Challenge for manufacturers
26 November, 2020, 8:45 pm
Manufacturing companies in the country are facing additional challenges of trying to cope with the current economic situation as now imported items are almost the same price as the locally produced items.
This was revealed by the Fiji Commerce and Employers Federation CEO Kameli Batiweti.
“One thing that has come out of the budget is that government was very good in implementing and providing some reduction in duty concession which was great for the people because it meant that goods were now much cheaper than what it was previously.
“Unfortunately it has affected some of the manufacturers that are members and so the prices of imported items are now almost the same price as the locally produced items.
“Some people are saying that our local manufacturers are inefficient, no its just the economies of scale,” he said.
Mr Batiweti added the economies of scale in places such as Australia and China was bigger as they had to produce to a certain demand.
He said China had more than 1.7 billion people and the demands which they had to produce was much bigger than Fiji’s somewhat 900,000 population.
“So therefore because of the extra amounts they are able to produce it at a reducing cost as for Fiji because our demand is relatively low we cannot compete in that regard.
“And so those other countries that are supplying those kind of products some of them they have excess production and so it’s in their best interest to send it out to countries like Fiji and the Pacific Islands because they are able to gain traction in our countries.”
Consumers got to benefit from this as it meant they would get cheaper goods but for the manufacturer, according to Mr Batiweti, competition now was much bigger than what they thought.
“There is this perception that imported goods are of a different quality but just for us to safeguard our Fijian production and all we should continue to support the Made in Fiji brand.
“So that doesn’t say that the manufacturers have not benefited from import duty of their raw materials coming down.
“Their raw materials get down, their prices come down also but it is still difficult to compete against economies of scale of countries like China, Australia and etc.”
FCEF had conducted an impact study survey which according to Mr Batiweti, revealed around 271 interviewed members which was 80 per cent reported a job loss of around 29,000 employees during the pandemic.
“However that has somewhat changed especially for Suva where most of them are back at work now and so it’s working well.”