Cement supply may fail to meet demand

Vietnam may have to deal with cement shortage of 30% in the local market this year due to lower supply.

Nguyen Van Thien, Chairman of the Vietnam National Cement Association, said petroleum and coal prices, along with VND depreciation and high interest rates, have badly impacted cement production.

Currently, only about 70% of producers’ energy demands are met, which has lowered productivity and caused some halts in operation.

In the coming months, cement prices will likely increase by between VND100,000 (USD4.78) and VND150,000 (USD7.17) per tonne, Thai said, adding that this price rise will soften losses for cement producers.

Since 2008, Vietnam cement prices have grown by 30%. Meanwhile, the price of coal has increased 400% and petroleum has seen a number of price hikes, Thien said.

He noted that, over the past ten years, Vietnamese cement prices have been the lowest in the ASEAN region, at USD50 per tonne, compared to USD65 – USD75 per tonne in other neighbouring countries.

This year, many cement producers are deep in debt, including the Vietnam Cement Industry Corporation (VICEMand), which owes VND3.2 trillion (USD153 million), as well as Cam Pha Cement Joint Stock Company, owing VND800 billion (USD38.26 million).

“If the current prices are maintained, most of cement factories will suffer from losses in 2011”, Thien emphasised. – Dtinews

Tags: Vietnam cement, Vietnam cement industry