, the Ministry of Industry and Trade proposed to increase electricity prices by 8.3%, which certainly gives rise to concerns, especially concerns over the increased operating costs and weakened competiveness amidst Vietnam’s much-greater-than-ever integration.
Given public’s concerns over the increased consumer price, businesses are worried about the increased production costs. In the recent years, a number of enterprises have boldly cut down on a wide range of production costs, even minimizing utilize expenses to enhance their competiveness. The increase in electricity price, if any, comes as a big shock to their business planning and apparently causes great difficulties to them.
According to a representative from a fishery company, monthly utility expenses would increase by VND millions due to the fishery sector’s feature in which electricity is required for processing and freezing finished products. The company has minimized the electricity use in order to be able to compete with both other domestic and foreign big companies. Given such an electricity price increase, the company will not able to keep its foothold.
Another animal feed company’s director said the company with a number of cold farming areas and animal feed production plants incurs a high electricity consumption. The electricity price increase leads to an increase in farming and animal feed processing expenses. Meanwhile, it is not easy to raise finished product prices, but even lower instead amidst competition in the market, so the economic efficiency is not likely to be in line with the initial plan.
rom a point of view on the electricity price hike, a representative from NS BlueScope Vietnam, the Southeast Asia’s most modern coated and painted steel factory stated that upon the Government’s electricity price increase by 8.36%, average electricity costs per coated/painted rolled steel is approximately VND 40,000 per ton depending on production technology. It is difficult to pass it on to the end users amidst the existing fierce competition. The electricity price hike would cause the profits of steel factories in general and NS BlueScope in specific to decline.
However, NS BlueScope expressed its support for the electricity price hike provided that such hike could ensure energy security and promote the development of clean energy and utilization of advanced and environment-friendly technology during production processes in Vietnam.
In addition, in order to gain competitive advantages and sustainable development in the face of fluctuation in electricity prices, businesses need to devise energy saving plans by investing, improving and changing their employees’ behaviors.
NS BlueScope Vietnam has pioneered in adopting brand-new technologies in order to enhance product quality and protect the environment. In specific, the company installed variable frequency equipment on motors and invested in heat recovery equipment to reuse the consumed electricity for production. Furthermore, NS BlueScope also applied the green building standards to some building structures such as using solar power panels and LED lamps, which would help NS BlueScope in cutting down on the electricity consumption by 30% as compared to that of a traditional coated and painted steel factory.