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Ministry urges firms to cut costs
Minister of Industry and Trade Vu Huy Hoang has called on businesses to review their manufacturing processes and the demand in the domestic market in order to reduce their production costs as part of the Government's plan to curb inflation.
At an online meeting held by the Ministry of Industry and Trade (MoIT) on Monday, Hoang said that inflation, forex, and high lending rates, along with the rise in petrol and electricity prices, were the most challenging factors to enterprises in the coming months.
Since March, several essential commodities, such as gasoline, diesel, fuel oil and electricity have seen big increases in prices.
At the meeting, business representatives expressed their concerns that increasing the prices of input materials would further raise the prices of their finished product.
Deputy General Director of the Viet Nam Steel Corporation (VNSTEEL) Le Phu Hung said domestic steel manufacturers had faced many disadvantages, such as the devaluation of the Vietnamese dong against the US dollar, high interest rates and surging input materials prices, which, in turn, forced producers to reduce production volumes on the domestic market.
He said that his corporation has used several solutions to cut costs and update technology to save power, adding that steel price stabilisation needed the consent of all manufacturers since VNSTEEL made up only 30 per cent of the market.
However, the General Director of the leading petrol distributor, the Viet Nam National Petroleum Corporation (Petrolimex), Nguyen Ngoc Bao, said the recent increase in petrol prices was only a temporary solution as it was able to compensate for about 40 to 50 per cent of petrol dealers' losses. Therefore, petrol dealers and distributors were still incurring huge losses.
Hoang said petrol dealers should not raise prices dramatically in a short time. Instead, they should adjust them carefully to avoid fluctuations.
He also praised petrol distributors' efforts to satisfy the domestic fuel demand as global oil prices had fluctuated and several private gas stations had closed.
The minister also asked market management bodies to crack down on speculation, trade fraudulence and illegal price increases.
At the meeting, the ministry also forecast the demand for power would increase from 17 to 18 per cent this year, stirring a fear of an electricity shortage this summer.
In response, Deputy General Director of Electricity of Viet Nam (EVN) Duong Quang Thanh said his corporation had implemented several solutions to reduce power shortages this summer, including mobilising thermo-electricity sources, while speeding up projects that were expected to be put into operation this year.
According to MoIT, the country's industrial production was estimated at VND59.7 trillion (US$2.88 billion) last month, an increase of 17.7 per cent in comparison with the same period last year.
In the first two months of the year, the figure totalled VND131 trillion, a rise of 14.6 per cent compared with the same period of 2010. Of this, private and foreign direct invested sectors saw the highest increase, at 17 per cent and 16.6 per cent, respectively. State-owned enterprises experienced a rise of 7 per cent.
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