Chinese scramble for materials, Vietnamese struggle to find ways-out

VietNamNet Bridge – A lot of new products have been created after Vietnamese businesses understand that they should not continue competing with Chinese businessmen in collecting materials, but they should find new ways out forthemselves.

A lot of businesses have experienced full of hardships when Chinese businessmencome directly to Vietnam to scramble for collecting materials from farmers.Unable to buy materials, some businesses have to halt their operation.Meanwhile, others still have been striving to exist and develop.

When coconuts fall into the hands of Chinese

Tri Duc is an enterprise specializing in making coconut extract to provide foodprocessing factories in Vietnam for the last 20 years. The company’s businesssuddenly faced a lot of difficulties in 2010, when Chinese businessmen came andscrambled for collecting coconuts from farmers. The scrambling led to the factthat the coconut price soared by two or three folds. Due to the higher inputmaterial price, Tri Duc has to raise the sale prices, which then makes productsunsalable

“We experienced a very difficult period, when we had to do the outsourcing forother companies, and accepted any jobs we could in order to have jobs and incomefor workers,” said Hoang Thi Tam Ai, Director of Tri Duc.

However, the instinct of self-preservation has helped the company recover themost difficult period. In mid 2011, when the lemon prices were low, Ai boughtlemons to produce lemon extract to provide to restaurant and food processingworkshops, and to provide lemon peel to the workshops which make moon cakes.After that she was accidentally informed that companies have the demand forintestinal vera soaked in syrup for food processing.

Ai tried to make this kind of product, because she understands that this is theway out for the company. After a lot of failures which forced her to throw awaytons of materials, Ai and her husband have succeeded in processing the productswhich have high quality and satisfy the requirements of food processors.

Especially, the products made by Tri Duc do not contain preservatives and havecompetitive prices. Since Tri Duc can design the production line, the productioncost is just equal to 1/10 of that of other enterprises. The company hopes toincrease the capacity by two folds in some more from the current level of 50tons per month.

Recycling rubbish also can bring money

In the context of the increasingly high pulp prices which have put bigdifficulties for the paper and packaging industry, Hoang Trung Son, Chair ofDong Tien Paper and Packing Company, tried to find materials from differentsources.

Rubbish could turn into money if they can be recycled, Son thinks. Milk cartoncould be re-used, because it can provide high quality paper.

Son realized that in Vietnam, milk cartons have been made of the kind of cartonwith six layers, which have been thrown away after use. Meanwhile, the cartoncontain 70 percent of pulp, and 30 percent of aluminum and plastics.

Then Son decided to join forces with Viet Thanh to design a new production line,worth one billion dong. In November 2011, he put the factory on recycling milkcarton covers in Vietnam which has the capacity of 50 tons per day.

Nearly all the elements of the cover, from paper to aluminum and plastics can berecycled. Every ton of milk carton covers can bring 500 kilos of pulp and 200kilos of aluminum and plastics. Pulp can be made wrapping papers, carton boxes,while aluminum and plastics can make materials for roofing.

The biggest difficulty for Son’s factory now is the lack of materials. Son saidthat every month he can collect 80 tons of materials, while the factory needs300-400 tons of materials to break even. Scrap-iron dealers have not beenencouraged to collect empty milk cottons because of the low price of 2500 dongper kilo. Meanwhile, he has to pay 4500 dong per kilo to collect materials inbig quantities.

Source: SGTT

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