OVERALL Forge reluctantly agreed to sign up for its latest gas supply contract at a cost of more than $116,000 per month compared to its previous which expired in April.
Company general manager Glen Nagle said sky-rocketing energy prices had become “very grim” for the company, which was a high gas user to make products for the mining and quarrying industries, among others, in domestic and overseas markets.
“We had massive price hikes in our gas contracts which has put a lot of pressure on our business,” he said.
We had massive price hikes in our gas contracts which has put a lot of pressure on our businessOverall Forge general manager Glen Nagle
“Since April our gas bill has gone up more than $116,000 a month.
“That is nearly $1.4 million a year and we are competing against an overseas market so we have lost business for it and we are running a lot less than we were about 12 months ago.”
Mr Nagle said the cost of gas represented 30 per cent of Overall Forge’s annual budget.
The Ettamogah-based factory played host to Prime Minister Malcolm Turnbull on Thursday and he said Overall Forge would ultimately be a beneficiary of measures introduced by his government to bring gas prices down.
They include restrictions on gas exports which, he claimed, had already led to wholesale prices coming down since the plan was first floated.
“The real pressure this business is under is from high energy costs, in particular gas prices,” Mr Turnbull said.
“They have gone up massively over the last few years, but wholesale gas prices are coming down.
“We’re determined to ensure there will always be enough gas for the domestic market whether it is industrial customers like Overall Forge or whether it is mums and dads at home wanting gas for cooking and heating.
“What were they (Labor) thinking to allow all that gas to be exported without for one moment heeding the warnings about the need for gas in the domestic market.”
Overall Forge, which exports 40 per cent of what it manufactures, employs 48 at the Ettamogah site which is down on the 73 when Mr Nagle joined the company in 2011.
It runs two shifts Monday to Friday and competes on a global basis.
“Our competition comes from overseas, but the actual world forging market is down,” he said.
“We’ve got the Italians, Koreans and Germans coming into what were once our traditional markets.
“Korea is buying Australian natural gas cheaper than what we can.”