Charoen Pokphand Foods PLC (CPF) proceeds with its “Faster Payment” scheme, to boost small-scaled suppliers’ liquidity in wake of new wave of COVID-19 infections.
Mr. Prasit Boondoungprasert, Chief Executive Officer, expressed concerns about the liquidity condition of suppliers, particularly very small or individual suppliers who are at risk following the reporting of new COVID-19 cases. As such, CPF will proceed with the “Faster Payment” scheme, to provide a 30-day credit to small and medium-sized enterprises (SMEs) with registered capital below Bt5 million and individual suppliers who are numbered about 6,000. The scheme is expected to boost small suppliers’ liquidity and hence foster the national economic growth.
“Faster Payment” was launched in October 2020 to help SME suppliers who experienced difficulties due to the new coronavirus (COVID-19) pandemic. These suppliers saw their orders drop for months and some had to shut down business, causing chain effects.
“Faster Payment is part of CPF’s social responsibilities. We need to support SMEs which are an integral part of CPF’s supply chain. We want to ensure mutual growth and want to help stimulate the economy in wake of new infections,” Mr. Prasit said.
In the past three months, SME suppliers who were given the 30-day credit enjoyed financial management flexibility. They could save jobs and save their operations. They had excess capital to expand business and were able to generate income and enhance competitiveness.
Mr. Peeranat Hoonthanee, managing director of Siam Phatee Co., Ltd., said that Siam Phatee, located in Nakhon Ratchasima, supplies CPF with industrial pumps and valves. He said that following the outbreak, the company witnessed a significant drop in orders. The 30-day credit injected liquidity, allowing SMEs to support new orders without having to seek interest-bearing loans. The credit could also be used to improve employees’ work conditions.
Mr. Kritsada Singhadecha of Waipop Engineering Co., Ltd., which is a construction contractor of CPF, said that the program was very helpful for the SMEs that experienced a significant drop in orders. It helps inject liquidity into those SMEs during economic slowdowns.
Ms. Naruemon Saengmanee, managing director of DMP Uniform Co., Ltd. which produces uniforms for food companies, added that the credit scheme allowed small SMES to expand their business and find new customers, without having to borrow. She said that loans are a burden, as borrowers need to shoulder interest rates for a long period.