Concerns about reducing production costs at the end of the year

VCN - Many economic experts predict that the pressure to increase prices in the last month of 2021 will be great, especially as this is the peak period for production and business of goods. Therefore, businesses need practical solutions to reduce production and business costs.
Answering FDI enterprises’ queries on tax refund for on-spot export Answering FDI enterprises’ queries on tax refund for on-spot export
Over 90% of businesses resume operation Over 90% of businesses resume operation
Rate of imported goods for export production sent to an outsourcing enterprise is not stipulated Rate of imported goods for export production sent to an outsourcing enterprise is not stipulated
Enterprises are making efforts to reduce costs and take advantage of opportunities to restore production. Photo: H.Dieu
Enterprises are making efforts to reduce costs and take advantage of opportunities to restore production. Photo: H.Dieu


Input increases, but the output price must be maintained

In the agricultural sector, commodity prices are continuously increasing. A representative of the Ministry of Agriculture and Rural Development said that the selling price of rice varieties, especially copyrighted rice varieties, has continuously increased. Previously, the average selling price was VND13,500 /kg, now it has increased to about VND15,000/kg. The prices of some input materials (fertilizers, plant protection drugs) are also increasing by 30-40%. In addition, according to businesses, gasoline and many other raw materials, components and accessories are also increasing in price. In particular, the sharp increase in petroleum products is causing many impacts on businesses. Despite the support of the Petroleum Stabilization Fund, the price of gasoline in Vietnam is still increasing by about 48% compared to the beginning of 2021.

A food production business said that after the outbreak caused the business to stop operating a part of its production line, it has now returned to more than 70% of operations, but the prices of many raw materials and goods increased by about 20% while businesses have to keep output prices to keep consumption.

Also talking about this issue, Mr. Bui Thanh Tung, Deputy General Director of Kido Group, said that the scarcity of global supply combined with high demand caused the price of gasoline to increase sharply. In addition, when businesses deploy the "3 on-site" model it also causes operating costs to increase by 12-15% compared to normal.

Now, enterprises continue to suffer from additional costs of transportation and logistics due to the increase in gasoline prices, which puts upward pressure on goods prices.

Regarding agricultural enterprises, Mr. Tran Duc Minh, Chairman of the Board of Directors of Trieu Son Joint Stock Company (Triso Group), said the consumption market of agricultural products at the end of the year is also very active, but the consumer market is still very active.

Output for agricultural products is not stable, people and businesses often face the situation that when the crop is good, the price will be lost; if the crop is bad, the price will be gained.

Moreover, export markets always require very high product quality, so enterprises must apply high technology. However, the application of high technology in the production process requires a very large initial investment capital, large investment costs lead to high product prices, causing difficulties in competition and sales.

The survey results of the Hanoi Association of Small and Medium-sized Enterprises show that most businesses are still facing many difficulties, in which, the biggest problem is in terms of finance to serve production and business, pay the wages for workers.

In addition, many types of rising costs such as logistics costs, pandemic prevention costs, etc. are putting pressure on businesses.

Depending on the practical situation for production

The above situation is causing the year-end production plan of many businesses to follow the method of based on the practical situation of the market to save costs. Moreover, the number of orders decreased, causing businesses to rebalance the workforce, equipment, etc. to match the existing financial resources. In addition, the labor force has returned to the hometown during social distancing measures, causing businesses to incur additional costs to recruit new people and re-train.

Therefore, at the conclusion of the meeting of the Steering Committee for Price Management in early November, Deputy Prime Minister Le Minh Khai said that pressure on the price level of a number of consumer goods that are not on the State list.

Valuation and price stabilization are very high due to the impact of supply and demand and difficulties in goods circulation. Therefore, price management needs to continue to be carried out cautiously, flexibly and proactively, closely following market movements, regularly assessing and forecasting in detail to adjust accordingly, focusing on in controlling inflation by the target and supporting the implementation of the Government's dual goals.

Therefore, in the last months of the year, solutions to reduce costs - even the smallest ones, are taken advantage of by businesses. Most recently, the Government issued Decree No. 92/2021/ND-CP dated October 27, 2021 guiding policies on exemption and reduction of corporate income tax and value-added tax in the spirit of Resolution No. 406/NQ-UBTVQH15 of the National Assembly Standing Committee. Businesses all assessed that this is a practical, timely and motivating solution and the source of "life force" is finance for businesses to continue to restore production.

Along with the issued support policies, currently many products and costs have increased for objective reasons, according to market supply and demand, so businesses still want the Government and ministries to study soon on solutions to support businesses, limit the rise of goods and costs that directly affect production activities. For example, a leader of Triso Group said that agribusinesses need a floor price subsidy policy (price stabilization fund) for agricultural products to be able to confidently invest and produce, and overcome uncertain price protection. In addition, like many other businesses, Mr. Tran Duc Minh wishes to have access to preferential loan policies, easier access to loan sources to invest in technology and optimize production costs.

In addition, according to the Vietnam Chamber of Commerce and Industry, regulatory agencies promoting administrative procedure reform is also an effective solution to help businesses reduce costs. For example, currently the list of goods subject to specialized inspection is too much; if the ministries consider continuing to reduce the number of product groups, the number of product lines to be inspected and the number of shipments to be inspected, thoroughly implemented according to the principle of risk assessment, testing according to probability, they will help businesses save both costs and time, helping to speed up import and export activities.

Related News

Build and protect the rice value chain against market fluctuations

Build and protect the rice value chain against market fluctuations

VCN - Due to recent risks and challenges,business performancehave been badly hurt andmany chain links have been under threats ..., the rice industry needs to enhance the role of ministries, branches, localities, and farmers and businesses in building and protecting the rice value chain against market fluctuations.
Why director of Saigon Port Import-Export and Services JSC suspended from exit?

