Businesses have a headache because of rising electricity prices

The increase in electricity prices from October 11 is creating great pressure on manufacturing enterprises - Photo: CONG TRUNG

Fear of increased production costs

Speaking with Tuoi Tre Online on the morning of October 12, Mr. Le Mai Huu Lam - General Director of Cat Van Loi Company, said that when electricity prices increase, it will have a strong impact on the production costs of enterprises.

At a time when orders have not yet recovered and the market is facing many difficulties, the increase in electricity costs will cause product prices to escalate, putting businesses in a difficult position.

Mr. Lam shared that businesses are forced to compete fiercely to maintain market share. They cannot easily increase prices for fear of losing customers, while production costs are increasing.

Minimizing costs and optimizing production processes is a must, but this is only a temporary solution.

Mr. Lam also stressed that global political tensions could push fuel prices higher, causing input costs to continue to increase, putting more burden on manufacturers.

"The nearly 5% increase in electricity prices forces us to tighten spending and optimize processes. But in the long term, businesses must switch to using renewable energy to reduce dependence on fluctuating electricity prices," Mr. Lam analyzed.

Many seaport businesses will have to pay additional electricity costs, some vehicles such as container cranes often use 3-phase electricity to operate continuously - Photo: Q. DINH

Through discussions with Tuoi Tre Online, many businesses acknowledge that costs will increase, but depending on the scale and industry, the impact will be different.

Mr. Nguyen Thanh Trung - leader of a logistics company in Ho Chi Minh City - said that in the warehousing sector, electricity costs will not increase significantly, an additional few million per month will not be significant. However, with equipment that uses a lot of electricity such as container cranes at seaports using 3-phase electricity, the monthly cost will increase quite a bit.

In the context of the market not recovering, many businesses not only face increasing production costs, but are also affected by the lack of clear information about the price increase roadmap.

For businesses with export orders, the increase in electricity prices has caused difficulties for them. Mr. Nguyen Tuan Nam - Director of a manufacturing company in Ho Chi Minh City, said that although the company had made provisions for the increase in electricity prices, it was still quite surprising when there was no exact information about the adjustment roadmap.

With orders typically negotiated over 3-6 months, the lack of warning when electricity prices increase makes it difficult to calculate costs.

"EVN needs to have a clear roadmap for price increases so that businesses can be proactive in their production and export plans. This sudden price increase makes it very difficult for businesses to cope," said Mr. Nam.

The lack of specific information about the roadmap makes it difficult for businesses, especially export businesses, to adjust contracts and production plans in a timely manner.

Stability of power supply is what businesses care about most, because sudden power outages cause more damage than increased electricity prices - Photo: CONG TRUNG

Find energy saving solutions

Meanwhile, Mr. Truong Cong Vu, General Director of Global Energy, said that with EVN currently losing money and adjusting electricity prices periodically every three months, the possibility of electricity prices continuing to increase in the future is very high. For businesses that consume a lot of electricity, they need to find solutions to save electricity soon. For example, using solar energy to reduce pressure on long-term costs.

Mr. Vu also pointed out that businesses that achieve green certification not only have the advantage of saving costs but also open up more opportunities to compete in the international market. This is not only a requirement of the times but also a long-term advantage in the context of increasingly focused sustainability standards.

Not every business has the financial capacity to cope with rising electricity prices.

The production manager of a leather shoe company said that the 4.8% increase in electricity prices has increased the company's operating costs significantly, especially when production has decreased by 70%. "We still have to use the same amount of electricity as before, but the serious decrease in production has made the operating costs too high," he shared.

His company has had to cut capacity and adjust production processes to suit the actual situation, but this is still not enough.

The director added that investing in upgrading machinery, restructuring or switching to alternative energy solutions requires huge financial resources, which many businesses currently cannot meet.

Businesses fear power outages without notice

Mr. Nguyen Van Khanh - Permanent Vice President of the Ho Chi Minh City Leather and Footwear Association, also expressed concern that the increase in electricity prices will increase the total production costs of leather and footwear enterprises, creating an additional burden for an industry that has faced many difficulties in recent times.

Meanwhile, Mr. Pham Quang Anh, Director of Dony Garment Company Limited, emphasized that although electricity costs in the garment industry do not account for a large proportion, the increase in electricity and fuel prices has a spillover effect, putting pressure on raw material prices and other costs.

"What we are most worried about is not the increase in electricity prices but the sudden power outages. One day of unannounced power outages can cause much greater economic damage than the increase in electricity prices," said Mr. Quang Anh.

He said that if the increase in electricity prices goes hand in hand with improvements in supply stability, businesses will be willing to accept the increase.

A stable, uninterrupted power system will bring greater benefits than keeping electricity prices low but facing frequent power outages.

Graphics: VNA

Source: https://tuoitre.vn/doanh-nghiep-nhuc-dau-vi-gia-dien-tang-2024101212252451.htm