Enterprises in production season for Tet goods

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Production activities at Vissan Company. Photo: provided by the company

Efforts to stabilize commodity prices

Along with the return to production after the social distancing measures, the end of the year is also a time for enterprises to accelerate with orders in the peak season of the Lunar New Year 2022.

According to the Board of Directors of Vietnam Animal Products Industry Joint Stock Company (Vissan), the unit planned to invest more than VND754 billion in preparing more than 2,800 tons of fresh food, up 8%, and more than 4,200 tons of processed food, up about 6% over the same period last year in order to supply for market in the upcoming Tet period.

Vissan has recruited more employees, working overtime to produce enough food supply to serve the Tet market, especially items such as Chinese sausages, spring rolls, sausages and some new products such as cooked meat.

Enterprises also prioritize importing raw materials, although in the current context that the prices of items are increasing, they have to "struggle" for new partners to buy them.

As a result, enterprises have completed about 80% of the plan. The remaining work from now until Tet is mainly sorting and distributing orders according to delivery time and other arising orders.

However, unlike previous years, enterprises currently only produce to order and have raw materials to accelerate if the market shows signs of improvement at the end of the year.

Ms. Pham Thi Huan, General Director of Ba Huan Joint Stock Company, said that up to this point, they have not yet dared to produce at full capacity. According to the survey, the purchasing power of the market was weak, down about 30% compared to before the pandemic, so the company implemented deep discount programs but the purchasing power was still low.

Previously, the company consumed about 1.5 million poultry eggs per day, but now it sells less than 1 million eggs. Accordingly, the company continues to probe the market and prepare sources of Tet goods.

Although production costs increased, it led to an increase in product prices, but increasing at the allowable level according to market stabilization, during and after the Lunar New Year, the company committed to no shortage of food in this category during Tet, Pham Thi Huan said.

Mr. Phan Van Dung, Deputy General Director of Vissan, said after the pandemic, production costs of some types of raw materials increased by 20-30%. In addition, meeting the full set of safety criteria for pandemic prevention in production and business also caused costs to increase sharply.

However, enterprises were still committed to selling at a market-stabilizing price two months before, during and after Tet to share difficulties with consumers.

Enterprises need support

Enterprises have been busy working overtime for Tet. However, the general atmosphere at many enterprises is quite tense this year because they are both worried about pandemic control and production and sale of Tet products.

A representative of the Food Association of Ho Chi Minh City said that some large enterprises were producing for a month before Tet and a month after Tet, but because purchasing power was very low, market movements were unpredictable and depending on the control of the Covid-19 pandemic, the enterprises did not increase production, and did not dare to develop new products.

Instead, enterprises prepared raw materials and packages, when distributors increased orders or the market flourished, they would immediately accelerate to ensure sufficient supply.

According to the Ho Chi Minh City Department of Industry and Trade, every year, enterprises actively prepared production plan of Tet products. However, due to the great impact of the Covid-19 pandemic, it was forecast that the consumption on the occasion of the Lunar New Year of the Tiger in 2022 would be difficult, so manufacturers were also cautious in investing.

Accordingly, from now until the Tet holiday, the Department of Industry and Trade would focus on stimulating domestic demand. In particular, focus on coordinating relevant departments, sectors and units to closely monitor market movements, supply and demand of goods to actively coordinate with enterprises to ensure a balance between supply and demand of essential products, stabilizing the market and contribute to the implementation of social security work before, during and after Tet.

According to some enterprises, the preparation of goods for Tet was facing difficulties because it was still affected by the Covid-19 pandemic. In particular, imported goods were still entangled because the problem of goods circulation had not been completely solved, so manufacturing enterprises had to balance production costs, find more effective sales solutions, and control internal pandemic control.

The number of infections in Ho Chi Minh City increased again, and the purchasing power was low, recently the Food Association of Ho Chi Minh City proposed solutions to the City People's Committee to support consumer demand stimulus in the last months of the year.

In addition, many enterprises said that they needed capital support to restore production during this golden time. Especially, food enterprises needed loans with preferential interest rates to purchase and stockpile raw materials, auxiliary materials, and finished products to prepare for the production season on Christmas and New Year's Eve.

According to enterprises, recently, a large part of the reserve capital, which had been used by enterprises to maintain a part of production in difficult conditions of the pandemic and social distancing, was nearly exhausted. Therefore, the source of capital to support new loans is very urgent and necessary.