Enterprises bump up prices on rising raw material costs

With raw materials prices rising, enterprises are hiking prices to protect their profit margins.

Enterprises bump up prices on rising raw material costs
Cement producers in Vietnam are raising prices by VND30,000-40,000 (US$1.31-1.74) per tonne as costs surge. — Photo dangcongsan.vn

Cement producers have increased prices by VND30,000-40,000 (US$1.31-1.74), according to Luong Duc Long, vice president and general secretary of the Vietnam Cement Association.

Sai Gon Food Joint Stock Company hiked prices by 5-15 per cent in the first and second quarters, and the rise in the third and fourth quarters might reach 25 per cent, its representative said.

Nguyen Quoc Anh, director of Duc Minh Rubber Company Limited and chairman of the HCM City Rubber and Plastic Association, said rubber prices are up 60 per cent, and enterprises are planning to hike product prices by 5-10 per cent, but if the cost rises continue in the next two months, 25-30 per cent hikes are likely.

“None of our orders in the first quarter was profitable. It is difficult to get foreign partners to agree to price hikes; they usually ask for further monitoring and renegotiation.”

Binh Minh Plastic Joint Stock Company saw after-tax profit drop by 18 per cent in the first quarter as raw material prices rose.

Plastic powder prices soared 25 per cent year-on-year to $1,085 per tonne in the first two months of the year, Rong Viet Securities Joint Stock Company reported.

With domestic supply only meeting 25-30 per cent of demand, the dependence on imported raw materials has lasted decades, according to Tran Viet Anh, vice chairman of the HCM City Association of Enterprises and general director of the Nam Thai Son Import - Export Joint Stock Company.

Many enterprises are working to cut costs and renegotiate contracts.

Some are hesitant about finalising prices for next year’s orders.

 

"Production cannot be interrupted, and enterprises must thus make use of all raw materials in stock while waiting for further developments," Anh added.

The major increase in prices is merely due to a cyclical upturn in the commodity market, Deputy Minister of Industry and Trade Do Thang Hai said.

Nguyen Duc Thanh, general director of Tan An Foods Processing Export Company Limited, encouraged enterprises to look at the bright side, namely abundant export orders.

According to the latest survey from IHS Markit, Vietnam’s industrial output growth was at a 20-month high, with a sharp rise in new orders and export sales leading to stronger rises in employment and buying activity.

The Vietnam Manufacturing Purchasing Managers Index increased to 53.6 in March from 51.6 a month earlier, the fourth straight month of expansion in manufacturing sector and the strongest pace since December 2018.

Difficulties in sourcing raw materials persisted, with suppliers' delivery times continuing to lengthen. But vendor performance fell the least in four months, and firms were able to expand their stocks.

Price data showed input cost inflation accelerated to an over three-year high amid higher steel prices and increased costs of items sourced from China.

Output prices rose at the sharpest pace in over four years.  

VNS

Domestic enterprises remain struggling

Domestic enterprises remain struggling

More than 90 percent of domestic enterprises are small and medium-sized. The advantage of this business model is that it quickly responds to market fluctuations. 

  • Tags :
 
 

Other News

.
Investment into local start-ups expected to rise this year
Investment into local start-ups expected to rise this year
BUSINESSicon  01/06/2021 

The investment capital into Vietnamese start-ups this year would see a breakthrough despite a year-on-year decrease of 48 per cent in 2020 to reach US$451 million.

New master plan for seaports needed to further boost economic development
New master plan for seaports needed to further boost economic development
BUSINESSicon  01/06/2021 

A new master plan for seaports is needed to further boost the country’s socio-economic development in the rapid international integration process, experts have said.

Realty tax needs revamp to ensure fairness
Realty tax needs revamp to ensure fairness
BUSINESSicon  31/05/2021 

Realty tax not only creates sources of collection for the State budget but also is a policy able to spur growth and reduce bribery related to land. Vietnam does have realty tax.

Market will continue to breach new highs, but investors should be more cautious: experts
Market will continue to breach new highs, but investors should be more cautious: experts
BUSINESSicon  31/05/2021 

The market witnessed strong buying interest last week and analysts from many securities firms expect indices to continue to hit new highs, but have warned investors to be cautious.

E-commerce changing domestic retail property market
E-commerce changing domestic retail property market
BUSINESSicon  31/05/2021 

The shift toward e-commerce due to the COVID-19 pandemic has brought challenges to Vietnam’s retail property market, according to Savills Vietnam.

