Charoen Pokphand Foods PLC (CPF) extends the “Faster Payment” scheme, a 30-day credit to small and medium-sized enterprises (SMEs) who supplies goods and services to the company, to the middle of this year to help over six thousand suppliers stay afloat amid new wave of COVID-19 infections.
The scheme is designed to strengthen the small business partners' financial strengths amid the crisis, as the recent spike in COVID-19 cases causes concerns and leads to a decline in sale revenue.
CPF launched the “Faster Payment” scheme in October 2020, offering SME partners a 30-day credit. The scheme has so far helped suppliers go through the crisis and maintain their workforce. Importantly, the scheme boosts their confidence in expanding business and adjusting to the new normal.
Ms. Naruemon Saengmanee, managing director of DMP Uniform Co., Ltd. which supplies uniforms for CPF, said that sale revenue dropped by half for 3-4 months after the COVID-19 outbreak. Facing a liquidity problem, DMP was concerned about huge investment to fulfil its uniform-maufacturing contract for CPF. The “Faster Payment” scheme means faster and exact financial injections, allowing the company to overcome the crisis, regain strength and expand business. She is convinced that the company will eventually pass the crisis.
Mr. Sekphon Boontechathanawat, managing director of Thank You 2562 Co., Ltd., one of CPF’s suppliers of chemical products and chemicals, said that SME partners have benefited from the “Faster Payment” scheme. Thanks to the 30-day credit, small companies’ liquidity has improved amid economic uncertainties. As high-interest loans are no longer necessary to finance raw material costs, the companies are spared from payment difficulties and able to introduce new products and grow sale revenue.
Ms. Thidarat Dechayonbuncha, vice president of CPF, said that a review of the “Faster Payment” scheme showed that it has strengthened CPF’s suppliers’ financial condition and enabled the suppliers to cope with difficulties particularly new wave of infections. Under the scheme, suppliers receive faster payments and have ample fund to support their business and retain employees even when the economy remains fragile.
Aside, CPF has shared COVID-19 prevention measures and guidelines with suppliers and supported them to ensure their business continuity. The suppliers can proceed with their production and deliver CPF quality and safe products, which ensures zero disruption to CPF’s supply chain.
Starting this year, CPF launches the capability building project for business partners throughout the supply chain, to ensure their compliance with laws and international standards on environmenmental, labor and governance aspects on a belief that mutual growth and competitiveness will sustain food security in the long term.