Manufacturers embittered by power cuts

Le Minh Chuan, a senior officer of Vinacomin, the Coal and Mineral Industries Group, said that in May alone, 20 mining companies in the group collectively endured over 400 hours of power cuts.

“In May, despite outages, we fulfilled 90 percent of our production goal. When the power is cut so regularly, the coal companies can’t provide the coal needed for power, cement and steel production,” Chuan warns. “The power cuts push up our costs of production and jeapordise our ability to provide coal at the prices we have negotiated.”

According to Chuan, it is very dangerous for mines if the power is cut and then restored unexpectedly. Subsidiaries of Vinacomin have endured cuts of up to 16 hours. Most of the companies have electricity generators, but these cannot not sustain production. The generators are just sufficient to run water pumps and blowers.

The Textile Sector

Diep Thanh Kiet, chairman of the HCM City Garments, Textiles, Embroidery and Knitting Association, said that none of the Association’s member companies escaped repeated power cuts in April, May and June.

Kiet said that many enterprises were idled for many days, notwithstanding delivery deadlines. A lot of enterprises had to pay penalties because they could not deliver according to their contracts.

The biggest problem, Kiet says, is that the power is cut without notice. In general, workers begin their morning production shift at 7 am. If the power is cut at 8 am, workers will have to sit idle, while enterprises will still have to pay wages to workers. If enterprises were informed of a pending power cut, they could rearrange production shifts.

Kiet said that the enterprises have petitioned the HCM City authorities about the regular, unannounced power cuts. However, enterprises doubt the petition will accomplish much. They are resigned to ‘eating’ the losses caused by the power cuts.

Digital Equipment Distributors

Bao An Company is a leading distributor of computers and electronic equipment used in supermarkets. On the afternoon of June 17, Director Phan Dinh Son left the office for a bia hoi (draught beer) restaurant because he could no longer endure the heat, fully 40°C. Power cuts over the last few days have caused chaos in the office, Son said. “My company loses tens of millions of dong every day when the power goes off. This is the fourth time so far this month!”

When the power is cut, the company fires up a generator, but it provides just enough power to turn some fans. Customers stay away, because it is too hot at the shops where the power is off.

The Steel Sector

A manager of a steel company in Vinh Phuc province says that the power is being cut one time a week, reducing the company’s productivity by 20 to 30 percent. Some 700 workers sit idle when the power is off, so the losses caused by the power cut could total hundreds of millions of dong.

“Steel prices are dropping, so we are afraid that we may incur losses. Meanwhile, we have to worry about the electricity cut as well,” he complained