VietNamNet Bridge – Enterprises have just begun making products
for Tet sale season since October, while they should have started in September
like in previous years. The anticipated low demand has made producers shrink
back.
Nguyen Chi Nguyen, Deputy Chair
of the HCM City Food and Foodstuff Association FFA, describing food producers
as the patients who make every effort to recover, said enterprises need time to
prepare in capital, materials and labor force for the year-end production
season after they experienced a very difficult period.
Nguyen said most of the
association’s members do not intend to increase the output this year, because
they can see the low market demand. Bidrico, a drink producer, only began
hoarding up materials in the last week of September and has recruited 80
seasonal workers. Meanwhile, the company needed 200 workers last year for the
year end production season.
Bidrico’s General Director Nguyen
Dang Hien has noted that the purchasing power is on the decrease, predicting
that the Tet sales would be equal to last year’s.
He is considering offering some
preferences to wholesalers and discounts to consumers in order to boost sales.
Especially, the company plans to market some new products, renew the package
designs but maintain the sale prices unchanged.
The Dong Nai Food Processing
Company (D&F) only summoned a meeting of the board of directors last week
to discuss the production plan for the 2013 Tet.
D&F General Director Nguyen
Tuan Phuong said by this time of the previous years, the material market got
bustling already, while price quotations were sent by material suppliers to
producers for their consideration. Meanwhile, no one can say for sure about the
price tendency in the time to come.
“As for fresh food, we would be
partially self-sufficient in materials, while we would rely on other supply
sources. If the market price goes up on the days just before Tet, we would
raise the retail price, and vice versa. The same strategy would also be applied
for processed food,” Phuong said, stressing that the company does not hurry to
make products in big quantities right now.
Viet Huong Food Company also said
the company would only begin the production campaign in late November.
Explaining this, Viet Huong’s General Director Nguyen Kim Ngan said the demand
would not increase sharply, therefore, no need to begin the production season
soon.
Saigon Food plans to churn out
the output equal to that of the last year. Le Thi Thanh Lam, Deputy Director of
the company, has noted that since consumers have to cut down their expenses,
they would prioritize to buy essential goods for Tet, therefore, she does not
intend of increasing the output of frozen products.
All producers have complained
about the risks they are facing, because it is unpredictable about the
purchasing power and the material prices.
“Pork and chicken are still cheap
now, but no one can say for sure if the prices would increase in some more
months, if the petrol and electricity prices increase,” Phuong said.
Sharing the same view, Van Duc
Muoi, General Director of Vissan, said the food prices are now still at low
levels, but they are very likely to escalate in some more months.
“The material prices have
increased five times in the last some months. Meanwhile, the sale prices of
finished products remain unchanged. Therefore, I think a price hike wave would
occur soon,” he said.
Saigon Food has decided to raise
the sale price by 10 percent commencing from October 2012. However, the
distributors have not accepted the price increases. Lam complained that the pay
for workers has increased by 15 percent, while the seafood material prices have
increased by 5-15 percent, which all have led to the 10 percent increase in the
production cost.
“If we do not raise the sale
prices, we would not make profit,” Lam said.
Compiled by Thu Uyen
Business & Investment Opportunities
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