A Toyo employee hard at work inside the company's Yangon factory. Pic: Hein Latt Aung

THE domestic car battery and inverter industry is facing stiff challenges as the domestic and international price of lead – the main raw material – increases production costs, producers said last week.

Only two local companies mass-produce batteries in Myanmar – GP and Toyo – but small- and medium-scale producers have been popping up around the country in recent years. Some of them have been forced to suspend their production because lead is too difficult, or expensive, to buy.

Daw Rosie Rao, the managing director of GP Battery Industries Private Ltd, said the price of lead had nearly doubled in the past year – from US$2000 a tonne in October last year to between $3800-4000 now.

Such increases, she said, have forced her to lift prices.
“We’ve had to increase the price of our batteries because raw material costs have increased significantly,” she said, adding that the company imports its lead from Australia.

U Than Htike Lwin is the general manager of Proven Technology Industry Co, which makes Toyo batteries at the Shwe Pyi Thar factory in Yangon. The company has been skirting around the international price rises by buying lead locally and then refining it for production.

He said smaller manufacturers that do not have the same resources are being forced out of production. Adding to the squeeze on lead supplies has been the lack of recyclable lead domestically.

“Chinese battery companies are buying as many of the discarded batteries in Myanmar as they can and then recycling the lead at their factories. This is also pushing up the price of lead,” he said.

U Than Htike Lwin said that when used batteries are available they sell for between K800 and K1000 a viss (about $480 a tonne).

U Kyaw Sein, a battery retailer in Latha township, said most customers this year have been buying 120-amp instead of 150-amp batteries because prices are too high. A 150-amp GP battery retails for about K160,000, while a GS battery, imported from Thailand, sells for about K167,000, meaning there is little price advantage in buying local.

“Last year the 150-amp batteries were our best-selling item but this year the 120-amp batteries are out-selling them,” he said.

U Kyaw Maung, the manager of Arrthit Battery sales centre in Tarme township, said that some customers have chosen to buy imported batteries because the price gap between them and locally produced versions has narrowed so much.