Vietnam: High energy cost to push up cement prices

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6 March 2010

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Cement producers are planning a price increase of between 40,000 and 50,000 dong ($2.1-2.6) per ton to compensate for the higher cost of energy, reported VNBusinessNews.com.

Nguyen Van Thien, chairman of the Vietnam National Cement Association said that the higher energy cost pushed the production cost by 2 percent to 3 percent, so cement makers are due to raise prices.

“Cement companies have to pay an extra cost of 40,000-50,000 dong for each ton of cement produced, or 2-3 percent, therefore they are considering to raise the selling price,” Thien said.

Several cement makers have hiked prices even before the power price hike was announced last week.Hoang Thach Cement Company in Hai Duong Province, for example, raised its price by 40,000 dong per ton last month after seeing its profit shrink by 10 percent last year. The company said it therefore would not raise prices now.

Some other producers raised prices by 19,000 to 60,000 dong per ton in January and added another 30,000 to 50,000 dong per ton in February.

The Ministry of Industry and Trade has forecasted that the price of cement will “slightly rise” in March.

Bim Son Cement Company in Thanh Hoa plans to revise up the price three times this year, adding a total of 100,000 dong per ton.

Last year, the price of coal rose 30 percent in September and December but the cement industry managed to keep their price unchanged, only to see their profits slashed. As the value-added tax doubles from 5 percent to 10 percent this year, coupled with the power price hike of 6.8 percent, a rise in cement price is unavoidable, they said.

This year to date, 6.42 million tons has been consumed while cement companies have produced 7.42 million tons. At the present, the industry has 1.84 million tons in stockpile, including 789,000 tons from Vietnam Cement Industry Corporation.

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