Why director of Saigon Port Import-Export and Services JSC suspended from exit?

VCN - Ms. Luong Tieu Tran, born in 1979, Director of Saigon Port Import-Export and Services JSC, was temporarily suspended from leaving the country from May 14, 2024.
Multi-dimensional picture of textile and garment enterprises

Multi-dimensional picture of textile and garment enterprises

VCN - Despite a quite positive start in the first quarter of 2024, the textile and garment industry has still faced many challenges from new requirements of importing countries, requiring enterprises to have proactive solutions to respond.

Latest News

Imports and exports achieve US$239 billion by the end of April

Imports and exports achieve US$239 billion by the end of April

VCN - The import-export turnover in April witnessed a slight decrease compared to the previous month but it is still high with more than US$60 billion.
Spending more than US$31 billion for importing computers and electronic products in 4 months

Spending more than US$31 billion for importing computers and electronic products in 4 months

VCN - Computers, electronic products, and components are the group of imported commodities with the largest scale in the country.
Promoting Vietnamese pharmaceutical industry

Promoting Vietnamese pharmaceutical industry

Vietnamese pharmaceutical market grew from $2.7 billion in 2015 to $7 billion in 2022 and is forecast to reach more than $10 billion by 2026.
HCM City to host iTech Expo 2024 in July

HCM City to host iTech Expo 2024 in July

The first-ever international technology exposition (iTech Expo) 2024 will take place in Ho Chi Minh from July 10-12, featuring 500 booths from leading technology countries and territories around the world, heard a press conference on May 20.

More News

Pangasius exports are forecasted to bounce back at the end of the year

Pangasius exports are forecasted to bounce back at the end of the year

VCN - It is forecasted that pangasius exports is forecasted to be better from the third and fourth quarters of 2024, leading to the uptrend being adjusted to increase by at least about 10% compared to the current price.
Exports to the US reaches over US$6 billion

Exports to the US reaches over US$6 billion

VCN - The US continues to be Vietnam's largest export market and achieves positive growth.
Market diversification key for enterprises to expand exports

Market diversification key for enterprises to expand exports

Vietnamese enterprises need to meet quality requirements and rules of origin, increase value-added content, and diversify markets, as production and business activities are forecast to face many challenges due to the unpredictable global economy and climate change.
Businesses advised to focus on brand protection in online export

Businesses advised to focus on brand protection in online export

As more and more Vietnamese businesses are using international e-commerce platforms such as Amazon, eBay and Alibaba to expand market, experts have advised domestic firms to pay greater attention to the protection of trademark in the cyberspace, especially during online exporting activities.
Find solutions to attract goods through the first specialized container port in Vietnam

Find solutions to attract goods through the first specialized container port in Vietnam

VCN- As the first specialized container port in Vietnam with 25 years of operation, the volume of goods passing through the international container port of Vietnam (VICT) is still very modest. Mr. Truong Nguyen Linh, Deputy General Director of VICT port, has shared solutions to attract cargo through this port.
Textiles and footwear in a greening spiral

Textiles and footwear in a greening spiral

VCN - More and more regulations on sustainable development are issued in major markets such as the US and EU, imposing pressure on Vietnamese textile and garment enterprises to be faster on the green roadmap.
Agricultural, forestry and fishery product exports continue to "scoring points"

Agricultural, forestry and fishery product exports continue to "scoring points"

VCN - In the first four months of 2024, the country's total export turnover of agricultural, forestry and fishery products is estimated to reach more than US$19 billion, an increase of 23.7 percent compared to the same period last year. Most key agricultural and forestry export products increased higher than the same period last year as well as the export value to all markets increased.
VN

VN's Steel industry ranks 12th in world crude steel production

This accomplishment not only highlights the industry’s rapid growth in production output but also signifies its increasing independence and diversification of product types.
Chu Lai Port installs specialised crane system

Chu Lai Port installs specialised crane system

Chu Lai International Port belonging to Trường Hải International Logistics Limited Liability Company (THILOGI) has installed a new specialised crane system that costs more than VNĐ400 billion (US$15.7 million).
Read More

Your care

Latest Most read
Imports and exports achieve US$239 billion by the end of April

Imports and exports achieve US$239 billion by the end of April

The import-export turnover in April witnessed a slight decrease compared to the previous month but it is still high with more than US$60 billion.
Spending more than US$31 billion for importing computers and electronic products in 4 months

Spending more than US$31 billion for importing computers and electronic products in 4 months

Computers, electronic products, and components are the group of imported commodities with the largest scale in the country.
Multi-dimensional picture of textile and garment enterprises

Multi-dimensional picture of textile and garment enterprises

VCN - The financial report of Thanh Cong Textile - Investment - Trading Joint Stock Company recorded revenue of more than VND 934 billion in the first quarter 2024, an increase of 7% compared to the same period in 2023; Net profit reached over VND 62 bill
Promoting Vietnamese pharmaceutical industry

Promoting Vietnamese pharmaceutical industry

Vietnamese pharmaceutical market grew from $2.7 billion in 2015 to $7 billion in 2022 and is forecast to reach more than $10 billion by 2026.
HCM City to host iTech Expo 2024 in July

HCM City to host iTech Expo 2024 in July

The first-ever international technology exposition (iTech Expo) 2024 will take place in Ho Chi Minh from July 10-12, featuring 500 booths from leading technology countries and territories around the world, heard a press conference on May 20.
Mobile Version