Energy cost drives up cement price

Cement producers are planning a price increase of between VND40,000 and VND50,000 per ton to compensate for the higher cost of energy.

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

“Cement companies have to pay an extra cost of VND40,000-50,000 for each ton of cement produced, or 2-3%, 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 VND40,000 per ton last month after seeing its profit shrink by 10% last year. The company said it therefore would not raise prices now.

Some other producers raised prices by VND19,000 to VND60,000 per ton in January and added another VND30,000 to VND50,000 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 VND100,000 per ton.

Last year, the price of coal rose 30% 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% to 10% this year, coupled with the power price hike of 6.8%, 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.

Tags: Vietnam cement, Vietnam cement industry, Vietnam cement price