SK Cylinder has decided to increase by 20% the prices of the aluminum and FRP composite cylinders which it import from Luxfer Gas Cylinders with effect from September. It was attributed to Luxfer’s notice to raise its wholesale price by 20%. SK Cylinder is planning to take a plunge to revise the selling price to 20% higher in the domestic market.

The Luxfer Group of Luxfer Cylinder’s parent has been emphasizing profit and share price for the management policy since enlisted in the New York Stock Exchange in October, 2012, and the share price has actually risen from $11 up to $25 during these two years.

Aiming for further upgrading, Luxfer closed its French Gerzat Plant in June. Along with the closure of the plant, the production of aluminum cylinders is shifted to Nottingham Plant in UK and FRP composite cylinders to Riverside Plant in USA. It follows that the output of both Nottingham Plant in England and Riverside Plant in the USA has increased substantially. Particularly, Riverside Plant increased its output so much that it now suffers quite serious long delays in delivery under the influence of the good economic situation of USA.

Due to Luxfer’s tight situation of production its earning rates are being reviewed. As for the business for the Japanese market, as the earning rate is 20% lower than that for the other markets, Luxfer gave a notice that it might reconsider the current allocation of quantity unless the earning rate becomes equivalent to that of the other regions.

SK Engineering has so far rejected repeatedly Luxfer’s request for the revision of price, but it seems that there may be no way out but accepting it in consideration of Luxfer’s tight condition and policy to review the current earning rates.