EnerSys chairman John Craig

World-leading industrial battery manufacturer EnerSys has reported higher sales and net earnings for fiscal year 2007, despite increased commodity costs.

EnerSys reports net sales for the year ended March 31, 2007 were USD1,504.5 million, up 17.2% from fiscal 2006's USD1,283.3 million. Net earnings were USD45.2 million, up 47.2% from the previous year's USD30.7 million.

Company chairman John Craig said in a June 14 conference call the growth came on the back of an additional USD19 million in commodity costs.

Craig said higher selling prices, increased market share in the global industrial battery business and EnerSys's cost reduction program helped cushion the impact of high commodity costs.

"Customers are willing to pay higher prices when they are confident of receiving the best overall value," he said. EnerSys had educated its sales force to explain to customers that increased lead, copper and nickel prices had impacted on battery prices.

Craig said the company's focus on being the "best value provider" to customers helped EnerSys gain market share.

"We're often not the lowest price supplier but our combination of high quality, innovative products and high level of service and delivery provide what I strongly believe is the best overall value in the industry."

Craig believes higher commodity costs are driven by speculation and not higher fundamental supply issues.

He said the recent acquisition of Energia AD in Bulgaria was a step forward in EnerSys's plan to increase its manufacturing volume in low-cost geographical regions from the present level of about 25% to 50% (Forkliftaction.com News #313).

"[Energia] not only provides new growth opportunities in the rapidly expanding Russian and Eastern European markets but also another low-cost manufacturing plant, which has substantial potential for expansion."