VIETNAM: Cement prices will rise at least 22%

Cement Association chairman Nguyen Van Thien Vietnam said that due to pressure on prices of electricity and coal, in time to cement prices will increase from 22 to 30% (about 100 to 150,000 VND / ton).

According to Compassion, from late 2010 until now, the cement industry under constant negative pressure on prices from a range of inputs such as electricity, coal, petroleum ... In addition, exchange rate for converting foreign currency be adjusted as well as a small factor to influence the cement industry.

In the process of cement production, energy costs accounted for between 45-50% of the cost, so the petrol, oil rose nearly 18%, electricity up 15.3%, coal 40% increase was expected to make Cement price increased by 10-15%. In addition, the increase in the exchange rate USD / USD to 9.3% and rising interest rates has caused great difficulties for cement plants, because plants have loans with interest rates above 20% years. In particular, many projects have come to cement the time limit for repayment, such as in 2011, is expected to repay VICEM 3,200 billion VND, Cam Pha cement was 800 billion ...

With the above factors, prices of finished cement must increase at least 22% to ensure the plant profitable. A considerable problem is that the Association is expected in 2011 cement consumption market will only increase by 10% compared with 2010, reaching 55-56 million tons, while output of the whole industry will produce output this year is estimated at 60 million tons. However, with input prices as high as today, most likely the factory will cut production to avoid losses.

"With the current situation, the power sector and ensure the supply of coal is only 70% of the demand for cement production plans. With that, the power cut will have to stop clinker kiln, causing a screeching halt production lines and large losses for the cement plant. More worrying is that if electricity, coal is only 70% required to ensure the production of cement factory may lack about 30% " , Mr Shan said.

According to the Vietnam Cement Association, during the recent 10 years, cement in Vietnam is always the lowest price in the ASEAN region, maintained at 50 per ton. "If prices continue to hold current sales (not adjusted), most cement plants in 2011 were lost, " Mr Shan said.