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Stretch Film: Ultimate Guide to Choosing and Using for Packaging Efficiency

Stretch film, a crucial material in packaging and logistics, finds itself at the center of an evolving business landscape as companies grapple with rising energy costs. This versatile plastic wrap, known for its ability to securely hold items together during transport, has become a symbol of how businesses must stretch their resources and innovate in the face of economic challenges.

The Impact of Electricity Price Hikes on Vietnamese Enterprises

Adapting to Rising Energy Costs Stretching Business Innovation

The recent 4.8% increase in electricity prices has sent shockwaves through Vietnam’s business community, forcing companies to reevaluate their operations and seek innovative solutions to maintain profitability. This price hike, which took effect on November 10, has raised the average retail electricity price to 2,103.11 dong per kWh (excluding VAT), putting significant pressure on businesses across various sectors.

For manufacturing companies, electricity is a crucial input cost, and any increase directly affects their bottom line. According to calculations by Vietnam Electricity (EVN), the average monthly cost increase for businesses in the commercial service sector is 247,000 dong, while manufacturing companies face an additional 499,000 dong in expenses.

The Domino Effect on Production Costs

The ripple effect of higher electricity prices is particularly pronounced in energy-intensive industries. Secoin, a company with nine tile manufacturing plants across Vietnam, reports that electricity costs constitute a significant portion of their production expenses. The company’s chairman, Dinh Hong Ky, notes that this price adjustment has had a notable impact on their operations, driving up production costs.

Similarly, a representative from a consumer goods company in Ho Chi Minh City reveals that input materials had already seen price increases earlier in the year. With market demand currently weak, they’ve been forced to cut costs to lower product prices and stimulate consumption. The electricity price hike adds another layer of complexity to their cost-cutting efforts.

Industry-Specific Challenges

The impact of rising electricity costs varies across industries. According to Nguyen Thanh Trung, an investment consultant at Thanh Cong Securities, electricity typically accounts for 4-10% of a company’s cost of goods sold, depending on the scale and sector. For instance:

  • Steel production: 10%
  • Chemical industry: 9%
  • Paper production: 4-5%
  • Cement manufacturing: 14-15%

These percentages highlight the uneven impact of electricity price hikes across different sectors, with some industries feeling the pinch more acutely than others.

Innovative Strategies for Cost Management and Energy Efficiency

Adapting to Rising Energy Costs Stretching Business Innovation

As businesses face the reality of higher energy costs, many are turning to innovative strategies to manage expenses and maintain competitiveness. From investing in renewable energy to implementing comprehensive energy-saving measures, companies are stretching their resources to adapt to the new economic landscape.

Embracing Solar Power Solutions

One of the most promising avenues for businesses looking to mitigate rising electricity costs is the adoption of rooftop solar power systems. The textile and garment industry, which has been grappling with competitive pressures and fluctuating order volumes, has been at the forefront of this trend. According to the Vietnam Textile and Apparel Association, several companies in the sector have already implemented rooftop solar installations to alleviate the burden of electricity costs.

This move towards solar energy not only helps reduce operational expenses but also aligns with global sustainability trends, potentially offering a competitive edge in international markets. However, the path to solar adoption isn’t without obstacles. Secoin’s chairman, Dinh Hong Ky, points out that for the past two years, EVN has suspended connections for new rooftop solar installations, leaving many businesses, including Secoin, in a holding pattern as they await supportive policies.

Comprehensive Energy Management Strategies

Beyond solar power, experts advocate for a holistic approach to energy management. Mac Dinh Khoa, Director of Business Strategy Development and Commercial Operations at Schneider Electric, emphasizes that energy conservation is key to maintaining profitability and creating a sustainable competitive advantage. He recommends that businesses:

  1. Develop independent energy measurement and conservation systems.
  2. Implement comprehensive strategies that apply energy-saving measures across all production stages, from individual machines to entire production lines.

This approach not only helps offset rising electricity costs but also positions companies as environmentally responsible entities, which can be a significant selling point in today’s eco-conscious market.

Operational Streamlining and Cost Optimization

In response to the electricity price hike, many businesses are doubling down on operational efficiency. This includes:

  • Tightening investment in various cost centers
  • Optimizing production processes to reduce energy consumption
  • Exploring alternative materials or production methods that require less energy

These efforts aim to balance production costs and ensure competitiveness with regional peers. For industries like textiles and garments, which are particularly sensitive to cost fluctuations, such measures are crucial for maintaining market share in a highly competitive global market.

The Broader Economic Implications of Energy Price Adjustments

While the immediate focus is on how individual businesses are adapting to higher electricity costs, it’s essential to consider the broader economic implications of these price adjustments. The ripple effects extend beyond the balance sheets of individual companies, influencing everything from consumer prices to national energy policies.

Impact on Consumer Prices and Demand

As businesses grapple with increased production costs, there’s a natural concern about how these costs might be passed on to consumers. In an environment where market demand is already weak, companies face a delicate balancing act:

  • Absorbing costs to maintain competitive pricing
  • Gradually increasing prices to reflect higher production costs
  • Innovating to deliver more value at existing price points

The decisions made by businesses in response to energy price hikes can have significant implications for consumer spending patterns and overall economic activity.

Driving Innovation in Energy Efficiency

On a more positive note, the pressure of rising energy costs can serve as a catalyst for innovation in energy-efficient technologies and practices. As businesses seek ways to reduce their energy consumption, they may:

  • Invest in research and development of energy-efficient production methods
  • Accelerate the adoption of smart technologies for better energy management
  • Collaborate with technology providers to develop industry-specific energy solutions

This push towards greater energy efficiency could lead to long-term benefits for both businesses and the environment, potentially offsetting the short-term economic challenges.

Reshaping National Energy Policies

The widespread impact of electricity price hikes on businesses may also influence national energy policies. As companies voice their concerns and adapt their operations, policymakers may be prompted to:

  • Reevaluate the balance between energy affordability and sustainability
  • Invest more heavily in renewable energy infrastructure
  • Develop more supportive policies for businesses transitioning to cleaner energy sources

The dialogue between the business community and policymakers could lead to a more collaborative approach to energy management at the national level.

 Conclusion for stretch film 

The recent electricity price hike in Vietnam serves as a microcosm of the challenges businesses face globally as energy costs rise. Like the stretch film that adapts to wrap around various shapes and sizes, companies are demonstrating remarkable flexibility and innovation in response to these economic pressures. From embracing solar power to implementing comprehensive energy management strategies, businesses are stretching their resources and capabilities to maintain competitiveness.

While the short-term adjustments may be challenging, this period of adaptation could lead to long-term benefits in terms of energy efficiency, sustainability, and operational resilience. As businesses continue to innovate and policymakers refine their approach to energy management, the hope is that a more sustainable and economically viable energy landscape will emerge—one that supports business growth while addressing broader environmental concerns.

In this evolving scenario, the ability of businesses to stretch, adapt, and innovate will be crucial. Just as stretch film securely holds items together during turbulent transport, the resilience and creativity of the business community will be essential in navigating the complex terrain of rising energy costs and environmental responsibilities.

Sourcing by Vnexpress

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