Ministry of construction calls for cement prices hikes

Ministry of construction calls for cement prices hikes
Published: 24 November 2006

Vietnamese Ministry of Construction and the Vietnam Cement Association (Cemas) are calling on the Government to increase the national cement price ahead of anticipated coal- and electricity-price hikes.  
This is the third time this year the Ministry of Construction and Cemas have asked the government to raise the cement price to remain viable. 
The government is currently considering a request by the ministries of Finance and Industry to increase the electricity price by an average of 8.8 per cent.  
If approved, the cost of producing a tonne of cement is expected to rise by VND30,000.  
According to the Vietnam Cement Corp, the cement industry is already having to cope with increases in the price of commodities such as petrol, gypsum and imported clinker, in addition to high transportation and packing costs.  
The retail cement price in Vietnam is the lowest in Asia, according to the Ministry of Construction. A tonne of cement fetches US$49.3 a tonne in Vietnam, compared to $54.6 a tonne in Thailand, $64.6 a tonne in Indonesia and $82 a tonne in Japan. 
Tong Van Nga, deputy minister for construction, said the world cement price had undergone a number of increases over the last 10 years but remained static in Vietnam. And if the diminishing dollar value is taken into account, the deputy minister said the real price of cement in Vietnam had actually fallen by almost 30 per cent in the last decade.  
In the first 10 months of this year, the domestic market consumed around 26.4 million tonnes of cement.  
However, there is expected to be a surplus of 5-10 million tonnes of cement between 2009-2013 due to an increase in the number of production plants.  
To reduce costs, the country plans to cease importing clinker from 2009, the Ministry of Construction said.