Industries affected by increasing cost of raw materials

08 Jun '10

2 min read

According to the Ministry of Industry and Trade, the costs of raw materials have witnessed a steep rise in 2010.

Owing to increasing global demands, cotton price has increased by 25 percent; cost of plastic has risen by 43.7 percent, fibre price has surged by 34 percent and cost of wood is up by 30 percent. However, the manufacturers said that, their cost has surged by merely 5-10 percent.

Around all this, the textile and apparel industry is adversely affected, as it has to compulsory import 80 percent of its raw materials.

Added, Nguyen Duc Khiem, CEO of Viet Thang Garment and Textile Company, viscose fibre cost has also risen to $2.7 per kilogram from last year's figure of $2.2. Also, cotton cost has increased to $1.6 per kilogram from $1.3 over the same period.

Adding to these woes is the acute dearth of raw material available locally. This is due to, delay in delivery of the raw materials from foreign countries and India's ban on cotton fibre since April, to safeguard its own textile and apparel industry.

Further more, Khiem informed that, local manufacturers are reducing their cost of manufacturing and are also sharing materials, so as to meet their work deadlines.

Government of Vietnam has now been called upon, by the domestic firms, to increase investment in the supporting firms.

http://english.vietnamnet.vn/biz/201006/High-raw-material-costs-hit-industries-914652/

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