efficient and cost-effective. Cutting down on unnecessary costs and related flab have to be undertaken to cushion the affects of the rising prices.

With the hardening of interest rates and its adverse affects on cost of borrowing, I strongly feel that these steps have to be undertaken fast and without delay.

We have to find ways to get out of this existing situation. I hope manufacturers will understand the gravity of the situation and act before it’s too late.

Monthly Economic & Commercial Report on Lebanon for quarter ending June 2006 giving latest updates on developments directly affecting India's foreign trade and investment.
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