Businesses say they accept high prices, if there is sufficient electricity

The electricity price increase is not the biggest worry for manufacturers any more. Regular electricity cuts is what worries them most.

Nothing can be done if there if no electricity

According to the managers of American Technologies Inc, the company that makes metal roofing products and water heaters, the sharp price increases for input materials have put hard pressure on the operations of the company.

For example, the price of imported rolled steel has increased by 20 percent, while plastic covers have also increased by 20 percent. Meanwhile, the exchange rate which is used to calculate import tax has increased from 18,932 dong per dollar to 20,683 dong per dollar as a result of the latest exchange rate adjustment. Especially, the dollar has been losing its value against the currencies of other countries from which American Technologies imports products. “As a result, the company is suffering double loss,” Tran Thi Minh Chinh, Deputy Director of American Technologies, complained.

She went on to say that other expenses have also increased. The wages for staff, for example, have also been raised, because the company has to pay higher wages to help its staff cover the recent price increases.

“In order to overcome the difficulties, we only have one choice – increasing productivity to offset the decreasing profitability,” Chinh said.

However, she complained, the mission might become impossible, because the company fears electricity cuts will stagnate production.

“We plan to make heavier investments to increase productivity and employ more workers. The imported machines and equipments are scheduled to arrive by April 2011. However, the electricity company has requested us to reduce the electricity consumption volume by 20 percent, or it will cut electricity.

“The biggest problem for us now is the lack of electricity,” he said

Any price will be accepted, provided that EVN provides sufficient electricity

“We don’t care about increasing the electricity price. What we want is the Electricity of Vietnam to commit to providing enough electricity,” Chinh said.

This is also the viewpoint of many enterprises and state management agencies.

At a conference held in late February 2011, a representative of the Vietnam Cement Corporation also said that the biggest headache for the manufacturer is not the electricity price increase, but the regular electricity cuts.

According to the representative, the electricity price increase has led the cement price to increase by 20,000 dong per ton, thus forcing the enterprise to adjust the sale prices sooner than expected.

“However, the electricity price increase would not be a big problem. “Any prices will be accepted, provided that we can have enough electricity,” he said.

It is expected that the designed capacity of cement plants in 2011 will be higher than the demand by four million tons, while Vietnam still had to import three million tons of clinker in 2010. “However, we are afraid that the growth rate will be lower in 2011 than in 2010 due to the lack of electricity,” the representative said.

Deputy Director of the Hanoi Planning and Investment Department Nguyen Van Tu said that if the Electricity of Vietnam EVN has to cut electricity this year, it should think carefully about the electricity cut schedule, so that enterprises can use electricity in the most effective way.

Last year, in a similar conference, Tu also asked EVN to prioritize to provide electricity to Hanoi, reasoning the 1000th anniversary of Thang Long-Hanoi. The reason Tu has cited for this year is the “need to push up production to stabilize the macro economy”.

“If Hanoi’s export companies cannot boost exports, this will very badly affect macroeconomic issues,” Tu has warned. – Vietnamnet

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage