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Cooking oil firm slashes price amid competition
The nation's only cooking oil manufacturer, Sengsavang Food and Plastic Production Company, last week slashed the price of an 18 litre can of oil by 20,000 kip.
The cans were previously sold for 250,000 kip but the price is now 230,000 kip, though last November the price was only 200,000 kip.
“We had to cut our price because the price of unfiltered cooking oil imported from Malaysia dropped,” a senior official from the company, Mr. Sanhti Louangsuvahnavong, said recently.
The price of the Malaysian product was also cut by 20,000 kip. Before that, it cost over 8 million kip (US$1,000) per tonne, “but it is now about 7,227,000 kip (US$900) per tonne,” Mr. Sanhti said.
“Price fluctuations of cooking oil made in Laos depend on the cost of imported oil,” he said.
The company is located in Savang village, Chanthabouly district, Vientiane.
The price dropped ahead of the Pi Mai Lao holiday which benefited customers and dealers who could buy large quantities and store it for sale before the company stopped production over the holiday.
“It is also good for us to compete with imported cooking oil,” Mr. Sanhti said.
Some oil is imported legally, some illegally, but both sell for low prices at local markets.
Sengsavang cooking oil now sells for 13,500 per litre; similar to the price of imported brands. However it previously sold for 16,000 to 18,000 kip per litre.
Mr. Sanhti said the company is likely to make a small profit because of the regular increases in fuel prices based on fluctuations in the world market, which push up transport costs.
In Vientiane, petrol stations are now selling premium petrol for 11,810 kip per litre, regular petrol for 10,640 kip per litre and diesel for 9,670 kip per litre. The rise in petrol prices varies by 150 to 300 kip per litre around the country.
Sengsavang imports unfiltered cooking oil from Malaysia, Indonesia and Thailand, then filters it and packages the oil in labelled containers and bottles, which are also made by the company.
The company's products are sold under the brand name ‘Somboun', and first entered the market in 2000. Previously sold only in Vientiane, the oil is now marketed nationwide.
Even as prices rise and fall, the company's sales and market share remain stable, and production has been increasing every year.
In 2004, the company sold 1.5 million litres, up from 400,000 litres in 2003. This increased by a further 10 percent in 2005 and another 10 percent in 2006.
Currently it imports about 5,760 tonnes of unfiltered oil per year.
The oil is mainly sold in Vientiane, with the rem ainder going to provinces nationwide. The company also manufactures plastic drinking water bottles for local supply.
vientiane times
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