Ironware makers feel heat from weaker yen

The sustained weakness of the Japanese currency, which slumped to a 24-year low of 140 yen against the dollar on Thursday, is driving up costs for makers of traditional Nambu Tekki ironware.

Oigen Foundry, a 170-year-old business in the northern prefecture of Iwate, uses large amounts of electricity and iron for casting.

The local power utility told the company last month it would raise electricity rates from October due to the weaker yen and higher crude oil prices. Oigen estimates its electricity costs will double as a result.

The rising cost of iron is another issue because the main ingredients, iron ore and coal, are both imported. Oigen says it can't use cheaper raw materials because that would involve compromising on quality.

So the company has been forced to pass on the higher costs to its customers.

Oikawa Kuniko, President of Oigen Foundry said, "We are worried that raising prices will drive away customers as ironware products are not something essential to everyday life."

The company will increase prices of almost all its Nambu Tekki products by up to 20 percent in steps from October.