High costs pressure cement makers

As prices rise for input materials, enterprises are debating whether or not to raise cement prices.

The electricity price increased 6.3 per cent on March 1, and coal, gas and other materials caused cement prices to increase 2 to 3 per cent. Therefore, many cement enterprises have said that they will increase their prices in the near future, according to Nguyen Van Thien, chairman of the Viet Nam Cement Association.

Hoang Xuan Vinh, deputy director of the Hoang Mai Cement Co, said that after the second round of coal price increases to 30 per cent in September and December, the company’s production costs for clinker (a material for cement production) went up VND72,000 (US$3.8) per tonne. This year, the electricity price hike would create further increases to their cement production costs. With these increases to production costs, price rises would be unavoidable.

The Hoang Thach Cement Co was also expected to raise its cement price this year to guarantee profits.

“The company’s product prices were not adjusted when the price of coal increased up to 30 per cent in 2009; therefore, the company’s profits decreased by 10 per cent over the previous year,” said Pham Huy Tho, chief of Hoang Thach Co secretariat.

However, enterprises worried that the cement price increase would negatively affect consumption and competition between the enterprises.

VietNamNet/Viet Nam News

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