Customs sector helps exporters utilise benefits of FTAs
Customs sector helps exporters utilise benefits of FTAs
BUSINESSicon  30/05/2021 

The customs sector will continue to introduce measures to help Vietnamese enterprises fully tap the benefits brought about by FTAs Vietnam has signed with foreign partners, an official from the General Department of Vietnam Customs has said.

CPI inches up 0.16 percent in May
CPI inches up 0.16 percent in May
BUSINESSicon  30/05/2021 

Vietnam’s consumer price index (CPI) in May was up 0.16 percent agaisnt April and 2.9 percent from last year, reported the General Statistics Office (GSO) on May 29.

Major transport infrastructure works to be started in June
Major transport infrastructure works to be started in June
BUSINESSicon  30/05/2021 

Four major transport projects will be kicked off in June, announced the Ministry of Transport at a conference on May 28.

Lending interest rates about to increase
Lending interest rates about to increase
BUSINESSicon  30/05/2021 

Recently, the interbank interest rates suddenly jumped, causing many people to worry whether bank lending rates will increase in the coming time while the business and production activities have been facing many difficulties due to Covid-19.

HCMC to try reigniting delayed BT projects
HCMC to try reigniting delayed BT projects
BUSINESSicon  30/05/2021 

Financial shortcomings of investors combined with the government’s failure to offer support are some of the reasons multiple BT infrastructure projects in HCMC are being delayed indefinitely, experts said. 

Firms should facilitate Gen Z to develop
Firms should facilitate Gen Z to develop
BUSINESSicon  30/05/2021 

Enterprises should consider applying new thoughts or amend regulations to meet the demand of Gen Z, including those born in 1996-2010, and create favorable conditions for them to develop as they will be an important part of the country’s workforce.

Vietnam credit growth forecast to hit 14% in 2021: Fitch Solutions
Vietnam credit growth forecast to hit 14% in 2021: Fitch Solutions
BUSINESSicon  30/05/2021 

A GDP growth of 5.8% in 2021, nearly double the 2.9% growth last year, would boost credit demand.

VIETNAM BUSINESS NEWS MAY 31
VIETNAM BUSINESS NEWS MAY 31
BUSINESSicon  31/05/2021 

New COVID-19 outbreak puts brakes on trade, transport

More Vietnamese agro products to be available on e-commerce platforms
More Vietnamese agro products to be available on e-commerce platforms
BUSINESSicon  29/05/2021 

Following successful sales of lychees, efforts have been made to sell other Vietnamese farm produce on e-commerce platforms, the Nong nghiep Viet Nam (Vietnam Agriculture) newspaper has reported.

Debt burden risks budget stability
Debt burden risks budget stability
BUSINESSicon  29/05/2021 

Vietnam has had outstanding economic development in recent decades, even through the pandemic so far. 

Paint makers’ fresh coat of progress
Paint makers’ fresh coat of progress
BUSINESSicon  29/05/2021 

Having one of the fastest-growing paint and coating industries in the Southeast Asian region, Vietnam is mainly dominated by international paint and coating groups, but it is now witnessing a refresh as local makers attempt to gain some traction.

Many factors behind rising inflation
Many factors behind rising inflation
BUSINESSicon  31/05/2021 

The 2020 Consumer Price Index (CPI) in Vietnam was contained at 3.23%, but which will be difficult to maintain at a target of 4% in 2021.

'Black-credit' lenders pose serious threat to borrowers
'Black-credit' lenders pose serious threat to borrowers
FEATUREicon  28/05/2021 

Experts have repeatedly rung the alarm bell over black credit, which is causing serious consequences to families and society.

70% of VN adults use banking services but many lack access to credit
70% of VN adults use banking services but many lack access to credit
BUSINESSicon  30/05/2021 

According to the State Bank of Vietnam, by 2020, 70% of adults in Vietnam had a bank account, but nearly half of them did not have access to credit. 

Vietnam stops importing pigs from Thailand
Vietnam stops importing pigs from Thailand
BUSINESSicon  29/05/2021 

The Ministry of Agriculture and Rural Development has sent a document to the Thai Embassy on the suspension of imported live pigs from Thailand into Vietnam.

 
 
 
Leave your comment on an article

OR QUICK LOGIN