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High fuel prices impact water firm
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Posted on Sep 18 2005
Saipan’s leading ice and water company, Saipan Ice Inc., will shut down its commercial freezer services beginning Oct. 1 as part of the company’s cost-cutting measures to cushion the impact of rising fuel prices.
Saipan Ice general manager Ador Songcuan said the company has been cutting down on other aspects of business operations, including that of its ice plant.
Songcuan said the company had to resort to drastic cost-cutting measures so it would not have to raise its prices.
“We should have actually raised our products’ prices, but we have been holding them back,” Songcuan said. “The people are already suffering. We did not increase our prices.”
Among its products, the five-gallon bottled water retails at $2.50 each.
Songcuan said rising fuel costs have doubled the company’s operational expenses. The company has already reduced its ice plant’s operations from 24 hours daily to 12 hours daily.
Despite the reduction, he said Saipan Ice’s utility bill from the Commonwealth Utilities Corp. remains at previous levels. He said the company’s bill for electricity consumption averages about $14,000 per month.
Saipan Ice has some 25 delivery trucks. With the increase in the prices of diesel and other fuel products, Songcuan said the company spends $12,000 monthly for fuel. He said the cost more than doubled compared with previous levels.
Increased freight cost also impacted the company’s bottling operations. Besides this, he said the price of pre-formed bottles have also increased from 4.7 cents to 5.2 cents. Saipan Ice imports pre-formed bottles by the thousands.
“Rising fuel prices have had a strong impact on the business,” Songcuan said. “But I assure the public that the company retains the quality and service it provides.”
