Firms seek new ways to adapt as Hanoi raises electricity prices

HANOI: After the latest power price hike announced by Vietnam Electricity (EVN), many businesses say they are seeking ways to adapt to the new situation.

Xuan Nguyen Group general director Lu Nguyen Xuan Vu said that his group operates in the field of agricultural product processing, with many stages from raw material processing to drying that must use electricity.

On average, the group’s factory in Ho Chi Minh City pays a monthly electricity bill of about 150 million dong. Two recent electricity price hikes will add 7.5% to its electricity costs.

If under favourable production and business conditions, this cost would not be a big problem, but with the current situation, the firm faces more difficulties, Vu said.

Since the beginning of this year, both domestic manufacturers and exporters have been under pressure from the market decline, while the purchasing power of local people has been limited due to the tough economic situation.

Purchasing power for non-essential goods has clearly declined despite the application of policies to stimulate consumption. Also, input costs, including electricity prices, continue to rise, yet businesses cannot increase product prices.

With the current economic conditions, where product prices are expected to increase, consumers would take non-essential products off their shopping lists.

“If we cannot sell our products, it would not only affect our factory’s processing activities but also cause many difficulties for farmers that supply the raw materials,” Vu said.

Vit Viet Industry Production and Trading JSC director Van Nguyen Vu said that as a mechanical manufacturer, they paid an average monthly electricity bill of about 200 million dong.

He said that higher electricity prices would lead to an increase in many other expenses, from raw materials and warehousing to transportation, and this would lower the firm’s profit amid a smaller number of orders.

Meanwhile, Vietnam Cement Corp general director Le Nam Khanh said input costs for cement production increased by 3% with the rise in electricity prices. — Viet Nam News/ANN