Prices stable as profit margin narrow
It is unknown at this time how long we will be able to sustain in the business without profits. We hope that the prices of these products will come down internationally soon
Raw materials prices have surged in the international market for a long time. The prices of wheat, oil and sugar used in food production have been on the upward trajectory.
All three ingredients are needed to make a biscuit. Of the total production costs, 80% goes to the ingredients and the remaining 20% to labour and other expenses. In other words, an increase in the price of these ingredients is affecting 80% of a product.
In this case, there is no way but to increase the price. However, the price cannot be increased so easily because an increase in prices put pressure on consumers.
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In such a situation, we have to do business on profit margins to maintain our presence in the market. We have to give up profit and, in some cases, suffer losses too. We have to do this in the interest of sustaining the business. Due to this policy, our sales growth has not slowed down. We are still doing business as usual.
It is unknown at this time how long we will be able to sustain in the business without profits. We hope that the prices of these products will come down internationally soon. And if the price does not decrease, then we must increase the price of our products. Then a kind of risk may be created in the market. But we are thinking positively. We hope everything will be normal.
Kamruzzaman Kamal is the director of Pran-RFL Group.
TBS Senior Reporter Abbas Uddin Noyon interviewed him on the phone.
