|
Canned goods firm believes price rise won't affect sales
Canned fruit and vegetable producer Lao Agro Industry Company (LAICO) is holding purchase agreement negotiations with overseas customers over planned increases in product prices.
The company has a large number of overseas buyers in countries including the UK, France, Germany, Poland, Vietnam and Thailand.
“Currently we have only made new agreements with four buyers – one in Spain, one in Germany and two in the UK,” senior company official Mr. Chanin Awakulpanich said recently.
“These four buyers make up only 10 percent of our customer base. We are now waiting for answers from the other 90 percent after we recently informed them of the new prices.”
New purchase agreements need to be made due to increases in costs; product prices are set to be 15 to 20 percent higher than previously.
Canned sweetcorn will now be sold for US$11 to US$12 per can when before it was US$10. Canned palm seeds previously sold for 159,600 (US$20) kip per 22 kg but will now cost 15 to 20 percent more.
The company produces canned sweetcorn, pickled garlic and cabbage, rambutan in syrup, baby corn in brine, bamboo shoots, sweetcorn milk and palm seeds on its 5-hectare site in Thoulakkhom district, Vientiane province.
It produces 3,600 tonnes of canned fruit and vegetables per year. About five percent of products are sold in the domestic market while the remaining 95 percent are exported.
“I believe the new prices will not result in fewer exports because canned goods producers worldwide have increased their prices,” Mr. Chanin said.
“We will also get a British Retail Consortium (BRC) certificate from the UK next month which we hope will attract more customers.”
BRC is the lead trade association representing the whole range of retailers, from the large multiples and department stores through to independents, selling a wide selection of products, according to its website.
It is the authoritative voice of retail, recognised for its powerful campaigning and influence within government and as a provider of excellent retail information.
LAICO has two other certificates - Good Manufacturing Practice (GMP) and Hazard Analysis and Critical Control Point (HACCP).
Both accolades are internationally accredited and indicate production and product quality.
“With those international standard certificates, I strongly believe we will get more customers, allowing us to continue to sell everything we manufacture,” Mr Chanin said.
LAICO raised export prices because of spiralling production, overhead and fuel costs.
The company uses a form of oil as its energy source for processing. The cost of the oil rose from 4,500 kip per litre in January to over 5,000 kip in February, and is now 5,700 kip per litre.
Workers' wages are now 25,000 to 30,000 kip per day due to the impact of fuel prices.
The cost of imported metal cans has also increased in line with the world market because manufacturers must also pay for fuel for energy, processing and transportation.
Foreign currency values have also fallen which affects the company's production costs as purchase agreements are negotiated in foreign currencies.
LAICO uses raw materials sourced from forests and farms in Luang Prabang, Xieng Khuang, Borikhamxay and Vientiane provinces, although some vegetables are imported.
vientianes times
|
