Golden Opportunity for Refrigeration Industry

Golden Opportunity for Refrigeration Industry 

"Temperatures in Summer 2005 will hit record highs"  forecast the world meteorological centres. The temperature in Vietnam could reach 39-40 degree Celsius. The forecast is reinforced by the current prolonged and widespread drought in Vietnam. While the public is concerned about the coming hot Summer, the refrigeration businesses sees it as a golden opportunity.

Preparation in advance

While Northern provinces still suffer from repeated cold spells, Southern provinces are already in full swing expanding the refrigeration industry to meet the demand in the hot and dry season of April and May. Mr Nguyen Bao Chau, Director of Reetech Joint Stock Company said that Reetech is running at full capacity and increasing its output to 1.5 times that of last year. For its part, LG Electronics has completed its plan in the early months of 2005 and will produce 35,000 air conditioners at the time of high demand. In addition to the competition in output, manufacturers have launched promotion campaigns with prizes that include automobiles, motorbikes, and holidays. Distribution agents have also joined the race increasing their plan by 30-50 per cent including Metro, Carings, Todimax and retail shops in Hai Ba Trung street, Hanoi.

Price dependent on the market

According to some economists, with the output increases, the price will not be necessarily higher as manufacturers are engaged in fierce competition for market share. However, the price depends on the fluctuation of the market. LG representative disclosed that in May the prices of LG products will increase 5 per cent against 2004. Therefore, distribution agents will have to increase their prices accordingly.

At present, the prices of air conditioners remain stable. Air conditioners assembled in Vietnam or imported from Korea, Thailand, Japan are diverse and at reasonable prices. A market survey shows that a 12,000 BTU LG air conditioner costs VND8.5 million, a 9,000 BTU Mitsubishi is VND6-6.2 million, Samsung Vina VND7 million, Sanyo 12,000 BTU costs VND7.5 million, and a 10,000 BTU Toshiba imported from Thailand VND8.1 million.  Chinese air conditioners assembled in Vietnam are also very competitive at prices half that of Japanese and Korean products.

While the demand on air conditioners increases with the improvement of living conditions, electric fans and vapour coolers remain the choice of lower income customers.  In addition to famous trademarks, new electric fans have been marketed such as Vina Wind, and Tran Phu.

• Thi Van