The elimination of the Special Consumption Tax for gas stoves reduced its prices and reactivated the demand. The incentive, which has been in force since September 1, is part of the Productive Development Law.
The tax was 100% since 2014 and sought to encourage the purchase of induction cookers. At Distribuidora El Tejar, in the center of Quito, these six-burner appliances cost between USD 600 and 650; after the elimination of the tribute they dropped to USD 440.
In the case of four-burner stoves, the reduction was about USD 150, according to the manager of this establishment, Eduardo Almache. Edison Cando is a seller of household appliances in the same sector. He said that the price of a gas stove depends on several factors, such as the size, number of burners and additional functions.
Cando confirmed that all the models and varieties lowered the price during this month. A kitchen with electric ignition, chrome, digital clock and other functions or accessories cost in this place USD 1 200. This artifact is now available for USD 700. For Cando, the consumer has the possibility of getting kitchens with better features and at a lower cost, “What has encouraged the sale of this product”. About the induction cookers, Cando and Almache agreed that they do not have stock because there is no demand.
Distribuidora El Tejar has not received new models for two months. The Chamber of Industries, Production and Employment of Cuenca issued a statement noting that the four Ecuadorian companies: Indurama, Fibroacero, Mabe and Ecasa, which develop gas stoves, increased their production immediately approved the reduction of the tax.
In addition, he indicated that companies have already generated 500 new jobs directly. “After this resolution, the sector is committed to its reactivation, which in recent years has suffered a 60% contraction in its market and a reduction of about 1,600 jobs.” According to Marcelo Javier Jaramillo, representative of Indurama, the elimination of Special Consumption Tax meets a request from consumers, who want to cook with gas “because it is part of their tradition and culture”.
To increase their production they hired 300 people. The intention is to reach the manufacturing levels of 2014, before the decision of the previous Government to prioritize the induction cookers. That is, 3,000 gas cookers per day. Of that amount, 60% is exported to 20 countries and the rest is sold in the country.
Indurama has 30 models of gas stoves, of which 15 have been prioritized. “These are already available to the consumer,” said Jaramillo. He noted that induction models are still maintained within the supply catalog.
But he considered that consumer demand shows that the product does not have the welcome outlined in the Government’s plan. In the first quarter of 2015, they sold between 20,000 and 30,000 induction cookers per month, but then there was a significant drop, up to 2,000 a month this year.
According to Jaramillo, Indurama made innovations in gas valve systems to provide greater safety and prevent leaks. In the case of Ecasa, the sale of these devices during this month went up 45%. “The kitchen line was practically stopped. Now we are very optimistic to be able to reactivate it”, commented Mario Esteban Espinosa, general manager of the company. Its projection is to increase sales by 20% until the end of this year.
The company will not hire more personnel, but will reassign 80 people from the refrigerator line to the kitchen line. “Refrigerator imports affected local production.” The company has 320 employees. Of these, 120 will be in the production of gas stoves. Andrés Mata, director of the Association of Warehouses of Appliances of Ecuador, mentioned that the consumers who choose to buy these devices will be those who postponed the renovation of their stoves due to the previous prices.
The Special Consumption Tax for gas stoves, according to Mata, had a negative impact on sales of up to 70%. The leader expects that, without this tax, the recovery will be of the same percentage. In relation to the induction cooker project promoted by the Government, Carlos Pérez, Minister of Energy, informed yesterday that the State is not going to be involved in the sale of these devices.
“We are not preventing the induction cookers from being manufactured, the companies that want to do it will do it, what we say is that the Ecuadorian State is not going to get involved” in marketing, emphasized Pérez. (I)