2008 FIREWORKS PRICE INCREASE

Notice To All Our Customers:

Why are the prices for fireworks going up?

In 2008 pricing on fireworks imported from China will be going up by as much as 20—30%.

Elite Pyrotechnics, LLC is committed to keeping pricing as low as possible, however, as with all companies we must increase our pricing because of our increased cost.
The details of the increased cost are as follows:

Exchange Rate: On July 21, 2005 the Yuan (China’s currency) ended a more than ten year fixed value as compared to the US Dollar. This exchange rate was 8.28 RMB (Yuan) to $1US. The current exchange rate as of November 26, 2007 is 7.40 RMB per $1US. This means that it takes nearly 12% more US Dollars now than it did two years ago. But this is not the only factor.

Chinese Tax Rebate: Fireworks Manufacturers in China pay 13% in taxes. In previous years, they would get a 13% tax rebate on all of the fireworks that were exported. This rebate has been decreased to 5%, so effectively the fireworks companies are paying 8% in new taxes.

Shipping: Shipping continues to become more complex and expensive every year. It is getting harder to ship and the price keeps going up. This cost has nearly doubled in the past 4 years. It now can cost as much as $12,000 for a container of fireworks to be shipped from the factories in China to the fireworks companies in the US.

Cost of materials and labor: As with many places around the world, the cost of raw materials and labor are increasing, including China. As China’s economy and standard of living is rapidly increasing, it is harder and more expensive for fireworks companies to purchase the raw materials that they need as they are competing with many other industries. Labor is also becoming harder to obtain as there are more opportunities for workers and many do not want to work at a fireworks factory when they have opportunities to work in cleaner and less hazardous places.

Fireworks Classification Changes: 10” and larger shells are now classified as 1.1G fireworks. This makes it very expensive, if even possible to import these from China. Many companies will no longer be directly importing large shells and/or will share one container of large shells among multiple companies. This may even spur US manufactures to start building more large shells.

Together, all of these issues are causing the fireworks pricing to increase significantly in a short amount of time. Some of these costs may continue to rise, and some may remain about where they are, however, we will never again see prices as low as we have in the past.

Thanks for your understanding and your support.